PAGES 72 inclusive of cover
www.surecommedia.com
VOL XI ISSUE IX august 2020 | `20
Postal Registration No.: DL (S)-17/3372/2019-2021 WPP No.: U(S)-81/2019-2021 Posted at Lodi Road HPO, ND on the 4th-5th same month RNI No.: DELENG/2009/31040 Published on the 2nd of the same month
Leaders Leading Logistics S e r i e s c h a p t e r II
TURKISH CARGO CONTINUES TO RISE. TURKISH CARGO BECAME THE ONLY AIR CARGO BRAND TO HOLD IATA CEIV PHARMA, IATA CEIV ANIMALS AND IATA CEIV FRESH CERTIFICATIONS, ONE OF THE MOST PRESTIGIOUS CERTIFICATES FOR THE AIR CARGO INDUSTRY.
turkishcargo.com.tr
contents
Volume XI Issue IX
august 2020 Publisher & Editor-in-Chief Smiti Suri
Chapter II
COVER STORY
Special Correspondent / Sub-editor Upamanyu Borah Principal Correspondent Ritika Arora Bhola
Revisiting plans for the unexpected
Correspondent Saurabh Sharma Event Coordinator Pallavi Jain Director Ajeet Kumar
08
Marketing Manager Rahul Arora Gagan Duggal
Elliott Paige, Director- Air Service
Development, Atlanta Airport ..................................48
Marketing Executive Akash Gupta Rahul Jain
Kruti Jobanputra, Director, JWC Logistics Parks...16
Piush Goyal, Managing Director, India & SAARC, Kelley India...............................................................50
Accounts & Administration Lavish Thakur
Aditya Shah, Executive Director, V-Trans (India).....18
Huned Gandhi, Managing Director, Air & Sea
Designer & Visualiser Ashok Saxena
leaders leading logistics Rubal Jain, Managing Director, Safexpress..........12
Ritesh S Ramakrishnan, Joint Managing
Director, Transworld Group.......................................20
Logistics- Indian subcontinent, Dachser.................52
Wally Devereaux, Managing Diector,
Cargo and Charters, Southwest Airlines...................54
Dr Xavier Britto, Chairman,
Kerry Indev Logistics................................................24
Pradeep Panicker, CEO, GMR Hyderabad
International Airport Ltd (GHIAL).............................28
Niki Frank, CEO, DHL Global Forwarding India......30 Adarsh Hegde, Joint Managing Director, Allcargo Logistics.....................................................32 Rohit Hegde, Director, KSH group..........................36 Andreas von Puttkamer, Senior Vice
President- Aviation, Munich Airport.........................38
SurendraJeet Singh, Managing Director,
Pinkcity Logistics......................................................40
John Ackerman, Executive Vice President-
Global Strategy and Development, Dallas/ Fort Worth (DFW) International Airport....................44
Lim Ching Kiat, Managing Director- Air Hub
Development, Changi Airport Group.........................46
30,349
Dr Rakesh Kumar Sinha, Founder & CEO, Reflexive Supply Chain Solutions.............................56
shipper speaks
Hemant Kumar Sood, Director- Value Chain, Raymond Consumer Care................................... 62
guest column
Divyanshu Tambe, Executive Director-
Transport & Logistics, M&A Transactions, Ernst & Young India.......................................... 64
People connect
All materials printed in this publication is the sole property of CargoConnect. The printed matter contained in the magazine is based on research and analysis and information provided by the spokespersons featured. The views, ideas, comments and opinions expressed are solely of those featured and the Editor and Publisher do not necessarily reflect the same. CargoConnect is owned by Smiti Suri,
and is printed at Compudata Services, 42, DSIDC Shed, Scheme–1, Okhla Industrial Area Complex, Phase–II, New Delhi-110020, and published at 6/31-B, Jangpura–B, New Delhi-110014
Sandeep Chadha, Founder & CEO,
Warehouster Capital......................................... 70
Regulars
Frontline............................ 6 industry dialogue.......... 58 News............................. 66-67 appointments.................. 68
6/31-B, Jangpura-B, New Delhi-110014 Tel: +91-11-24373365, 24373465 Mob: 97113 83365, 98109 62016 Email: cargoconnect@gmail.com sales@surecommedia.com Website: www.surecommedia.com
30,349
frontline
In 2019, China’s exports to India stood at 515.6 billion yuan, up 2.1%, and India’s exports to China totalled 123.9 billion yuan, down 0.2% yearon-year.
Construction has been initiated on some corridors, which include the Delhi-Mumbai expressway. Such projects are expected to provide alternate routes to diversify traffic, provide connectivity for major towns, thereby reducing distance and travel time, along with giving thrust to backward regions in the country by improving infrastructure. Nitin Gadkari, Minister for Road Transport & Highways
In these indispensable times, we realise the importance of essential services with their regular supply chains. The government is working on creating digital platforms and mobile apps for logistics such as warehouse information tracking and trading yard (WITTY), among others towards mapping of warehouses. Pawan Agarwal, Special Secretary- Logistics
Parcel vans are suitable for a wide range of products such as farm produce and FMCG. A shipment of even up to 500 tonnes can be conveniently made over in parcel vans, whereas in case of wagons, at least 2000 tonnes are required.
While the coronavirus-induced demand hit cargo volumes at the country’s ports, Paradip’s operational performance was driven by a surge in iron ore loadings which jumped to 6.915 mt from 4.842 mt. Petrapole, India’s largest land border port with Bangladesh is also one of the largest Land Customs Station (LCS) in Asia handling a trade of more than US$ 2.5 billion. Food & beverage is this quarter’s strongest commodity,
while apparel & clothing accessories saw the biggest drop and has hit a record low.
There was a decline of 11% in warehousing demand during the last fiscal year at 41.3 million sq ft across eight major cities due to economic slowdown. 6|
august 2020
Connectivity provided by the existing and the newly added protocol routes – five new Ports of Call and two extended Ports of Call – provides excellent opportunity for expansion of our bilateral trade between India and Bangladesh. Besides, in the present COVID-19 scenario, it provides economical, faster and safer mode of transport. Riva Ganguly Das, High Commissioner of India to Bangladesh
Considering the current tough times, it will be important that no rampant undercutting of fares happen. To that extent, this is a move in the right direction, intrastate movement would benefit a lot more and for interstate movement, a proper working methodology has to be brought out between the states as well. Jagannarayan Padmanabhan, Director & Practice Lead, Transport & Logistics, CRISIL Infrastructure Advisory
Almost all major brands are pushing for online and offline channels to meet customer requirements. There is a huge demand for micro logistics because everyone needs to get a delivery. We are seeing a lot more traction where individual brands are thinking about setting up their own omni-channel network and this is where the hyperlocal delivery becomes critical. Hanish Yadav, Associate Partner, McKinsey & Co
coverstory Chapter II
revisiting plans for the unexpected CARGOCONNECT Leaders Leading Logistics Series intends to provide key insights to logistics and supply chain leaders grappling with responding to the existing crisis while ensuring employee safety, operational viability, and reviving their business from a historic supply-chain shock. A deep analysis of the ongoing situation by the industry experts suggests that several
8|
august 2020
businesses can mobilise and set up rapid crisis management mechanisms to ensure business continuity. However, the typical focus of most of these efforts has been understood to be for the short-term. Logistics and supply chain leaders must also plan for the medium and long-term in order to build resilience for the future. Now that can be done through:
G
auging existing inventory at hand
At this stage, businesses must begin by estimating how much inventory is available in their value chain. This facilitates capacity planning for the long-run and also acts as a bridge to keep production running. Specific categories that must be considered include stock of finished goods in the warehouse, spareparts inventory, inventory-in-transit, and blocked inventory that may be held for sales, QC, and testing.
Building logistics and supply chain transparency Begin by determining components that are critical for operations. Also, have a clear idea of the components that are sourced from high-risk areas and lack ready substitutes. Supply chain risks related to these commodities can then be analysed to assess the risk of interruption from suppliers of tier-two and onward. Manufacturing companies must engage with their key suppliers across tiers in an effort to form an agreement to monitor lead times and inventory levels and establish an effective recovery plan.
Evaluating realistic end-consumer demands A crisis such as the existing COVID-19 may cause an exponential increase or decrease in end-customer demand, making it increasingly difficult to gauge the fluctuations in demand harder. Evaluating the underlying uncertainties in forecasts during short-term and medium-term demand planning is essential. Additionally, direct-to-consumer communication channels, market insights, and internal and external databases can prove to be invaluable sources of information in assessing the current state of demand among the customers’. To prepare better for supply chain and logistics challenges related to the surging demand, manufacturers can consider integrating market intelligence into productspecific demand forecasting models, use advanced statistical forecasting tools to generate a realistic forecast for base demand, and look into dynamic forecast monitoring to react quickly to inaccuracies.
Strengthening security and networks A shift to remote offices requires robust internet, network and software security and failover. All are critical areas that historically have been overlooked in crisis recovery
plans, which have tended to focus on data center hardware and software. The entire internal and external network topology should be documented in an appendix in a company’s disaster recovery plan. This master schematic can be used by personnel in time of a disaster to assist with rerouting and reconfiguration of communications. It should also be noted that failure to keep the internal and external network schematics updated is one of the major fail points. The crisis recovery plan network schematics should be updated every time a new network is added, or a network revision occurs.
Working with vendors There is one final and critical point about crisis recovery and business continuation: Any company must have the cooperation of its vendors in any crisis recovery circumstance. Before a company signs with a vendor for any type of product or service, the vendor should be vetted for its disaster recovery plan. Does it have one? How often is the plan tested? Is the plan certified by an outside auditor or agency? If the company is using a cloud services vendor, it should also insist that an annual disaster test be conducted for the company’s applications hosted by the vendor. If a vendor is reluctant to meet these criteria, the company probably needs to be best served by another vendor.
What’s inside Chapter II? After four months of mandatory global shutdown, the supply chain and logistics sector is resuming, albeit slowly, amid the pandemic with limited resources/manpower, but most importantly without compromising on the safety aspects, to what has been evident. Navigating the uncertainties have called for a sharp focus on people, liquidity, operational risks, and contingencies while keeping sight of the bigger picture – strategy, risk, and resilience. With information changing daily (even hourly), companies are recalibrating their responses – and potentially reframing their thinking about how the COVID-19 crisis is impacting the business – as conditions keep changing. Experts say the pandemic didn’t let them fall apart, rather accelerated their innovation opportunities. The increased use of online services during the COVID-19 pandemic has accentuated technology and connectivity disparities, as telework is not an option for employees without broadband. Operators in developed
august 2020 | 9
cover story and developing countries suspended data limits and boosted data capacity during the pandemic, and many governments issued additional wireless spectrum to further increase capacity. Overall, the crisis is further underscoring the importance of services that enable online supply, such as telecommunications and computer services, as well as the broader infrastructural role of financial, transport, distribution and logistics services in facilitating merchandise trade and economic growth. Services sectors, and the creation of conditions conducive to trade in services is enabling companies for a gradual recovery from the economic slowdown. However, managing cash flow continues to be a major issue every business face. Today’s new reality of uncertainty urges business leaders to harness a critical tool to help mitigate risk in this area: scenario analysis, or mapping. Planning ahead and forecasting various outcomes from the effects of COVID-19 is giving businesses many advantages – they can take actions and recognise their impacts; they can estimate cash flow backed by data; and management can ensure the business is appropriately staffed to meet demand. This kind of an integrated approach is casting a wide net over many enterprises and buoys faith among customers that their business is well prepared to face the roadblocks ahead. Logistics service providers are driving transparency by assessing “what-if” scenarios with customers to understand planned volume and strategic needs. Advanced capacity bookings for air cargo is now helping mitigate supply risks for customers on emergency shipments. Freight forwarders and small and medium-sized freight operators are emphasising on building digital capabilities to evaluate alternate route-to-market models and address potential operational gaps. The crisis also led to a greater focus on online supply in sectors such as retail, health, education, telecommunications and audiovisual services. Suppliers are accelerating efforts to expand their online operations and consumers are adopting new habits that may contribute to a long-term shift towards online services. In the future, increased supply of services through digital networks could increase trade through cross-border. Leaders Leading Logistics Chapter II essentially brings forth unanimous viewpoints of global executives from the logistics and allied industry sectors- air cargo, maritime, delivery and distribution, and warehousing. In the more than a dozen interviews in Chapter II, experts have focussed on utilising this crucial time on moving towards ‘Digitalisation,’ and hundred per cent installation of new advanced technologies at work front. 10 |
august 2020
Logistics brands are increasingly going hyper local for the faster delivery of goods. For small sellers who wish to take their business online, logistics aggregators prove to be a boon – assisting them with easily navigable tec h- e n abled tools to help them fulf ill local dema nd wh i l s t c o n n e c t i n g with their customers. Logistics aggregators are striving to streamline orders and ensure a friction-less post-order experience for every small business by automating the fulfilment and warehousing services. In the face of these unprecedented challenges, MSMEs that have traditionally served local Indian markets are offering the best prospects of minimising supply chain disruptions with their ability to provide on-ground support to communities of people through low-cost innovations. Such sector-specific MSME partnerships will enable low-cost innovations, create horizontal equity in the economy and ensure that outcomes of economic recovery generate employment opportunities at the bottom of the pyramid. Today, the need for medical devices, pharmaceutical goods distribution and associated value-added services is seen to be rising among government and healthcare institutions across the region. This is requiring pharma/healthcare contract logistics service providers to work closely with their customers to guard against supply chain disruptions, with increased inventory accuracy across the distribution network. This, in turn, is presenting opportunities for logistics companies to utilise on-demand warehousing with the outsourced workforce for value addition and order fulfilment processes to overcome in-house labor shortages and storage space constraints near the major consumption centers.
W
hat’s suggested for businesses post-COVID?
Asia Pacific is expected to have the largest logistics market size as the region has taken stringent and quite early measures to contain the virus outspread. China has almost recovered from the COVID-19 pandemic faster than any other country. Only some provinces of the country were brought under lockdown after the second wave of COVID-19, but now they have returned to normalcy. Industries that relied heavily on the Chinese supply base for intermediate and finished products, with lean and just-intime inventory models, are now shifting their production logistics using near-shoring by increasing inventories to warehouses in their domestic markets. The World Health Organisation has also appreciated India’s control over the spread of the pandemic. This has allowed
cover story the logistics and supply chain companies to meet consumer demands during the pandemic situation. The supply of vital products in Singapore, South Korea, and Japan have also regained normalcy. Thus, Asia Pacific region is expected to show positive signs in the near future as the supply chain industry recovers gradually. Still companies have to continue the mammoth task of protecting their people and productivity in times of the ongoing crisis – and according to a PwC Covid-19 CFO Pulse Survey, 45 per cent of Chief Financial Officers (CFOs) anticipate that their companies will see productivity loss. As we define new practices around ways of working, the question remains: How to ensure a successful return of the workforce and to maintain business continuity throughout any crisis? How do you develop and roll out the right training to support increased employee productivity? The answer lies in upskilling workforces at scale by putting the right tools and procedures in place. A 2019 Global CEO survey observed that 79 per cent of business leaders believe that a lack of skills is threatening the future growth of their organisation. Upskilling and automation have long been discussed as C-level imperatives, but the current environment is only accelerating the demand for digital maturity. The need for automation is driven by not only efficiency, but also resiliency. Though most efforts around transformation and automation have been driven from an enterprise-led perspective, a centralised effort alone cannot achieve scale. Instead, enterprises should focus on enabling infrastructure that allows the entire
organisation to play a role. If a finance or operations professional sees an opportunity to make things more efficient and has knowledge of the digital tools available to help automate it, that’s half the battle. And, when you can help your workforce learn automation technology, this opens the doors for citizenled innovation, where employees surface the areas that can become more efficient, pinpoint to processes that need optimisation, and embrace the opportunity to reinvent their work.
P
umping up citizen-led innovation prospects
To help jumpstart citizen-led innovation, it’s important for businesses to leverage free tools that are already available. This includes Digital Fitness, a mobile app that assesses one’s digital acumen and enables an individual to put together a development plan to increase his or her digital abilities. There are also on-demand automation courses available online today. Whether people are interested in learning basic automation concepts or want to earn a professional certification, these free, extensive curriculums will enable them to get them up to speed. Once a group of employees had started building automation literacy, it’s important to then involve them in bottoms-up ideation, from leveraging hackathons to running internal competitions to generate ideas around what can and should be automated within an organisation. There are also collaborative tools that expose more people within an organisation to the possibilities of automation and how it can help them in their work.
august 2020 | 11
rubal jain
We can use this time to step back, listen and learn from others in the ecosystem to determine how we can utilise more inclusive and supportive policies and technologies and not go back to the mess we had before this pause. This would mean designing, experimenting and identifying actions now that will improve our resilience to future shocks. Rubal Jain, managing director, Safexpress in an exclusive conversation with Upamanyu Borah, evaluates more on this rare opportunity of time for governments and companies to put in the necessary planning work to be better able to manage temporary disruptions as well as sustain prolonged interruptions, and, how they are on their way back to synchronisation with sophisticated ongoing scenario modelling to build a shock-resistant supply chain.
W
hat you consider as the top three challenges the industry is currently facing? Like every other industry, logistics too is confronting tremendous c ha l lenges i n present times – driven by
Companies must use this time to break from the past inertia tec h i n novat ions, changing consumer expectations and stringent regulations, making it a very testing and watchful time for us. Some of those include: 12 |
august 2020
Transportation roadblocks Road blockages on account of curfews, rallies, processions, constructions, natural calamities, poor road connectivity and quality, traffic congestions, multiple checkpoints and toll stations, lastmile challenges including no-entry, one-way entry restrictions, congested cities and narrow lanes are issues where logistics companies lose out on a lot of time and money. Shortage of manpower The lockdown has left a majority of the workforce confined to their homes except for essential workers. Even as lockdown statutes are being lifted, the government has announced that businesses can operate only with half or less than half of the workforce. Particularly for logistics players, limited manpower equates to deliveries unfulfilled owing to shortage or nonavailability of delivery executives. Governance policies and bottlenecks With compliance mandates being tightened even more, Indian logistics companies are facing the brunt of increased regulations from multiple regulatory and policy-making bodies resulting in lack of seamless movement of goods across modes.
How do we ensure that key personnel are protected and available and that the network can continue to run during the extended periods of lockdown? While many companies are still figuring out ways to sail through the COVID-19 crisis, some had already planned in advance and were prepared internally by training employees to be able to handle the situation better. Above all, companies must use this time to break from the past inertia by overcoming suboptimal old habits and systems. That kind of change will require transformational thinking rooted in facts. Ultimately, the reinvention will result in something that companies have always wanted – a safe environment where people can closely work and collaborate with each other to achieve the objectives of their organisations. Safexpress have taken all the necessary precautions well in time. When other service providers had completely shut their operations, forcing their workforce to migrate to their villages and hometown, Safexpress continued functioning without any halt and running its
entire network in full strength. We continue to pay our associated members and the community on time, despite all odds and challenges posed by the impact of COVID-19 pandemic. Throughout these volatile times, Safexpress has been maintaining the safety of its residential staff at the hubs – their security and housekeeping of facilities, carrying out a morale boost, as well as retaining the custodianship of customers’ consignments. Our strong digitalised cloud-based platform has made work from home easier as well as enabled e-payments and ebillings. Quick decision making, constant connection through internal and external communications and swift actions has really changed the current adversity into an opportunity for Safexpress.
What are the key areas in which technology has had a deep impact on the way Safexpress works and has it helped drive your operations amid the ongoing scenario? Data and analytics have pushed Safexpress to optimise network for the fastest transit time. We’ve leveraged IoT and analytics to significantly speed up delivery operations, reduce manual errors and bring down operation costs. We have a strong innovation team that is driving faster technology rollouts to benefit our customers and continuously improving services to our customers at all times. We provide real-time capturing, tracking and tracing of the consignments’ information. Cloud is a game-changer for emerging technologies like AI, blockchain, chatbots and IoT, especially in the areas of transportation and warehouse management. Safexpress, has a steady road map focussed on five pillars of Cloud, Analytics, Mobile, Social and Security, and has been building tangible business accelerators to integrate solutions that have given it a competitive advantage in the emerging logistics sector.
How have you leveraged data and information to improve delivery efficiencies? Safexpress have digitised its entire shipment process and integrated it with a robust ERP solution, bringing down cost, increasing time efficiency and enhancing last-mile visibility. Today, the company’s larger hubs are equipped with Wi-Fi barcode scanners and the entire loading and unloading is done through package level scanning which is interlinked to the in-house developed mobile app platform called PROSCAN. With extensive digitisation, today, everyone- from the hub manager to the CEO, gets clear visibility of the supply chain, and the company leverage insights on types of shipment, time taken for transit, misrouted packets, etc. And because the GPS can also be tracked by customers on the company’s website and mobile app portals, the delivery boy cannot falsely claim to say that the premises were closed without even going there. Safexpress has set up an innovation lab where its technologists have joined forces with leading technology players like Cisco, Google, Amazon and IBM
Our strong digitalised cloud-based platform has made work from home easier as well as enabled e-payments and e-billings. Quick decision making, constant connection through internal and external communications and swift actions has really changed the current adversity into an opportunity for Safexpress.
and utilising artificial intelligence (AI) and machine learning (ML) solutions for some interesting use cases ranging from weather data to image recognition in supply chains and logistics. Besides, Safexpress is the only company in the industry that has integrated with National Informatics Centre (NIC) for E-waybill automation and 100 per cent technology innovation and implementation at all levels such as booking, transhipment, and delivery. We pride ourselves in being the only organisation scanning every package at every point in the network, enabling capturing of real-time information at all stages of movement and completing 100 per cent deliveries through last-mile tablets.
E-commerce changing the way companies approach logistics/ distribution network strategy and the way shippers approach carrier relationships. As such, how can one be more prepared? The rapid growth of e-commerce is driving deep changes in the area of logistics, from tightening up trucking capacity to raising the importance of last-mile delivery processes. To counter that, logistics companies now need to leverage diverse systems and figure out new ways of thinking in an effort to improve carrier partnerships and increase speed and efficiency. For businesses in the e-commerce space, having a strong presence with highly scalable, available, agile and resilient supply chain operations will no longer be an option. It’s a matter of businesssustainability now more than ever and brands that are embracing advanced digital tools will be the ones to come out strong when normalcy is restored. The current pandemic has not only changed how people buy products online but also what they buy, and this change is here to stay. The impact of 300 per cent surge in demand for online orders in the country is not going to disappear any time soon.
august 2020 | 13
Will the cold chain continue to be a vibrant sector or has to remodel many of its aspects after the jolts of the pandemic? The cold chain has the potential to continue to be a vibrant sector given its importance in the healthcare system for maintaining the quality of vaccines or temperature-sensitive medicines as well as swiftly and carefully taking care of food supplies. COVID-19 has had adverse effects on the cold chain sector just in a few months, forcing them to rethink and redirect their strategies, the sooner the better. Though the panic buying in these last few months has fuelled the demand but has also emptied the shelves of most of the cold chain holders. They might have to remodel many of their aspects, in terms of efficient service personnel, better utilisation of the pack-houses to keep the perishables safe, and faster reefer transportation to avoid degradation and wastage, due to the short-term disruption based on the volume of the ever-increasing demand. What’s the difference you have made to transport and warehousing? Any new initiatives planned to bolster your services in the sector in the wake of the crisis? As a 3PL, warehousing is one of the most important aspects of Safexpress. Our engagement in warehousing begins from the planning stage, which includes identification of strategic location. We further work with our customers closely to design their rack layout as well as to decide the optimal stocking levels. Our WMS record all events and activities in the receipt, handling and storage of products and orders in the warehouse or distribution center, including the location of inventory for dedicated supply chain-ready solutions. What differentiates us from other 3PL companies in India is our highly configurable lot handling and shelf life, for FMCG and food items. Each piece is scanned for tracking movement of inventory within and between warehouses. We have in place highly configurable rules and strategies for put-away, replenishment, picking, kitting, and other value-added services. Our WMS solution has the ability to integrate with customer’s ERP systems – orders from their order management 14 |
august 2020
system can seamlessly flow into the WMS for processing, while stock and updates can flow back to amend the inventory in the customer’s materials management module. The solution alerts immediately if any item is lying idle or happens to be in the wrong aisle and sends a real-time alert indicating the item’s actual destination. Transparency and real-time delivery status updates are captured by the company’s systems through booking and delivery app which help optimise delivery routes to maximise delivery in minimum time and provide real-time specific information about vehicle trips and stoppages, vehicle load status and capacity packages to be managed, among other things. The warehousing sector has emerged as one of the most resilient sectors in the wake of the crisis. Post-pandemic, the sector is set to emerge as a promising opportunity, stronger and better. To bolster the warehousing sector, Safexpress has taken a series of gradual changes considering the ongoing situation.
Safexpress is the only supply chain and logistics company in India with such a dense network and fastest deliveries. We’ve seen smaller grocery stores pick up where large chain grocers have failed by supplying pantry staples. How are they adapting to the changes bought by the pandemic situation? To meet the rising demand for home deliveries, small businesses have optimised key assets such as staff and vehicle capacity and leveraged crowd sourcing technologies to optimise staff capacity by onboarding temporary delivery personnel from across disparate delivery provider ecosystems. As ‘social distancing’ becomes the norm of the day, smaller grocery stores and retailers have started providing customers with contactless digital payments and deliveries. OTP based transactions or even payments by touch cards are among the new norm. However, that said, retailers have started leaving certain key aspects of decision making to their workers in order to respond quickly to immediate supply
chain challenges as they have first-hand knowledge about ground-level activities.
Is this the right time for modal shift from road to rail? Will it also lead to more automation coming into the entire supply chain for handling of cargo in a multimodal network? Shifting from roadways to railways will put a huge pressure on the latter, as their cargo volume will increase manifold. Automation in the entire supply chain will not be a farfetched dream once we adapt to a multimodal network utilising both roads and rails and not limit our deliveries only to one mode of transport. Affording implementation of various measures such as operation of heavier and longer trains, higher average speed and more wagon space, etc. though achievable, will take its own time and cannot be implemented overnight. Undoubtedly, this will bring in increased capacity, better planning and faster reach at some points, but this has to go through a series of carefully sought out plan and thinking. Can you already draw conclusions for 2020? We are anticipating a rebound in volumes and a subsequent pick-up in economic activity over the next few months as the unlock phase continues. We’ve seen demand come back to 40 per cent levels in the first weeks of July, and we are expecting further improvement in the coming days. We are hopeful that there will be significant growth in volumes. October to December will be far better on a comparative basis as the entire supply chain ecosystem unlocks now. Do you see yourself at the core of a new, emerging ecosystem that’s built for the ‘next normal’? Safexpress has established its unparalleled presence pan-India by providing express distribution to every single pin code of the country within minimum transit time, enabled through its worldclass network that operates on a hub and spoke model, state-of-the-art infrastructure, and unique capabilities that get continuously expanded, upgraded and improvised to align with the customers’ futuristic requirements. In fact, Safexpress is the only supply chain and logistics company in India with such a dense network and fastest deliveries.
State of the Art Cold Storage for Food & Pharmaceutical products in Mumbai and Bangalore Total Storage of 26000 pallets in Mumbai Total Storage of 5700 pallets Bangalore Temperature range of +25°C to -25°C 24x7 Operational Hours VAS Facility of Processing, Repacking, Labeling, Sorting, Kitting, etc Custom Bonded Area Operated reach trucks, forklifts & hand pallet movers
Temperature Control Handling Area
IT Infra with VMS, FIFO control H Barcoding systems Freezer, Chiller & Ambient Chambers Inflatable Dock Shelters with Dock Levelers 100% Power back-up with multi generators Fire-fighting & fire prevention systems LED eco-friendly lighting ISO 22000:2005 and HACCP certified Refer Vans to support distribution GDP Certified
Freezer/Chiller Chamber
Bangalore Cold Store
JWL CoLd Store Pvt. Ltd. Mumbai: 15-23, National Highway 4B, Panvel-JNPT Highway, Village Padeghar, Panvel, Maharashtra-410206 Tel: +91 22 50500000, +91 86557 87200 | Fax: +91 22 50500199 Email: raaj@jwllogic.com | kruti@jwllogic.com | vaman@jwllogic.com
Bangalore: 16/3 Village Hyadalu, Kasaba Hobli, Bengaluru-562123 Tel: +91 22 50500000,+91 86557 87200 | Fax: +91 22 50500199 Email: raaj@jwllogic.com | vaman@jwllogic.com | kruti@jwllogic.com
www.jwllogic.com
Kruti Jobanputra
Indian logistics industry drivers geared up to support manufacturing
H
ow we may best summarise the current state of the Indian logistics and supply chain industry amidst COVID-19. How is the industry reacting and responding to the pandemic? The logistics industry is the backbone of the country; without which the whole nation would collapse. We are proud to say that we belong to an industry wherein from day one of the lockdown, despite all possible difficulties and unimagined circumstances, the logistics industry is providing its service to the nation in all possible forms. Apart from the medical fraternity’s service, logistics industry is the only one which is working at 85-90 per cent capacity. Morally, what are your mantra/strategies to sail through this difficult hour? O u r ma nt ra i s Patience and Perseverance. JWC Group’s Chairman, in other words, my father, has always been the guiding force for us. He has always t aug ht us t hat Pat ience is t he abi l it y to w it hstand something difficult without a loss of composure, a nd Pe r s eve rance is the de16 |
august 2020
We have poured huge investments into land, building, machinery, warehouses, transportation and technology to create world class state-of-the-art facilities, processes and infrastructure to effectively and adequately serve our customers, says Kruti Jobanputra, Director, JWC Logistics Parks. In an interaction with Ritika Arora Bhola, the woman leader extends her analysis and suggestions on the current state of the country’s logistics sector, and informs how they are meeting the requirements of customers and priorities of employees in a complex environment. termination to stick to something and stay on course in spite of obstacles. We have followed the same principles
In the wake of the outbreak, how are you ensuring smooth coordination between suppliers, transporters and other departments? As a company, we have always believed in providing customised and personalised logistics solutions to our customers. Some might call this a tactic or strategy but we call it a personal touch and that is what makes us different from others. May we expect to see more shippers moving freight from ocean to air this year? Today, it will not be fair to categorise the logistics industry into modes of Air/Sea/ Road/Rail; it completely depends on
Under Ease of Doing Business moto, government should ease the list of permissions required for a new company to setup business. It will encourage more companies to start over and revive.
Time/Money/Value. So, depending on this, cargo will be moved.
There are various problems that every company faces related to its logistics and supply chain process. Can you brief on the ones that your company is facing since the last few months and how have you managed to overcome them? The biggest problem that every other organisation in the logistic industry has been facing is manpower shortage. Most of the logistical hubs have migrant workers/labours/drivers. In our case, we decided to create a hygienic and safe place for our team, for workers and drivers to stay, which helped us give a surety to them. And because of this, we were able to retain 30 per cent of our team who were ready to service our customers. We surely were under pressure but we were constantly in touch with our people. Within a span of just one month, we were able to bring back our people from their villages safe and sound through our own business. Today, we have more than 300 people staying in our premises, and working in a safe and secure environment. How has logistics, warehousing and supply chain operations changed as a result of coronavirus? The logistic industry has not changed much, because ‘work from home’ can’t be practiced here. In fact, in these coronavirus-induced circumstances, many logistic business especially B2B, e-commerce and retail business has flourished. Tell us about your embracement of technology in executing operations. Our group has been implementing and practicing digitally driven operations for a very long time now. We have developed our own customised software for CFS and transport operations and deployed the best warehouse management software of Microsoft for our warehousing and distribution operations. What can Indian government do more to facilitate the smoother storage and flow of cargo? Your suggestions? Government has been taking prudent steps to support and facilitate industries
including logistics to technologically smoother the flow of cargo by enabling most of the paperwork to be conducted online. While we truly appreciate these measures, we have a few suggestions: Government should provide economical benefits to the industry by waiving off taxes for the next one year. Government should compensate the companies who give full salaries to the staff and workers during the lockdown situation. This will help companies to recover some of the losses. Under Ease of Doing Business moto, government should ease the list of permissions required for a new company to setup business. It will encourage more companies to start over and revive.
We have always believed in providing customised and personalised logistics solutions to our customers. Some might call this a tactic or strategy but we call it a personal touch and that is what makes us different from others. Post-lockdown, how long would you estimate it would take for our industry to get back to business as usual? What will be the growth drivers? The industry will start recovering by the last quarter of this year, which we all surely hope. Although, sector experts believe that the situation will not improve before 2021. How can the logistics ecosystem players need to gear up in supporting India’s dream of becoming a manufacturing hub? I believe, the logistics industry drivers are already geared up to support manufacturing, and we are always ahead of time. Like us, most players in the logistics industry keep pace with time and competition. The coronavirus outbreak has adversely affected several businesses, but logistics is expected to bounce back strongly in the post-
COVID-19 world. Do you feel logistics sector can offer a glimmer of hope to the economy? Yes, for sure. Indian logistics industry contributes largely to its GDP. The logistics industry will surely bounce back faster like the medical industry; we have been giving our best and constantly working throughout the corona situation. According to experts, multimodal logistics has a very bright future in India. Do you agree? What kind of investment goes into infrastructure building at JWC? We have poured huge investments into land, building, machinery, warehouses, transportation and technology to create world class state-of-the-art facilities, processes and infrastructure to effectively and adequately serve our customers. Any expansion plans? Yes, we have big plans to expand in Navi Mumbai where we presently are situated; along with many other cities in our list. Please share with us your journey in this industry. How hard has it been to leave a mark in this male dominated industry? My experience in the logistics industry has been a different one. “It’s a man’s world” was the first line I heard just after stepping into the industry. I joined JWC as a trainee working alongside men. Eventually, I got to learn and became familiar with this magnificent sunshine industry. Initially, it was not easy for people to accept me, especially as their boss. I was treated only as boss daughter for the first few years in office; after which I built determination to create my own place and started working towards it. I got to learn about the different culture, about the business. Over the time, I developed the interest and worked across departments like operations, admin, HR, finance. Not only did I learn everything but also tried to bring in new ideas/techniques and methods which helped the company to improve and grow. After that, there was no looking back. Today, after having gained a small experience of over 14 years, I am still keen to learn more new things and enjoy new experiences every day. august 2020 | 17
Facing regulatory and social pressure about sustainability, concerns about cyber security, and an increasingly difficult retail market, many companies have been slow to catch up with the new circumstances of supply chain management. Predictive analytics presents tangible solutions to so many of these modern woes. Aditya Shah, Executive Director, V-Trans (India) informs Upamanyu Borah, how their functions have increasingly moved from being reactive to proactive and predictive, in the wake of the crisis, allowing for improving operational productivity and better customer satisfaction.
Aditya Shah
We have built our decisions completely on data-backed predictive models
W
hat is the current state of your transportation and warehousing segments? Both the segments are dependent on the manufacturing and supply of finished goods. As manufacturing and supply chain cycle has started rolling, transportation is also moving and facilitating the same. Besides, inventories that clients couldn’t collect or take due to lockdown and the new load making our transshipments full to the capacity, we are prioritising the inventory based on essential services and critical importance to the clients. 18 |
august 2020
Likewise, warehouses are full with inventory. Because manufacturing activities came to a halt, the inventories remained ideal in the warehouses. However, at present, we see good traction in the warehousing activities. We are now close to 80–85% of our pre-COVID business levels. Given the short-term scenario, we hope to adequately recover by October 20 and be better, going forward.
How efficiently have you been able to assist domestic supply chains and keep cargo moving during the crisis?
V-Trans is predominantly operating in the domestic market only. Our network and infrastructure is penetrated across India and we cover every nook and corner of the country. Similarly, our clientele is from across geographies and industries. As we move both raw materials and finished goods, our role becomes very significant to keep up the economy. In the initial few days, we partly halted and only served emergency services. But soon we started supporting all essential deliveries adhering to government and industry rules and instruc-
tions. In a short time, we made our services functional and available for every logistical and transportation need. In totality, as we have our own fleets, loyal set of ground staff and drivers as well as attached fleets, cargo movement did not experience any hindrance. It was the local lockdown and containment zone which had put the cycle into a lower gear.
What are those aspects of the sector you believe require adequate attention from the government and industry alike? Clear guidelines on movement, controlled fuel prices, and better coordination between the state and Centre on many aspects would prove beneficial to industry and ease existing complexities. Will the cold chain continue to be a vibrant sector or has to remodel many of its aspects after the jolts of the pandemic? For perishable cargo and pharma, cold chain would continue to be a vibrant sector. In this hour of a global outbreak, the wastage of food can prove to be another disaster we can’t afford. This could be minimised with a better prevalence of cold chain market and infrastructure in the country. A robust cold chain infrastructure with effective policy support and implementation strategy can go a long way in unprecedented times such as now. How do you ensure vertical integration with the distribution network, thereby allowing direct control of the market and also customers? We provide end-to-end solution right from express to hard freight to value added services like warehousing which allows customers to have single roof solution. Our central procurement cell has created an ecosystem of vendors and we float the queries to all vendors simultaneously. Hence, the market rates remain within our control supported by the ongoing benchmarks. In the wake of the crisis, what are the top 3 areas in which technology has had a deep impact on the way V-Trans works? Communication– This is one area where technology has come to our aid, especially in the recent times. Decision
making has become faster, thanks to the virtual platforms that made connecting with colleagues and clients possible at any time. Our communication channels have developed better and we remain constantly updated with the information required for problem solving and immediately address our customer’s concerns. Business intelligence and predictive decision making– In the last couple of years, we have built our decisions completely on data-backed predictive models with accuracy of 95% and above. This has really helped us in many areas of network expansion, business development, enhancing service levels, ultimately impacting the bottom line positively. eCargo, our in-house ERP has been the backbone since inception. All the data is hosted there, with intelligence built in to bring efficiency and service enhancement. We have recently upgraded it to a more mobile-friendly version. One can now access the full ERP services on mobile from anywhere; this has also helped us immensely for flawless execution of operational objectives amid the ongoing crisis.
While we continue to further increase our strengths, we also adapt to the emerging trends like lean management, integrated approach, Big Data and automation. There’s an enormous amount of talk around it, but how important is data and information to logistics professionals as they work to improve e-commerce delivery efficiency? Data is extremely critical to any industry and any function. It has often been said ‘Data is new Oil’. Whether it’s in the logistics, e-commerce retail or any other industry, using data is not a choice anymore. The kind of complexities that exist and the very thin margins of error, data is the only way out to plan things well. Besides, predictive analysis gives you more confidence on your business strategy. You can check multiple times in your train and test data at what confidence level and accuracy you want to move ahead.
Specifically, in e-commerce, there are many areas where data helps, be it inventory routing, location optimisation, sentiment analysis, demand and delivery forecasting, predictive modelling, and more.
The carbon footprint of the logistics sector is high, and there is increasing pressure on the sector to be environmentally sustainable. How are you addressing this issue? The industry has always been one of the major contributors to the cause. Although we have innovations like eTrucks which has the power to make substantial impact directly on the issue, however for a country like India, this will take considerable time to be a commercially viable option. Everybody needs to play their part for conserving the environment, and we are proud that our company has been steadily progressing in that direction. Our corporate office which is a ‘green building’ is LEAD certified. Besides, at many places we have done rain harvesting measures. We also abide by electronic waste policy. Most of our trucks comply with latest BS norms. Further, we always use undiluted fuel for our own trucks. We keep a keen focus on health and mental well-being of our drivers and on-ground staff through various trainings and camps, thus encouraging a healthy and happy ecosystem for logistics industry. Going forward, how will emerging trends, structural changes, and new markets redefine your company? We have transitioned from a regional transporter to a pan-India single window logistics solutions provider. We have in the process learned and built new technologies and process. During the journey, we have also created some strength that makes our company unique – on the national level the scale that we operate for LTL segment can be compared to none. Our diverse industry base and capabilities to deliver any load in any geography in the country is also noteworthy. While we continue to further increase our strengths, we also adapt to the emerging trends like lean management, integrated approach, Big Data and automation. august 2020 | 19
ritesh s ramakrishnan The need to build a standard model is necessary to ensure levels of portability, interoperability and manageability. It starts with having the best people, then having standardised processes around the globe, to then making customers aware and wanting to grow together. Because the more a company grows with its customers, the more opportunities it can provide. Ritesh S Ramakrishnan, Joint Managing Director, Transworld Group informs Ajeet Kumar, on their quest to digitally transform the industry by incorporating new emerging technologies, as they move forward on their digital journey to change the whole paradigm and climb higher on customer’s value chain.
The idea of standardisation is somewhere linked to technology
C
an you just give us an update on your company’s operations at the moment and what you expect this year? In the very beginning of the year, our volumes were strong. Just around the time when the virus started to spread out of China, considering our wide geographical spread, we felt the fresh jolts of the pandemic because we are close to the epicenter. The direct impact of the pandemic was a huge drop in business and volumes, thanks to the lockdown in other countries. As we have our network in Middle East, India, Southeast Asia and 20 |
august 2020
the US, so it was actually one after the other countries going into lockdown. In that sense, we knew what was coming. Having said that, the way things looks like at present, I still believe that we have seen the worst and things will start moving up from here. A lot of volumes which we lost early April and during May now seems to be back and slowly moving upwards. If we divide our business, as a vessel owner and operator, we have all of them deployed currently including our bulk carriers and container carriers, as the bulk and chartered container markets are slowly reviving. However, the regu-
lar volumes that we carry cross-border are still bottom down. On the logistics and warehousing front, initially, we faced issues as importers were not able to take the delivery of shipments and that supply chains were slower due to lockdown enforcement in regions. Now, we are seeing a customer confidence turnaround.
Do you already seesigns of recovery on the horizon? I am positive that we have overcome the worst; we can see volumes rising up gradually. But, we keep reminding ourselves that we are still in a state of ‘cau-
tious optimism’, considering what is happening around us…everything possible has been done, and the world keeps fighting through this challenging times. We can only hope that things stabilise soon and we return to better normalcy.
What is the situation at private ports today regarding container movement? Much better in June/July as what it was in April/May. When we were going into the lockdown, the ports, port workers, ship crew, everyone had to turn up to facilitate the flow of essential commodities and EXIM trade. Initially, there was a lot of chaos and confusion at the private and government-led ports. Despite the port sector being considered an essential service and continuing to remain operational during the lockdown, there was been an adverse impact on the cargo at the start of the lockdown. This was on account of several factors like subdued global trade, contraction in domestic industrial activity due to lockdown and logistics bottlenecks impacting evacuation of cargo from the ports, especially by road. Amid a shortage of workers to unload and transport goods, due to the nationwide lockdown, all the country’s ports were choked up. We cannot blame the government for all of that. The crisis was completely unprecedented and nobody knew how to deal with it. So yes, we had challenges previously, but for the overall business, we saw positive improvements in the volumes handled through these ports. Currently, the ports are beginning to ease the backlog of vessels and containers that had congested the premises. Customs has facilitated electronic movement of documentation, is it working well? It is definitely a good move, something that was long overdue. We had multiple issues in the past due to lack of IT-enabled protocols and speed over a given medium. Also there was little impetus to the establishment of such infrastructure from the previous governments. I think shipping and trade were only talked about and nothing much was done. Today, we see a government that has actually come forward and made things easier, in line with the buzzword ‘Ease of Doing Business’.
To support the movement of essential goods and commodities through Customs, the government allowed importers and customs brokers to give electronic out of charge copies of bill of entry and e-Gate Pass from April 15. The latest reform towards paperless customs to a great extent helped tide over difficulties during the COVID-19 pandemic spread by reducing interface or contact with authorities. When you have these kinds of initiatives at place, it becomes evident that the government is trying to do as much as possible to reduce manual work and help tackle the scourge of COVID-19. First and foremost, the industry has to step up, the industry has to realise that they can’t move away from technology which actually make things easier for customers. If we are part of a larger objective, it’s just not about one or two persons or entities, everyone stakeholder has to play their part.
Can you describe your company’s own supply chain contingency plans and how the company has helped clients in times like these? I guess we are lucky here. Before the
Before the COVID situation took over, we were already working on our digital transformation project with Oracle. We were in the midst of going live with the deals, it’s not just one business or one vertical but across the entire supply chain.
COVID situation took over, we were already working on our digital transformation project with Oracle. We were in the midst of going live with the deals. It’s not just one business or one vertical but across the entire supply chain, through all the products and services that we offer like NVOCC, fleet management, shipping, warehousing, cold chain, etc. From day one, we had zero downturn; customers had all the required information as we were working like any normal day. Our digital initiatives such as online freight portal, shipment tracking on mobile as well as portal, online Bill of Lading (BL), accepting online payments, updating shipments status on WhatsApp, digital signatures in BL invoices, online quotes with realtime update of tariffs, have eliminated manual intervention and introduced far advanced operational efficiencies. Combining Oracle back-end and our own technology and expertise, we have been able to implement the best practices. We are trying to be vocal as possible and this has allowed us to empower our employees to deliver heightened service satisfaction even during the crisis. We have people working round the clock 24x7, whether at the front lines or at the back-end. At every single point, we have been able to effectively communicate and create value for our customers and vendors. Be it a third party agency or a vessel, we handled every source, every asset diligently. The entire team stepped up together to support the business.
Could you give us a practical example of a hurdle which the industry is facing due to lack of standardisation? The entire industry had to understand
august 2020 | 21
the notion of excelling together. In general, the idea of standardisation is somewhere linked to technology. Simply put, if you are more standardised, you are able to bring forth improved performance, collaborate and contribute to standard procedures of operating. Now more than ever, reliance on legacy systems is one of the biggest hurdles in the digital transformation journey. Essentially, the industry has to realise that the way forward is standardisation and that can only happen by embracing IT-enabled progression, helping one’s businesses flourish faster and smoother. The advent of IoT and the cloud have certainly altered the way people work, creating new workflows. Today, fortunately, we see lot of changes in the country, and logistics and supply chain is no exception.
What are the major markets you cater to and which specific domains you operate within? Any new business vertical you look to start with? We are an Indian origin company, although we have made a home in the Middle East. 60 per cent of our business originates from India. So our backbone and backyard is in India where we deliver to around 3,000 pin codes. Here, in the Middle East, we have presence in 30 different cities. Basically, we cover different industry sectors, from food and beverage, chemical, and retail, and this contributes to the overall business. On the shipping side, we own and operate largely container ships under Transworld Feeders and Shreyas Shipping and Logistics. We also have fleet of multiple bulk carriers and multipurpose ships. We operate them as chartered ships under Transworld Bulk Carriers. As far as our multimodal logistics business is concerned, the largest part of it is regional coastal under Avana Logistek, and international liner business under Avana Global. Another vertical where we are advancing since a decade is supply chain and 3PL business. We are involved in air and sea transportation, trucking, warehousing, cold chain, Customs clearances, documentation, end-to-end logistics, etc. The most recent business vertical on which we are excessively focussing since the last couple of years is agencies for international foreign operators. In India, we are represent lot of vessel owners, 22 |
august 2020
technical management, crew management, bulk handling, etc.
At Transworld, do you involve any external partners like digital innovators or startups to help you implement the new standards and bring in innovation? For us as an organisation, involving external partners has a fairly relative importance across the supply chain of our operations. It is something that we do as an initiative, not only for us but for our customers, vendors, partners and for the entire ecosystem that rely on us. Our digital transformation project ‘Innovation in Motion’ is driven by Oracle India and KPIT Technologies. Oracle has provided the cloud-based technology platform and KPIT has been the implementation partner. Innovation requires a rigorous process. It starts by generating ideas, but the hard work is in prioritising, categorising, gathering data, testing and refactoring. For example, before we approached Oracle, we had discussions with several stakeholders, software providers, industry people and our customers. Personally, I had multiple
As long as the tools are available, the back-end is secure, robust and safe; the rest of it can be built upon. chats with associate and colleagues I have known and shared a close connection for years and years. Most significantly, we had an entire process to evaluate, so it took us around 15 months to come up with the final assessment. Today, we offer the kind of platform that is highly customer centric. We have a fairly strong and young team and that also helps when it comes to reaching out to the industry. Of course, there’s no point in doing something intrinsically dull just for the sake of it. Do something with all your heart to make the journey meaningful. As long as the tools are available, the back-end is secure, robust and safe; the rest of it can be built upon. So there were plenty of options we had to watch out and decide carefully. Just to mention here, for two large
chemical company deals in the Middle East and India, we had actually gone there and sat with them to understand their end-to-end requirements. We have everything digitalised so much and to the extent that even today their teams are using our portal and the tools seamlessly for increased assistance. As such, technology for us is not something that we should have, but something that should look good. However, I feel it’s a must as it is something that helps us drive business and cement relationships with our customers. We have taken that approach and that seems to be working for us.
Any expansion plans, new initiatives? We have endeavoured on our digital journey two years back. Today, we are almost in the verge of transforming into a fully digital company. We are very much aware of the fact that technologies continue to carve out their role in the global logistics industry, and we do it just as one of them who is in the business of logistics. You will see couple of initiatives rolled out in the next few years. The only objective is to make our customer’s life easier, with offering levels of optimisation throughout their supply chain. Further, we are looking forward to expanding our business more in the US, currently where we are settled with two offices, and in the East Asian region, including China. How have your company values influenced the overall success of the business or its change efforts? We have never compromised on the fundamental values of our business. In essence, our core company values are integrity, transparency, respect, customer centrality, excellence, and social & environmental responsibility that drives our business. I believe this has enabled us to serve better as well as survive through volatile situations. These values and morals will continue to hold us and our business in the years to come. As an integrated and holistic global shipping and logistics conglomerate, professionalism remains very largely intact in our business proposition and service delivery. Most importantly, we have a fantastic team of professionals who help steer the organisation in our consistent pursuit of operational excellence.
Dr Xavier Britto “Crisis is an opportunity riding on a dangerous wind.” In order to sail through this critical period as well as maintain innovation during these crisis conditions, companies have to be able to quickly setup up digitally-driven platforms and start harnessing the wisdom of their employees to tackle the headwinds. Dr Xavier Britto, Chairman, Kerry Indev Logistics in an inclusive conversation with Upamanyu Borah, reveals about having the accurate methods and systems in place to collaborate around ideas and refine solutions to help safeguard the enterprise and also get ahead of the curve with embracing evolving market trends and reprioritisations.
Continuous transformation in this unpredictable VUCA world will help us spring forward
W
hat immediate effects did the coronavirus outbreak have on your operations and portfolio? Initially, on-time clearances of imported commodities were affected with ports and terminals getting congested, causing complete supply chain disruption. The different inter-state policies also caused hiccups with detention at the state borders leading to longer turnaround time. Our teams including our ground staff across all divisions worked 24x7, maintaining open lines of communication vertically and horizontally across our organisation, both internal and external with timely updates and consistent support to our clients which became our lifeline. 24 |
august 2020
Can you explain in detail about Kerry Indev’s change in strategies in project execution? How is your ground workforce helping ramp up your projects? The pandemic crisis removed all vertical and horizontal barriers of internal/external communication which required teamwork across divisions and locations to experiment, adapt, evolve and have open lines of interaction constantly moving onward amidst the crisis, building pliability on the way. Execution-AsLearning and the Power of Teaming were few of the adaptive solutions undertaken successfully. Our ground workforce’s biggest strengths were commitment to their roles and responsibilities as well as steady adaptability. As and when a new project
arises, for example, movement for Air Freight Station (AFS), all personnel responsible for the operations and communication flow were present at the scene ensuring smooth operations and absolute coordination, despite being day or night. During the initial outbreak of the pandemic, there was heavy storage movement as a step to decongest port terminals for which our ICD and CFS teams including the management as well as the ground workforce worked overnight to ensure successful completion of the operations.
What according to you has been the biggest shift in the way companies have been operating since the lockdown? The biggest paradigm shift has been the ability of employees to work from home and the feasibility of successively coordinating and communicating internally to the organisation as well as externally to the stakeholders, which was thought to be not possible pre-COVID-19. The pandemic has also expanded the technological ability to reach across to various stakeholders through video con-
ferencing which will continue offsetting the need to travel for business which was a surprising positive outcome.
What is your outlook on the industry’s overall improvement in the coming quarters? Restarting of the processes with clear emphasis on maximisation of capabilities, optimal capacity utilisation and appropriate allocation of resources is the present scenario. The next quarters are expected to be a definite period for gaining a steady drive forward, with the industry reacting to the demand. The logistics and warehousing sector is projected to be one of the first sectors to recover from the pandemic. By the fourth quarter of FY20, we also expect to generate revenues in boosted markets – the current market data reflects the same. Multi-Storey warehousing will gain momentum with more retailers and ecommerce players choosing commercial spaces within the city to cater to their consumers, as peripheral warehouses proved their faults during the pandemic. Pharmaceuticals are a major component of India’s trade expansion strategy, particularly with the country’s stated objective of a wider diversification of the export profile in terms of both products as well as destinations. Where does the life sciences business fit in the overall Kerry Indev Express’ operations? How have been the results? Pharmaceuticals forms one of the major portfolios that is handled by Kerry Indev where our customised services through a dedicated central team, encompasses international freight forwarding, global trade operations, customs clearances, obtaining the required statutory compliances, adhering to safety regulations and safe transit. We have built customer specific cold storage and temperature-controlled solutions in our own warehousing space including the FTWZ, exclusively offering warehousing & distribution services with world class infrastructure that meets stringent safety regulations with humidity and temperature control options. Our AFS is also an advantage for the pharmaceutical sector, for speedy clearance of the essentials without any delay,
with storage options available within the same premises.
At present, what portion of Kerry Indev Express is dedicated to the textile and apparel value chain? How has been the contribution of SMEs to the fashion logistics industry as compared to the high profile fashion giants? Textile and Apparel sector is one of the most diverse portfolios handled under the roof of Kerry Indev. We handle a huge volume of business, ranging from traditional textile clients like Gokaldas to global retailers across pan-India locations. Our vast network of warehouses and distribution centres are offered to our customers, with packaging, cash-ondelivery features for e-commerce retail also being supported by us.
The next quarters are expected to be a definite period for gaining a steady drive forward, with the industry reacting to the demand. There is a vast network of Small and Medium Enterprises (SMEs) belonging to the unorganised sector, who are vendors to big fashion giants. However, their lack of awareness of global trends, limited marketing efforts and lack of capital funds inhibit their global and domestic development. The modern sector of the Indian SMEs, which uses latest state-of-the-art technologies, has already developed a niche in establishing sound subcontracting arrangements among large enterprises in India.
With multinational companies deciding to shift production and supply chains into India, meaning that Kerry Indev can benefit from global con-
tracts with big names. How do you believe MNCs penetrating the market can impact your client portfolio? With the advantage of our strategic alliance with Kerry, we will be able to cater to the global requirements of MNCs where cross selling of our services, domestic and international as well as penetration of the overseas market as single point LSP for managing the entire supply chain for MNCs will be viable and a favoured solution. From the first-mile connectivity to the last-mile, every point of operational requirement will be satisfied by our global team transforming our overseas presence strategically. As we are already expanding our (3PL) warehousing capacity and exploring new warehousing designs, we will be able to cater to our customers’ demands better. What is the rationale behind Kerry Logistics Network’s investment in India and what is the importance of the affiliate within the strategy of the group? Kerry Logistics, a member of Kuok Group is Asia’s leading premier logistics provider with growing capabilities and ambition to establish global presence especially in the Indian subcontinent. Investing in Indev Logistics, was a step forward to gain a foothold in the fastest growing economy in the world. This is where the strategic partnership of Kerry and Indev Logistics at 50:50 stake became the key game-changer in both our portfolios, becoming mutually conducive and beneficial as we share similar interests and goals. Kerry’s expertise in supply chain management with its extensive global operations and integrated logistics comprising of international freight forwarding, express, seaport management and operations as well as insurance brokerage is benefitting to Indev in our goals to establish our global presence by capitalising on Kerry’s global operations, infrastructure and customers.
august 2020 | 25
As part of our expansion plans aided with Kerry’s experience, Kerry Indev Express (KIE) was launched in 2019 – for exclusive first and last-mile delivery capabilities to serve the growing ecommerce market including express courier services. For expanding our chain of warehouses, and warehousing capacity to 5 million square feet, 4PL presence and developing cold storage facilities across pan-India as well as building an information technology backbone, Kerry’s affiliation and investment is playing a key role in achieving our goals. Indev has become a key member of Kerry Logistics on the Global board with our own representation for the Asian markets, after rebranding as Kerry Indev Logistics. Kerry Indev Logistics is a growing leader in project shipments and break bulk via association with PCL Shipping and PACC Line which is a part of the Kuok Group of Companies.
What are the ground breaking initiatives, logistics management methods and technology the company has adopted? As part of our expansion plan and with sharp focus on becoming a top notch leader in the warehousing segment, we offer top of-the-line advanced infrastructural facilities – CFS, ICDs, custom bonded warehouse, 3PL warehouse, Free Trade Warehousing Zone – constituting an aggregate of 3 million square feet. Kerry Indev is listed as one of the largest occupiers in the Chennai Warehousing Market in the Sriperumbudur - Oragadam cluster according to the India Warehousing Market Report 2020. Our ICD facilities are equipped with bonding/debonding warehouse for FCL & LCL EXIM handling and value added services. As part of our automations and digitalisation drive, Timelapse Informatics and Solutions - an IT start-up initiated in 2018, is playing an essential role in developing and upgrading our IT infrastructure across all platforms to make it customer-centric with evolving technology to better suit to changing customer needs; as well as service customers across the globe, especially in logistics management, SCM, accounting and finance. We have established our own transportation fleet, NVOCC with self-owned containers, ably supported by interna26 |
august 2020
tional freight forwarding and customs brokerage services. As envisioned, we instituted India’s first Air Freight Station (AFS) - a monumental step for the entire industry as transporting the essential commodities directly from the AAICLAS facilities to the AFS with immediate customs clearance and availability to the importer, paved the way for hassle-free clearance. This proved strategically successful during the pandemic, when all essentials were moved directly to the AFS to ease port congestions, highly supported by AAICLAS, Indian customs and our customers. This is one of our own value innovation measures. Kerry Indev Express (KIE) was envisaged to be a door-to-door express distribution service brand with strong IT groundwork. The arm is now catering to prominent customers such as Samsung, Lenovo, Eureka Forbes, Netmeds, NSDL, Amazon, as well as private banking companies.
Kerry Indev Logistics is a growing leader in project shipments and break bulk via association with PCL Shipping and PACC Line which is a part of the Kuok Group of Companies. Services are active across surface, air and ocean modes of transport, connecting from the first till the last-mile with same day and next day delivery through our Priority Package Express and E-com Business Express, as well as value added services such as warehousing solutions, and Critical Solution Express that handle sensitive and critical courier and cargo. Shipping agency/chartering was also started as part of our strategy, through PACC line with a dedicated professional team handling exclusive project imports, break bulks, etc.
How can companies be more prepared, ready to respond and able to recover from crisis? How can they best plan for future events like COVID-19? Vectors for building a resilient and sustainable organisation must be developed through efficient crisis management strategies consisting of contingency plans sup-
ported with specific measures and established communication flow. Most importantly, we have to allocate the time to build the system, and constantly review. The companies must ensure resilience and sustainability is not restricted to only the operational flow rather layered through customer portfolio management, vendor management, supply chain management and process flow SOPs. This system will follow the three essential steps: Plan Signal Alert Proactive Response Plan for low likelihood high consequence event Read and listen to the signals React to the crisis immediately with proximate action plan by: Evaluating the situation Establishing a Critical Incident Management Team (on stand-by) and setup the process Assembling the right people Engaging in iterative, agile problem solving activities. Cash conservation was one of the significant factors that decided on the survival as well as the revival of the company. Going forward, the plan for long term cash conservation and reserves is a must whilst in short term, it is vital to keep a watch over lines of credit with stringent measures and streamline the business activity to reduce unjustified expenses and avoid unnecessary investments. Singular digital capabilities alone will not help survive but continuous transformation in this unpredictable VUCA (Volatility, Uncertainty, Complexity and Ambiguity) world will help us spring forward. In the long term, robotics and automated systems for warehouse operations, IT platforms for transportation management and control tower operations, and artificial intelligence-powered technology platforms for SCM/vendor/ customer management will allow logistics companies to anticipate supply chain risk and promote sustainability goals with enhanced operational efficiency. Customised SOPs involving current action plan and future vigilant measures must be primed by all pro-active organisations, with adoptive solutions in-built to best prepare for true crisis events – large scale, highly uncertain circumstances like the COVID-19 pandemic and it’s myriad of follow-on consequences affecting the whole community.
Customs Bonded Warehouse Covered warehouse facilities of over 4,50,000 sq. ft. under 1 roof with modern racking system which can house more than 40,000 pallet spaces 3PL Facilities & State of Art Warehousing Flexi Warehousing Automobile Logistics Services Spread over 50 acres of land Over 6000 teus per month i.e. 72,000 teus p.a. Robust fleet of company owned vehicles, monitored & tracked electronically 24x7 CCTV monitoring CFS owned equipment – 5 Top Lifters, 30 Forklifts, 2 Empty Handles, 1 Crane Direct access to the National Highway No 66, from Panvel to Goa DPD Facility along with 3PL Facilities – 10,000 Palletized racking 200 Trailers for PAN INDIA movement
Warehouse
Certified DPD Area DPD AREA
Covered Warehousing Facility
JWC Building
JWC LOGISTICS PARK PVT. LTD., 69/91 National Highway66, Village-Palaspe, Panvel, Maharashtra-410206. Landline: +91 22 68381900 (100 Lines) | Fax: +91 22 68381952 Emails: jwccfs@jwclogic.com | krutijobanputra@jwclogic.com | jignesh@jwclogic.com
www.jwclogic.com
pradeep panicker
K
indly elaborate on the types of cargo transported to and from GHIAL and other initiatives taken to increase capacity in the last three months. Hyderabad International Airport has been categorised as one of the six national hubs under the government’s ‘Lifeline Udan’ initiative for operating medical cargo lifelines for the nation in this hour of crisis. During the lockdown, despite several logistical issues, our team rose to the occasion in line with the nation’s call and continued to seamlessly handle cargo operations. This included all kinds of goods including COVID-19 relief material, pharmaceuticals, engineering, IT, aerospace, perishables, and console cargo, among others. During the period from April-June 2020, GHIAL handled around 16,000 MT of air cargo. Now that operations have resumed, what efficient plans and strategies have you adopted to revive growth? GMR Hyderabad Air Cargo has been working round the clock in close coordination with its stakeholders enabling the critical chain of essential supplies running intact. The team seamlessly worked with regulatory bodies to set-up the processes to ensure door-to-door movement of cargo during these uncertain times. We created dedicated Emergency Teams to handle various needs of customers round the clock. Several ad-hoc operations of airlines were handled last minute without any hassle to the customers, thanks to our effective stakeholder management. On the business continuity and health front, safety and sanitisation have been the key focus area all these while. We continue to adhere to the strict regimen of safe work culture during COVID-19 scenario. Elaborate on the cargo flights scheduled from the airport and the growth chart of (domestic/international) traffic. GMR Hyderabad Air Cargo is handling 28 |
august 2020
With dedicated and highly motivated personnel working in shifts, GHIAL together with GMR Hyderabad Air Cargo is working round the clock in close coordination with the ground handlers, forwarders, Customs House Agents (CHAs), regulators, state police, and cargo trade associations to keep rolling the critical chain of essential supplies. Pradeep Panicker, the recently appointed CEO of GMR Hyderabad International Airport Ltd (GHIAL) in an exclusive conversation with Ritika Arora Bhola, discusses more about their expedited efforts towards maintaining all links in the airport supply chain and continued commitment to worldclass cargo handling operations, eventually shaping the growth of a future-ready super hub airport.
We are optimistic that we will bounce back stronger around 12 freighters weekly along with some special cargo charters, which connect Hyderabad with all major international destinations in the US, Europe, Middle East, Africa, Far East, etc. Based on the fuel requirements, the freighters also uplift fuel, for which GHIAL fuel farm is available 24x7. Among the key scheduled freighters operating from the airport include- Cathay Pacific, Turkish, Qatar, Lufthansa, SpiceXpress (domestic and international) and Blue Dart. In the post-lockdown scenario, GHIAL has handled several passengers to cargo aircrafts. This started with the first
ever passenger aircraft of Qatar Cargo uplifting 28 MT of essential supplies from Hyderabad to Doha through aircraft belly in the first week of April 2020. Garuda Indonesian freighter from Indonesia made a maiden landing at GHIAL on April 08 to carry some COVID-19 relief materials. Amid the lockdown, the airport got directly connected to the African markets. Ethiopian Airlines commenced a new direct connection between Hyderabad and Ethiopia throwing open new opportunities to reach out to the markets in Africa and beyond leveraging the robust cargo network of the Ethiopian Airlines.
GHIAL also handled the first ever commercial cargo service from Russia with the landing of Aeroflot Airlines. The airport is pursuing to have a regular weekly frequency of this freighter, which if works out, will enable a direct connectivity of Hyderabad to Russia and other CIS countries who have a major demand for pharmaceuticals. The sector also has a demand for aerospace, engineering and general cargo. This freighter can open up a direct gateway to the region.
Post-lockdown, how long would you estimate it would take for our industry to get back to business as usual? What will be the growth drivers? The MSME sector would emerge as the market growth driver, as we see it, and the steps taken by the government to boost the sector. We also feel that the export recovery will be led by pharmaceuticals, medical and diagnostic equipment, technical textiles, agriculture, processed foods, plastics, chemicals and electronics. India can become the new manufacturing hub of the future, which will step-up cargo service substantially. The positive signs of battling the pandemic globally, across the industry and countries accounting for 85 per cent of world GDP are now past their peak of new COVID-19 cases. This in itself is a precursor to easing restrictions on aviation. With the support and efforts of the government and all other stakeholders, we are steering through the challenging situation. We are optimistic that we will bounce back stronger. Digitalisation is also seen as a key lever for the development of new innovative services and solutions, which will drive efficiency in the air cargo ecosystem and deliver incremental value to the end customers and we continuously work towards it. GHIAL has always been at the forefront of adopting technology and automation to handle its operations, be it passenger services or cargo.
How can the logistics ecosystem players need to gear up in supporting India’s dream of becoming a manufacturing hub? There is a strong co-relation between growth in trade and logistics infrastructure. In the air cargo logistics business, changing business models such as justin-time manufacturing and global outsourcing models have contributed to the rapid growth of the sector. In this scenario, the Indian logistics sector needs to develop an efficient supply chain management integrated with robust digitalised processes. This will offer significant benefits including lower inventory and intermediary costs, and simplicity in order placement, delivery and management of suppliers and customers.
The MSME sector would emerge as the market growth driver. We also feel that the export recovery will be led by pharma, medical, textiles, agriculture, electronics etc. The pace of efficiency and quality improvement will consequently demand a rapid development of capabilities of LSPs. Logistics being a service oriented sector would need a significant focus on manpower skills development in tandem with the requirement posed by the dynamic logistics sector.
How do you think Indian air cargo industry is reacting and responding to the pandemic? What kind of challenges the industry is grappling with and how is it making up for the solutions? The Indian air cargo industry has been developing out-of-the box solutions to maintain operations and support the global supply chain during the COVID situation. Amidst these challenging times, the industry rose to the occasion with a business continuity plan adapt-
ing and innovating to sustain the business. Some of the strategies/solutions implemented were: A collaborative dialogue between various stakeholders of the industry to wade through the crisis. Effective stakeholder and people management. Leveraging technology to redefine logistics/supply chain management to ensure uninterrupted service delivery.
Any new facilities coming up? Hyderabad air cargo is in the process of expanding and augmenting its infrastructure to cater to the demand for various commodities such as temperature-controlled pharmaceuticals, fruits and vegetables, international courier, e-commerce and live animals. With an eye on improving aquaculture exports, the Telangana government has signed a memorandum of understanding with the Marine Products Export Development Authority (MPEDA), an arm of the Union Ministry of Commerce and Industry on July 19, 2020. Under this pact, an Aquatic Quarantine Facility will be established at GHIAL through an MPEDA society named Rajiv Gandhi Centre for Aquaculture (RGCA). Under the agreement, the MPEDA will set up a multi-species aquaculture centre with funding from the state government. The facility will consist of hatcheries, nurseries and training centres for export-oriented aquaculture species. GMR Hyderabad Aviation SEZ Limited (GHASL), a 100 per cent subsidiary of GHIAL, and airline company Spicejet has signed an agreement to build a facility for the airlines to carry out the warehousing, distribution and trading activity within the Free Trade Warehousing Zone, known as GMR Aerospace and Industrial Park. This facility will be 33,000 square feet in size initially with a potential to expand 100,000 square feet based on demand. Further, GMR Hyderabad Aerotropolis Ltd, a subsidiary of GHIAL, and the global logistics real estate firm ESR are jointly developing a 66-acre logistics park in Hyderabad. In January, ESR and GMR have entered into definitive agreements with an equity interest of 70 per cent and 30 per cent respectively in the special purpose entity, namely GMR Logistics Park Pvt Ltd. august 2020 | 29
Niki Frank India is right up there, almost number one in terms of investment and capability, and DHL remains much focussed on the country, as it continues to make big investments. The company is continuously working on rolling out new services to offer its Indian customers a state-of-theart experience – all in line with Deutsche Post DHL Group’s Strategy 2025 goal of ‘Delivering Excellence in a Digital World’. Niki Frank, CEO, DHL Global Forwarding india briefs Upamanyu Borah, on how they have continued to invest to enhance their infrastructure and technological capabilities to stay relevant to country’s needs.
India has huge potential to play a larger role in global trade
H
ow would you evaluate the current state of the logistics sector in India? What are your top 3 concerns? Prior to the COVID-19 outbreak, the logistics sector in India was clearly on the right path. There were a lot of good initiatives that addressed the major needs and bottlenecks of the industry. While the pandemic has interrupted a lot of these crucial approaches, it has on the other hand led to an acceleration of digitalisation efforts across the sector. My top three concerns right now are 30 |
august 2020
the unavailability of labour (e.g. at seaports, airports as well as within Customs), the heterogeneity of rules and regulations across different states, and the unavailability of capacity and equipment, (e.g. trucks, trailers and airline capacity).
businesses keep rolling. This we made possible with putting into place strict guidelines and operat i ng procedures. Though this was practically challenging, we succeeded in implementing the working pattern. Another difficult challenge that posed was the sheer lack of availability of labour on the ground, (e.g. in the air cargo complexes, at the seaports, CFSs and within Customs).
What has been the most difficult challenge for DHL in India since the outbreak of the pandemic? Our teams of dedicated employees have been working very hard from day one of the lockdown, overcoming several challenges, to ensure our customers’
After the outbreak fades, what do you expect would emerge as the key issues affecting the freight forwarding and logistics business, going forward? One of the key issues already affecting the industry and which we will continue
to face in the coming months is a reduction in air cargo capacity. Many passenger airlines are re-starting operations as certain countries – especially in Europe and Asia – are easing their travel restrictions, but the general market situation still remains volatile. Air freight capacity, in particular belly capacity, is still very tight. Besides, air freight rates on some lanes though are starting to decrease vs their earlier peak, but are still significantly above the 2019 average. Ocean freight capacities are also very tight at the moment; this is driven by intentional blank sailings from the carriers, which will stop as soon as demand picks up. Here we expect a normalisation of demand and supply and hence, the shipping rates, much sooner.
What strategies do you use to foster innovation internally during times of a crisis? How do you structure those kinds of teams internally to get the most out of your people? The current crisis has in a way been a catalyst for innovation in the industry. Due to the fact that most companies and people are working from home and given the restrictions on physical movement, a lot of changes and innovations were required. All these primarily focussed on digitalisation of physical documents or manual processes. Digitalisation and innovation are core pillars of DPDHL Group’s Strategy 2025 and we have used this opportunity to further drive projects and initiatives, and working on them with cross-functional teams. What do you identify as the emerging trends in the local life sciences logistics segment? How is demand evolving over time? The Indian pharma industry has been a world leader in generic drugs, catering to a large share of the demand. Made-inIndia drugs supplied to the developed economies such as the US, EU and Japan as well as to developing markets like Africa or Latin America are known for their safety and quality. India’s large import dependence for intermediates and APIs on China (nearly 70 per cent by value) has become a bottleneck to India’s healthcare manufacturing and global supply chain during the current crisis. We foresee Indian pharma
players will steadily decrease their dependence on imports from China over a period of time and migrate up the value chain, focussing on value-added formulations with higher margins. In the mid to long-term, I believe, India has a huge potential to step up and play an even larger role in global trade and supply chains. Given the country’s leading position in the global vaccine supply chain, we also expect the local life sciences sector to play an essential role once a COVID-19 vaccine is discovered.
What is the scope of your capabilities with regard to your dedicated facilities in India? Our focus in India is always to simplify the complexities and challenges for our customers, and deliver the best solutions to them. For example, in the life sciences and food sector, we have invested significantly in getting our key stations certified and trained for the handling of temperature controlled cargo. We are also investing in our own cold chain storage facilities in key pharma hubs like Hyderabad.
India will see substantial growth in the manufacturing segment, which will mean opportunities for us. There are two reasons to this. Firstly, the size of the domestic market itself is getting larger. Secondly, the country will increasingly serve as a major sourcing and supply hub. Furthermore, we have set up three dedicated facilities in Special Economic Zones (SEZs) - two in the South and one in the West, where we continuously endeavour to provide innovative solutions to our customers. These facilities enable ease of business for them, and with our strong expertise in the field, we ensure on-time performance, smooth distribution and meticulous inventory management, allowing customers to focus on achieving their goals.
Any examples of best-in-class solutions that you have brought to the Indian market via your strong internal DHL network? We are continuously working on new services to offer our customers state-ofthe-art experience. To this end, we have recently created a one-stop customer portal ‘myDHLi’ that is tailored to the needs of our customers. The industry leading portal combines services like online quotation and booking with shipment tracking, document accessibility, and data analyses. By doing so, we have not only created 360-degree visibility, but also laid the foundation for customers to manage their logistics– anytime and anywhere. Where do you believe lies the biggest potential for growth in India now and beyond? The entrepreneurial spirit in India and the prospects created in the EXIM markets give us plenty of opportunities to grow. In the coming years, India will see substantial growth in the manufacturing segment, which will mean opportunities for us. There are two reasons to this. Firstly, the size of the domestic market itself is getting larger. Secondly, they country will increasingly serve as a major sourcing and supply hub. What are DHL’s immediate priorities in the post-COVID-19 scenario? Our priority will always be to support our customers in their logistics needs by being customer centric. We will continue to provide flexible and innovative logistics solutions, simplifying our customers’ business, increasing productivity and driving efficiency across the entire supply chain. As the CEO of an organisation, what is the biggest threat you face living in a fragile global economic system and disrupted times? I am not worried at all about the future of my organisation and if I had a wish for the global economic system, I would say, the need of the hour is more connectedness. More collaboration is what we need now, and hopefully we will see more openness across borders in the future. Organisations will need to re-think their sourcing strategies for raw materials along with their supply chains, and we, at DHL will play a key role in supporting this. august 2020 | 31
adarsh hegde If India intends to strike a balance between managing vulnerabilities in global value chains (GVCs), and building resilience, it may need to reassess its regionalisation strategy to take advantage of the accelerated momentum towards regional value chains (RVCs). This will necessitate deeper reforms in labour markets, trade infrastructure, and improvements in the overall business environment. In an exclusive conversation, Adarsh Hegde, Joint managing director, Allcargo Logistics informs Upamanyu Borah, India’s need to adopt a holistic perspective focussed on ‘whole of the supply chain’, by driving strategic changes in its investment-development paradigm, dismantling bottlenecks and through greater integration with the global economy.
Focus should be on greater integration of India in the global value chain
P
ost lockdown, how long would you estimate it would take for our industry to get back to business as usual? The logistics industry has survived the COVID-19 pandemic crisis and is, in fact, recovering. The industry, as a matter of fact, is at an inflexion point. Our views are the recovery for the logistics sector could be Wshaped, as there will be periodic lockdowns and subsequent unlocking in various parts of the country till a vaccine is invented or 32 |
august 2020
the intensity of the pandemic reduces. Currently, we are witnessing a phase of recovery in various manufacturing sectors. We expect import volumes to keep improving post-August this year if the recovery continues.
In the later phase of lockdown, what is the ground reality? Has seamless transport systems been restored? As lockdowns ease in various parts of the country, businesses are gradually opening up. Where there are disruptions and challenges, players across the logistics ecosystem are collaborating more closely together to resolve the situation and keep trade moving. Logistics services providers are taking the required efforts to ensure safety and also provide incentives to drivers, equipment operators and handlers, so as to continue serving their customers. We, at Allcargo, have been operating throughout the lockdown and are now opening up our offices at various locations in strict adherence to government rules and regulations for COVID-19 prevention and safety. We are in constant touch with our customers, taking the necessary steps to offer them seamless logistics services to the maximum extent possible. Despite few unavoidable situations due to the COVID-19 crisis, the transport systems continue to operate and are bound to only get better and more efficient in the coming days. How your organisation had been providing customer experience during the lockdown? As port and CFS operations come under essential services, those were operational throughout the lockdown phase. We made all the required arrangements
Logistics players in the country will need to place emphasis on creating a digitally advanced warehousing infrastructure with an onus on modern Warehousing Management Systems (WMS) and IT-driven solutions. so that our unit employees and handlers were housed in our CFS facilities, allowing us operate seamlessly during the lockdown. The adverse impact on our business was relatively less as we were supported by our multimodal transport operations across the world through our whollyowned global subsidiary ECU Worldwide. Besides, we have adopted various digital tools and technologies, enabling our teams to work remotely. Our inhouse ECU360 platform launched in some countries emerged as a utility platform both for us and our customers. We also facilitated e-payments, electronic-delivery order and electronic bill of lading, amongst other digitally-enabled operations. Furthermore, during the lockdown phase, our teams went the extra mile to ensure customer satisfaction. They worked tirelessly to manage the space constraints in our CFSs to help both, customers who needed deliveries of essential goods as well as customers who were not being able to take deliveries. This ensured that ports do not get choked and global trade kept moving. Our Projects & Equipment (P&E) division undertook special efforts to
transport Over-Dimensional Cargo (ODC) for critical projects even during the COVID-19 induced lockdown phase, displaying professionalism and operational excellence. Right from permissions to documentation, and maintaining social distancing and all safety precautions, we have emerged stronger in the face of challenges.
Which sector related developments are set to help address the growing freight transport demands? The COVID-19 outbreak has seen the ecommerce segment take center stage as a primary delivery source for essential items. Going ahead, in the post-COVID-19 phase, it is likely that a large number of households will go online for procuring supplies of household essentials. The anticipated surge in last-mile deliveries of essentials to the end-consumer presents a huge business opportunity to express logistics players in the country. These developments present the potential for the domestic logistics segment in the country to transition from a purely operational role to a strategic one. Factors like a robust IT infrastructure, providing value-added services to customers, a streamlined distribution model and penetrating untapped markets in the country’s hinterlands will be the key to any express logistics company while retaining market share and expanding business operations. In addition, the warehousing sector in the country is set to emerge as an attractive asset class in the commercial and industrial estate segment. Logistics players in the country will need to place emphasis on creating a digitally advanced warehousing infrastructure with an onus on modern Warehousing Management Systems (WMS) and IT-driven solutions. august 2020 | 33
The consumer sentiment being low now and considering economic downturn across the globe, what will be the scenario of logistics services requirement in the next couple of years? The demand for logistics services in the next two years will primarily be driven by the e-commerce boom. E-commerce players are relying on logistics service providers for their first-mile pick up and last-mile delivery. Traditional businesses are also embracing digitalisation to remain relevant to the consumers. As the purchase behaviour of consumers change due to COVID-19 scenario and become more contactless, the demand for tech-enabled logistics services specially designed for e-commerce players will continue to grow. In this ever-evolving new normal business environment, many countries looking to de-risk and diversify supply chains by relocating their manufacturing. Even this may open up great opportunities and potential for India, especially in the warehousing sector. Experts say the industry will also see lot of automation across industries with less staff and more of machines doing the job. Is this a curious case of commercial consideration or a business continuity necessity? Artificial Intelligence (AI) and Internet of Things (IoT) are transforming logistics operations. Automated processes powered by AI as well as Machine Learning (ML) can accelerate many logistics operations while reducing inefficiencies and optimising the available resources at every level of the logistics supply chain. We have been taking forward strides in optimising our operations further by implementing AI and IoT. In the post-COVID-19 scenario, we’ll intensify our focus on implementing advanced automation. Technology, after all, is the future of the logistics industry and is very likely to be a necessity for business continuity. Do you see some modal shifts in the way the industry had been working earlier? We are already seeing some shift in ways the industry is moving. The effects of COVID have only accelerated this and the industry is likely to witness a significant modal shift in its functioning. 34 |
august 2020
This can be further made possible if the government places priority onus on expediting the completion of the highspeed, dedicated freight corridor project which will account for the transportation of long haul and bulky commodities. This is expected to streamline the container freight movement and reduce turnaround times. Apart from having a positive multiplier impact on the Indian logistics sector, the project will play a vital role in decongesting a highly saturated road network.
Providing cost-effective logistics solutions and building an integrated, digitally robust supply chain infrastructure is the key to positioning India as a global manufacturing hub. It is also anticipated that coastal shipping in the country will get a boost with the share of inland waterways increasing substantially in the country’s overall transportation modal mix. An impetus on developing a robust Inland Water Transport (IWT) network will not only make freight transport cost-effective but also lead to reduction in logistics cost to around 10 per cent of GDP from the current levels of 13-14 percent.
Only companies diligently following a customer-first approach will survive in a highly volatile global business environment. Can we expect more automation coming into the entire supply chain for handling of cargo in a multimodal network? Automation is expected to play a pivotal role in the handling of cargo in a multimodal network. The integration of technology and digitalisation will be critical in steering the logistics sector on a high growth trajectory. Artificial Intelligence (AI) can and will play a key role in creating route optimisation systems for the channelisation of cargo movements. By
leveraging real-time data for improving decision-making capabilities, IoT can boost supply chain monitoring efficiencies and streamline the overall inventory management processes.
What are the areas logistics professionals globally need to keep an eye on and put up an unified front? Logistics professionals will need to realise that, the customer’s experience and feedback will determine the reputation and brand recall of the company on a global scale. Only companies diligently following a customer-first approach will survive in a highly volatile global business environment. It is important to be aware of the customers’ ever-increasing demands and expectation when it comes to safety. In addition to ensuring security of the cargo, implementing all necessary COVID-19 precautionary measures, a focus on the health and safety of staff members and visitors at offices and locations will be of utmost importance. Logistics players will also need to leverage new-age technologies to interpret real-time data and develop timely insights to predict upcoming contingencies. They will need to build seamless data sharing and exchange platforms which will not only help in harnessing cross-functional synergies but also build mutual trust and transparency in the global logistics ecosystem. How can the logistics ecosystem players need to gear up in supporting India’s dream of becoming a manufacturing hub? Providing cost-effective logistics solutions and building an integrated, digitally robust supply chain infrastructure is the key to positioning India as a global manufacturing hub. Logistics players in the country will need to place responsibility on improving maritime linkages, promote port-led industrial development, and strengthen road and rail connectivity within the interior regions of the country. The focus should also be on greater integration of India in the global value chain. The country will need to make rapid progress in establishing trade links with newly emerging global markets. This will help the Indian manufacturing sector expand its market presence in untapped geographies.
Customs Bonded Warehouse LCL Import & Export Hub Buffer Yard & Factory LCL Cold Storage in the CFS Storage area 5,00,000 sq.m., of covered warehouse space Direct access to the National Highway 4B leading to the JNPT Port Ample space for parking of 1000 cargo trucks 24x7 CCTV monitoring CFS owned equipment- 4 Top Lifters, 200 Trailers, 30 Forklifts, 2 Empty Handles, 1 Crane Distance from JNCH 11 Km Zero toll charges, Zero congestion in the CFS, TEU Handling Capacity -9000 TEUs per month Carting & Stuffing done in covered area Ideal Location for Exporters/CHAs/Freight Forwarders Prompt Carting of Cargo Unique Temperature Controlled Pharmaceuticals product handling capabilities in the CFS
Covered Warehousing Facility
LCL Import & Export Hub along with LCL Cold Storage
Covered Carting & Stuffing Area
Custom Area
JWR Logistics Pvt. Ltd., 15-23, National Highway 4B, Panvel-JNPT Highway, Village Padeghar, Panvel, Maharashtra -410206. Tel: +91 22 50500000 | Fax: +91 22 50500199 Email: kruti@jwllogic.com | raaj@jwllogic.com | hema@jwllogic.com
www.jwclogic.com
rohit hegde The clear differentiator for India, as it was for China two decades ago, is its large domestic market. It is a pathway to local scale, climbing the competitive value chain, as well as building an export base. The outcome is long-term employment and opportunities that will, in turn, strengthen the economy qualitatively and commercially. Rohit Hegde, Director at KSH group explains how improvement in governance, attention to employment and tackling key issues faced by the industry is critical to realise the value proposition at India’s core. Excerpts from his interview with Upamanyu Borah.
The dynamic entrepreneurial spirit of India will shine and pull us through
I
n the later phase of lockdown, what is the ground reality? Has seamless transport systems been restored? Seamless transport systems have absolutely not been restored, and it won’t until we get back the migrated labour force. This would require putting in place safety policies that can enable a phased return to a semblance of normal operations. I think we are a while away from that, and it’s too early to say when 36 |
august 2020
that will be. We have to see if the lockdown and all other measures taken by the government can curtail this widespread pandemic as adequately and expected before the transport systems can return to normalcy.
How has your organisation been providing a stable customer experience during the lockdown? We have multiple businesses and the experience in each has been different. In
our container logistics business, we have been classified as an ‘Essential Services Provider’ and our operations kept running throughout the lockdown period. However, we had been struggling with the trucking segment with all our drivers having returned to their respective states of Punjab, UP and Bihar. Despite business constraints, we have been serving our customers who have also realigned expectations considering the market conditions.
Talking about the infrastructure developments, initially, we had a temporary shutdown of the construction sites due to lockdown. Later, we managed to resume operations and retain our labours on site, with taking necessary care of their health and safety throughout the ongoing lockdown period. This has resulted in our ability to continue work when the situation has become today’s ‘new normal’.
The consumer sentiment being low now and considering economic downturn across the globe, what will be the scenario of logistics services requirement in the next couple of years? We expect this year to be a tough one for the logistics sector. There have been several disruptions to the global supply chain, which will have a lasting impact on the Indian logistics industry as well. Having said that, a few sectors will continue to grow; e-commerce, in particular, is expected to see manifold growth. I think every organisation will have to recalibrate their business strategies to cope with the challenges of COVID-19 and also benefit from the opportunities that are likely to arise. In our 3PL segment, we have identified the multi-client warehousing operations segment as critical and putting our renewed focus. We are currently rolling out a pan-India platform to cater to the growing need for short term and flexible operations. With growing disruptions in global supply chain, we feel, large multinational companies will look for more dynamic supply chain, and one which is not constrained by location or scalability. We expect this market evolution to continue at a robust pace. Do you see some modal shifts in the way the industry had been working earlier? India will continue to see a push towards automation, but I doubt if there will be a dramatic shift in the way things are being done. We will still need a lot of trained manpower, and the future will continue to be bright as long as we can make fundamental changes that can lead to our manufacturing sector becoming more competitive. In India, it’s an absolute necessity to accelerate growth considering our exploding population, and for those fundamental issues such as
availability of land and trained manpower will have to be addressed, the rest will automatically follow.
Experts say the industry will also see lot of automation across industries with less staff and more of machines doing the job. Is this a curious case of commercial consideration or a business continuity necessity? Globally, automation is a growing trend, and we see rapid adoption of automation amongst multinational companies. Most of them will learn from global experiences and continue to adopt ideas that have worked elsewhere. Having said that, the balance between business continuity necessity and commercial consideration will differ from industry to industry and each will react accordingly. I think in a country like India, we should focus more on job creation, improvement of governance, and tackle key issues faced by industries such as availability of
In our 3PL segment, we have identified the multiclient facilities segment as critical and putting our renewed focus. We are currently rolling out a pan-India platform to cater to the growing need for short term and flexible space. land and trained manpower, and not worry too much about disruption of job opportunities because of automation. I personally feel that we are still far away from those concerns and have plenty of basic economic issues to address, which could help make India a more sustainable manufacturing base for global players. All our focus should be on supporting and enabling that.
Post-lockdown, how long would you estimate it would take for our industry to get back to business as usual? I expect the industry to recover in the next 6 to 9 months post-lockdown. This is largely due to two factors, first is the non-availability of labour. Skilled labours from across industry sectors have
gone back to their villages or towns and are likely to return only when COVID-19 cloud completely settles down. The nonavailability of labour, combined with continuous disruptions to work on account of spike in COVID-19 cases is hampering business stability; this is likely to continue to an extended period. The second factor is consumption, which may remain depressed for some time. Key players have already recalibrated their operations to sustain their engagement and outreach capacity to cater to this depression in the market. For this sentiment to reduce and consumption to pick up in general, it may take minimum six to nine months after the end of the lockdown period.
What are the areas logistics professionals globally need to keep an eye on, and put up a unified front? The logistics industry is going through a technological transformation. The startup eco system in logistics is robust; there are several different businesses that are being built from the ground up over the past five years. These businesses will compete with a lot of the nuts and bolts players of the past. I think every aspiring logistics professional should be informed these developments. And for that, it’s imperative that you keep your ears close to the ground. In India alone, there are several startups such as Rivigo, BlackBuck, Delhivery, etc. which are disrupting the way logistics has been traditionally carried out. These are young and exciting companies and it’s important for everyone to stand up and take notice and learn and adapt. As India tries to be a manufacturing hub, how can the logistics ecosystem players gear up in supporting India’s dream of becoming a manufacturing hub? I think the logistics ecosystem is gearing up for the e-commerce revolution, and a number of renowned companies have emerged on Indian soil. Having said that, India becoming a global manufacturing hub would not only depend on the private sector. Key structural reforms will need to be undertaken to make that happen. I am quite confident that when these reforms do take place, the dynamic entrepreneurial spirit of India will shine and pull us through. august 2020 | 37
Andreas von Puttkamer
W
hat’s the current situation at Munich following the COVID-19 lockdown? What about the state of traffic flow, both in terms of domestic and international cargo? As an integral part of critical infrastructure, Munich Airport has maintained uninterrupted operations, playing a role both in helping travellers to return home and in ensuring the ongoing rapid shipment of vital goods. In terms of the overall cargo trend, since the rapid escalation in COVID-19 spread, we have seen a yearon-year decrease of 66 per cent in freight turnover from March to June. At the low point in April, freight turnover was down 82 per cent, as compared with a 99 per cent decrease in passenger traffic. By far the largest share of the freight handled in Munich is transported in the belly hold of passenger aircrafts, generally on long-haul routes. From March to June, belly freight showed a year-on-year decrease of 81 per cent, and in April alone, it was down 96 per cent. This steep drop was not fully offset by the ‘cargo-only’ segment, which bottomed out in March, with a 35 per cent year-on-year drop, but was already 16 per cent higher in March to June than in the same period a year earlier. Driven by a surge of +83 per cent in imports, mainly due to an increase in incoming shipments of medical protection equipment, the volume of freight carried on cargo-only flights reached a new all-time high in May. Following the sharp decline in exports in the early days of the crisis, they were already picking up again in May, with a year-onyear increase of 3 per cent. The four integrators UPS, FedEx, DHL and TNT with operations base in Munich have kept their flight operations going throughout the crisis. As a result, they have handled approximately 58 per cent of the total freight volume. Whereas just 15 airlines were offering passenger flights and 17 different carriers were operating freight services in May. How is the airport handling pressure during these times of emergency? 38 |
august 2020
Having established itself as the second biggest hub in Germany, bolstered by an excellent intercontinental footprint and of course the endeavour to be a very good employer for its staff, Munich Airport puts a lot of emphasis on the aspects of sustainability, profitability and social ability. Andreas von Puttkamer, Senior Vice PresidentAviation speaks to Upamanyu Borah, more on their capabilities around requirementoriented expansion of infrastructure, solutions to demographic trends, and shaping of digital transformation, ultimately strengthening the airport’s resilience to life-changing situations.
We continually develop our infrastructure in line with changing needs Conversely, what do you see as the biggest untapped opportunities? Our top priority during the crisis has naturally been to safeguard the health of our passengers and employees with an extensive package of measures to protect against infection. Limiting the enormous economic impact and ensuring the liquidity of the company has also been an important focus. For example, we reached an agreement with the staff representatives to introduce shorter working hours for around 7,000 of our approximately 10,000 employees. Another key move was the temporary suspension of passenger handling operations in Terminal 1 and in our satellite facility. With air traffic greatly reduced owing
to the coronavirus pandemic, we also temporarily shut down the south runway for maintenance work. I believe, as a consequence of the pandemic, we will seize the opportunity to move ahead decisively with the digitalisation of our handling processes and create additional touchless services for passengers.
From the connections point of view, are there any possibilities of airlines re-establishing their schedules to Munich to make the process of moving cargo more seamless amid the volatile environment? From early June, the aviation sector has been showing clear signs of recovery, with many airlines ramping up flight
Looking at the current changing environment, what’s most critical to your mind for Munich to succeed? First, it comes down to when the global pandemic will be stopped and second, when the global economy gets back on track after the crisis is overcome. How are the conversations with your airline partners proceeding? These conversations are going very well. Our partners have been highly cooperative in their acceptance of our protective and hygiene measures. We’re optimistic that our airline customers will be back. Germany and especially Bavaria are considered ‘healthy markets’. The support of the economy by the federal government is also fostering trust in the market. What are the ideal strategies you are planning to consider in the runway to recovery? Against the backdrop of the severe impact on our financial situation, the Munich Airport Group had started to implement extensive measures to secure liquidity. We launched a package of groupwide measures to place tight limits on personnel and material costs, requiring extensive savings in all areas. Last year, Munich Airport entered into the top five international airports in terms of hub connectivity, from its previous 11th position in 2018. What did you do best to take such a giant leap forward? Do you believe you are now in a position to compete with the world’s largest hubs? A decisive factor behind this success is the close partnership with Lufthansa, specifically the construction and operation of Terminal 2 plus the satellite building. Lufthansa’s decision to make
©Munich Airport
operations and gradually adding destinations to our route network. Many European connections have been reactivated. Transatlantic and Asian traffic is also gradually restarting. In the meantime, 40 airlines are again offering flights from Munich to around 120 destinations, with demand trending upward. On some routes, we’re seeing some very creative solutions in that regard. For example, Lufthansa is operating the outbound leg of its Munich to Delhi service as a cargo-only flight and the return leg as a passenger flight carrying belly freight. Munich the exclusive base for its A350 fleet and to transfer Airbus A380 aircraft to our airport delivered a massive boost to intercontinental services and our development as a hub. Also worth mentioning is Munich’s outstanding defined peak infrastructure. Rather than trying to compete with the world’s biggest hubs, we are much
We see ourselves in the future as a successful, full-service ‘airport city’, and will be increasingly engaged in consultations with other airports and in the construction of our unique LabCampus innovation site. more focussed on the quality of our services and the passenger experience. This is reflected in the ‘Five Star Airport’ status awarded to us by Skytrax.
Which airport developments have been the most influential, and how have they contributed to the growth? As I mentioned before, the cooperation with Lufthansa in Munich is an important growth driver. We continually develop our infrastructure in line with changing needs. For instance, we have continued with the expansion of Terminal 1 even during the crisis. A further clear signal that growth will continue at this location is the agreement recently signed by DHL and Munich Airport for the construction of a freight building with investment of 70 million euros. Our investment in diversification,
such as the establishment of the LabCampus innovation centre, will also contribute to the long-term success and growth of the airport.
Munich Airport has a roadmap for the future: the Corporate Strategy 2025. What role has technology to play therein? At present we are concentrating on recovery and consolidation. However, our corporate strategy for the coming years is clearly focussed on climate-neutral growth. Through numerous innovative measures, Munich Airport will ensure airport operations that protect the environment and conserve resources, with the aim of gradually arriving at full decarbonisation. By 2030, our goal is to eliminate 60 per cent of CO2 emissions ourselves by means of technical measures and the remaining 40 per cent through appropriate offsetting measures, preferably in the form of climate protection projects in the airport region. Munich Airport will invest a total of 150 million euros in this ambitious climate protection program. By 2050, Munich Airport aims to reduce its CO2 emissions to net zero. We are thus committed to the NetZero 2050 climate protection target of ACI Europe, the professional association of European airports. What is the main goal of Munich airport and where do you see yourself in the years to come? Our main goal is the climate-neutral development of our hub system. We see ourselves in the future as a successful, full-service ‘airport city’, and will be increasingly engaged in consultations with other airports and in the construction of our unique LabCampus innovation site. august 2020 | 39
Surendra jeet singh
The freight forwarding and logistics industries suffer from what is called ‘Regulation Fatigue’. It is not just the MSME sector, even large industries, today, find that not only the cost of law compliance is increasing but it is also getting harder to ensure complete law compliance and it exhumes greater percentage of management time. The issue assumes importance for Indian freight forwarders who have to operate in countries where the industry is developed. Surendra Jeet Singh, Managing Director, Pinkcity Logistics talks about weeding out unregistered and unorganised players/ segments - the so called fly by night operators in the trade - necessary to increase law compliance and operational efficiency. Excerpts from his interview with Upamanyu Borah.
Freight forwarders were already in a challenged space before the pandemic
I
s Pinkcity Logistics still operating in the work from home scenario? Are you able to provide a good shipping experience? Pinkcity Logistics as a company is operating on a mix of-- work from home and work from office, as we are in the business of multimodal logistics for industrial and manufacturing units at various locations which include not just sea 40 |
august 2020
ports and dry ports but also various manufacturing sites. Since these sites are into continuous production and also ICDs – the operations were not much affected due to lockdown, and we could operate under essential services. During the pandemic, for shipping/ freight forwarding businesses, the client experience is based on how the shipping line responds to the lockdown and their
operations as well. In most cases, the shipping experience was affected not by actual shipping but due to lack of availability of documentation and post-sales. Most of the staff of shipping companies was non-operational during the early part of the lockdown. This was also due to lack of policy consistency of the shipping companies on various charges.
What are the main challenges facing freight forwarders in the country at the moment? The main challenge for freight forwarders at the moment is getting back the business which is lost due the COVID-19 pandemic. However, for any
The only sustainable model is increase of import movement into the country which will make available sufficient containers at various ports and ICDs. freight forwarder, getting back sales volumes similar to the pre-COVID levels will depend on how quickly the production companies become 100% operational. The stock of finished goods (which is putting a strain on working capital) won’t be replenished with more production before the same is liquidated. Therefore, the volume of shipments both in export and import shall remain subdued for the next two quarters until the production companies get fresh injection of liquidity either from bank or government. Besides, the offtake or demand needs to double to recoup for the 2-3 months closure where orders which were put on hold. Freight forwarders were already in a challenged space before the pandemic due to lack of regulations in the segment; a number of freight forwarding companies are serving production units as more of credit vessel rather than a value added service. Since shipping companies won’t provide credit to production units, the role of freight forwarders have become more about providing the same services but at lower margins. This has not only affected the quality of services but also time frame, and this will continue without any government/regulatory intervention.
What is the situation at private ports regarding container movement? Since the outbreak, the private ports/ ICDs in respect to movement of containers have taken at least 50% dip. Imports at most ports have dried up, having a domino effect on less imports at ICDs. Although exports have picked up, but it is still at 45-50% of where it was pre-COVID. Movements are also affected due to lack of equipment availability. Lots of shipping companies are getting the empty equipment from port to hinterland to be able to supply containers to their clients. But, this empty movement is not sustainable; it is only a stop gap
Forwarders should be backed by industry bodies and associations to do shipping business, and not the shipping lines directly. arrangement. This can be fulfiled only if the import picks up. Otherwise, rate for export containers will quickly go up due to lack of equipment rather than higher production and offtake. This will then become a vicious circle and challenge to overcome for the sector.
Customs has facilitated electronic movement of documentation. Is it working well? Customs’ facilitation of electronic movement of documentation has been an on-going process for a while now. However, the clearance at the ground level has taken a hit due to movement of people being affected at various ports and
ICDs. The process despite being electronic needs human interface and liaison which is also dependent on vested interest of various interested parties involved in the clearance procedure. At a policy level, the process of electronic movement of documentation looks nice but to practically achieve the same is still impeded by the role of various stakeholders who have their physical involvement to further their own interests.
Do you anticipate accelerated empty container movement into the country to make up for the equipment shortage? The accelerated empty container movement into the country is being done to arrest the immediate shortage of export containers at various plants and ICDs. But, this is only momentarily. The only sustainable model is increase of import movement into the country which will make available sufficient containers at various ports and ICDs. The repo movement can give a push until the next one august 2020 | 41
ernment owned and backed rail operators. The government owned container/ rail operations have a skewed hold on the business which is detrimental to private players. Multimodal operations are best done by private players and not by state-owned companies who due to their backing by the government have an undue advantage, while competing because of their size, Also, due to the vested interest aligned in these organisations, they control the major traffic as well as decision making position in the industry.
month, but post that, export movement will become challenged without an increase in import containers coming in.
Given the situation of what is the scenario of liquidity and cash flow in the industry? The COVID-19 sit uation has presented a very critical situation of liquidity and cash flow. The service providers- freight forwarders/t ra n spor ters/CH A agents are worst affected as the priority to pay for services was always the last in line. With cash flow getting affected, the payment situation from clients have worsened as they want to use every bit of liquidity to order raw material and also make up or hold on to the liquidity till the piled up stocks which has been accumulating at the warehouse gets liquidated. Unless the fresh injection of liquidity is provided to manufacturing either through interest free working capital either by the government or banks, the offtake will not lead to more than 2-3% growth in the next several months. This will ultimately have severe strain on allied businesses.
What in your opinion should Indian freight shipping services learn from the global players to strengthen their value chain? The biggest learning for Indian freight shipping services from its global peers, which has not materialised in years, is that regulation has to be implemented and lesser and bigger players with government and industry accreditation be only allowed to operate. Smaller freight forwarders which open up and start providing services to clients without experience or credibility has hurt the industry for a long time. The trust of freight forwarders is low; the 42 |
august 2020
perception that we are only seen as an organisation for providing vessel or credit facility for shipping requirements have to vanish from the minds of everyone. The sector and we players should be recognised as an industry and clear business models be fixed for operating.
The ones that are able to sail through the next two quarters will take off in the next financial year. Cross-border trade has helped business grow and multimodal shipments are on the rise? Still what are the major challenges that exist? Cross-border trade has helped business grow and multimodal shipments are on the rise – is practically correct. However, the challenge is that most production companies are internalising their logistics arm in lieu of saving some pennies rather than approaching contract professionals. This, in long-term, affects the purpose of logistics (multimodal) due to low quality and not being that cost-effective, for which the same was intended in first place. Private rail/road operators need to be allowed to flourish and not just gov-
In future, how can forwarders and brokers be more prepared, ready to respond and able to recover from the crisis? Forwarders or brokers collectively can only be prepared and respond to this crisis if the government regulates the entry of entities by establishing criteria of having a certain financial and organisational strength, rather than every new entity coming up or mushrooming without any regulation. This regulation is most important, otherwise the need and purpose of forwarding companies will keep on diminishing over the next decade, until we see the last of forwarding companies. None of the Indian forwarding companies are close to the global companies and this is because of unavailability of regulations. Forwarders should be backed by industry bodies and associations to do shipping business, and not the shipping lines directly. Further, forwarders will recover sooner if the exposure of outstanding is less. What do you visualise for the sector after the lockdown is lifted? Logistics as a sector will see ten-fold increase over the next few years if it is able to overcome the immediate future of lack of cash flow and business continuity challenges through innovative methods of cost optimisation and allocating resources in more productive businesses for immediate returns. All contracts which are for a period of six months to one year can be managed, as any new business in this environment is most important due to the unutilised capacity lying with most companies. That said, the ones that are able to sail through the next two quarters will take off in the next financial year.
55
THE WHOLE W RLD OF LOGISTICS AT YOUR FINGERTIPS
70Mft2
Countries & Territories
26Mft self-owned land & facilities
47,000+
10,000+
2
Self owned operating vehicles
Employees
3 PL Solutions Customs Brokerage Container Freight Station International Freight Forwarding C
M
Shipping Agency & Chartering
Y
CM
Inland Container Depot
MY
CY
CMY
K
Express Logistics
Transporation - Vaahan Value Chain Solutions Industrial Packaging Free Trade Warehousing Zone Air Freight Station Project Logistics
Kerry Indev Logistics Pvt. Ltd. Corporate Office : Arihant Nitco Park, 6th Floor, No.90, Dr. Radhakrishnan Salai, Mylapore, Chennai – 600 004 Landline Number : 044-40909090 | Email : corporate@kerryindev.com | Website : www.kerryindev.com
John Ackerman India is a very important trading partner for DFW. Mumbai and Chennai are among the top 25 import and export markets for us, says John Ackerman, Executive Vice President- Global Strategy and Development at Dallas/Fort Worth International Airport. In an exclusive interview with Ritika Arora Bhola, the expert talks about India as an important investment destination and that the airport always encourages airlines to operate more service to India. He also informs how DFW is elevating the customer experience with modernised facilities and updated amenities. Edited excerpts.
It’s our commitment to work together on the path forward
D
FW International Airport has reportedly been the world’s busiest airport in April-May, 2020. Please elaborate on the cargo operations at the airport in terms of cargo handling, loading/ unloading of cargo, supply chain operations and scheduled cargo freighters. DFW has seen a significant number of passenger aircraft operating as cargo freighters. We have been able to make use of our hard stand area and passenger gates to deliver critical cargo during this period. Most of our freighter schedules have remained as planned and we are seeing very good load factors for 44 |
august 2020
both imports and exports.The airlines and ground handlers have implemented social distancing practices for employees and drivers picking up and dropping off cargo to the warehouses, as well as enhanced sanitization of public areas.
Kindly throw light on the categories of cargo that have been moved from the airport since COVID-19 has hit the industry. We have seen large quantities of PPE, medical equipment and pharmaceuticals coming through DFW Airport. Besides, there has been an uptick in electronics and telecommunications equipment that supports people working from
home. We have also seen an increase in outbound mail to US military personnel stationed abroad.
Tell us about the superior infrastructure at the airport for efficient supply chain operations. DFW Airport has modern, efficient,
We are in process of updating our DFW Cargo Master Plan that will provide for a variety of long-term updates to our facilities.
Pharma is a big piece of that traffic, as well as raw materials and manufactured goods. We feel the investment in our cool chain facility will allow us to grow the pharma business overall at DFW, added that India will be a key component of that growth.
How do you look at India as an investment destination? Any plans for future trade with India? India is a strategic market for us and we are always looking for ways to encourage airlines to operate more service to India. We will continue to focus on those opportunities. high-throughput cargo facilities with cargo ramps capable of supporting multiple Group 6 freighter operations 24-hours a day. DFW also has a state-ofthe-art perishable and pharma facility to support handling of large quantities of temperature controlled commodities. In addition, DFW Airport boasts more than 5 million square feet of warehouse space to support freight forwarder and e-commerce operations.
What kind of strategies DFW Airport adopted for smooth and safe movement of cargo at the airport, in the last few months? As an airport, we have monitored changing guidelines from government authorities. We have implemented best practices as they have evolved, including use of face coverings. Our airlines and ground handling partners have implemented social distancing practices in the airport cargo facilities and warehouses, and also carrying out enhanced sanitisation of public areas. Due to the COVID-19 outbreak, a ban was imposed on the national and international movement of cargo. Please share with us the challenges that DFW Airport faced during this crisis and how did you cope up with it? We saw changing regulations with regard to exports of PPE. The DFW Airline Relations Team implemented a week ly ca l l w it h ou r a i rl i ne a nd ground handling part ners to stay abreast of rapidly changing regulations and operational conditions. On these calls, we have representation from our airfield operations, Depart-
We saw changing regulations with regard to exports of PPE. The DFW Airline Relations Team implemented a weekly call with our airline and ground handling partners to stay abreast of rapidly changing regulations and operational conditions. ment of Public Safety, and US Customs and Border Protection to update our partners regarding changing policies and operational procedures. All this worked well for us to clarify any questions and communicate changes quickly.
Does DFW Airport follow an effective risk management policy in times of crisis like these? It’s our commitment to work together on the path forward. We have been working closely with all the teams deployed across the airport to ensure DFW Airport is safe, secure, and ready for all our customers and employees. Tell us about the trade activities with India. What are the major items currently transported to and from India? India is a very important trading partner for DFW along with the economies in its catchment area. Mumbai and Chennai are among the top 25 import and export markets for us. Delhi falls just outside the top 25.
According to you, how is the air cargo industry reacting and responding to the COVID-19 pandemic and DFW’s effort to boost the same? The air cargo industry has indeed played a vital role during this crisis. The entire industry helped bring forth DFW Airport’s importance in the supply chain when critical supplies need to move around the world quickly. The passenger carriers came to the table with creative solutions to help ease the burden on the strained freighter system and keep the world supplied with PPE and pharmaceuticals. We are proud that DFW was a hub for some of these activities. How are you ensuring safety and security of cargo as well as staff, considering DFW Airport is always a busy super hub for both passenger and cargo? Safety and security of staff and customers is always a top priority for us. Even during normal days, our Risk Management team keeps on constantly evaluating the various policies and procedures. During this ongoing crisis, they continue to work closely with government authorities to ensure we follow the best practices and quickly adapt to the changing regulations. Social distancing, sanitisation, and minimising exposure between crews and ground staff are at the forefront of this. Any new facilities coming up? We are in process of updating our DFW Cargo Master Plan that will provide for a variety of long-term updates to our facilities. The goal is to ensure and better fund future growth. august 2020 | 45
Lim Ching Kiat
W
hat kind of impact the lockdown had on the Singapore Changi Airport? Kindly give us a sense of the cargo categories that have been moved to and through the airport since COVID-19 has hit the industry? During this period, we have facilitated several flights for humanitarian aid, as well as flights carrying essential and time-sensitive medical and food supplies by both scheduled and nonscheduled freighter operators including British Airways, Singapore Airlines, SpiceXpress, SF Airlines and Swiss International Airlines. Shipments containing critical medical supplies such as PPE, test kits and masks were among the cargo uplifted from the region to and through Singapore Changi Airport.
Since the start of the COVID-19 outbreak, Changi has implemented a series of measures to safeguard the community, such as more frequent cleaning of high contact areas, enhanced SOPs to facilitate contactless security access checks and additional safe distancing measures, says Lim Ching Kiat, Managing DirectorAir Hub Development at Changi Airport Group. In an exclusive interview with Ritika Arora Bhola, the expert informs about the strategies the airport has adopted to sail through this difficult hour, post-crisis expansion projects, and more.
Securing critical connectivity and capacity during this challenging period Tell us about the cargo handled to and from India. According to Seabury Trade Database, in the first four months of the year, the main commodities exported to India from Singapore were high-technology products and machinery parts, while imports were mainly perishables and pharmaceuticals. Throw light on the efficient plans and strategies the airport has adopted to ensure efficient cargo and supply chain operations amid the COVID-19 induced lockdown. Through close collaboration with governments in the region, Singapore government, along with the Changi Airport Group and our partners, facilitated the 46 |
august 2020
continued supply of essential food supplies into Singapore through additional ad-hoc services. For instance, the governments of New Zealand and Singapore launched a new trade initiative to ensure supply chain connectivity and the removal of blockages to trade in a list of essential products that includes medicines, medical and surgical equipment. Shortly after the trade declaration, the first chartered flight NZ6172 from Auckland to Singapore arrived at Changi Airport, carrying over 20,000 kilograms of chilled meat. In parallel, we worked with our partners to ensure uninterrupted air cargo operations at the airport. Our cargo handling agents- dnata and
SATS have been working tirelessly roundthe-clock on flexible shifts to manage the extra cargo flights and maintain shorter lead times for certain charter flights. For instance, in coping with the increased workload, dnata was quick to redeploy staff from other departments like customer and ramp services to support air cargo, reinforcing the operational capacity and efficiency. All these we enabled while maintaining the well-being and health of the air cargo community. Additionally, since the start of the outbreak, Changi has implemented a series of measures to safeguard the community, such as more frequent cleaning of high contact areas, enhanced SOPs to facilitate contactless security access checks and additional safe distancing measures.
Share with us the challenges the airport faced during this crisis and the strategies adopted to sail through this difficult hour. The COVID-19 pandemic has led to a worldwide lockdown and travel restrictions, which in turn caused massive passenger flight suspensions and slump in global belly-hold cargo capacity. PreCOVID, belly-hold cargo capacity represented more than 50 per cent of overall global air cargo capacity. Consequently, global air cargo capacity has been severely constrained, disrupting international supply chains. Aligned with the strong calls by IATA and various industry bodies to keep air cargo flying, Changi’s ongoing strategic triage of priorities are to ensure timely distribution of cargo, especially vital commodities such as medical and food supplies, and minimise supply chain disruptions by keeping air cargo lanes open, through close collaboration with our air cargo community and government authorities. Changi is working closely with airline partners to secure critical connectivity and capacity during this challenging period; increasing freighter frequencies and introducing more cargo-only passenger flights. We have also established strong
cooperation with our authorities to introduce clear guidelines on cargo conveyance on passenger aircraft, as well as facilitate flight crew turnaround and layover.
Elaborate on the frequency of cargo flights scheduled from the airport and the growth chart of (domestic/ international) traffic in the last few months. In June, our weekly cargo flights, including cargo-only passenger flights have more than doubled compared to preCOVID (Dec 2019). Freighters used to carry about 25 per cent of Changi’s air cargo volume. Today, freighters and cargo-only passenger flights make up close to 90 per cent of cargo traffic at Changi. Between January and June this year, more than 40 carriers such as Singapore Airlines, Scoot, Cathay Pacific, British Airways and AirAsia X have since launched cargo-only passenger flights to Singapore, transporting cargo to about 65 cargo city links. Some of the ad-hoc freighter services were operated by non-scheduled freighter operators such as Ethiopian Airlines Cargo, SF Airlines, and SpiceXpress. In the month of April, Changi has also welcomed two new scheduled freighter operators to our family of freighter operators– Kalitta Air and Sichuan Airlines Cargo. How long would you estimate it would take for our industry to get back the business levels of preCOVID era? What will be the growth drivers? In the near-term, air cargo capacity constraints ensue due to uncertainties on the recovery of the air travel sector.
According to WTO, world merchandise trade is set to weaken by up to onethird in 2020 in the worst-case scenarios, weighed down by the pandemic. This will lead to further volatility and uncertainty in air cargo demand. We expect that cargo demand to and from Singapore will reflect a similar performance and continue to be highly volatile in the coming months. Cognizant of the challenging environment that the aviation sector is in, Changi together with Singapore government will continue to review additional support and reliefs for our air cargo community – cargo airlines, cargo agents and ground handlers.
Community digital transformation continues to be high on our agenda. A major upcoming initiative at Changi Airport is the Changi East Development project. Any expansion plans for the future? In collaboration with our air cargo community, we have been pursuing a few strategic programmes to secure longterm competitiveness and resiliency for the Singapore air cargo hub. Our priorities for building capabilities include IATA CEIV standards for specialised cargo segments as a community. Besides, community digital transformation continues to be high on our agenda. A major upcoming initiative at Changi Airport is the Changi East Development project. It includes the following: Changi Airport’s fifth terminal, Terminal 5 (T5). A three-runway system. The construction of tunnels and other underground systems. Landside and aviation support facilities. The Changi East Industrial Zone.
august 2020 | 47
A city within a city, the success of the giant Hartsfield-Jackson Atlanta International Airport (ATL) keeps tens of thousands employed across Georgia. But as the airline industry takes brutal hits amid travel bans from Europe to the United States, the challenges are troubling Atlanta. Elliott Paige, Director- Air Service Development in an in-depth conversation with Ritika Arora Bhola, explains more on the ground situation at the world’s busiest airport and the near-term outlook, which he thinks, will be feasible to be in a good position and have most of the business back, and what’s down the line in order to stay on top of trends and developments.
Elliott Paige
Which categories of cargo have been mostly moved to and from ATL since COVID-19 has hit the industry? We have seen a rise in shipments of PPE used by the healthcare sector to fight COVID-19. There have been many charters, sometimes as much as 60 flights on our peak day of the week– Thursdays. Among the select flights have been charters of the Antonov 124 filled with masks, along with passenger planes
We aim to have trade corridors, linking us to promote trade and business
E
laborate on the cargo and supply chain operations at ATL. Hartsfield-Jackson Atlanta International Airport (ATL) has three main areas that service cargo. North Cargo serves several airlines such as Southwest, United, and Alaska, as well as the integrators- FedEx, DHL, and UPS. The mid-field area services Delta Airlines and all its SkyTeam partners.
48 |
august 2020
Finally, South Cargo is where the airport sees most of the action in terms of big all-freighter business. Airlines serviced in South Cargo include ABX, Cathay Pacific, China Cargo Air, Asiana, Cargolux, Amazon Air, and many others taking the number to 23 carriers in addition to charters. The three ground handlers are Swissport, Alliance Ground International, and Lufthansa Cargo AG.
from as far as Taipei filled with PPE strapped to the seats and in the carry-on overhead compartments.
Tell us about the superior infrastructure and technologies installed at the airport for supporting efficient supply chain operations– cargo handling and movement. ATL airport has been working for five
years to improve operations through new procedures, nurturing relationships with cargo stakeholders and implementing new technologies to bolster speed and efficiency. In 2017, we implemented TruckPass, a truck marshaling yard, supported by software and dock sensors that allocate doors at the warehouse for delivery and pick-up through trucks. This has reduced truck congestion around the warehouse facilities, and instead helped in significantly increasing throughput. In November 2019, we launched the first Airport Cargo Community System in the US. This AI-powered system allows perfect track and trace, billing delivery, and other features of cargo at the airway bill level for all stakeholders-- freight forwarders, airlines, ground handlers, and truckers. We are adding new participants who want to increase their efficiency, save costs, and protect staff from COVID-19 infections by shaping the digital transformation of their operations.
Now that operations have resumed, what efficient plans and strategies have you deployed to ensure smooth cargo operations? The airport, in collaboration with the private sector, has implemented plan of action for all staff to be protected and for clients such as truck drivers, to practice safety procedures. The staff within the cargo facilities have been provided with masks, gloves, and training on how to use them safely. Touch points are cleaned between shifts, while times between shifts are delayed ensuring there is minimal interaction between departing and arriving shifts of staff. Some companies are using electrostatic cleaning tools, while others have dedicated staff solely for compliance with COVID-19 protection procedures. The aim is to continue operations as safely as possible, given the absolute necessity that air cargo stays in services as it’s an essential sector for the fight against coronavirus. Post-lockdown, how long would you estimate it would take for our industry to get back to business as usual? What will be the growth drivers? The cargo industry has seen a tremendous shortage of capacity that has led to increased cargo rates. Indicators from
freight forwarders are that the prices are beginning to go back to normal due to a combination of more passenger flights taking to the air on the wake of lifting up of lockdowns and dampened aggregate demand. At ATL, it took us 10-years from the 2008 financial crisis to return to precrisis levels when cargo handling reached to around 650,000 MT. In those instances, the initial shock lasted less than a year with after effects lasting several years. The indicators this time are that much depends on how countries that are linked through trade, in both goods and services like tourism will have to boost consumer confidence by managing the coronavirus contagion. Countries that have done the right things and come closest to eradicating the virus, with 100 per cent testing of the population, are moving back to dynamic economies. Those that have not managed the pandemic well enough will likely suffer consumer confidence. The challenge is every country is dealing with this differently. Therefore, we may not see pre-COVID numbers until 2023 for cargo. The driver will be the speed of carrying out total eradication of the virus in as many countries possible, including measures to prevent its resurgence.
ATL airport recently awarded a new warehouse of 100,000 square feet (9,291m2) to Worldwide Flight Services. The expectation is that it should be operational by the end of 2020. Where do the trade activities with India stand at this moment? What are the significant items transported to and from India? India and the United States have a variety of trade disputes and negotiations ongoing in every area from goods trade and investment regime to services trade especially movement of natural persons. Despite these disputes, the US has been exports machines (gas turbines, computers), minerals, precious metals, chemical
products, plastics, paper, and textiles to India. Similarly, India exports the same type of products. Currently at ATL, most of the goods to and from India are related to the pharmaceutical sector including medical equipment and supplies.
How do you look at India as an investment destination? Any plans for future trade with India? I have coordinated three trade missions to India, visiting both public and private sectors in Delhi, Hyderabad, and Mumbai during 2016-2018. The delegation included the State of Georgia representatives, the Mayor of Atlanta representative, the Tourism Authority of Atlanta (Conventions and Visitors Bureau), and us as the airport. The main aim was to promote trade, investment, and an air service route between Atlanta and India. We were very disappointed when Delta Airlines through a new service in December 2019 decided to connect Mumbai with New York instead of Atlanta. We thought Atlanta was an obvious choice. Nonetheless, we wait to see what will happen as markets change in the recovery after COVID-19 pandemic. Any new developments impending? ATL airport recently awarded a new warehouse of 100,000 square feet (9,291m2) to Worldwide Flight Services. The expectation is that it should be operational by the end of 2020. We are also soon to launch a project titled ‘Modern Air Cargo Terminal,’ a state-of-the-art cargo warehouse complex with advanced refrigeration and e-commerce capability, material handling and cargo community systems as well as green technology. This is a public-private project where the airport provides the land, and the private sector will build, finance, and launch an on-airport cargo warehouse. The request for proposal should be issued by the last quarter of 2020, with the expectation to have proposals to review and approve in 12 months. We want ATL to be one of the premiere leaders in moving high-value air cargo, connecting the metro city Atlanta to major trading partners like Mumbai, Amsterdam, Seoul, Shanghai, Riyadh, Paris, and Mexico City. We aim to have trade corridors, linking us to promote trade and business with each of our airport partners. august 2020 | 49
piush goyal
W
hat kind of impact is COVID-19 having on the supply chain and operations of businesses in the Indian material handling sector? There were two things we observed. Initially, when the lockdown started at midnight on March 24, the business came down to almost zero. After lockdown restrictions started to ease, the industry was making a cautious start to resume. By the time it was mid of June, the industry started picking up. However, we were still very apprehensive about whether to go to the office or warehouse. Seemingly, no one was operating; we had machines ready and in stock, my engineers were fully prepared to go to the site while adhering to social distancing measures and every necessary guideline, but we were still skeptical of post-lockdown predictions, added that dispatches were still very low due to multiple external reasons. Now, things are starting to change. In fact, in the last 15 days, many customers had called me up and mentioned that they want to buy certain machinery and parts. We are adequately looking into their requirements and have the level of required inventory to cater to their specific needs. Given this situation, what is the scenario of liquidity and cash flow into the company? As there was no business since the last three months, liquidity could have been a big issue, considering if the company is just domestic. Often, it is also due to factors such as the difficulty to reach foreign markets, the variety of transportation modes that might have to be used, multiple handling procedures, and regulations involved with transporting goods or service cross-border. Kelley being a global brand and multi-billion-dollar company has not witnessed or felt any severe impact on its revenues amid cash flow implications led by the crisis across the extended supply chain. Our global supply chain management treats the entire value chain as an integrated whole and works to inte50 |
august 2020
Knowing how the crisis will likely impact your business, particularly your customers, will not only strengthen your customer service and communication but will also help you identify stakeholders in affected areas. Piush Goyal, Managing Director India & SAARC, Kelley India (wholly owned subsidiary of 4FrontES, USA and part of USD 9.0 billion ASSA ABLOY Group) informs Smiti Suri, how maintaining a positive and professional reaction by following key communication tips goes a long way towards establishing the brand in line with global standards.
We have the level of required inventory to cater to customer’s specific needs grate processes efficiently. This also helps us keep costs to a minimum and ensure we meet the challenges associated with global trade and its changing scenario. Thanks to our global HQ in the USA, which continued to be very positive about the Indian subcontinent.
What is the current state of your manufacturing plants and warehouses? We are an American company; every equipment or spare part directly comes from the USA. We have created a huge stock of all the machines required by the Indian market. Whether it is our ground breaking dock levelers or HVLS fans, if someone wants 100 quantities of both (or
even more), we can supply according to their requirements. We have purposefully built that stock to ensure our customers or the industry does not face any problem or lack of supply. However, we are in the advanced stage of setting up our manufacturing facility in India (which will be the first outside Americas) maintaining the same global standards).
Today, when demand and supply are rising and falling sharply in response to the changing conditions, how do you ensure optimum service delivery to your customers? Since the very nature of the crisis was unexpected, it can be a scramble, particularly at the start, while figuring out what
to do and how to deal. To ensure greater customer service during the crisis, we provided management and employees with all the necessary knowledge. Both management and front-line employees must be involved in awareness, prevention, and business continuity protocols. The goal was to enable our business to handle anything that might come it’s way. Most of my team members in India have been trained at our USA HQ in order to be able to cater to the growing customer needs of global standards. A list of prepared crisis management responses also ensured that our frontline team members and service engineers confidently answered and responded to all customer queries in a realistic, helpful, and consistent way.
Could you explain how human resources have been important to the bottom-line of your business during the crisis? The ‘new normal’ is evolving daily, right in front of our eyes, as we see it. Companies that view these challenges as opportunities to review and adapt their people policies, practices and systems will be much better positioned for growth and success, as we begin to emerge from the crisis. At Kelley, we foster diversity and inclusion, dignity and respect. At a time, when some of the companies are firing employees, we have offered a salary raise of an average 10 percent to all the employees. This will definitely help keep their morale up. The attraction and retention of talent, during good times and bad, will always have bottom-line impact. Moving forward, we would keep focussing on our employees, the places where they conduct business and our vendors to ensure that everyone is treated fairly – and not just on the bottom line profit. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. How are you conducting stakeholder communication to embrace ecosystem partners that have become critical components of your business model? Stakeholder communication is critical during a crisis. It has the potential to lead the entire business towards success
or failure. The advice senior leadership or stakeholders provide – how to respond to the crisis – and the policies and procedures that need to be put in place guides every aspect of the business crisis management plan. We, at Kelley India, were in frequent communication with our leadership team, and the suggestions and takeaways were communicated with all of our employees so that they are able to address the crisis response daily or weekly, as needed. Nonetheless, it was because of our constant communication with the leadership team even during the initial stages of the outbreak that we were able to forecast and anticipate the market requirements for the next few months. An adequate level of inventory and a number of replacement or repair parts were maintained at our warehouses.
Kelley® and Serco® are one of the world’s largest manufacturers of Dock Levelers and HVLS Fans and renowned brands catering to the manufacturing, warehousing and e-commerce sectors. Challenges like lack of standards for palletisation and unsafe lifting and handling practices are still prevalent in the Indian industry. What needs to happen/occur to align the standards and see the right goals come to fruition? India has a long summer season, and growing sectors like e-commerce and warehousing will have increased challenges of employee comfort leading to a huge demand for HVLS fans, which not only results in increased productivity but lowers down the electricity bill, allowing a positive impact on the bottom line. The Indian material handling equipment market is transforming in terms of knowledge, use and the importance of efficient equipment, driven by major investments in infrastructure and construction. The roll out of the GST is already a game-changer for the industry, as it has enabled to consolidate and build warehouses and distribution cen-
ters where it makes economic sense. Consequently, the pallets market in India will incur steady growth as developers and building corporations exhibit progressive interests towards the expansion of the warehousing industry. Pallet vendors are already seeing a higher influx of demand from warehousing endusers, which is justified with the country’s growing transportation and logistics needs, and soaring manufacturing potential. Palletisation is therefore bound to become the norm over the years as part of the streaming of the supply chain process, hence the growing need for loading dock equipment.
What do you visualise immediately for the sector and your company after the pandemic subsides? I believe the logistics and warehousing industry would definitely undergo drastic changes. Today, nobody is willing to go to a shopping mall but wants to buy as many things as possible. For instance, my personal online purchasing has increased 10 times over the last two months. I expect a huge double-digit growth for eCommerce and Warehousing sector. In times of great uncertainty, people’s routines and purchasing habits go out of the window, which opens up the opportunity for businesses that can pivot operations and develop strategies to adapt to the changing climate. Considering the current scenario, we expect many MNCs to shift their base to India in the near to mid-term future, hence a growing need for world-class equipment compared to a cheap low technology product. COVID-19, undoubtedly, is bad for business. But for some companies, the outbreak has opened a window for growth, and this, in turn, will throw business opportunities at us. Kelley ® and Serco ® are one of the world’s largest manufacturers of Dock Levelers and HVLS Fans, and also renowned brands catering to the manufacturing, warehousing and e-commerce sectors in addition to churches, temples and colleges/schools. These are the ones driving most of the growth for India. The service providers and others supporting these sectors need efficient equipment and machinery to continue and run their operations and we are here to provide them the same, best-in-class solutions and service experience. august 2020 | 51
Digitalisation and smart transportation solutions might be the answer to several issues this pandemic has unveiled. Given the circumstances, logistics professionals and respective industries faced the need to change and adjust to a new status. Huned Gandhi, Managing Director, Air & Sea Logistics- Indian subcontinent, Dachser speaks to Upamanyu Borah, more about how they set in place a secure and connected ecosystem, finding new balance in methods and paradigms without shifting focus from people and goods.
huned gandhi
A
t Dachser, what fundamentals go the extra mile to define supply chain management during times of a crisis? Dachser has always been a customer centric organisation. Our approach as well as processes is designed based on customer expectations and maintaining high quality services. Besides, we are constantly guided by our Dachser values for enhancing customer and partner relationships. During the crisis, it becomes even more important that our teams are close to our customers, even if it is practically not possible to meet them in person. As such, we haven’t seen any challenge to connect to our customers and understand their requirements, considering we have robust IT solutions and systems in place to serve our customers digitally. Last year, we implemented our in-house air and ocean freight management system- Othello in India, which is backed by SAP as a financial system. This has helped us to support our customers seamlessly, even while working from the safety of our homes. Initially, there were some snags pertaining to slow internet connectivity that a few staff had to face due to lack of bandwidth in their homes, but these issues were well tackled by our efficient IT teams. After the concerns were addressed, our staff enjoyed a better bandwidth to be able to connect to the systems and keep processing shipments for our customers from their remote locations. We are continuously trying to alleviate the potential impacts of the pandemic by supporting the global supply chain with the efficacy of our extensive network, and constantly finding solutions for our valued customers to carry on their operations. Our teams are our biggest strength, and amid this unprecedented juncture, they have once again done a remarkable job. Even during the first phase of the lockdown, they were continually engaged with customers for organising 52 |
august 2020
Technology is the only thing that can hold logistics networks together urgent and critical shipments, especially LSH customers who were shipping out critical medicines and relying on us to manage their shipments. We have received several testimonials from our top customers in India and overseas for the critical support extended by us. I can recall there was an urgent requirement of raw materials from Europe for Ahmedabad Textile Industry’s Research Association (ATIRA) to manufacture masks. Our team of experts worked round the clock on all days including the weekend and made sure that the shipment arrived on time. There are many such instances where our teams ensured that timely solutions were found albeit the arduous circumstances.
How do you manage to keep your people aligned to service your
customers more abruptly than ever? Any challenges you had to deal with in internal and external communications? Ensuring the safety of our teams has always been the topmost priority during the pandemic. As soon as the outbreak took over India, the first thing we did was to start framing guidelines with regard to working from home, maintaining health and safety, and communicating the same with all our people across India. It’s only because of the collective teamwork that we were able to internally communicate faster and effectively with all our colleagues. Our 500+ people are on the job even today moving both regular and timecritical shipments for our customers from all the major airports and seaports across India.
Currently, how are air freight volumes distributed between India and the rest of the world? There was a huge surge for PPE and other medical essentials from China into Europe as well as the US, during the period from March to June. Since the start of the crisis, Dachser Air & Sea Logistics has handled more than 40 charter flights worldwide from the APAC region and transported a total of over 60 million respiratory masks as well as other medical items such as PPE and protective gloves, and made sure the requirements of the US, European governments were met and distribution to hospitals across these regions was carried out smoothly. Talking about India, the movement was largely for pharma goods, both by air and sea modes. The regular volumes were missing, because across sectors manufacturing was almost at a standstill during the lockdown. Other than the pharma shipments and a few timebound automotive shipments, there wasn’t much demand for air freight. Now, we are seeing some project imports for the automotive sector and other industries. With production reviving gradually, we hope to get back to our normal business soon. Where are the freight rates headed? Why? As of now, we are starting to see some stability; the rates are not as high as they were during the March to June period. The airlines have not yet started operating with full capacity, which is still a challenge. The rates are still inflated, but considerably lower than what we had experienced in the beginning of the outbreak. If we talk about imports, initially, for Europe, it was 3-4 Euros a kilo, while China went up to 40-50 CNY a kilo. Now, the levels have come down to 20-25 CNY a kilo out of China, and Europe is at 1.5-2 Euros a kilo. Export rates are still high; we are at `250-300 per kilo at present. This is expected to continue in the short-term. Once passenger airlines return to the skies, we expect to see better stability in rates. What about the more mature markets? There is no denying that the pandemic has exposed the market vulnerabilities. Even the mature markets were not
spared from the wrath. It’s definitely shaping up to be an enormous stress test for globalisation. Currently, we are seeing high demand to USA. Exports to Europe are also improving as the markets in the region are slowly starting to recover.
Today, what are the major risks for logistics managers embracing an e-commerce strategy? E-commerce in my opinion has its own usage and logistic managers will opt for it whenever it’s feasible. I don’t see this as any threat to our Industry which will continue to grow steadily as the world comes to terms with the ongoing pandemic.
Our 500+ people are on the job even today moving both regular and time-critical shipments for our customers from all the major airports and seaports across India. Which trade lanes currently exist at Dachser Air & Ocean India? What are additional ones planned for 2020 and beyond? Being a German company, the largest trade lane for Dachser India has always been Europe, followed by intra-Asia and USA. In recent times, we have seen an exponential growth in the intra-Asian markets and currently the US trade is also booming with all vessels running in full capacity. For the future, in addition to Europe and intra-Asia, we see USA as one of the major trade lanes for our growth. The markets of Thailand, Singapore, Vietnam, and Indonesia also hold the potential and we look into exploring and enhancing our business in these markets, considering that we already have well-established Dachser offices in these countries. What are the most sought after developments in India’s aviation sector that has helped address growing freight transportation demands? One of the sector’s biggest developments
has been the expedited practice of rapidprocess-digitalisation, the focus—investments and innovation—by the stakeholders and industry towards the adoption and enhancement of IT capabilities have been phenomenal. Also, airport infrastructure has seen overwhelming developments over the years and contributed directly to the country’s international competitiveness.
What are the short to medium-term prospects for the air cargo market? Initially, as the crisis starts to subside, we will see a peak in demand for air freight, because of the depleted inventories across manufacturing companies. Once those are replenished by the arrival of a batch of new units, the demand for air freight will stabilise, and ocean freight demand will kick in. Towards the end of the year, once the vaccine production stage matures, there will be a huge demand for moving those shipments. Then the factors of speed and timely delivery will be crucial. May we expect to see more shippers moving freight from water carriage to air this year? What kinds of commodities are most likely to shift? Quite frankly this question arises every now and then, and we have always seen the consistent growth of air cargo as a clear answer to these questions. Air cargo has come a long way, and with new age aircrafts and technology, it has proven itself as a time and cost-effective solution for many products. Can you help us understand Dachser’s role in future logistics, and services evolving around this concept? Are similar developments in Europe also planned for India? We firmly believe that our air and sea business in India will continue to grow steadily in the years to come. Contract logistics— warehousing and distribution has also been a mature business for us in Europe as well as Asia. In the next five years, we expect similar developments to happen in India. Our focus has always been to provide high quality services and this has been our USP for growth over several decades. Even during the crisis, the recognition and recommendation from our customers bear testimony to our solutions and tech-driven efficiency in logistics. august 2020 | 53
Southwest Airlines has been the best positioned financially among major airlines, with less debt and more reliance on domestic flying than its rivals. But the airline still has to dig deep to ensure it has enough available to make it through the steepest drop in flying in commercial aviation history. Wally Devereaux, Managing Director Cargo and Charters in an exclusive interview with Ritika Arora Bhola, shares how the COVID-19 pandemic affected the carrier’s business, and how they are preparing to come out of the crisis bigger and more powerful than ever.
Wally Devereaux
T
ell us about Southwest Airlines' plans to resume business operations both nationally and internationally amid COVID-19. While Southwest Airlines has reduced daily departures in the short term, the carrier has continued to operate at least a portion of its domestic flight schedule throughout the pandemic. International flying will return as countries open their borders to international travellers. We continue to prepare for the re-launch of our international flights and are eager to start that service when possible. What kind of impact the lockdown had on Southwest Airlines? Kindly throw light on the categories of cargo that have been majorly moved by airlines since COVID-19 has hit the industry. Specific to our cargo business, we have experienced a dramatic shift in the commodities we carry with significant growth seen in e-commerce related goods and medical supplies. We've also seen the number of commodities decline dramatically in line with retail and restaurant closures, the cancellation of many different types of events, and even the restrictions placed on certain medical procedures. Many of these commodities are starting to return as businesses are reopening. Due to the COVID-19 outbreak, a ban was imposed on the national and international movement of cargo. Tell us about the challenges Southwest Airlines faced during this crisis, despite which it maintained operations. Much of the cargo Southwest Airlines fly moves in our US domestic network, however, all of our international service to the Caribbean and Latin America has been temporarily suspended along with interline partnerships covering the Canadian market. 54 |
august 2020
We continue to focus on areas of our business within our control We've also experienced a decline in imports and exports to the US. This has had an adverse effect on the business as well. But, despite these challenges, we continued to focus on areas of our business within our control, including the launch of cargo services on our flights to HNL and cargo piece level scanning on and off all domestic flights.
How long do you think, the impact of the coronavirus would last and by when Southwest Airlines would achieve the same capacity, load factor levels and demand as it was in 2018-2019? That’s a very difficult question to answer, but we are encouraged by improving demand as of late and will continue to invest in our schedule as is warranted.
Does Southwest Airlines follow an effective risk management policy in times of crisis like these? Southwest Airlines utilises well-documented safety risk management processes for many different reasons including the current pandemic.
Any plans for expansion in the future? As a regular course of business, we continually assess opportunities to grow our cargo business through new markets, new products, new technologies, etc. This has not changed and will continue to be our strategy, going forward.
The Highest Circulated/Read & Referred Logistics Industry Magazine
Dr Rakesh Kumar Sinha
As economic activity picks up, logistics services will come back to a reasonably high level. Last-mile delivery will undergo a significant transformation as consumers demand more and more goods and services, delivered to their doorsteps in a safe and hygienic manner. We can see clear trends in faster transit time, track and trace of consignments, and digitisation of the entire supply chain, says Dr Rakesh Kumar Sinha, Founder & CEO, Reflexive Supply Chain Solutions in an interview with Ajeet Kumar. The expert also talks about flexibility in the entire supply chain which would help in synchronising supplies to dynamically changing consumer demands and that these operations must be performed in a fast and efficient manner to improve India's manufacturing competitiveness.
Interfaces between various supply chain partners need to be smooth and efficient
P
ost-lockdown, how long would you estimate it would take for our industry to get back to business as usual? What will be the growth drivers? The pandemic has changed certain consumer behaviors at the fundamental level. Many industry segments have also been reshaped. The speed of recovery would depend on the pandemic coming under control and consumer confidence coming back. I believe it would take about three to four quarters for most 56 |
august 2020
companies to get back to their pre-COVID levels. In my opinion, there would be two main growth drivers. The first and foremost is understanding the changed consumer behavior and rejigging the portfolio offering accordingly. Some companies would actively work towards shaping consumer behaviour further for faster industry growth. The second growth driver would be the ability of the company's supply chain to adapt to the changing market construct and max-
imise the service level. It would mean synchronising supply with demand, building flexibility in operations and improving the speed of response.
How your organisation had been providing customer experience during the lockdown? A lot of transactions have gone online. In such a scenario, it’s important to provide a trouble-free and reliable interface, which customers, both current and potential, can access on a need basis. We
As an important part of the value chain, our eyes should be on the changing needs of consumers. Secondly, various players in the value chain must work for a win-win solution to make it sustainable in the long run. Inter-dependence on each other makes the supply chain even more robust. have incorporated flexibility in our schedules and improved the speed of response in all our offerings.
The consumer sentiment being low now and considering economic downturn across the globe, what will be the scenario of logistics services required in the next couple of years? As economic activity picks up, logistics services will come back to a reasonably high level. Last-mile delivery will undergo a significant transformation as consumers demand more and more goods and services, delivered to their doorsteps in a safe and hygienic manner. We can see clear trends in faster transit time, track and trace of consignments, and digitisation of the entire supply chain. Interfaces between various supply chain partners need to be smooth and efficient to improve the overall consumer experience. Experts say the industry will also see a lot of automation across industries with less staff and more of machines doing the job. Is this a curious case of commercial consideration or a business continuity necessity? It's quite likely that automation would accelerate, especially in those sectors where staff availability is a challenge. Several manual touchpoints would get automated to improve the safety and hygiene of products and services. T hese would be pre-requisites to operate in the new normal, for commercial consideration as well as for business continuity.
Can we expect more automation coming into the entire supply chain for the handling of cargo in a multimodal network? Definitely! Automation is expected to accelerate in the entire supply chain to help in terms of safety, hygiene and sustainability of operations. Freight ha ndli ng as well as warehousi ng would witness more automation as we go forward. Do you see some modal shifts in the way the industry had been working earlier? The industry needs to get more responsive to changing consumer needs by improving on the following three dimensions. First and foremost, batch sizes across the entire supply chain would reduce, thereby increasing the frequency of servicing… right from vendors delivering in smaller lots, factories taking shorter production runs, and logistics companies delivering more often. Secondly, the supply chain would get more flexible in terms of multiple vendors for the same item, multiple products on the same production line, and an assorted portfolio in the same consignment. Flexibility in the entire supply chain would help in synchronising supplies to dynamically changing consumer demand.
Automation is expected to accelerate in the entire supply chain to help in terms of safety, hygiene and sustainability of operations. Freight handling as well as warehousing would witness more automation as we go forward. Thirdly, the speed of response would become a competitive advantage for everyone in the supply chain – vendors, factories and logistics service providers. Players who are slow to respond would lose out to those who respond more quickly. Safety and hygiene would become pre-requisites to operate.
What are the areas logistics professionals globally need to keep an eye on, and put up a unified front? As an important part of the value chain, our eyes should be on the changing needs of consumers. If we keep our eyes firmly on consumers and adopt requisite practices to serve their needs, everything else falls in place. Secondly, various players in the value chain must work for a win-win solution to make it sustainable in the long run. Inter-dependence on each other makes the supply chain even more robust.
The speed of response would become a competitive advantage for everyone in the supply chain – vendors, factories and logistics service providers. As India is trying to be a manufacturing hub - how can the logistics ecosystem players need to gear up in supporting India’s dream of becoming a manufacturing hub? The logistics ecosystem serves such a manufacturing hub in two distinct ways. Firstly, it gets all input materials from all over the world to various manufacturing sites. Secondly, it reaches the finished products to customers and consumers across the globe. These operations must be performed in a fast and efficient manner to improve India's manufacturing competitiveness. Our internal objectives should be subservient to what the consumers need from such a manufacturing hub. In the later phase of lockdown, what is the ground reality? Has seamless transport systems been restored? Most of the transport systems are getting back to normal. However, challenges continue in containment zones, where operations are severely constrained. Contactless delivery and social distancing norms at warehouses and transport hubs are prodding the sector towards a higher level of digitisation, safety and hygiene. august 2020 | 57
industry dialogue
F
ounded in 2009, DACAAI acts as the central coordinator with airlines, cargo terminal operators, government and various agencies with the aim to enhance co-operation and process efficiency that will lead to growth of the domestic air cargo sector in India and welfare of the agents and industry at large. As a nodal agency, providing valuable insights, with a renewed focus on educating and guiding agents and the sector to prosper through these difficult times, DACAAI has consolidated some
key concerns and recommendations to the government.
Roll back GST on bad debts during COVID-19
India’s air cargo sector is definitely one of the worst-hit as a result of the unsettling pandemic and against a backdrop of already-weak credit measures. The mandatory four months nationwide lockdown has further pushed the sector towards losses and downturns in core business activities due to market and earnings slumps. Even though the supply of pharmaceuticals, medical equipment and other essential commodities continue as per directives of the government considering it is the need of the hour, the credit downturn caused by COVID-19 has been abrupt and severe, with a tremendous
impact across the country’s domestic air cargo sector. The consensus among industry experts is that the pandemic may now be at, or near, its peak in some regions but will remain a threat until a vaccine or effective treatment is widely available, which may not occur until the second half of 2021. At such a time, domestic cargo agents are literally struggling to survive as they are having to continue pay GST on invoices for which they hadn’t even received the payments. As a result, many domestic agents/vendors are now on the brink of bankruptcy. As per provisions under GST law, agents have to pay 18% GST on invoices up front, but the coronavirus pandemic and consequent lockdown have led to an increasing number of cases of bad debts.
Rebuilding Domestic Air Cargo Sector: In discussion with DACAAI In a virtual interaction with Domestic Air Cargo Agents Association of India (DACAAI)’s senior-most members, CARGOCONNECT intended to identify the dilemma of the problems that the association is facing, which also led to perceiving other underlying issues that revealed more than one root cause to the many contributing factors hampering the growth of the domestic air freight sector. Excerpts from the intriguing discussion that helped in assimilating significant information.
58 |
august 2020
industry dialogue
DACAAI informed they have not received payments for services provided to clients, leading to huge losses for members of the association. The worries seem to accentuate as customer defaults are on the rise due a general breakdown in business payment cycles. “On one side, there is no business for the past two and a half months, and on the other, due to lockdown, we are not getting payments from our clients for ser v ices prov ided to t hem,” says Hemant Anand, Executive Body Member of DACAAI. “This situation puts us in double jeopardy and our members are suffering huge losses.” The value of supply of goods or services is transaction value, which is the price actually paid or payable for the said supply of goods or services. In the case of bad debts, the amount payable remains the same, however, it is just that it is not realised. These assertions would not change the taxability component in the transaction; thereby no tax reversal can be taken out of bad debt. Domestic cargo agents are unanimously urging the government to reverse back GST paid on bad debts, as it would provide some relief to them and it’s a matter of survival. This, of course, will all be possible only if government has a liberal outlook towards unconventional policy measures. “Our members are facing huge losses and lack of working capital as our payments are not forthcoming, and that we are unable to reverse the GST already paid on bad debts,” stresses Suraj Agrawal, General Secretary for DACAAI. “ We urge the government of India, GST Council and all concerned that GST paid on bad debts be credited back into our account. Either Government should consider charging GST only after the payments are realised or refund us the GST paid on bad debts.” When we talk about the global scenario on tax relief, it is much more balanced in case of bad debts whereby quite a few tax jurisdictions do not collect taxes on the component of unrealised payments. For example in the USA, States usually provide sales tax relief for tax remitted to the states on the amount that later becomes uncollectible. In Germany, bad debt relief is given if the cus-
There is an urgent need for focus and efficient policy implementation by the government for facilitating the export of agri produce like fruits and vegetables as well as aqua products to every corner of the country. Amit Bajaj, President, DACAAI
We urge the government of India, GST Council and all concerned that GST paid on bad debts be credited back into our account. Consider charging GST only after the payments are realised. Suraj Agrawal
General Secretary, DACAAI
tomer becomes insolvent. Unfortunately, nothing of this sort exists in India.
Facilitate efficiency in movement of horti-agriaquaculture produce
India wastes 16% of its agricultural produce every year. In some reasons, agri or fresh produce is surplus and farmers have to sell at a loss. They see produce rot in fields as they rush to find areas of demand and prevent closures. Meanwhile in other regions, there is scarcity of the same product that is
faci ng a massive surplus i n some other region. Additionally, lack of cold chain and proper storage facility, exports, transportation, adequate processing facilities, and marketing are fields where the government has failed to deliver, leading to wastage of food. “There is an urgent need for focus and efficient policy implementation by the government for facilitating the export of agri produce like fruits and vegetables as well as aqua products to every corner of the country,” says Amit Bajaj, President of DACAAI. “There is heavy demand for peas from Himachal Pradesh, coriander from Bangalore, litchi from Patna, pineapple from the Northeast, cherries and apple from Srinagar, and variety vegetables from Kolkata. These markets can grow exponentially with more products moving in and out, if government provides right policies and procedures that support growth in the agricultural marketing setting,” informs Bajaj. Besides, there is 0% GST charged on transportation of farm produce by road and rail, while 18% if flown through air. “This inflates the cost for the end customer making the movement unviable,” feels Bajaj. “18% GST should be withdrawn on domestic air transportation of fruits and vegetables and aqua products like shrimps and fish. This would give much needed relief to the farmers, consumers and agriculture produce marketing companies, as well as help to expand the domestic air cargo market,” says Bajaj.
Improve MSME payment cycle
The government recently created a special provision wherein the payment to MSMEs has to be actualised within 45 days to avoid undue distress to them. If a company does not pay an MSME within the aforementioned timeline, the same is declared as a default in the audited balance sheet of the company. This has improved the payment cycle, but enforcement of the regulation is not up to the mark. “The corona crisis has hit the liquidity crunch in the MSME sector. During such a time, it is essential that corporate hordes give some breathing space by august 2020 | 59
industry dialogue
expediting the release of payments to its vendors, especially MSMEs,” says Gaurav R Ghuwalewala, Executive Committee Member of DACAAI. “The enforcement of 45 days payments is a welcome move and becomes all the more important for the survival of MSMEs.” “We propose the imposition of 18% tax chargeable as penalty to the government on payments that are made to MSMEs beyond 60 days from the date on which a bill is generated,” insists Ghuwalewala. This, Bajaj also feels, will critically ensure that payments to MSMEs are cleared within 45 days and also act as a self-regulatory mechanism for improving the cash flow to the MSME sector. “This will help in funding the MSMEs organically, and also bring down the recovery litigations in the court,” explains Bajaj. “Collection of fine for nonpayment and its use is solely up to the government. The MSMEs are only concerned about receiving their due payments on time. They would be more than happy if the same is facilitated,” says Ghuwalewala. According to Bajaj, most of the DACAAI agents are small and medium enterprises and are on the verge of closing down businesses due to losses being suffered by them. Furthermore, he pointed out that in the current situation, airlines are insisting that charges be paid in advance. Not to question, the ‘frenetic’ air freight market has become a ‘pay-to-play market’, and it’s all about deep pockets and whether forwarders/shippers can afford to pay. “Cash-flow management has always been a concern for domestic air cargo agents. Post-COVID-19, this has become even more challenging. We are sandwiched between airlines - who want advance payment and customers who wish for more credit,” says Ghuwalewala. Many forwarders were at pains to explain the effects of this and noted that they themselves were not taking additional margins from the high prices. Additionally, the urgent demand of PPE products has tripled the number of freighter flights from Asia, adding to congestion and delays at airlines. It is recommended to place and pay for 60 |
august 2020
The corona crisis has hit the liquidity crunch in the MSME sector. During such a time, it is essential that corporate hordes give some breathing space by expediting the release of payments to its vendors, especially MSMEs. Gaurav R Ghuwalewala Executive Committee Member, DACAAI
On one side, there is no business for the past two and a half months, and on the other, due to lockdown, we are not getting payments from our clients for services provided to them. Hemant Anand
Executive Body Member, DACAAI
bookings at least two weeks before estimated departure dates to secure space. However, this situation has now stabilised from what was just a couple of months ago.
Signs of hope
Considering the ongoing issue, the government is mulling upon providing a GST relief package to industry’s worst-hit sectors like aviation, air cargo, real estate, etc. that can help to mitigate the impact of coronavirus outbreak and help prop up the econo-
my. The package may consist of a sixmonth suspension of GST payments for the sectors that have suffered most due to the pandemic. Other proposals include a switch to a cash-based principle of levying tax from the current invoice-based system and providing GST relief on sales for which payment is not received due to the lockdown by treating those as bad debts. A cash-based system implies that businesses would pay GST to the government when they received the cash in hand not when the invoice is raised. This may however lead to ballooning of the liabilities on the face of balance sheets, eyeing which certain companies may take an aggressive stand to deny payments to the agents/vendors on flimsy grounds. Further, the government is looking at exempting the other statutory charges on a temporary basis for the worst affected sectors. GST Council, the apex decision-making body for the tax, has not given a final nod on the proposal as of now, but is expected to, soon. In the wake of a demand for complete GST exemption, the government is veering around to the view if suspending the tax will work better. Exempting a sector from tax would mean breaking the credit chain, leading to further problems down the line. Suspension of GST for six months is said to be a good move, if implemented as it will offer some relief to the companies to scale up their business and cope up with the volatile situation. Most service providers are facing delays in payments from clients but are saddled with GST liabilities. Taxpayers including various companies have been demanding that they should be allowed to pay GST on actual receipts as against on the date of raising invoice as there are huge cash flow and working capital issues. Liquidity is among the immediate needs of industry, tax experts have also pointed out. “At this time, industry needs more liquidity and hence deferment in payment of GST for next few months (without interest) should be considered,” states Pratik Jain, National Leader, Indirect Tax, PwC. However, Pratik is of the opinion,
industry dialogue
while providing selective exemption is an option, it often creates complications as input credit gets blocked, aside from coping with the rigours of anti- profiteering provisions. “An embargo on the utilisation of input tax credit for payment of reverse charge liabilities has been a matter of financial stress perpetually for the businesses. With the current pandemic, this concern has only worsened and businesses have been strenuously representing to the government for some relief on this aspect - specifically businesses with fixed committed costs i nvolvi ng a reverse-c harge lev y,” says Abhishek.
End remarks
One can justify taxing the wealthy or the super-rich and large businesses any time. The paradox is that large businesses and wealthy entrepreneurs can
take larger risk, undertake new ventures and create large number of jobs. The cascading impact on supporting and ancillary industry sectors results in both, as a multiplier of jobs and economic output. For a change, the legislators should give them a pat on their back; let their contribution to the crisis aid come voluntarily. Drive them to strengthen their business models and the environment where they conduct transactions. The government can give people free food grains from its warehouses, but cannot create enough jobs for them. For private enterprises to create jobs, they should feel good too. They take risk for the ‘lure of profit’. If the government fails to create a conducive supportive environment with profit opportunities for them, we can be rest assured of large-scale job losses. Take for instance the real estate sec-
tor, which creates a large number of jobs for the poorest labourers and demand for several sectors like cement, steel, building material and finance. The housing sector is in dire need of capital, and banks have little risk appetite. This sector is the backbone of the economy and financial system as well. For a limited period, say one year, the government should offer full tax deductionon the value of residential property over five years.It can catalyse the economy’s revival, more than making up for direct tax loss. With above, considering the global best practices, there is a need to change the psyche of Indian bureaucrats whereby an environment of trust is established for businesses to grow and thrive. Indian indirect tax system needs a thorough look into the provisions to identify and uproot any harsh anti-business stipulations.
LEADERS LEADING LOGISTICS series Part III chapter will appear in CargoConnect September edition. Watch out for the leaders charting the course to purposeful success.
To participate, reach out to ajeet@surecomemedia.com | +91 9810962016 august 2020 | 61
Speed to Market is Key
O
rganisation background and corporate mantra
Moving products into the hands of customers as quickly as possible is the mantra, Hemant Kumar Sood, Director- Value Chain, Raymond Consumer Care adheres. The action strategy, he says Ajeet Kumar, remains `Agility´, as the deciding factor for prosperity and speedy supply chain, which is most important for winning the battle.
62 |
august 2020
The Raymond Group has a noteworthy presence in the FMCG business through its associate company – Raymond Consumer Care Pvt Ltd, the second oldest FMCG Company in India and in operations since 1964. With pioneering brands like Park Avenue and KS-- home care segment through the premium brand and sexual wellness segment through the KamaSutra brand, Raymond is steadfastly expanding its presence in the category. In this direction, the company is already looking to expand the Park Avenue brand into skincare as well as haircare sub segments. Last year, Raymond brought global perfume brand Tonino Lamborghini to India. The success mantra for Raymond is in fulfilling the need gap of the customer and providing high quality products that consumers can cherish and enjoy. The guiding principle of ‘consumer first’ remains at the core, therefore all innovation, efforts and products are designed, developed and commercialised to win consumer trust and loyalty.
Best practices for seamless and efficient supply chain operations E-commerce is a fast emerging channel and establishing a supply
chain for it is a daunting task, given the requirement could range from 2X to 50X in a short period along with customised requirement of a product. Speed to market is key for us in today’s digitally connected world. Today is the era of fast failure and quick success. Innovation to commercialisation life cycle has reduced from 18 months to 90 days. Supply chains must therefore generate value and agility for organisations. As shoppers move to an ‘omni’ mode, expecting the products to be present ‘when’ and ‘where’ they shop, FMCG companies will need to transform their distribution models to enable this. As such, our distribution and manufacturing strategy have been designed and executed to cater to e-commerce, after a detail study of saliency across geography, time and inputs to demand. Last year, we introduced 99 products, i.e. three products coming out for commercialisation every third day of the year. This has helped us in achieving a leadership position in the FMCG segment.
The ability to serve the demand that can’t be forecasted will be a megatrend which will bring about structural changes in warehousing.
The primary expectation from logistics service providers are value-added services such as product customisation and fast and efficient transportion of products to the retailer, so that it reaches the hands of customers as quickly as possible. Warehouse management strategies
Our warehouse provides strategic inventory buffers at pre-determined locations and act as shock absorbers. We consider location, serviceability, cost and safety as strategic points while designing and setting up new warehouses. Locations are selected looking at cost benefits that may come. Consistently inspecting storage areas, regular cycle counting, setting up KPIs, periodic monitoring, regular staff training on product and process are key parameters we adopt.
Ensuring smooth coordination across the supply chain
IT and IoT plays an important part in smooth operations and coordination across the supply chain. GPS tracking of trucks is now something that everyone boasts.
Procurement methods
With the integration of sources, purchasing and procurement technology and its interface into wider and specialised business applications, has single-handedly transformed the procurement process for us. If organisations haven’t done it yet, they must start today.
Managing logistics network
Complete logistics function is outsourced to our partners in the logistics services network. Planning is done internally. The primary expectation from logistics service providers are
Our warehouse provides strategic inventory buffers at pre-determined locations and act as shock absorbers.
value-added services such as product customisation and fast and efficient transportion of products to the retailer, so that it reaches the hands of customers as quickly as possible.
Optimising logistics cycle
Discreet and customised solutions across the board are worked out considering given priorities along with long term supply chain management strategies.
Megatrends in supply chain management
The agility of the supply chain will determine the prosperity of an organisation. To enable agility in the supply chain, it must be backed by cutting-edge technology. Blockchain in supply-side, AI in demand-side would help predict how the current distribution is likely to emerge as the most efficient model in the
Disaggregation will lead to ‘disowning’ a large part of the distribution network, but facilitate partnership with regional and national players to enable the most efficient and lowest ‘cost to serve’ distribution model for FMCG brands across all channels. coming years. Disaggregation will lead to ‘disowning’ a large part of the distribution network, but facilitate partnership with regional and national players to enable the most efficient and lowest ‘cost to serve’ distribution model for FMCG brands across all channels. This will, in turn, allow brands to focus on creating the ‘pull’ and in-store customer/shopper experience. In China, approximately 25 per cent of FMCG business is distributed by aggregators. In the end, the ability to serve the demand that can’t be forecasted will be a megatrend which will bring about structural changes in warehousing. Apart that, others that would emerge: Megatrend 1 Increased competition and price pressures
In order to continue to compete with the commoditised products, firms
would need significant cost improvements with supply chain redesign and technology. Megatrend 2
Outsourcing
As many companies step back and examine their core competencies, outsourcing parts or a complete supply chain can be advantageous. Megatrend 3 Shortened and more complex product life cycles
Today, many companies are under pressure to develop and innovative products, and bring them to market more rapidly while minimising cannibalisation of existing products which are still in high demand. In order to meet the needs of both customers and consumers, companies need more efficient product lifecycle management processes. One key benefit of product lifecycle management processes is helping companies design products that can share common operations, components, or materials with other products, thereby reducing risks of obsolescence, write-offs, increasing cost leverage on the purchasing of key materials and ensuring that infrastructure investments are optimally utilised.
As shoppers move to an ‘omni’ mode, expecting the products to be present ‘when’ and ‘where’ they shop, FMCG companies will need to transform their distribution models to enable this. Megatrend 4 Collaboration between stakeholders in the extended supply chain
As supply chains continue to develop and mature, there has been a move towards more intense collaboration between customers and suppliers. The level of collaboration goes beyond linking information systems to fully integrating business processes. Megatrend 5
Flexible warehousing
Today, most of the organisations are exploring the trend of moving towards flex warehousing or on-demand warehousing. More is hired when it is required, thus effectively creating value for the customer.
august 2020 | 63
guestcolumn Divyanshu Tambe
Executive Director– Transport & Logistics, M&A Transactions, Ernst & Young India
Changing landscape of Warehousing and Contract Logistics: A Multidecadal Perspective
I
n the past two decades, warehousing has evolved from being carried out in run-down ‘Godowns’ to modern structures, aided by the implementation of the GST reform, benefits of scale offered by larger warehouses, capital flows enabling building of the modern warehouses, and increased outsourcing by end-user industries (EUIs) to specialised Logistics Service Providers (LSPs). Outsourcing of the logistics function to specialised LSPs as a trend got fast-tracked in the aftermath of the Global Financial Crisis of 2008, as EUIs focussed more on their core business. Warehousing in the country stands at ~950 mn sq ft with average rental of $2.1 pa – that makes it a ~$2 bn annual rental market. Warehousing operations yields are ~2.5x of rental & secondary distribution of ~1.5x of warehousing ops, making overall contract logistics (warehousing + distribution, “CL”) a ~$12.5 bn industry. Top 10 CL players enjoy ~10% of this market, with organized industry making up ~25% ($3bn). A multi-decadal analysis of the warehousing sector brings out 3 clear trends: 1. Growing penetration of Grade A/B warehouses– Penetration of Grade A/B warehouses as % of total warehousing has grown from ~5% pre2000 to ~23% in 2019. Grade A/B addition of ~36 mn sq ft in 2019 alone was the equal to all additions during 2001-2010. From 2011-2020, India has added nearly 5x Grade A/B capacity vis-à-vis the previous decade. 2. Steadily changing tenant profile from EUIs to LSPs– In the early 2000s, EUIs (non e-commerce, brick-and-mortar businesses) com-
64 |
august 2020
manded 80% share in the total Grade A/B warehousing pie, which has since steadily declined to ~35% in 2019. The remaining share (~67%) has now been taken up by LSPs and e-commerce companies. 3. Emergence of reliable and specialised Contract Logistics players– With increasing penetration of Grade A/ B wa r e hou si ng a nd change in the tenant profile, India has seen the emergence of reliable and specialised CL players. The growing maturity in the CL market is facilitating the shift of EUIs towards a service-led, variable pricing model provided by LSPs from erstwhile inefficient, do-as-directed cost-plus model. For better appreciation of evolution of the sector, let’s look at four periods of 5 years each more closely: 2001-2005: Local Labour Supply Services, with limited capital and capabilities on a ‘cost+ plus’ model were availed by EUIs to undertake warehousing operation services in ‘Godowns’ (Grade C/D) owned/ leased by the EUIs. The supply of Grade A/B warehouses stood at ~ 5% of the total warehousing space of 350 mn sq ft by 2005. 2006-10: The foundation for modern warehousing and Contract Logistics was laid in a slow and steady manner. This was driven by the growing needs of EUIs, foreign LSPs such as DPDHL, DB Schenker scaling their operations in India and a few home-grownLSPs (KD Logistics, Future Supply Chain etc) foraying in the industry. Most of these domestic players were supply
chain entities of large end-user companies such as M&M, Future Group and TVS Motors. Initially, these large EUI provided their supply chain entities with anchor volumes enabling them to build thirdparty business thereon. By 2010, India had ~400 mn sq ft of warehousing of which the penetration of Grade A/B was a mere 12% (~44+ mn sq ft). E-commerce had started taking baby steps since late 2007 with Flipkart, Myntra, Snapdeal & likes. 2011-15: India witnessed an e-commerce boom led by homegrown etailer Flipkart, Snapdeal, Firstcry, Jabong as well as the entry of Amazon in 2013. E-commerce fulfilment mandated challenging service-level (SLAs) from LSPs being pull-based sales channel vs traditional pushbased model. Quality warehousing & technology were at the core of the solution. The traditional LSPs were not geared to undertake the complex logistics needed to do order fulfilment. This led to emergence of specialised e-commerce logistics players (Delhivery, E-com Express) and e-tailers themselves developing a logistics function in-house. Eventually, larger LSPs did enter the domain but a lion’s share continued to be with e-com logistics players and e-tailers themselves. On the back of this traction in warehousing and capital flows into the sector, modern warehousing added 30% more capacity in these 5 years than all additions from 2001 to 2010. 2016-2020: With all the above enablers growing in scale and the impending policy reform of GST and
E-Way Bill, organised warehousing started to gain further traction. With the onset of GST in 2017, compliance and re-organisation of the supply chain gained focus and a hub-andspoke model with larger warehouses in fewer strategic locations (such as Delhi NCR, Bangalore, Chennai, Mumbai) came to the fore. EUI accelerated migration from unorganised, non-compliant and local LSPs towards organised, compliant and pan-India present LSPs. India added nearly 3x capacity in this period compared to the 2010-15 period. Considering the ongoing COVID-19 pandemic, it is also important to reexamine some of the above trends and assess the pandemic’s implications for some of them: Shift towards a variable pricing model– As EUIs grapple with liquidity challenges and attempt to make their cost structure variable to the extent possible, the shift towards a ‘variable pricing’/‘pay-perpiece’ model from the inefficient, cost-plus model is expected to accelerate. From a tenancy perspective, this would translate to an accelerated shift towards outsourcing by EUIs to LSPs, who in turn are likely to operate multi-user facilities (MUFs) (shared by multiple EUIs vs single user) and underwrite volume risk to benefit from a larger share of gains from efficiency and scale, that come from higher utilisation. We expect LSPs from all subsegments like full truck load(FTL), e-com and express logistics to diversify into Contract Logistics. Shift from unorganised to organised LSPs– As EUIs seek reliable and resilient logistics partners in challenging times, organised players with professional management teams, IT systems and processes, pan-India network, and superior operational capabilities are expected to replace and gain market share from unorganised service providers who are struggling to operate in the current challenging environments. Outsourcing and partnership approach– The relationship between
EUIs and LSPs is expected to undergo an upgrade from the current transaction-based model to a contractual one, with higher level of outsourcing and LSP involvement. The contractual scope is likely to be more integrated, under a variable pricing model (pay-per-use), extending from the factory till the end consumer (irrespective of the sales channel). In comparison, the previous model involved leasing of warehouses by EUI themselves, cost-plus pricing model for manpower supply by LSPs, in-house inventory and demand planning by the EUIs and collaboration with multiple LSPs for various legs of the supply chain.
2021-2030: Trends for the decade ahead
A. Warehouses designed to enhance supply chain efficiencies to gain focus as LSPs become main tenants and users: Currently, a large portion of the Grade A/B facilities are designed to maximise storage area and thus rentals, without adequate number of docks, poor road connectivity, and insufficient area for truck movement within premises. This result in inefficiencies like higher detention times for trucks and low throughput. This is expected to undergo a change as the tenant profile is shifting to LSPs. We expect addition of ~400 mn sq ft of modern warehousing space in this decade. Of this, the share of LSPs is likely to exceed 90% by 2030 from current levels of 45%. Cumulatively, we expect LSPs to have ~75% market share, up from the current ~35%. B. Pay-per-piece pricing methodology: The adoption of a variable pricing methodology is expected to be widespread with EUIs opting for flexibility to optimise their supply chain spend and focus on core business. LSPs with larger warehouses are likely to improve their cost structure owing to inventory optimisation via a throughput-drivenmodel and increasing value-added services (VAS) such as inventory and demand planning along with
integrated services. This shift from the previously followed storage-led model to a high-churn one to increase the tonnage handled/sq ft is expected to translate into higher realisations for LSPs. C. Shared warehousing in multi-user facilities: Built-to-Suit (BTS) warehouses are designed under instructions from a EUI customer for longterm use. Currently, BTS warehouses enjoy 70% share in the total Grade A/B space. However, shared warehousing in MUFs operated by LSPs offers benefits such as shared administrative costs, flexibility to meet fluctuation in demand as well as pay-per-piece pricing model. To summarise, the increasing share of organised LSPs shall help reduce inefficiencies in supply chain, enhance pricing power of efficient LSPs, leading to the emergence of Contract Logistics as a critical business support service. Market leaders could command >50% share of the industry going forward, thereby presenting the ecosystem (consisting of existing LSPs, capital providers like Private Equity funds, Foreign Strategic investors, and EUIs) with an unprecedented opportunity. Simply put, growth in Organized Contract Logistics is expected to have three major drivers: i) Grade A/B warehousing footprint growth at a CAGR of 14%+ (vs historical 10-yr CAGR of 16%+) ii) Market share gains for LSPs of 6%+ annually in new leasing vs EUIs iii) Conversion of ‘cost-plus’ contracts to ‘pay-per-use’ model leading to pricing gains of ~5% in lieu of reduced obligations and lower fixed costs for EUI. The above three factors are likely to drive growth at 25%+ CAGR in the Organised Contract Logistics market, making it a $9 bn market by 2025 and $25 bn by 2030. In the 2020-30 decade, fresh real estate (RE) capital required (at current prices) to fund modern warehousing and its sustained growth would be $10 bn+and additional capital for secondary deals sponsored by sovereign wealth funds (SWFs) and pension funds could be$5 bn+. Let’s build!
august 2020 | 65
n ews taudi-Rewari section of NH 352W costing `1524 crore, the 14.4 km 4-lane Rewari Byepass costing `928 crore, the 30.45 km 4-lane Rewari-Ateli Mandi section of NH 11 cost-
MoRTH inaugurates economic corridor projects worth `20,000 cr in Haryana
U
nion Minister for Road Transport, Highways and MSMEs Nitin Gadkari recently inaugurated and laid the foundation stones for various highway projects as part of a new economic corridor worth `20,0000 crore in Haryana via webcast. The projects inaugurated include the 35.45 km 4-lane Rohna/Hasangarh to Jhajjar section of NH 334B costing `1183 crore, the 70 km 4-lan-
ing of Punjab-Haryana Border to Jind section of NH 71 costing `857 crore, and the 85.36 km 2-lane with paved shoulders Jind-Karnal Highway on NH 709 costing `200 crore. Foundation stones were laid for projects including the 227 km 6-lane access controlled Greenfield Expressway from Ismailpur to Narnaul on NH 152D in 8 packages costing `8650 crore, the 46 km 4-lane Gurugram Pa-
ing `1057 crore, the 40.8 km 6-lane Narnaul Byepass on NH 148B, NH 11 and Narnaul to Ateli Mandi section of NH 11 costing `1380 crore, the 40.6 km 4-lane Jind-Gohana (Pkg 1, Greenfield alignment) of NH 352A costing `1207 crore, the 38.23 km 4-lane Gohana-Sonipat section of NH 352A costing `1502 crore, and the 40.47 km 4-lane UPHaryana Border to Roha on NH 334B costing `1509 crore.
DIAL handles record 1,850 flight movements in June; highest-ever in the country
D
elhi International Airport Ltd (DIAL) announced it has handled 1,850 cargo freighter aircrafts in the month of June 2020, which is the highest in the country and highest-ever recorded at the airport. This comprises of 1,091 scheduled and 759 non-scheduled freighter movements.
According to the airport, it has also recorded the highest volume of cargo in the first quarter of the financial year 2021, between April and June. The airport handled more than 20 million pieces of essential medical supplies – 10.3 million facemasks, 6.2 million gloves, 4.9 million goggles, 1.9 million bodysuits, 1.4 million
JNPT declares commencement of operations at its multi-product SEZ
S
tate-owned Jawaharlal Nehru Port Trust (JNPT) has announced the start of operations at its port-based special economic zone (SEZ). JNPT sa id t wo u n it s – OWS LLP and Krish Food Industry have completed their first phase of operational activity at its multi-product SEZ spread over 277 hectares at Navi Mumbai and have been 66 |
august 2020
declared operational units by the Development Commissioner, SEEPZ, SEZ. Three more companies are likely to commence their construction activities soon.
shoe covers and 250 ventilators – the largest volume handled by any airport in India. Within a record time of seven days, the airport was able to set up a 3800 sq m facility to handle COVID-19 related medical essentials. The import medical cargoes were stored in separate export zones to be further transported across the country.
The multi-product portbased SEZ aims to boost exports by enabling port-led industrialisat ion under t he Sagarmala program of the Shipping Ministry. The port hopes that the SEZ units will generate cargo that adds to the volumes shipped through its facilities.
DHL Global Forwarding opens first Indian temperaturecontrolled facility
D
HL Global Forwarding, the freight forwarding specialist of Deutsche Post DHL Group has opened its first temperature-controlled facility in India to meet the growing demand for reliable temperature-controlled transportation from point of departure to arrival. Located in the cargo satellite building close to the airport in Hyderabad, the new facility offers conditioning of packaging materials in different chambers for varying temperatures up to -20° Celsius, successfully meeting the stringent needs of pharmaceutical shipments. The facility also offers online temperature monitoring and SMS alerts with all data available for download from a cloud-hosted service.
Centre to privatise Varanasi, Haldia, Sahibaganj multi-modal cargo terminals
T
he Inland Waterways Authority of India (IWAI) has sought bids to privatise multi-modal terminals at Varanasi in Uttar Pradesh and Haldia in West Bengal on equip, operate and transfer (EOT) basis. The Varanasi terminal will be taken up on the EOT model with an initial concession period of 10 years. The concession can be extended by another five years linked to performance and on meeting some conditions. The Haldia facility is a full-fledged terminal with no scope for any expansion. The Haldia contract will have a concession period of 15 years, which can be extended by five years. In the case of Sahibganj terminal, the private operator will get the mandate to expand the terminal from 3.03 million tonne to 5.9 million tonne with an investment of `300 crore.
First-ever container cargo reaches Agartala from Kolkata Port via Chattogram
T
he first-ever container cargo from Kolkata via Bangladesh's Chattogram port has reached Agartala, the Ministry of External Affairs (MEA) said on July 23, terming it a ‘historic milestone’ in the Indo-Bangladesh connectivity and economic partnership. Bangladeshi ship MV Shejyoti carrying the consignment comprising 50 MT TMT steel bars and 53.22 MT pulses (in two TUEs) left the Haldia Dock
Complex (HDC) at Kolkata (Syama Prasad Mookerjee) Port on July 16 and reached Chattogram (Chittagong) seaport on July 21. From Chattogram international port, four Bangladeshi trucks carried the goods up to Akhaura Integrated Checkpost (ICP), adjacent to Agartala city, where the consignment was formally received by Tripura Chief Minister Biplab Kumar Deb. The consign-
ment of steel bars was subsequently ferried to western Tripura's Jirania while the pulses were transported to southern Assam's Karimganj. Union Minister of State for Shipping Mansukh Mandaviya had flagged off the first trial container ship from Kolkata to Agartala through Chattogram Port of Bangladesh last week in a virtual ceremony. This has been done under the Agreement on use of Chattogram and Mongla Ports for movement of India’s transit cargo through Bangladesh. Mandaviya had said that the route will open doors of new opportunities for both the countries. It will provide the alternative and shorter route to connect the North Eastern region through Bangladesh.
Alitalia launches maiden weekly service to Mumbai
I
talian flag carrier Alitalia Airlines announced it will operate a weekly flight every Sunday on the Mumbai-Rome-New York route with utilising a modified Boeing B777 passenger aircraft. Alitalia had been operating a daily passenger service between Rome and New Delhi with an Airbus A330 aircraft since 2018 till the suspension of the international air services due to COVID-19 pandemic. The carrier on June 21 operated its maiden cargo-only passenger flight uplifting 45 tonnes of cargo from Mumbai to Rome and then to New York.
appointments
Shashi Kiran Shetty takes helm of Gati
Express logistics company, Gati has appointed Allcargo CMD Shashi Kiran Shetty as its Chairman in a move that will expedite its turnaround in a big way. Allcargo acquired 46.83% in Gati for `416 crore in April, making it one of the largest multimodal logistics players in India. Shetty, a logistics industry pioneer and visionary leader, has spearheaded a number of successful mergers and acquisitions with Indian and international companies over the past decade.
Raja Narayanan is the new CFO of
ACFI promotes Cyrus Katgara as
American highspeed transportation technology company, Virgin Hyperloop has announced the appointment of Raja Narayanan as Chief Financial Officer. Raja will oversee all finance and business development functions as the company steers hyperloop technology towards commercialisation. Before joining Virgin Hyperloop, Raja was most recently an SVP at HyundaiAptiv Autonomous Driving Joint Venture, focused on commercialising L4 autonomous driving technology.
Air Cargo Forum India has (ACFI) has promoted Cyrus Katgara to the role of President for the year 2020-2022 from his previously held post of Vice President. Cyrus Katgara is one of the three Partners spearheading India’s century plus old logistics giant Jeena & Company. Katgara is the member of Customs Simplification and Advisory Committee at Delhi International Airport for air export. He is also the member at Air Cargo Agents Association of India (ACAAI) and Federation of International Air Transportation Association (FIATA).
Jessica Tyler named American Airlines’ President of Cargo and VP of Airport Excellence
Volga-Dnepr appoints Konstantin
Virgin Hyperloop
American Airlines has announced the appointment of Jessica Tyler as President of Cargo. She has also been named VP of Airport Excellence, a newly-formed organisation to support the airline’s commitment to operational excellence. Tyler will be leading the teams responsible for the success of the cargo business and delivering operational and customer service excellence for both airports and cargo. She will report directly to Jim Butler, Senior VP of Airport Operations and Cargo.
68 |
august 2020
President
Vekshin as Chief Commercial Officer
Volga-Dnepr Group has appointed Konstantin Vekshin as Chief Commercial Officer as part of a wider move to centralise its approach to sales. Vekshin’s key objectives will be to implement the Group’s approved marketing directive and sales plan, in addition to the centralisation and digitalisation of all its sales teams. Konstantin first joined the Volga-Dnepr Group in 1997, and developed his career from Sales Executive. Since August 2018 he has held the position of Executive President, Charter Cargo Operations (CCO) for Volga-Dnepr Airlines.
Yashpal Sharma elected Vice President of ACFI
Yashpal Sharma, who previously served as Honorary Secretary at Air Cargo Forum India (ACFI), has now been appointed to the post of Vice President. Yashpal Sharma joined the family business of global logistics- Skyways Group- one of the top 2 Indian origin and top 50 global airfreight forwarders, in July 1995. Over the years, he has proved to be a dynamic leader and an accomplished strategic executor. He has been working closely with the organisation’s teams across regions and verticals since two and a half decades.
Air Canada’s Tim Strauss takes CEO role at Amerijet International
Tim Strauss, Vice President of Cargo with combination carrier Air Canada, is set to join Miamibased all-cargo carrier Amerijet International Airlines
as CEO on August 17. Tim brings a deep air cargo background to the position, having also worked at Northwest/Delta Cargo, Hawaiian Airlines Cargo, and Emery Worldwide. He also led Air Canada Cargo to explore ways to optimise operations using artificial intelligence and drones.
Swissport promotes Liam Mcelroy as
Head of its Western Europe region
Swissport has promoted Liam McElroy from his previously held post of interim Chief Operating Officer to the company’s Head of Western Europe region, comprising the UK and Ireland. He takes over from Jason Holt, Former Head of Swissport Western Europe. In this new role, McElroy will steer Swissport’s ground services and cargo handling activities in the region. He will report to Luzius Wirth, Executive Vice President EMEA and member of Group Executive Management of Swissport International AG.
WEEKLY NEWSLETTER
100000
cargo professionals receive CARGOCONNECT E-newsletter weekly on Tuesdays. With updated weekly news, interviews, articles, information, jobs, events and an extensive archive CARGOCONNECT WEEKLY NEWSLETTER drives traffic to your website to build response and maximise brand awareness.
SUBMISSION INFORMATION All Banners must be supplied in static GIF or JPEG format. Flash or HTML banners are not compatible for email use (because of firewalls) Maximum file size – 25kb Banner cannot be animated
Contact us for placing your brand on CARGOCONNECT-WEEKLY NEWSLETTER ajeet@surecommedia.com | + 91 9810962016
Sandeep Chadha Founder & CEO, Warehouster Capital
It has been a long journey. I commenced business operations at a micro-level. When it comes to technological changes – the penetration, width, scale, I have witnessed lots of changes over all these years. Over the long haul, the modus operandi has changed but the fundamentals remain the same. A well-located and uniquely poised property still gets the same return on investment irrespective. As far as logistics and warehousing is concerned, the sector has evolved. It’s near maturing and is on the cusp of an inflexion point. The booming e-commerce business and robust overall demand from across the sectors makes warehousing an attractive and fulfilling option. Earlier, it was more physical, more valuebased and equally viable. The onslaught of technology has made it smoother. It can be more thoroughly validated now, keeping in mind the technology but overall the fundamentals remain same. The due diligence has been eased, the valuation is thorough and the execution is smoother of late. Well, the technology is an enabler, the execution is faster and the timelines are shorter, we are in a new era thanks to the new developments. The customers’ expectations are high and the incumbents are adapting accordingly.
Strategies for survival These are unprecedented times. There is a lot of uncertainty and chaos on offer. One has to stay steadfast and relentless. Things will take their own time to normalise but the key is to keep basics right and be pursuant irrespective. Of course, a pandemic of this nature comes with its own repercussions but at the same time it gives scope for deliberations, for contemplations, for brainstorming. Keep your best foot forward and hope for the best.
Mantra for success There is no mantra as such. One should follow the basics and stay
70 |
august 2020
optimistic. The persistency makes all the difference. If the fundamentals are followed, if the energy is put into, if the drive is there, success will follow. The belief in the value proposition and a positive deliverance of the entire ecosystem makes all the difference. The sooner or later those who think they can make a difference ultimately are the ones who do.
Interests and hobbies I read and it’s always fulfiling. I travel a lot and it’s never without learning. I try to learn and imbibe from the various cultures I encounter. I meditate and internalise. Catching up with classic world cinema detoxes me, it’s almost always therapeutic.
Values for success I keep it basic. I am optimistic by nature. My beliefs and value systems are driven by the realisation that every cog in the value system matters. That keeping it grounded and personal always reciprocates. Humility, concern and responsiveness are the tenets that come natural to me. One who scales is the one who starts from the scratch and includes everyone along the way.
Weekend plans I recollect and mediate. I read. I catch up on current affairs. Above all, I take time out and strategise for the week ahead. Exercising is a regular affair as well. It’s very important to detox and plan ahead.
Confidence and selfbelief is supreme Message for aspirants Just believe in yourself. Confidence and self-belief is supreme. Plan your future and work from there upon. Persistence moves mountain. Decide a goal and then give it your all.
Interviewed by Ritika Arora Bhola
I
ndustry overview
together Let’s MOVE on
PINKCITY LOGISTICS LIMITED REGISTERED OFFICE: V5 04, Ansal Garg Enclave, 122/235, Sarojini Nagar, Kanpur-208 012 Tel: +91-512-2224641/2217001/2216976 Fax: +91-512-2234911
CORPORATE OFFICE: 201-224 Chawla Complex, Sector-15, CBD Belapur, Navi Mumbai-400 614 Tel: +91-22-27562739/49, 61400500 Fax: +91-022-27565396 Email: info@pinkcitysilica.com
AGRA BHOPAL DELHI GANDHIDHAM HAZIRA INDORE KANPUR
KOLKATA LUDHIANA MUMBAI MUNDRA NAGPUR RENUKOOT VIZAG