FROM THE EDITOR

Be optimistic, but watchful on the variables

his is the time of year for annual and Indonesia may be the frontlines to reckonings and predictions by benefit due to availability of cheap labour. Tindustry experts. There are many Amid a gloomy global economic outlook reasons to be optimistic about 2019. The and rising commercial trade tensions, the domestic economy will continue to do forecast for container transport demand will Southeast Asia better across the next 12 to 24 months, be reduced over the next few years. During providing conducive environment for 2019 and 2020, capacity growth in shipping will emerge as the companies to scale up operations. But the lines will be lower than demand growth, but new production depreciating Rupee will play the spoilsport carriers will face increases in costs due to making a rough impact on the businesses. stricter 2020 fuel standards. powerhouse, In , governments at central and We may see further vessel-sharing especially for state level will be more willing to revisit agreements. Smaller and independent policies for the sake of promoting business. labour-intensive carriers will particularly be a big target for Infrastructure investments made so far will larger carriers. Shipping lines will strive start delivering results in later part of 2019. products such as to keep up with increased demand for The Indian growth story will continue to better service. Premium services, such as textiles, apparels, grow logistics sector. guaranteed loadings, faster unloadings, and footwear, and Coastal shipping and Inland waterways will guaranteed transit times will be more on pick up steam and more investments will offer. For instance, Maersk has worked on furniture. go into developing highways to improve being an end-to-end logistics provider and connectivity to the ports. Ease of doing more will follow suit. Technology will make business will be a major focus of the further inroads into the shipping industry as governments to invite foreign investments there are multiple developments underway and grow trade. by both established players and new startups. 2019 will be a turning point for Trade tensions between China and the US supply and demand balance in the tonnage. continue to escalate, slowing US GDP Still, fuel costs, trade discussions, disruptive growth to 2.75% for the year, but it will be entrants, and industry consolidation will strong enough to push oil prices higher than remain the big unknowns that can bring a current levels. China will move away from paradigm shift. being the world’s factory for goods towards being a consumption country. The ongoing To sum up, an exciting year ahead! trade war between the US and China has made importers realize that they MUST have an alternative to China. Southeast Asia will emerge as the new production R Ramprasad powerhouse, especially for labour-intensive Editor and Publisher products. Malaysia, Vietnam, Bangladesh [email protected] Editor and Publisher R Ramprasad [email protected]

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32 36 INLAND WATERWAYS TRANSSHIPMENT We are sailing, finally Quick passage for IWAI has revamped the inland Bangladesh exports waterways by installing ultra- Transhipment through Indian modern cranes, jetties and has ports can enable Bangladesh deployed barges that can sail in expedite its cargo movement, lesser draft, to ensure logistics provided the bottlenecks at land happens in the waterways round customs stations are resolved. the year. OUTLOOK 2019 INDUSTRY OUTLOOK 2019 POSITIVE STEVE FELDER SUNIL NAIR MD, (INDIA, SRI LANKA, CEO, SNOWMAN LOGISTICS LTD BANGLADESH, NEPAL, BHUTAN HARPREET SINGH MALHOTRA AFTER A AND MALDIVES), MAERSK LINE MANAGING DIRECTOR, TIGER CAPT. VIVEK ANAND LOGISTICS (I) PVT LTD IMMEDIATE PAST PRESIDENT OF CHALLENGING MANSA & VICE PRESIDENT, FILA CAPT SUNIL THAPAR CEO, ALLCARGO SHIPPING CO PVT LTD SHANTANU BHADKAMKAR ASHISH KUMAR GUPTA YEAR PRESIDENT, AMTOI MD, TM INTERNATIONAL RIZWAN SOOMAR LOGISTICS LTD CEO & MD FOR INDIAN 18 SUBCONTINENT REGION, NAFEESA MOLOOBHOY DP WORLD MANAGING DIRECTOR, A. S. COVER STORY MOLOOBHOY PVT. LTD. SAMIR SHAH, FORMER After a difficult and challenging 2018, industry forsees PRESIDENT, FFFAI PIROJSHAW SARKARI a further push in digitalisation, more initiatives from CEO, MAHINDRA LOGISTICS JAYYANNT LAPSIAA Government on ease-of-doing business and greater PRESIDENT, AILBIEA K SWAMINATHAN investment into logistics infrastructure. DIRECTOR -SERVICE BUSINESS, VIVEK KELE, BALMER LAWRIE & CO. LTD. DIRECTOR, TEAMGLOBAL INTERVIEWS SHAILESH GARG UMESH GROVER, MD, DREWRY MARITIME SERVICES SECRETARY GENERAL, CFSAI PRIVATE LIMITED 30 DELIVERING DEEP INTO THE HINTERLANDS SLS AMARAVATI REVIEW AJIT VENKATARAMAN, MD, APM TERMINALS 38 INLAND SERVICES SOUTH ASIA Global Logistics Hub: Destination Andhra Pradesh Initiatives being taken by formulating policies and developing infrastructure to reduce production and logistics cost for making Andhra Pradesh a logistics hub were detailed. 34 LOGISTICS SECTOR TO WITNESS GREATER GROWTH 40 S. RAMAKRISHNA, CHAIRMAN, FFFAI Building an Ecosystem for Global Logistics Hub Development of infrastructure and connectivity, formulation of logistics policies, skill development and need for promoting digitalisation was voiced by the panel members. OTHERS 44 08 Point Blank EXIM Growth, Cargo Transportation and Connectivity 10 Numbers & Graphs Shippers of major commodities from the state voiced their logistics concerns and improvements needed in infrastructure and connectivity 12 News were highlighted. 16 International News

POINT BLANK

Further escalation in The key challenge for trade restrictive measures Customs today is creating a by G20 nations remains a convergence of facilitation real threat. If we continue and enforcement. Leveraging along the current course, digitisation and technology the economic risks will for non-intrusive operations increase, with potential is vital for a data-empowered effects for growth, jobs and and digitally-enabled consumer prices around the Customs. WCO should be world. The WTO is doing proactive in harnessing all it can to de-escalate the Blockchain and big data.” situation.” - A B Pandey - Roberto Azevêdo Revenue Secretary Director General, WTO

Import of cargo which are meant for consumption in the heartland of India, especially from the Far East, can now move in a very economical manner through waterways. This shall save cost and Kolkata Port will be an added advantage for these Maharashtra and imports.” account for 52% - Sudip Dey of the total coastal cargo Vice Chairman, FFFAI while the rest is spread across the remaining coastal states due to absence of mapping the infrastructure and West Bengal missing railway links to should see a maritime manufacturing hubs.” revolution given the - Capt. Amit Wason new potential in inland President, MANSA. waterways and a deep sea port at Tajpur in progress. The target is to bring down the logistics cost to 10 per cent for the industry from 14 per cent now.” - Amit Mitra Finance Minister, West Bengal

08 MARITIME GATEWAY / JANUARY 2019

NUMBERS & GRAPHS

TREND IN CONTAINERISED RAIL LOGISTICS IN INDIA SHARE OF INDIA'S TRADE THROUGH LAND BORDERS IN 2017-18 PHYSICAL 4000 $ Million 3532 Via land IMPORT EXPORT Via land 3500 3111 3103 685 Bangladesh 2869 2925 75% 8,614 50% 3000 2563 2604 2587 3002 53% 377 Bhutan 546 96% 2500 2622 99.8% 438 2362 2476 2642 Nepal 6,612 97% 2000 2019 2136 2153 48% 488 1,924 2500

TEUs TEUs in Thousands 1000 544 468 434 508 508 449 460 530 500 0 FY10-11 FY11-12 FY12-13 FY13-14 FY14-15 FY15-16 FY16-17 FY17-18

Domestic Handling International Handling Total Handling Note: India also trades with Afghanistan, through Pakistan Source : Directorate General of Commercial intelligence and statistics CARGO MOVEMENT THROUGH ICP INDIA PAKISTAN REVENUE AT ICP, ATTARI S.No ICP India Asian Rail Trade Passenger National Highway Rs. In Highway crs 3500 3000 1 Jaigaon NH317A 595.28 9764 2500 2 Hili NH512/NH27 1150.23 102476 2000 1500 3 Ghojadanga NH 19 2482.82 204391 1000 4 Sunauli NH29E 7754.78 57.453 100 0 5 Panitanki NH27 AH 48 and 1525.68 22.548 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 Upto Feb 6 Changrabandha NH27 AH2 For 177.79 64.328 YEAR Connecting 7 Sutarkandi NH27 114.02 5.690 India. Nepal Import Export Duty Collected on Import 8 Rupaidiha NH927 & 1407.62 546 9 Kawrpuichhuah NH302 Bangladesh - - 2014- 2017-18 10 Mahadipur NH27 1323.81 66.393 2010-11 2011-12 2012-13 2013-14 15 2015-16 2016-17 Upto feb 11 Fulbari NH31 114.01 16.328 Import 452.08 965.00 1748.10 2053.70 2367.94 2414.08 2907.36 3177.59 12 Banbasa NH9 550.73 43.087 Export 1170.42 1375.15 3052.14 3390.02 2177.44 1328.14 1063.63 964.13 Rev- 13 Bhithamore NH227 469.96 - enue -NA- 86.79 145.32 172.10 196.43 174.60 242.49 398.73

INDIAN LOGISTICS COST EFFICIENCY CONCOR EXIM PROJECTIONS

110.00 103.83 Massive 100.00 Opportunity 90.00 as we aspire to bring it down to 80.00 70.92 70.00 64.47 9% 58.61 9% of GDP Million Tons 60.00 53.28 80% 50.00 Operating Cost 40.00 34.38 14% 30.00 India’s GDP 10.00 9.73 is Spent on Logistics Customer Service 5% 8.00 4.94 5.46 6.04 6.64 6.76 Warehousing 5% 6.00 Indian 3.19 3.47 3.82 4.20 4.62 Transportation 45% 4.00 Logistics $370 2.24 Sector billion Inventories 25% Million TEUs 2.00 Labour & Handling 15% 0.00 Packaging 10% 2018-19 2019-20 2020-21 2021-22 2022-23 2026-27 Throughput (TEUs) Originating Traffic (TEUs) Tonnage Source: CONCOR

0810 MARITIME GATEWAY / JANUARY 2019

NEWS EXCELLERATE YOUR BUSINESS cargo affordable," he said. of Railways. Of the total, that setting up of a major IPRCL has taken up 32 port at Dugarajapatnam in Krishnapatnam Air Freight Station (AFS) is projects worth `18,253 Nellore district was one of an off-airport common user Port clocks crore across nine major the provisions of the AP facility that offers service ports, of which eight Re-organisation Act, 2014 20,600 teus for handling and temporary transhipment in projects worth `175 crore but the Union government storage of import and have been completed. had gone back on the Nov 2018 export cargo. Similar to promise. After the Centre In addition, 23 rail Transhipment volumes the ICD in maritime cargo, found Dugarajapatnam not connectivity projects worth at Navayuga Container it helps in de-congesting suitable for the port, the `24,877 crore identified Terminal (NCT), the air cargo terminals at state government had sent under Sagarmala have been Krishnapatnam have airports. Meanwhile, the the alternative proposal of taken up by the Ministry grown steadily from Civil Aviation Ministry is Ramayyapatnam but there of Railways. Of these, 13,000 teus average expected to soon come out was no response. Therefore, seven projects entailing transhipment volume per with an air cargo policy that the Chief Minister said that an investment of `2,491 month in the first quarter would seek to address the the state was going ahead crore have been completed. of current financial year various problems faced by with the project. to 17, 200 teus by second the industry players. The Another 15 rail connectivity quarter, and now in Ministry wants to transfer projects worth `4,193 were the third quarter to an many functions related to also taken up, of which First mainline average of 19,800 teus per air cargo operations offsite three projects worth `52 vessel flagged month. The transhipment since space at airports is crore have been finished. off at VoC Port Production Logistics, volume at NCT accounts expensive. Besides, a pact for Returnable for 45 per cent of total implementation of the Terminal throughput which is Total air cargo at all Indian 362 km Indore-Manmad Management, kitting & the industry norm for airports during 2016-17 new railway line project transhipment cargo and 2017-18 witnessed a has been signed between Line Feeding handling ports in the growth of 10.1 per cent and JNPT, Ministry of Railways CBU Logistics, Multi-modal South East Asia region. 12.7 per cent, respectively, with 3.35 million metric and the governments of Logistics, Yard Management In response to the trade tonnes cargo traffic in Maharashtra and Madhya need for transhipment financial year 2018, as Pradesh. The project will facilities, Krishnapatnam per a report. International reduce the distance from port extended its quay cargo contributes about 60 Mumbai/Pune to key length at the container per cent of the country’s central India locations Nitin Gadkari, Union terminal by 150 m to total cargo, with double the by 171 km, resulting in Minister for Shipping provide an exclusive growth rate as compared to lower logistics costs. The and Road Transport coastal berth where domestic cargo business. new railway line will pass and Highways and coastal vessels can berth through the Delhi-Mumbai Water Resources, River without window timings industrial corridor nodes Development and Ganga and use the ship’s gear of Igatpuri, Nashik and to load / discharge in Rail connectivity Rejuvenation, flagged off Aftermarket Logistics & Distribution Center Sinnar, Pune and Khed, the inaugural call of the first addition to the handling to ports a major and Dhule and Nardana. by the shore-based Mobile mainline vessel at Dakshin Parts Consolidation Center (PCC) for EXIM Harbour Cranes. focus Bharat Gateway Container Terminal at VOC Port, Tuticorin through video Facilitating air New port in conference, along with Other Key Industry Verticals: cargo Prakasam district Edappadi K. Palaniswami, Chief Minister, Tamil Nadu. SIMPLIFI YOUR INNOVATE YOUR SECURE YOUR IMMUNIZE YOUR PERPETUATE FLOURISH YOUR RMS BUSINESS The government is Andhra Pradesh will M.V. Wan Hai 510, a 4,333- OMNI CHANNEL RETAIL HI-TECH SUPPLY CHAIN CHEMICAL SUPPLY CHAIN PHARMA SUPPLY CHAIN YOUR COLD CHAIN actively pushing for soon get a new port at teu capacity mainline vessel establishment of air Ramayyapatnam in operated by Wan Hai Lines, freight stations as it As many as 52 projects for Prakasam district. The made the maiden voyage to looks at ways to reduce rail connectivity to ports state Chief Minister, Mr the terminal. It called as part costs involved in air entailing an investment N. Chandrababu Naidu, of the China India-2 (CI-2) cargo operations, the of `44,605 crore are will lay the foundation service which connects the Civil Aviation Secretary, underway. These projects stone soon. Naidu made Malaysian ports of Penang R. N. Choubey, said are being carried out this announcement while and Port Klang as well as recently. "That is the jointly by the Indian Port addressing students at Chinese ports like Hong way forward... We are Rail Corporation Ltd Marturu in Prakasam Kong, Qingdao, Shanghai, committed to making air (IPRCL) and the Ministry district recently. He said Ningbo and Shekou.

0812 MARITIME GATEWAY / JANUARY 2019 EXCELLERATE YOUR BUSINESS

Production Logistics, Returnable Management, kitting & Line Feeding CBU Logistics, Multi-modal Logistics, Yard Management

Aftermarket Logistics & Distribution Center Parts Consolidation Center (PCC) for EXIM

Other Key Industry Verticals:

SIMPLIFI YOUR INNOVATE YOUR SECURE YOUR IMMUNIZE YOUR PERPETUATE FLOURISH OMNI CHANNEL RETAIL HI-TECH SUPPLY CHAIN CHEMICAL SUPPLY CHAIN PHARMA SUPPLY CHAIN YOUR RMS BUSINESS YOUR COLD CHAIN NEWS

Wilhelmshaven SCI has introduced this exclusive Kolkata-Port PK Das takes over IPA launches & ports Blair cargo service which is as Chairman of ‘PCS 1x’ to in technology expected to commence from CBIC increase ease of collaboration December 17, 2018. The service will be fortnightly, The doing business The port of Wilhelmshaven with duration of 10-12 Appointments and are days for a round trip. It is Committee collaborating in technology envisaged that the service of the and joint promotion for will boost the economy Cabinet has customers using both the of the islands and provide approved the ports, said Capt. Sandeep business connectivity to the appointment of Pranab Mehta, President, APSEZ mainland. Kumar Das as the Ltd, at a function hosted Chairman of CBIC from by the Chairman/CEO, Revamp of January 1, 2019. Das will Port of Wilhelmshaven, Kolkata Port take over from current Indian Ports Association Andreas Bullwinkel. Both Chairman S Ramesh, under the guidance of ports are linked by the who retires on December the Ministry of Shipping, ME1 service operated 31. The Central Board of has launched the Port by Maersk Line, which Indirect Taxes and Customs (CBIC) is the apex indirect Community System offers a weekly call from tax policy-making body ‘PCS 1x’. The url www. Mundra to Wilhelmshaven. under the Finance Ministry. indianpcs.gov.in was The Wilhelmshaven The CBIC is headed by launched by Sanjay management also toured Bhatia, Chairman, IPA. the Chairman and consists the Mundra Port, which of six members, who ‘PCS 1x’ is cloud-based is the flagship port of the overlook various areas and seamlessly integrates Adani Group, and agreed such as customs, central 8 new stakeholders, on sharing best practices excise, service tax, Goods besides the 19 existing and discussed synergies and Services Tax (GST), stakeholders from the between the two entities. Pon. Radhakrishnan, administration and budget, maritime trade on a The Minister of State for among other. Das is single platform. Shipping and Finance, currently Member, Customs SCI launches at CBIC. The platform offers has informed that the value-added services coastal service government is preparing a such as notification linking West plan to invest and revamp engine, workflow, Bengal & the facilities at Kolkata Major Port traffic mobile application, track Port to boost industrial up 5 pc and trace, better user Andaman ports and commercial business in West Bengal. At Haldia interface, better security The Major Ports recorded The Shipping Corporation features, improved Dock Complex, berth no. a growth of 4.83 per cent of India (SCI) has inclusion by offering 3 will be mechanised on and together handled introduced a regular cargo dashboard for those Design, Build, Finance, 461.21 million tonnes of shipping service linking with no IT capability. A Operate and Transfer cargo during the period Kolkata and Port Blair unique feature of ‘PCS basis, a RMQC will be April to November 2018 with the deployment 1x’ is that it can latch on procured, an outer riverine as against 439.96 million of MV MCP Salzburg, to third-party software terminal will be developed tonnes handled during the which will be able to which provides services and liquid cargo handling corresponding period of the carry containers as well as capacity will be developed previous year. The highest to the maritime industry, break-bulk cargo. SCI has at Shalukkhali. Road growth was registered by thereby enabling the already been extending connecting to general cargo Kamarajar Port (20.15 per stakeholders to access its yeoman service to the berth main gate of berth cent), followed by Cochin a wide network of people of Andamans by no. 13 will be widened, (11.73 per cent), Paradip services. The system carrying passengers and road over bridge cum (9.73 per cent), Kolkata enables single sign-on cargo, in association with [inc. Haldia] (8.52 per cent) facility to provide one- the Directorate of Shipping flyover will be constructed and Deendayal (7.37 per stop interface to all the Service, Port Blair. But at Ranichawk crossing cent). Kamarajar Port’s functionalities across all with the changing business at Haldia and a second growth was mainly due stakeholders. scenario of the sector rail line will be developed to increase in traffic of and with the mounting from Durgachawk to HDC containers (19.8 per cent). demand of the trade, railway system.

0814 MARITIME GATEWAY / JANUARY 2019

INTERNATIONAL NEWS

NEPAL build, own and operate a AFGHANISTAN SRI LANKA gas-fired power plant with a generating capacity of SAGT breaks Nepal to connect 1,760 MW in Indonesia’s Afghan connects through 2 million Bihar through rail West Java province, while to Azerbaijan via JSR will build, own teu in 2018 A 34 kilometres (21 miles) and operate a FSRU at Turkmenistan new rail link connecting South Asia Gateway sea for storage and to On 13 December, a test Janakpur in southeastern Terminals (Pvt) Ltd regasify LNG to supply motorcade carrying achieved an impressive 2 Nepal and Jay Nagar in fuel to the power plant. cargo has been sent from million teu in a calendar- Bihar is being developed. The power plant and the Afghanistan’s western year for the first time on Once the new $80 million FSRU will be maintained province of Herat, to 19th December 2018. The rail line begins operations, and operated in an be delivered through achievement of 2 million plans call for extending the integrated manner and Turkmenistan and the teus in a single year is a Caspian Sea to Azerbaijan. railway deeper into Nepal. the electricity produced first for the company and The transport corridor particularly significant For now, only a dusty trail by these facilities will be passing through villages allows Afghanistan to enter considering the terminals sold to Indonesian state- global markets bypassing original design capacity connects Jay Nagar and owned electricity utility Janakpur. It's mostly used the traditional Pakistani was assessed at just 1.1m PT PLN (Per-sero) for direction. The cargo by people bringing in daily teu. Over the last five years over 25 years. will pass from Turan to SAGT has averaged around goods on motorcycles and Turkganbashi International 1.7m teu per annum. Its small trucks. The new train MYANMAR Terminal, from there previous highest volume connection is expected to to the border town of was 1.9m teu achieved in give India a boost. And Turkmenistan, then to the 2009 and 2010. when it comes to railways, Bonded Turkmenbashi International it already has an advantage warehousing Sea Port. The caravan will MALAYSIA since Nepal's border with introduced then be sent across the China is mountainous while Caspian Sea to Azerbaijan - the frontier with India is in the Baku International Sea Penang Port may Port. the plains. lose 20 per cent of BANGLADESH cargo traffic INDONESIA The customs department Bonded will introduce customs The Penang Port may be warehouses, or bonded cargo from at risk of losing 20 per cent MOL to construct of its cargo traffic volume warehouses – where goods Bangladesh unless its logistics’ efficiency FSRU service in can be stored without improves, said Indonesia- Value-Added Tax (VAT) flies out from Indonesia Malaysia-Thailand Growth or import duties. The aim MITSUI O.S.K. Lines Kolkata Triangle Joint Business is to align local customs (MOL) has signed Bonded cargo from Council Malaysia Chairman deals for construction warehousing procedures Datuk Faudzi Naim Noh. with international standards Bangladesh was flown out of a FSRU service and of Kolkata airport after and reduce import Thailand is developing financing for the Jawa 1 LSP EFL created a tailor- a deep-sea port off the gas-fired project, through restrictions on Myanmar made logistics solution goods. The tax reductions Chana district in Songkhla PT Jawa Satu Regas (JSR), to handle the very first province, which faces the will involve lowering the bonded, cross-border, land- a joint venture company of Gulf of Thailand and the advanced income tax air transhipment between PT Pertamina, Marubeni South China Sea. The Corporation and Sojitz burden and simplifying the two countries. The the logistics processes EFL offices in Bangladesh port could serve as a direct Corporation. MOL is seaborne gateway to China to save time. Customs and India collaborated entrusted with FSRU and other countries in East warehousing is not new in in handling the cargo of construction, supervision, Asia, which means that Myanmar. Thilawa SEZ apparel at the point of maintenance and freight traffic from East last year already introduced origin. The transfer of operation services. cargo weighing 4.1 tonnes Asia would travel via the bonded warehouses and from Bangladeshi trucks to South China Sea instead of In this project, JSP, jointly SEZ warehouse services Indian trucks took place at ‘looping’ around Peninsula established by Pertamina, for domestic and foreign the Benapole (Bangladesh)- Malaysia via the Straits of Marubeni and Sojitz, will companies. Petrapole (India) border. Malacca.

0816 MARITIME GATEWAY / JANUARY 2019

OUTLOOK 2019

OUTLOOK 2019 POSITIVE AFTER A CHALLENGING YEAR

0818 MARITIME GATEWAY / JANUARY 2019 After a difficult and challenging 2018, industry forsees a further push in digitalisation, more initiatives from Government on ease-of-doing business and greater investment into logistics infrastructure

he year 2018 continued to be transformational for the logistics industry, buoyed by the enhanced governmental focus. Going Tforward in 2019, the growth trajectory in EXIM trade will see a continued upward trend with geopolitical situations getting better off to support global trade. The augment in port capacity both on the west coast and east coast and increased EXIM volumes will also augur well for the CFS business as well. The government’s focus on developing logistics hubs will improve logistics reliability and reduce transaction cost. Warehousing will adapt to the hub and spoke model as fewer and larger warehouses evolve. The domestic economy is expected to do better in the next 24 months, allowing businesses to scale up and expand operations. Inland water transport will pick up steam with NW-1,2 and 4 becoming operational. IWAI is procuring new ships that can sail in lower draft and this will also boost Indian trade with South East Asian neighbours. While the containerised trade continues to rise unabated, the liquid bulk industry will continue to perform well given the strong macro- economic fundamentals of growth, rising incomes and demographic pressure. Technology is going to play a key role in advancing the shipping and logistics industry. It will not only change the way business is done but also the business models will undergo a paradigm shift. PCS 1.0 X in its revamped form will connect and provide real-time information to all stakeholders. Automation of processes with ICEGATE has been a phenomenal improvement by participating government agencies. More rationalization of processes and procedures will promote ease of doing business further. As the general elections approach, the elected government should come with an agenda to create conducive regulatory environment for industry to grow further and this should be supported by a bold and progressive budget with forward looking approach. Volatile currency movements, high capex costs and event risks including Brexit will continue to pose challenges. Another concern is the trend of increasing fuel price as this is impacting logistics industries badly. The government looks to be moving in the right direction to achieve its Maritime Agenda 2020 that promises a positive outlook of expanding India’s port capacity to 3,130 million tonnes and multiplying existing port performance. We hope 2019 brings stability and economic growth for one and all.

JANUARY 2018 / MARITIME GATEWAY 19 OUTLOOK 2019

STEVE FELDER Expectations in 2019 MD, (INDIA, SRI LANKA, BANGLADESH, NEPAL, BHUTAN AND Technology is going to play a key role in advancing MALDIVES), MAERSK LINE the shipping and logistics industry. Digital innovation is one of our focus in the transport and logistics divisions Business in 2018 where the brands – Maersk, APM Terminals, Svitzer and India’s containerized Maersk Container Industry will perform better as one trade with the world business with a digital-first approach. Plus, conferring has witnessed a positive industry status to the logistics sector would attract more uptick in FY 2018. The investments in developing cold chain, industrial parks and depreciating rupee has warehousing facilities in India. made Indian goods’ We see the depreciation of rupee as a cause of concern price competitive, but we will await the cycle to turn over. Even though the further leading to the impact of major policy reforms such as demonetization implementation of and GST have subsided, the backlog of unpaid claims trade barriers that have remains a challenge and weakens liquidity in the market. opened new markets for In the second half of 2019, we expect global refined India. With the effects products and fuels to be dearer in the face of the IMOs of demonetization and ruling that from 1 January 2020, marine sector will reduce GST implementation sulphur emissions by over 80% in international waters. settling in, the Indian On the regulatory front manufacturing sector has picked up with rising imports India’s maritime sector in the shipping and logistics from European and North American nations. industry owes to 14% of the nation’s GDP. The In terms of our operations, we have strengthened our Government of India has come up with several policies trade lanes - we migrated port operations to Ennore, due to help propel the industry forward by increasing shipping to the congestion at the and started a weekly fleets in the country, opting for greater manufacturing feeder service between Colombo and Male to provide a of cargo vessels and working towards developing strategic trade opportunity to all the countries in South efficient intermodal systems that would support seamless Asia. We have also undertaken digital transformation movement of cargo across ships, rails and trucks. The initiative in collaboration with IBM using blockchain government’s increased investments and push for ‘Make technology to streamline the transport and logistics in India’ can increase the sector’s contribution to GDP business for end-to-end supply chain solutions. and trade volumes; undertake strategic efforts to develop The need of the hour lies in developing connectivity its 7,500 km long coastline and expand public-private and infrastructure between coastal areas and hinterland partnerships to open newer opportunities for the sector. and remove trade bottlenecks. The road network and rail The government’s Maritime Agenda 2020 promises capacity across ports in India has to improve. The drafts at a positive outlook of expanding India’s port capacity major ports need to be deepened to allow larger vessels. to 3,130 million tonnes and multiplying existing port Trends that shaped the industry in 2018 performance. In FY18, cargo traffic at major ports in India was reported at 679.36 million tonnes and for April-August’18 CAPT. VIVEK ANAND it grew 5.13 per cent year-on-year to 288.38 million IMMEDIATE PAST PRESIDENT OF MANSA & VICE PRESIDENT, FILA tonnes (source: IBEF). The government has taken couple of transport and logistics friendly policies in the form of the Bharatmala and Sagarmala initiatives, relaxation Business in 2018 of Cabotage law and abolition of TAMP to transform 2018 has been India into a transshipment hub. This is indeed a relief for recovery year for Indian shippers – until recently, more than 30 per cent of the maritime sector. Indian container traffic was transshipped at ports outside Businesses have been India – they can now increase their competitiveness. The consolidating and development of non-major ports and the SEZs closer to building on their ports are imperative since ports handle almost 95 per cent strengths. The freight of trade volumes in India. rates have recovered The push towards Digital India has increased the pace but not to the desired of implementation of Single Window Systems to enable levels which can dole out efficient customs clearance. Artificial Intelligence (AI) and shipping industry from Internet of Things (IoT) have made a significant impact the severe downturn. in the originally brick and mortar industry, it is helping Developing new transport and logistics companies consolidate, analyze and business could be one track through mountains of data. major achievement and Finally, the commendable efforts in bringing up India’s to encourage and retain talent pool in difficult times was a rank to 77 points in World Bank’s ease of doing business challenging task for organisations. survey, by reducing the operational aspects of business or Trends that shaped the industry in 2018 compliances. This year has been good for the Tanker segment as

0820 MARITIME GATEWAY / JANUARY 2019 markets have picked up. However, the bulk trade remains (MSMED) Act, 2006. Following the half-yearly reporting burdened with over capacity. Gas business has been requirements, all companies who buy goods or avail riding a high wave and hopefully, this will continue for services from micro and small enterprises and whose next couple of years. Most of the other sectors are still payments to such suppliers have exceeded 45 days are struggling with low freight and high CAPEX costs. obliged to submit a half yearly return to the ministry of Expectations in 2019 corporate affairs (MCA) stating the outstanding amount Expand or venture into new businesses. We hope and the reasons for the delay. Besides building several geopolitical situations will be better off and support checks in the tax laws including GST & Income Tax. The global trade. In India, we hope 2019 brings stability and government has also introduced Udyog Aadhar Scheme economic growth. for facilitation of recovery of overdue payments, other On the regulatory front remedies include the petition in NCLT for winding-up of • Bold and progressive budget with forward looking a company on grounds of its 'inability to pay debts'. approach Considering the government initiative for the • Since, it is election year we hope whichever agricultural sector, the Reefer Logistics Sector is expected Government is elected, comes with a majority and with to grow fast in future. an agenda to create conducive regulatory environment Trade facilitation initiatives like Single Window for industry to grow further. (initiated by the World Customs Organisation and • Ease of doing business should be focus area to make implemented by the Indian Government) and the Bali Indian industry more competitive in the Global Package of World Trade Organisation for trade facilitation markets. will catalyse growth in international trade. On the other hand, we see growth in countervailing forces of protectionism resulting in trade wars. The regional and SHANTANU BHADKAMKAR bilateral agreements among the countries have a greater PRESIDENT, AMTOI influence on trade flows than the WTO. Most regions have robust intra-region trade, the exception being the Business in 2018 Indian subcontinent i.e. South-Asia. For the logistics India's exports have sector to grow at a much faster rate, India's trade with the grown at a steady pace neighbouring countries has to grow considerably. in the year 2018, hence GST was one of the most important reforms of the there is a moderate government. GST being a new tax, there are several growth in the logistics uncertainties about the interpretation of the provisions sector. Though the and implementation methodology. imports growth is very The double taxation on import freight is also a high, it is primarily due matter of concern as import freights gets merged into to high oil prices, the the value of the goods and is subject to customs duty non-oil imports have as goods, yet it is also subject tax to GST as a service. grown moderately. This is Similarly, some International transactions where the based on the provisional foreign customer is billed is also subject to GST. It creates statistics that are available. a high resentment among the foreign customers as they Consequently, the cannot get an input tax credit for the same in their own logistics sector has done country. Insofar as GST is concerned, the logistics sector reasonably well in terms of volumes, though the growth is expects simplification and greater clarity about the tax not all round. Further, the sector is under serious pressure liability. The sector also expects the taxation structure of high account receivable from the customers, as almost to be compatible with the International Tax Regime for all customers are slow payers. The industry continues to similar services rendered by the foreign freight forwarders suffer the challenges of unremittingly dropping margins. and other Logistics intermediaries. The burden of The operational problems in the port and ICEGATE system filing numerous returns for GST and different returns have also contributed to the challenges of the Exim logistics in different states is also a cause of concern as it has sector. Some of the segments that have done well and have increased the workload manifold. One more adverse outperformed the other sectors over the past 5 years include impact of GST is the need for increased fund flow (cash Liquid Logistics and NVOCC, sometimes referred to as flow) for the logistics service providers. container operators, who are engaged in slot chartering. Among the important developments on the operational The SME segment of the industry has not been able side include the launch of Port Community System (PCS) to grow fast due to the pressure of financial credit, late and Direct Port Delivery (DPD) of import containers. payments by the customers, particularly the big companies This, as expected, has expedited the dwell time and has & high cost of energy. The logistics industry also also reduced the transaction cost. suffers from the malady of late payments by customers. Trends shaping the industry Recognising the seriousness and the gravity of the It is expected that the digitisation of commerce situation the government has introduced online delayed will change not only the way the business is done but payment monitoring system called MSME Samadhaan. in addition, the business models itself will undergo a Delayed Payments to Micro and Small Enterprises under paradigm shift. The foray of e-commerce companies in Micro, Small and Medium Enterprise Development logistics is going to change market dynamics considerately.

JANUARY 2018 / MARITIME GATEWAY 21 OUTLOOK 2019

This will be compounded by some shipping lines getting engaged in the last mile solutions while rendering other logistics services. Both pose a challenge of There is a need to revamp inland disintermediation. The government also has been investing heavily in the logistics infrastructure, and the policy infrastructure to connect with focus is on developing the logistics hubs, particularly the internal markets via multi-modal multimodal transport hubs. The investments will improve the reliability of logistics and reduce the transaction cost, transport. Increased investments are including the overall transportation cost. However, to achieve its full potential, the connectivity and the quality needed to improve cold storage and of infrastructure in the port area needs to improve. to boost the use of inland waterways. Acknowledging the importance of the sector, many states also now have published logistics policy and more are considering it. A clear and investor-friendly logistics policy will attract private sector investment in this sector. The country is currently one of the fastest growing economies in the world with major strides being made with the logistics sector set to reach $215 billion by 2020, RIZWAN SOOMAR 34 mega MMLPs and over 1300 infrastructure projects CEO & MD FOR INDIAN SUBCONTINENT REGION, DP WORLD underway. DP World has already invested $1.2 billion in the last 20 years supporting 24 per cent of all container Business in 2018 trade and we look forward to expanding our contribution 2018 has been a to the growth of the Indian economy. landmark year for Expectations in 2019 us, our partnership It is an exciting period to be playing an integral part in with NIIF has made the country’s growth story. Numerous proactive measures key investments have been undertaken by the government such as Make in with the acquisition India, Digital India and Invest India in order to boost the of Continental manufacturing sector. For these projects to be successful, Warehousing there is a need to revamp inland infrastructure to connect Corporation and won with internal markets via multi-modal transport. Increased the bid to develop and investments are needed to improve cold storage facilities operate the FTWZ at and networks and to boost the use of inland waterways. JNPT. Through these, An integrated logistics network will not just assist in we have enhanced ensuring just in time delivery, making cargo reach existing our portfolio to offer markets faster, but will also enable creating new markets integrated multi-modal for Indian manufactured products. logistics solutions to our customers. Additionally, we have Further, growth in e-commerce will have a positive strengthened hinterland connectivity from our terminals impact on the logistics sector, driving investment and and are working towards optimizing our inland assets to development in the sector. Investments focused on offer customized solutions to our customers. development of logistics infrastructure near manufacturing There is still a need to reduce supply chain hubs and ports such as – ICDs, DFCs, FTWZs and SEZs inefficiencies and leverage emerging technologies to will help reduce logistics cost, making exports more deliver cost effective solutions. At DP World, we are competitive and imports less costly. This will further working towards enabling ‘smarter trade’ by expanding promote manufacturing and agriculture and will directly into complementary sectors as we work to build both contribute in making them even more competitive in necessary physical infrastructure and digital platforms. global/local markets. Trends that shaped the industry in 2018 On the regulatory front The year has witnessed significant changes in the We have been a part of India’s growth story over the regulatory environment. The ever-changing industry last two decades and are committed to the development of dynamics have forced businesses to re-think their the port sector and have recently entered into agreements strategies and offer more value to their customers through to develop efficient logistics infrastructure. India has vast improved service levels, competitive prices and advanced economic potential and unlocking it will provide new technological services. trade opportunities. Efficient logistics is the way forward – Developments such as cabotage relaxation, to get cargo moving faster, safer and more cost effectively implementation of GST as well as the emphasis given for all stakeholders. to reforms under Ease of Doing Business has had a We support the government’s initiatives to encourage noticeable impact. India has jumped 23 ranks in the World ease of doing business in the ports and the logistics sectors. Bank Ease of Doing Business Rankings, to now stand at We believe that ease of tariff regulation across terminals the 77th spot. GST has enabled rationalization of supply will provide all terminal operators a level playing field in chains, which has increased operational proficiency. order to facilitate trade and commerce in the country. We Further, DPD has resulted in reduced turnaround time for need a change allowing all operators, both existing and cargo. future to move towards a market-determined tariff.

0822 MARITIME GATEWAY / JANUARY 2019 SAMIR SHAH they will have to scale down their operations. Compliance FORMER PRESIDENT, FFFAI on all sides will start taking precedence. Today we are more concerned about speed than compliance, but with single window interphase of Customs everything is Business in 2018 available at the press of a button, compliance will increase The business and functioning will become smoother and better. continues to remain a On the regulatory front bit competitive and the There is a need for change in mind-set at the bottom demands of the clients level. The government has a will to bring in change are increasing without and they recognise that unless this change comes in a proper understanding development will slowdown, but this attitude needs to of whether a forwarder percolate down. At the operational level a lot of things can do it or not and need to be changed. If you look at Customs, different without even wanting cities in India marginally follow different procedures, so to compensate the it is required that senior officials of Customs implement forwarder for the extra uniform practices across the country. Manual processes work he is expected that need to be phased out should be done in a fast to do. In future the manner as still a lot of paper work is done. forwarder will have to offer a lot of extra services within the same price. Importers and exporters JAYYANNT LAPSIAA are going to expect more and more services from the PRESIDENT, AILBIEA forwarder. Trends that shaped the industry in 2018 Business in 2018 I have worked at the inland centers of India and I have Overall business noticed that there is a lot of innovation and readiness scenario has been among forwarders in the smaller cities to do more and satisfying though more. They are more adaptable and ready for changes the global economic than basically an older port-based forwarder. The only landscape faced problem is that while they are enthusiastic and ready they headwinds in 2018 with don’t know how to do it and they don’t recognise that geopolitical tensions, they should charge for these services. They are offering sanctions, protectionism, a lot of additional services that a port-based forwarder trade war and event risks doesn’t offer. The expectations of the exim community in as the main feature. terms of credits is reaching disproportionate levels. Today While the U.S. sales are done based on the credit capability rather than economy performed actual ability. Whereas earlier, exim community looked at robustly, China has the reputation of the company, the knowledge base and markedly slowed down; desired to work with people whom they were comfortable and growth in Europe with. Today they don’t mind working with anybody as and Japan continues to remain sluggish. long as they are getting the price. Despite strong headwinds the Indian liquid bulk On the other hand, the exim community’s insistence industry has performed creditably. Import of two most on wanting to be compliant, but expecting their service essential commodities - crude oil and edible oil - has not provider to be non-compliant is something that doesn’t shown any significant let up in the volume. balance out well. Trends that shaped the industry in 2018 Catching up with digitalisation There was a spike in the international price of crude The freight forwarding community doesn’t has a choice oil to a recent record of $86 a barrel by early October but has to start finding solutions which are technology which has fortunately eased in recent weeks to about $60 a based. Technology to a very large extent has done away barrel bringing much needed relief. India's dependence on with domain knowledge. The older generation had spent import of crude oil is to the extent of 80 per cent. At the a life-time in picking up domain knowledge, but the newer same time, the currency (Rupee) depreciated alarmingly forwarders will not have to work that hard because they during the year, moving down from 65 to 73 in a span of will get everything at the press of a button. So, domain a few months. But, notwithstanding these twin challenges, knowledge is going to take a beating but people will have the liquid bulk industry weathered the storm admirably. to learn technology more and more. It is not very far away This by itself should be seen as an achievement and credit when the forwarding community will start working with should be given to corporate houses and service providers their smart phones. who worked in unison. I am happy to mention, the All Expectations in 2019 India Liquid Bulk Import Export Association (AILBIEA) The prices charged by freight forwarders is going has been the focal point for much of the country's liquid to increase, because the profit margins on which they bulk trade. are working today are not sustainable. Either they will Expectations in 2019 collectively or individually start increasing their prices or The year 2019 is going to be equally challenging.

JANUARY 2018 / MARITIME GATEWAY 23 OUTLOOK 2019

There are signs of continuing trade tensions, volatile ocean routes. currency movements and Event risks including Brexit, There were no new orders for New Builds for most Indian elections, early signs of El Nino weather conditions part of the year, only recently couple of carriers have and so on. We expect the U.S. Federal Reserve to hike placed order for large ships, this goes to indicate that the interest rate at least once in 2019 (most likely in March) growth forecast is subdued, We saw relaxation of cabotage after which there could be a pause. This may stop the by the Govt and a big push for Inland Water Transport. dollar from gaining further strength. There is also talk of These policy changes will certainly bring about changes in the U.S. beginning to lose growth momentum in second the Indian transport industry, half of 2019. In the event, global growth may slow down We also see digitalisation of the transactions and lots and shake the confidence of investors. More so, with the of action on that front among all quarters. general elections slated for 2019, much will depend on the Expectations in 2019 eventual outcome and as to which party is going to form We see further push in digitalisation, this will lead to the Government. disintermediation, this will open opportunities for new Yet, in the Indian context, we believe, the liquid bulk players, challenge for the existing players. Govt efforts on industry will continue to perform well given the strong Ease of Doing business, new logistics infrastructures like macro-economic fundamentals of growth, rising incomes IWT, DFC, New highways and port connectivities will be and demographic pressure. AILBIEA will continue to play the growth drivers. its legitimate and useful role in ensuring uninterrupted On the regulatory front trade in liquid bulk cargoes. More Deregulation than Regulation is expected, On the regulatory front we saw successful implementation of GST, that saw The liquid bulk industry in our country is a significant reduction of local taxes and corresponding self-regulated industry. We would expect further paperwork. Going forward Govt is seriously implementing rationalization of processes and procedures that would Single Window platform and making the customs continue to promote further easing of business which ‘Faceless’ in turn is sure to improve our ranking in Ease of Doing Business. AILBIEA is constantly working towards UMESH GROVER these objectives. We expect more progressive and more SECRETARY GENERAL, CFSAI facilitative measures being introduced by the Government to boost the trade and remove more and more shackles, Business in 2018 making it much more easier to do business in a more CFS Industry has conducive environment. been facing rather difficult and challenging VIVEK KELE times since 2017 as there DIRECTOR, TEAMGLOBAL was a sort of negative image created about Business in 2018 CFSs attributing high The Business was dwell time and the good in 2018, we associated costs to them. launched vertical of Some loose statements Coastal Forwarding, made by one or two over our volumes in FCL enthusiastic bureaucrats forwarding grew added fuel to the fire. substantially and our The timeline study CFS facility at Nava done by FIEO on key Sheva, the first green stake holders identified the average dwell time in CFSs at CFS in the country JNPT around 150 hrs. However, the analysts as well as received excellent the government after clarification and representations by response. Our major CFSAI, recognized and accepted the fact that the dwell achievement has been time of Imports are solely controlled by Importers or their Teamglobal Logistics agents and CFSs have really no role to play. The activity and the CFS Division, within CFS required for any importer is barely 10-12 hrs. Globicon Terminals, both getting prestigious AEO Our biggest achievement as CFS industry in 2018 was certification by Indian Customs Authorities. our ability to bring out the factual position and correct the Trends that shaped the industry in 2018 wrong perception that CFSs are responsible for high dwell 2018 saw further consolidation in the liner trade, we time for imports and the associated costs. Secondly, the will have fewer shipping lines at end of 2018 than what trade and the ministry realized that the ports having been we had in the beginning of 2018. This happened in both conceptualised on CFS model, en-block evacuation of box and bulk trade. The ‘America First' Policy of Donal the DPD imports is best done by CFSs and not by direct Trump saw significant rise in USA imports before the importers. With the trust of DPD importers and they trade barriers came in to the place. Now that the trade realizing that CFSs add value, out of approx. 58000 teu barriers are in place, we will see significant realignment of DPD imports, only 13-14,000 teus are cleared by DPD customers whereas the major chunk is evacuated by CFSs.

0824 MARITIME GATEWAY / JANUARY 2019 Trends that shaped the industry in 2018 the prescribed norm in terms of timelines and threshold The industry has shaped slightly better than expected at limits, cost recovery waivers are often delayed for years. JNPT and Mundra where there is surge in volumes in 2018. This is one area where trade has been representing and The weakening of Rupee against Dollar saw an increase a recent Gujarat High court Judgement in favour of the in exports. Though imports have become more expensive custodian has made the CBIC rethink and they would with Rupee falling, however both Mundra and JNPT need to come out with new norms. saw reasonably good growth in imports as well. In JNPT, commissioning of the 4th container terminal BMCTL owned and operated by PSA has resulted in rationalisation SUNIL NAIR of some services. This has eased the pressure on other 4 CEO, SNOWMAN LOGISTICS LTD terminals to some extent. With GST more or less settling down, the trade has realized that their transactions are far Business in 2018 more secured and safe. After the However BMCT being standalone and not having introduction of GST and inter-terminal connectivity with other 4 terminals, it has demonetization, there also posed many challenges in terms of inter-terminal have been several changes movements by rail and road causing increased dwell time which companies have and cost. had to adhere to. Most Expectations in 2019 of last year was spent For CFS industry, our expectations are that trade in streamlining the IT would grow further in 2019 and if the present government systems and the operating gets a mandate for another 4 years, the growth trajectory in processes to be compliant EXIM trade will see a continued upward trend. with these new changes. The formation and shaping of the new MMLP policy, At the same time, it gave which is on the anvil, is expected to redefine EXIM opportunity to consolidate logistics to a large extent. The creation of new SWZ at volume to lesser number JNPT and evolving of new MMLPs will also be a game of warehouses. We changer. The Shipping Ministry’s initiatives towards up- worked on this with our customers, which helped us gradation of New Port Community System PCS 1.0 X in increase our volume. As we have strategically located our its revamped form by Portall as the service provider will warehouses, this also helped us bag more business from our connect all stakeholders and real time information to each existing and new customers. And opened opportunities stakeholder will be available. This will bring in efficiency to add a lot of value added services to our clients. We and at least 1- days of transaction time is likely to be increased our utilization by around 10 per cent. reduced in EXIM logistics chain. Trends that shaped the industry in 2018 The growth drivers for CFS industry would be the When it comes to the industry, it took a year for the augment in port capacity on both coasts and increased implications of GST to be streamlined. Businesses had EXIM volumes. With 4th Terminal at JNPT picking up to be restructured to include GST and now we can see volumes, additional capacity commissioning at Mundra that most companies have firmed up their plans. This and other locations will surely surge the growth in EXIM led into requirement of larger size warehouses and trade. With increasing volumes and existing overcapacity transportation solutions. Now companies are clear on available in CFSs, the competition will be tough and CFSs which distribution network helps their business. Resultant, revenue realization per teu may dip to some extent. But the a lot of warehousing facilities are being built on a fast track. additional volumes should nullify that impact. Importance of 3PL logistics companies is more visible now. On the regulatory front Expectations in 2019 A series of unprecedented reforms by present Government has announced that they have over Government especially by CBIC & Customs in last 2-3 achieved their GST collection target. The government years have truly made a paradigm shift in EXIM logistics should think of restructuring the GST so that the burden and has actually benefited the trade in “Ease of doing on corporates is reduced, while you still meet GST targets. Business.” Customs have changed their role to some extent A special focus on small and medium sized organisations from being a “Regulator” to a “trade facilitator.” However would help. All recent changes have helped larger players for better productivity, the Regulators (Customs / CBIC) to adapt quickly leaving smaller organisations behind. also needs to ensure that the stakeholders, especially the The trend of increasing fuel price is still a challenge. CFSs created at a huge Capex are not “over regulated”. This is impacting logistics industries badly. Most of the Renewal of operating licence on regular intervals, small transporters are off road now, and struggling to come hazardous cargo handling approvals and stringent audits, back on road with business. They are completely broken despite most of the CFSs following world class systems and after increasing fuel price in the recent past, which they processes need to be curtailed. Like other industry, under could not pass on to customers, where agreements are “Ease of doing Business,” self-assessment and certification signed with fixed pricing for a longer period. Daily price should be encouraged. change in freight is still not an acceptable phenomenon due Lastly, the newly created CFSs/ ICDs as custodians to administrative hassles. have the additional burden of the staff cost under “Cost On the regulatory front recovery” by DGHRD, CBIC. However despite completing Firstly, there should – hopefully – not be any new

JANUARY 2018 / MARITIME GATEWAY 25 OUTLOOK 2019

introductions in terms of taxation and/or logistics related logistics sector in India, is a manpower heavy industry and laws and policies. I feel that a couple of years of stability lack of adequate training institutions has led to a shortfall is very important for this industry to streamline things. in skilled management and client service personnel. Maybe after that it would be ready to take on more Trends that shaped the industry in 2018 changes. At present there are investors looking to invest The Indian transportation and logistics industry is in logistics industry in India, but constant fluctuations in emerging rapidly to an efficient level along its growth policies showcase the industry as an unstable one and that trajectory. Rising investments, rapidly evolving regulatory may work as a caution to the investors. policies, mega infrastructure projects, and several other Second important thing is control on fuel price. It will developments in recent times have driven the Indian be great if government could control fuel price at lowest logistics market to a global extent. As the Indian possible, and revert back to monthly price changes rather Government implemented GST, E-WAY Bill, MAKE IN than daily one. Customers’ agreements do not allow INDIA, and PPP program on a broader and bigger level, changing prices daily for a transporter, their frequency left no stone unturned, our country continues to emerge as is, at max, monthly and hence to protect transporter’s a biggest manufacturing source/partner. It’s important to interest, reverting back to monthly price change would be know that all aspects of a business are profit centres, so be of great support. ready for the increased workload that’s coming your way. The country will be a crucial part of everyone’s business plan for 2021-2022. Near-shoring is a growing reality, HARPREET SINGH MALHOTRA and India is coming on very strong within that context. MANAGING DIRECTOR, TIGER LOGISTICS (I) PVT LTD Con- currently, we see positive indicators for the Indian economy. Business in 2018 Expectations in 2019 2018 has been a mixed By the implementation of GST, the logistics year for Tiger Logistics. companies, which are currently forced to set up many The company has small warehouses across multiple cities are setting up completed 2.5 years on just a few, big warehouses region wise and also following Bombay Stock Exchange’s the hub-and spoke model for freight movement from main board and feeling the warehouses to the different manufacturing plants, good with a proud wholesale outlets, retail outlets and the various POS. experience. September That means the fastest growing Indian economy will be end half yearly results engaged in a new, rising trend that’s going to make its first were closed with more run in 2019. than 15%. The company As an economy and trade specialist, I’m looking hopes to keep the growth carefully right now at the positive economic growth momentum high in the trends that are coming in 2019 and 2020. I expect the next two quarters. domestic economy to do better across this 12 to 24 month Tiger Logistics has period, which means many companies should be thinking become the 9th Indian company that registered itself as now about how to scale up for and accommodate this an AEO (Authorised Economic Operator) and got the expansion. certification. Today the company has a staff strength of On the regulatory front 375+ persons, a fleet of 59 vehicles with 14 offices in We appreciate Government of India efforts behind India – New Delhi, Mumbai, Nashik, Pune, Kolkata, implementation of GST, E-WAY Bill, paperless process Ahmedabad, Veraval, Mundra, Hazira, Vadodara, in Excise & Customs and also removal of Octroi and Ludhiana, Jaipur, Bengaluru, and Chennai. Tiger Logistics retrieval of Ease of Doing Business ranking of India on has the best Technologies like customer redressal system, the global front. No doubt that the India government is mobile applications, GPS tracking and cloud computing to playing good moves to prevent tax outliers and promoting improve communications, logistics, and inventory tracking. investments in India by marketing Make In India. This works together to boost customer trust and brand Logistics industry is increasing and growing but at a very loyalty. constant speed and the reason behind is Dollar Exchange Achievements: rate. The decreasing value of Rupee is making a clear Tiger Logistics has successfully operated newly opened rough impact on the business and industry. The Indian offices in Bengaluru and Chennai locations. Tiger Logistics logistics industry spends around 14 per cent of the GDP has covered almost entire ports of India through pan on different types of cost incurred in logistics operation. presence and agents and associates presence. We have a The amount of cost incurred is very high in comparison to team of reputed agents and associates around the globe and the logistics cost incurred by different nations. through them we operated several successful supply chain Domestic third party logistics space is expected to operations. Tiger Logistics management has always been grow at a 19-20 per cent Compounded Annual Growth keen in growing the corporate customer base in order to Rate to reach `58,000 crore by 2019-20. This growth give leeway to company to always reinvest its profit for the rate is based on the expectation that the new government future organisation. improve its services and policies for 3PL players like us Challenges: so we can optimize our operations to reduce cost and The company feels in the disorganized nature of the increase margins.

0826 MARITIME GATEWAY / JANUARY 2019 CAPT SUNIL THAPAR ASHISH KUMAR GUPTA CEO, ALLCARGO SHIPPING CO PVT LTD MANAGING DIRECTOR, TM INTERNATIONAL LOGISTICS LTD

Business in 2018 Business in 2018 The dry market has TMILL group has been seeing ups and witnessed significant down this year also and growth in volumes, the YO-YO continues un revenue and profits in abated. On an average current financial year. there has not been The railway business is much change except in an exciting growth in that tanker Market. phase and is likely to Accordingly our business grow further with the has also been flat. Same introduction of the time we have managed GPW-IS Policy by to keep our head above Indian Railways. water and expect to close Trends that shaped the Financial year on a the industry in 2018 positive note. The industry is trying Trends that shaped the industry in 2018 hard to become more organised and changes are visible. Like I said above the industry is still not sure if we The approach of the companies and industry is more are out of dumps. There have been some positive signs. professional and there is resolve to change things. The Going forward we do expect positive developments as far most significant emerging trend is the focus on efficiencies as tonnage supply is concerned. January 2020 Should see led by digitalisation. Going digital is the way forward. some of the older tonnage going to the recycling guys. Expectations in 2019 Fitting of scrubbers on such vessels may not be such a Not only the central, but also the state governments good idea. Availability of compliant fuel will be also an are willing to look at the policy framework to promote issue and so will be the Price differential for 0.5% IFO. business. There is a resolve to change and the government How much of this will get passed on the trade and how is willing to listen and solve problems. much ship owners will have to absorb will be a governing On the regulatory front factor. Overall 2019 will come with its ups and downs, made Expectations in 2019 more exciting by the upcoming general elections. The 2019 will see lot of discussion and action on fitting year is expected to have steady growth for the industry. of scrubbers and use of complaint fuel. Already there are The investments done in ports, roads and railways should view points on close loop or open loop scrubbers or hybrid start delivering results towards the later part of 2019. With scrubbers. Vessel owners need to shell out millions of rapid growth of Indian economy, the logistics sector will dollars for fitting these and not fitting the right one could find it difficult to manage the rate of growth and it may be counterproductive. Singapore has already said it will expose more bottleneck and areas for redressal. While the only allow Close loop scrubbers in its waters. With most government is trying to play its part in developing policies of the East West Trading vessels using these waters, the and infrastructure, the industry players are yet to get their choice seems to be obvious. act together. The scepticism of the industry has to go, it Dry Market is not expected to change much. The USA needs to be replaced with optimism, faith and positivity. China Trade / Tarrif war will have its own repercussions and industry will be watching that. Other wise I don’t expect much change. NAFEESA MOLOOBHOY MANAGING DIRECTOR, A. S. MOLOOBHOY PVT. LTD. On the regulatory front The Govt is trying hard to promote Indian Shipping as well as coastal and Inland waterways. The initiatives have Business in 2018 moved from paper to field. Proactive steps have been taken Business could have including investing in roads to improve connectivity with been better. However, Ports, building inland terminals, barges for leasing out for we are grateful that promoting trade movement etc. What has not been acted we managed to come on is how to incentivise the poor ship owner. He has been through another year left to fend for himself and the market forces. Opening up safely; without being of Cabotage has brought more challenges to Indian ship scarred by the onslaught owners. We would like the authorities to realize if the of recession or severe ship owner does not find a particular trade lucrative, he cash flow problems. will not invest his time and money to acquire and operate Cash flows are my ships. No one is in the business for charity. The authorities main worry. need to work on rules and regulations applicable to coastal Along with shipping. They must be in line with what is ground reality unprofitable business. and focused towards ease of doing business. There is too little

JANUARY 2018 / MARITIME GATEWAY 27 OUTLOOK 2019

business being chased by too many people and this is with E-way bill, Logistics Performance Index for States, unhealthy for all. Even the customers. and a nodal Department for Logistics. Our major achievements were winning the ONGC In addition, there is an umbrella initiative: LEEP contract for supply and installation of Communication i.e. Logistics Efficiency Enhancement Program; under equipment on their rigs and platforms and entering which several steps are being planned by the Department the Charts business by winning the SCI charts tender. of Logistics. The department has also unveiled a new However, both are almost with zero profit, so the going logo for Indian logistics and working towards ensuring will be tough. that only credible players are permitted to use the logo. Trends that shaped the industry in 2018 The ‘National Logistics Portal’ has also been launched I think Defense has still been our saviour this year too. recently. This portal will be the market-place for all And of course Service. services for the entire logistics ecosystem. We render service to a host of foreign customers who One of MLL’s purpose principles is ‘Shaping the actually do pay on time, enabling us to keep our cash Industry’. We are working with the ‘National Council for flows safe. Logistics’ under CII and ‘Department of Logistics’ on Our thrust towards quality and honest lifeboat and initiatives like standardization in the logistics industry. fire fighting services, especially putting up a state of the From a contribution to GDP, logistics sector at 13- art hydrotesting machine is something I am very proud 14% is almost as important as agriculture and therefore of. Considering all the accidents that have taken place last needs proper attention. Government is advocating Make year, especially SCI, I do hope it encourages ship owners in India. We believe that for this to succeed Move In India and vessel managers not to only go by L1 but to give due has to be more efficient. That is the importance of role of credence to quality and integrity. logistics sector. Expectations in 2019 In conclusion, at Mahindra Logistics, we foresee I do hope the offshore industry picks up and for the another exciting and action-filled year for logistics”. return of new shipbuilding orders. Shipyards have a cascading effect on the job market. Currently all private K SWAMINATHAN shipyards are in the doldrums. DIRECTOR -SERVICE BUSINESS, BALMER LAWRIE & CO. LTD. Interesting will be the development of the Marina in Mumbai. I hope the Government has the good sense to Business in 2018 continue with its thrust in this sector. The development Performance in of Inland Shipping should also provide an impetus for calendar year 2018 was growth to our industry. Hopefully it will bring about the satisfactory for Balmer revival of shipyards and facilitate relatively pollution free Lawrie as far as Logistics transportation ! business is concerned. On the regulatory front We have done marginally I think GST rates need to be rationalised. 18% is too better than last year; but high for the shipping industry especially on Services. It for certain headwinds makes us uncompetitive as a result we lose business to which were beyond the counterparts in the UAE or Singapore. I am waiting for the control of the industry, new software from DG Shipping for liferaft servicing and we could have done even supply of Pyros etc. The current scenario of spurious Pyros better. We have started and unethical LSA servicing is worrying especially since handling more DG cargo the dishonesty in this segment is so blatant and obvious!!! in the last couple of years The Government needs to step in and regulate it. and executed multiple shipments of IMO cargo, the biggest shipment being that of 167 teus in one lot in PIROJSHAW SARKARI 2018 so far. We have been handling a lot of International CEO, MAHINDRA LOGISTICS air charters and in this year, we have ventured into domestic air chartering too. The firming up of oil prices Overview of the in the third quarter of the calendar year led to volatility in year gone by and freight market. We also noted that many importers started outlook for 2019 converting FOB shipments to CIF shipments citing ease “At Mahindra of transaction which is a matter of grave concern for any Logistics Limited (MLL) Indian freight forwarder. we believe that the year As far as CFS business is concerned, there has been 2018 continued to be no growth and it is becoming extremely difficult to hold transformational for the on to the existing volumes as DPD volumes go up and logistics industry. This the “available volumes for CFS” is being chased by too was due to enhanced many players leading to chaos in the market place as far as governmental focus on revenues and earnings are concerned. the sector. The work that Trends that shaped the industry in 2018 commenced in 2017 with Year 2018 is proving to be transformative for the GST, continued in 2018 logistics industry. The government has given the “infra”

0828 MARITIME GATEWAY / JANUARY 2019 challenging the incentive schemes for Indian Exporters. Collaborative working will be On the regulatory front taken to the next level with the The Government should figure out a way to encourage FOB import shipments to lend support to Indian freight mushrooming of start-ups which will forwarders. This will ensure that cartel formation bring innovation into play in offering between the suppliers and local freight forwarders in some countries is not adding to cost of imports for services. Ease of doing business will India. MSMEs, which happen to be the backbone of the economy, used to import on FOB terms. However, open up opportunities. because of GST on Ocean Freight, MSMEs are switching over to CIF primarily to avoid cash flow issues related to taking credit of GST paid. Further, there is an increase in status to logistics enabling better access to funds at lower FE spend through this process. rates. This year has seen increased government spending in the development of infrastructure – ports, rail stations, roads, border check points etc. Inland waterways, which SHAILESH GARG has been talked about for a long time has finally taken MD, DREWRY MARITIME SERVICES PRIVATE LIMITED off and will go a long way in addressing pollution related ecology issues of the country. This development can lead Business in 2018 to much reduced domestic freight charges and spare the From our business country of a huge import bill on oil. First and last mile perspective, there was connectivity issues still needs to be addressed for it to be no major change from a game changer for the country. We saw enhanced focus 2017. Recovery in the oil on serving Tier II and Tier III cities by virtue of this. prices brought back some Technology like Blockchain offers companies and their activity in the Middle supply chain more transparency, allowing them to work East but overall market seamlessly with suppliers and logistics providers without scenario remained fear of compromised information. Use of Artificial volatile. Changing geo- Intelligence would also help the logistics industry in a big political scenario has way to meet the growing customer expectations, in the added to the uncertainty. days to come. One of the major The Government decided not to allow CFSs to be set challenges in 2018 has up in four major port cities viz., Mumbai, Chennai, Vizag been the unpredictability and Mundhra as the stated objective is to promote direct of the demand, leading deliveries from the port without the involvement of CFSs. to underutilisation of resources and higher overheads and There seems to be some confusion in what is recorded as lower margins. DPD imports. DPD has definitely changed the earning Trends that shaped the industry in 2018 profile of the CFSs and many are struggling to stay afloat. One of the key trends has been consolidation in Margins have dropped significantly and many have started the liner industry, which is changing the competitive providing “more value added services” to negate this landscape and impacting position of terminal operators impact. and other service providers. This trend is expected to Expectations in 2019 continue in coming years as supply pressure will force Continued governmental expenditure in infrastructure shipping lines to forge alliances to manage capacity and key industries is what we expect. We have seen and margins. In addition to this, industry is witnessing mergers and acquisitions in the past and also have seen increasing penetration of IT in the form of digitalisation, some collaborative working where multiple service e-commerce, automation, data analytics and the trend will providers share common resources to provide cost effective pick –up in the coming years as players will be forced to logistics solutions to clients. The collaborative working adopt these tools to remain competitive. will be taken to the next level with the mushrooming of Expectations in 2019 start-ups in this domain which will bring innovation. We expect 2019 to be bit subdued for Indian market in Ease of doing business will open up opportunities with view of general elections. Players and investors will adopt initiatives like ‘Make in India’ and ‘Skill India’ helping wait and watch policy. Similarly, increasing protectionist the industry to grow. The dedicated Freight Corridors are policies is expected to add to trade war could restrict expected to be fully operational in 2020 and the Inland flow of goods and global trade. This would have adverse Waterways will open up opportunities for the creation impact on demand for shipping, which is already suffering of Logistics Infrastructure along the route. Technology from over supply. On operational front, ship-owners are initiatives like “portals” to find the best freight rate may still not sure of the impact of new emission norms which pose some serious challenges to the conventional “brick will come into effect from 1st Jan 2020. There is lack of and mortar” logistic companies. A bigger challenge I clarity on the compliance cost and supply of low sulphur foresee is on the incentives being extended to the exporters fuel. However, digitalisation and AI in maritime sector is particularly after the US lodged a complaint with the expected to provide new opportunities for various industry WTO’s Dispute Settlement Body (DSB) in March 2018, participants.

JANUARY 2018 / MARITIME GATEWAY 29 INTERVIEW

Delivering deep into the hinterlands Q How has been the business Be it in the middle of the Thar Desert or a of APM Terminals in South Asia in 2018? Which of the regions have village in the interiors of Tamil Nadu, delivering been the star performers and major revenue contributors? into the deep pockets of the Indian hinterland 2018 has been a landmark year for APM Terminals Inland Services has been the forte of APM Terminals Inland South Asia with the creation of service. Ajit Venkataraman, Managing Director, an opportunity to service India’s high potential agriculture, seafood, APM Terminals Inland Services South Asia, pharmaceuticals and chemical industries. South India’s first integrated details on their impeccable services backed by CFS and Cold Chain solutions facility based in Chennai was inaugurated this high-tech infrastructure and robust technology year and delivers services of global standards. leading expertise in refrigerated to the supply chain. Simultaneously, Broadly, APM Terminals Inland containers maintenance and repair, larger automated warehouses closer Services has performed in line with the and thoughtful Garment-on-Hanger to manufacturing and consumption market trend where the west region fabrication solutions. centres are replacing traditional ones. and the northern part of India have Q What have been the major ICDs have found an increasingly seen shipment and cargo growth. trends witnessed in 2018? significant role to play in developing Being fairly new facilities, our business Broadly, for India, 2018 has the hinterland of India – an increasing in Mundra and Tuticorin has shown been a year of identifying gaps and number of ICDs with better road and an impressive pick up in volumes. inefficiencies across the logistics and rail connectivity have been set up. The Pune too is delivering on its promise of supply chain industry, developing DFCs and Industrial corridors are being the one-stop solution for various solutions, and executing. the focal points around which most manufacturers in the vicinity and While DPD, aimed at making the of the infrastructure and strategies neighbouring regions. The receipt of supply chain more efficient is the right are being developed. The cold chain AEO Certification has also helped add way forward, approximately 60 per industry witnessed customers showing value to the customers’ supply chains. cent of the containers are still sent to preference for single service providers Our Container Services Division’s CFSs that are transforming themselves for transportation and storage. performance has been significant and identifying avenues to add value Q In India which are the this year backed mainly by its

0830 MARITIME GATEWAY / JANUARY 2019 hinterlands served by APM Terminals Q How is APM Terminals a world class cold chain facility in close and how is the inland connectivity? embracing technology? proximity to the Port as well as the We have five facilities in Western We have constantly taken lead market – both Chennai and Tuticorin. India – two CFSs in Nhava Sheva, in introducing technology to make Q Tell us about the cold chain a dedicated reefer services facility business easier for customers and facilities of APM Terminals? in Dighode, an integrated ICD and enhance efficiencies and speed. Globally APM Terminals operates warehousing facility in Chakan, Pune Enterprise resource planning, supply five Cold Chain facilities at Vado in and a CFS in Mundra. These facilities chain management, GPS, real- Italy, Puerto Montt in Chile, Cape connect the entire western region time empty container management Town in South Africa, Ziguinchor in and enable connectivity between the software, token management system, Senegal and the recently inaugurated northern and southern hinterland. electronic data interchange, warehouse facility in Chennai, India. In the North, our ICD at Dadri management, RFID, hand-held mobile Inaugurated in 2018, this is South specializes in customized solutions solutions, online container tracking, India’s first integrated CFS cum Cold for retail apparel industry including e-invoicing and bar coding are a few Chain solutions facility. An integrated - Garment on Hanger (GOH) of the solutions we have developed. temperature-controlled facility fabrication of containers, GOH- Technology has been implemented in spread across 10,000 square meters, on-wheel facility and specialized cold chain especially for active and it offers multi commodity and multi- warehousing at standards conducive passive monitoring of temperature. temperature storage solutions. With for global retail apparel brands. A recent development that stands out a pallet capacity of 6350, the facility Through the two facilities in Chennai is the yard management automation features reefer plugs and value-added (CFS and Cold Chain) and Tuticorin system providing container handling services like customs clearance, bonded - located close to the East coast, it is instructions to Reach Stacker operators warehousing, cargo palletization, and able to cater to the requirements of and updating container position in the packaging, transportation logistics to south India and beyond. yard and its status – all in real time. seaports and airports, and on-wheel Serving deep pockets of India, We are currently in the initial phase customs seal verification – for domestic APM Terminals Inland Services has of developing an ambitious integrated and export-import freight. A blast made solar deliveries across states facility operating system. freezer saves the day for customers like Rajasthan, Tamil Nadu, Andhra Q With DPD how has the role of mainly dealing in seafood and read- Pradesh, Karnataka, , CFS transformed? to- cook products. By the virtue of other regions in Central India and even DPD is ahead of its time when being integrated with a CFS, it can in the middle of Thar dessert. These viewed in conjunction with the current also offer services like management of deliveries have been made from the infrastructure, and long-established refrigerated containers and container ports of Chennai, Mundra, Vizag and supply chain models prevalent in repair. Krishnapatnam. the country. So, while a container is Q What will be the major trends Q Tell us about your last mile supposed to be cleared within 24 hours in inland services in 2019? connectivity in India? of its arrival, consignees don’t really New and innovative models of We have increasingly worked on have the expertise and infrastructure infrastructure attuned to emerging developing our Store Door or end- to- (space to hold the container/ cargo, multi modal logistics options aimed end supply chain solutions capability equipment to handle the container/ at addressing unique region-specific and it has become our forte today. destuff cargo). While DPD has requirements will emerge. (for example, Receiving the cargo at the Port, to brought about efficiency in customs the Freight Village in Varanasi along delivering at the customer’s doorstep, clearance process, the overall issues the river Ganga). Factors like new and everything in between; we have related to end-to-end efficiencies are and varied kinds of products being been offering services across the yet to be addressed. traded, increased awareness, higher Indian hinterland – right from an At APM Terminals Inland standards, and clear focus on quality interior village in Tamil Nadu to the Services, we have been addressing and efficiency, will herald an era of Thar desert. Our cold chain facility in our customers’ needs by providing specialization; special expertise in Chennai has already delivered on last specialized and value-added services handling different kinds of cargo will mile distribution for aquaculture feed like palletization, packaging, labelling, replace the age old traditional forms. market apart from cargo pick up from end-to-end solutions to customers, ICDs will grow in significance. Three source for consolidation and laden skilled expertise for stuffing of major trends that will shape the Cold container movement for export. cargo in containers – both dry and chain industry will be: Enhanced focus Another perfect example of last refrigerated. We are rethinking our on agricultural commodities; demand mile deliveries is our service offering business models. For example, at Pune, for a farm level solution at the ICD cum warehouse at Chakan, by attaching a full-fledged warehouse Transparency, visibility and safety Pune. The deliveries to the customer’s to our ICD, we are enabling JIT for will all be infused with Blockchain manufacturing unit, Just-In-Time is the auto manufacturers specifically, to achieve better standards and made possible by the location and and multiple other benefits for other efficiency in temperature controlled the solutions developed to address customers. Similarly, with the set-up of movement, handling of chemicals, requirements of raw material/ a cold chain facility next to the CFS in transit time, planning and scheduling a components. Chennai, we are able to fill in a gap for consignment.

JANUARY 2018 / MARITIME GATEWAY 31 INLAND WATERWAYS We are sailing, finally IWAI has revamped the inland waterways by installing ultra- modern cranes, jetties and has deployed barges that can sail in lesser draft, to ensure logistics happens in the waterways round the year. Sensing the opportunity a lot of companies are migrating to this cost-effective and eco-friendly mode of transport

ndia has about 15,000 km of waterways which have been Itotally neglected since the independence of our country. Nations like Bangladesh, Vietnam, Myanmar, US, China and Argentina have made immense progress in the use of their waterways, which are used at par with other modes of surface the notion that logistics in Ganga road, congestion in the city and traffic transport. In India the share of cargo is not possible in the months of restrictions. movement through waterways has November and December, and can From 2 million tonnes in 2011 increased to about 6 per cent from happen only during the monsoon and 2012, cargo movement through about 0.5 per cent few years back. season. Following this successful waterways increased to 5.8 million Now compare this with China that debut shipment, another cargo tonnes in 2017 and by October 2018 has more than 17 per cent of cargo consignment of Emami products about 6 million tonnes of cargo has moving through waterways, while and Pepsi sailed from Kolkata to been moved through the waterways. Vietnam has 45 per cent. This also Patna. On 23rd November, 1,600 So, people are realising the importance translates into environmental benefits tonnes of stone chips were flagged off and efficiency of waterways and the for these nations. In November 2018, from a jetty in Pakur, Jharkhand to cost of logistics will force people to for the first time containerised cargo Bangladesh and there is daily cargo use waterways, if not today, in the near was flagged off from Kolkata to movement happening on this route. future. Varanasi through river Ganga and Containerised cargo movement is also “Nobody ever imagined that 1,233 the ship also carried return cargo of happening from Haldia to Varanasi tonnes of fly ash from NTPC could Dabur and Pepsi from Varanasi and and then to Patna. Waterways are the be loaded at Kahalgaon and moved reached Kolkata on November 27. answer to all the logistics issues such to Guwahati in 21 days through the This important milestone disproved as high cost of moving goods through

0832 MARITIME GATEWAY / JANUARY 2019 Indo-Bangladesh protocol route of 3 meters from Haldia till Patna, but and the cost was 55 paise per tonne beyond Patna the draft is 2.5 meters. per km. This is one of the biggest Pravir Pandey IWAI is also in the process of buying consignments being transported Vice Chairman, IWAI 25 vessels of various kind – bulk, on the waterways and no road break-bulk, container carriers, Ro-Ro, or rail service can beat this cost- oil tankers, push tug flotilla. About efficiency,” revealed Pravir Pandey, Nobody ever imagined that 1,233 10-12 barges are already moving on Vice Chairman, IWAI. But there is tonnes of fly ash from NTPC could the waterways. These barges will be a challenge of return cargo. Major be loaded at Kahalgaon and moved given on lease to private companies to brands including Dabur, Parle-G, to Guwahati in 21 days through operate, but beyond that the private Emami and Hindustan Lever are the Indo-Bangladesh protocol companies need to invest in barges. looking at using waterways. If night route and the cost was 55 paise Logistics service providers, instead navigation facilities are developed per tonne per km. This is one of of owning 100 trucks wherein each then further logistics time can be cut the biggest consignments being truck costs about `5-6 crores, they down on the waterways. transported on the waterways and can invest in one vessel of 1500-2000 Coming to the Jalmarg Vikas no road or rail service can beat this cost-efficiency. tonnes capacity that costs about `10- Project Pravir Pandey revealed, the 11 crores. Once the benefits of using Sahebgunj multimodal terminal in waterways are realised, confidence Jharkhand will be ready by March or will build up among the logistics April 2019 and the Haldia multimodal service providers who will gradually terminal will be ready by the end lesser draft are being designed for move from trucks to vessels. of 2019. IWAI has put the Varanasi moving containers, bulk, break-bulk The first challenge for waterways terminal for bidding through the PPP and Ro-Ro on the waterways. About transportation was cargo handling mode for 30 years on operations, 15 such vessels will be procured. 10 cost, because loading and unloading maintenance and development model. Ro-Ro vessels are also being procured of cargo was manual due to which The bidders include DP World, JM from Cochin shipyard and the first the cost was skyrocketing, but use Baxi and Adani. The government vessels will be delivered in February or of mechanised equipment for cargo is not going to operate any terminal March 2019. handling has helped to control the actively, but will undertake IWAI is very keen to use methanol cost. Today at multimodal terminals in maintenance of the waterways. IWAI as marine fuel in ships plying on Varanasi, Sahebgunj, Haldia, Pakur, is deploying staff on water with echo waterways. Niti Aayog is piloting Kalughat and Ghazipur, most modern sounders and other equipment for this movement and a committee cranes and mobile harbour cranes are channel marking and monitoring chaired by Dr Saraswat, Member, being installed, the jetties are designed their depths, so that uninterrupted Niti Aayog, is formed for promoting for high level and low level boats. For movement of cargo and passengers use of methanol. IWAI has given example, the Pepsi cargo consisting takes place. three of its boats to Cochin shipyard of 16 containers that reached Banaras The NW-4 has become operational to redesign and retrofit its engines was offloaded in 52 minutes. on Krishna River and more than for using methanol. IWAI has also IWAI is acquiring 100 acres land 50,000 tonnes of cargo is moving on placed orders with Cochin Shipyard in Banaras, 350 acres in Sahebgunj this route. 90 kms of this waterway for 6 cargo vessels having 1000-2000 for developing freight villages that from Muktyala to Vijayawada is being tonnes capacity that run on methanol. will attract and aggregate the cargo. developed and in-between the new Methanol costs Rs.25 per litre as All operations from manufacturing capital city of Amaravati is coming compared to Rs.65 per litre of diesel, to assembling and packaging, up. so it can drastically bring down the warehousing, bonding can happen Seeing the development on Ganga logistics cost by about one third. in the freight village. These villages – NW-1, the government is planning A concern in using methanol is for will have multimodal connectivity to to develop Brahmaputra (NW-2) bunkering, because if a ship sails from waterways, road and rail. The shipper for which the World Bank will fund Kolkata to Patna then it will need can choose a combination of the Rs.3,000 crore. Moving further to refuelling in the journey and methanol transport mode based on his cost and connect with the South East Asian can’t be stored in huge quantities like convenience. nations, the Kaladan multimodal diesel as it needs more space onboard At Sahebgunj in Jharkhand, transit project in Myanmar is being a ship which will reduce cargo holding moving beyond the freight village, funded by the Ministry of External capacity. So ships will need frequent an industrial hub is being planned Affairs at a cost of `700 crore. The bunkering, maybe after every 500km. for which 350 acres land is being idea is to connect Kolkata and Haldia IWAI is also planning bunkering and acquired. These freight villages are to Myanmar at Sittwe which further fuel supply strategy on the national expected to be operational by 2020. connects to Mizoram. The Sittwe port waterways. IWAI will acquire land and develop is now ready for operations and this A lot of thought process was put the basic infrastructure such as roads, project will not only make connecting for using barges from Goa that were water and electricity supply, and the north east states easy but will also defunct after the ban on mining there. thereafter through PPP mode land open India to the South East Asia. But those barges need a draft of 2.8 will be given to a private operator to Special vessels that can move on meters. While waterways have a draft develop.

JANUARY 2018 / MARITIME GATEWAY 33 Q & A

Logistics sector to witness greater growth The Indian logistics cost will come down as the sector is all set to witness more growth in the days to come, reveals S. Ramakrishna, Chairman, FFFAI, as he looks at the opportunities and challenges facing the freight forwarding community Vijay Kurup

Q What are the pressing issues industry responded to automation, the logistic cost but the surge in fuel that the freight forwarding industry transparency and closer interaction price actually took the sheen out. is facing today? with the regulatory bodies? Q Is our freight forwarding The challenges are many in terms Ministry of Finance in co- industry still unorganised? Has it of reduced volume of business, the ordination with other related evolved from being a service provider margins have to be compromised to Ministries have been having regular to offer end-to-end solutions? sustain, recovery of dues in time etc., interactions to bring all agencies into It is harsh to say it is an but at the same time the avenues are the ambit of SWIFT. This is already unorganised community. We have also opening up such as new MMLPs, the norm where major PGAs are been requesting the government for inland waterways, AFS, where the CB online. industry status for the entire cargo and freight forwarder would get newer Q The logistic sector is expected business which would help us in opportunity to work. Reduced margins to grow from $160 billion to $215 funding. Our sector has contributed and mergers of shipping lines have billion by 2020. What is going to be majorly to exchequer in service tax posed more challenges for the freight the change? earlier and now in GST. Service forwarding community. There are also The logistics sector will grow for sector does dominate the GDP disturbing trends of carriers getting sure especially with cold chain which contribution in the Indian economy. into end-to-end solutions. are being set up, UDAN scheme of the Q Your expectations on the Q How has been the business in Ministry of Civil Aviation, setting up regulatory front? 2018? of AFS to cater to the various small The government has included The business in 2018 has been airports to have hub and spoke model, logistics sector in the harmonised slow for the various reasons, mainly creating India as a major transhipment master list of infrastructure sub-sector due to global recession, oil prices and hub for nearby countries. and this is a very welcome step. fluctuation in foreign currencies, but Q The Western DFC should be This in fact is the first step towards at the same time the exporters have on the rails in about a year. What recognition of logistic sector as an benefited from exchange rate surge. potential does the freight forwarding industry according to us. There was also an issue about the industry see here? The Ministry of Finance along understanding of GST which also DFC should reduce the cost with Agriculture, Ministry of Health reduced the trade in the financial drastically. The challenge would be and other government departments year. However, the scenario has disparity of imports vs exports in have joined hands in reducing the changed dramatically now with better terms of container from hinterland to dwell time by automation process with understanding and facilitation from the port. DFC could also be utilised ICEGATE which is a phenomenal the government as well as due to for Ro-Ro vehicular movement for air improvement by participating proactive initiatives from association shipments apart from containers. government agencies. The Reserve & stake holders. In 2019, we look Q How can FFFAI contribute in Bank of India through their portal forward for positive growth in industry reducing logistics cost? have substantially reduced the especially with the latest accord It would be the economy of the discrepancies in the transactions of with UAE and Iran with rupee trade scale which would reduce the cost, our exim trade by auto populating the agreements. endeavour should be to achieve that. exim data from Bills of Entry & Q How has the freight forwarding The E Way bill and GST did reduce Shipping Bills.

0834 MARITIME GATEWAY / JANUARY 2019

TRANSSHIPMENT Quick passage for Bangladesh exports

or long, South-east Asia has been marred with poor intra- Transhipment through Indian ports can enable Fregional connectivity and trade, until India and Bangladesh came Bangladesh expedite its cargo movement, provided together to put forward a classic the bottlenecks at land customs stations are example of intra-regional coordination on matters of connectivity by resolved initiating coastal shipping which has been growing steadily. Bangladesh moved a step forward by allowing use of Chattogram and Mongla Gede/Ranaghat to Nhavasheva which makes it very difficult for Ports for the movement of goods port by rail. moving cargo.” to and from north-eastern states In a first of its kind move, bonded Pointing at another bottleneck, of India. Reciprocating India has cargo from Bangladesh was flown Ashutosh Jaiswal, President - Intl initiated a pilot programme for out of Kolkata airport in December Business Division & Logistics, transit of Bangladesh export cargo 2018. The transfer of cargo weighing Century Plyboards (I) Ltd says, “This from Petrapole to Kolkata Port and 4.1 tonnes from Bangladeshi trucks movement has been happening earlier Nhavasheva Ports / Kolkata Airport. to Indian trucks took place at the as well, but the government has put a Port congestion resulting in Benapole-Petrapole border and restriction that only 5 per cent of the delayed cargo movement and longer was moved to Kolkata airport and traffic can move directly from CFS dwell time for ships has been a airfreighted to reach Europe. to the check post. The land customs perennial problem for the Bangladesh While the transshipment via stations at Benapole and Petrapole trade that has been bearing the brunt Kolkata airport has been successful, have a typical issue for parking in terms of higher logistics cost and movement through Kolkata port is yet of trailers. Any trailer coming for often delayed consignments shipped to to take off. Elaborating on the time exports, except perishable goods, has their business counterparts in the west. and cost issues that may deter the to go to parking first due to which the While the Bangladesh government has cargo movement from Kolkata Port, cargo movement gets delayed and the taken a slew of measures to address Ashish Kumar Gupta, Managing shipper has to bear a demurrage for this issue by adding infrastructure Director, TM International Logistics 11-21 days, which is around `20,000 at the ports and developing new says, “Bangladeshi exporters have so to `30,000 for a shipment. Off late, terminals, another feasible option is far been moving their cargo through the government has decided that the new proposal which is in pilot road to JNPT as most of the exports any cargo coming from CFS or ICD phase for transhipment of Bangladesh are destined to the west and so JNPT can go directly to the check post and cargo through the Benapole/Petrapole is a logical port of choice. So it is skip the stop at the parking. But this land customs stations to the Kolkata very unlikely for exporters to come could not materialise as only 5 per Port, Nhavasheva Port and Kolkata to Kolkata Port and then move west. cent of the traffic was allowed direct Airport. Further there are hardly any mainline movement to the check post.” The Pilot Program has been calls at Kolkata Port and even if Ashutosh Jaiswal argues that initiated for a period of six months some RMG exports come to the port once the cargo moves out from CFS during which Bangladesh cargo it is seasonal. Comparing logistics or ICD, it is already Customs cleared movement will be as follows: cost wise, it will be much cheaper and should not be delayed. If the 5 per • From LCS Petrapole to Kolkata for Bangladeshi exporters to move cent restriction on cargo movement Port and Air Cargo Complex, cargo via Land Customs Stations to is relaxed then seamless movement Kolkata Mumbai. Another issue is the traffic of cargo to and from Bangladesh can • From LCS Petrapole and LCS restrictions in the city of Kolkata happen at a much lesser cost.

0836 MARITIME GATEWAY / JANUARY 2019

INAUGURAL SESSION

(L to R) Ramprasad Ravi, Editor in Chief and Publisher, Maritime Gateway; V Kalyana Rama, Chairman and Managing Director, Container Corporation of India Ltd; S P Tucker, IAS(Retd), Former Chief Secretary, Government of Andhra Pradesh & Executive Vice Chairman, AP Economic Development Board, GoAP; Dr Koya Praveen, IPS, Director of Ports, Government of Andhra Pradesh; K V Satyanarayana, IAS, Managing Director, Andhra Pradesh State Warehousing Corporation

ithin few years of formation the sunrise state Wof Andhra Pradesh is Global Logistics Hub: surging to become a global logistics and transshipment hub, under the visionary leadership of honourable Destination Andhra Chief Minister N Chandrababu Naidu, informed R Ramprasad, Pradesh Editor-in-Chief and Publisher, Maritime Gateway, setting the Initiatives being taken by formulating policies and conference in context. World class developing infrastructure to reduce production and logistics and storage infrastructure is being planned and developed close to logistics cost for making Andhra Pradesh a logistics the cargo generation and consumption centers, to ensure time and cost hub were detailed efficient logistics services are provided to the exim community in the state IT, skilled manpower and standards required are being mapped and these and the surrounding hinterland. Today for logistics and warehousing were developments have led to the double globally the focus is on developing developed. Andhra Pradesh has been digit growth of the state. Two support efficient infrastructure that enables recording about 11 to 12 per cent departments are planned – one for ease of doing business, reduce growth in GDP for the past 3-4 years transport and another for ports. Cargo inefficiency in cargo movement, and will soon be the first developed generation and export centers are bringing down the cost of logistics state of India. The state government being mapped and what part of it is through digitalisation using cutting has linked up with Germany, Russia being generated in Andhra Pradesh edge technologies such as BlockChain and US for improving the standard of and can move via the state is being and IoT. education in universities. To become studied. S P Tucker, IAS (Retd), Former a hub in pharma sector, 3-4 mega The main challenge before the Chief Secretary, Government of pharma parks are being developed country today is job creation, shared Andhra Pradesh and Executive in Nellore Praksam and Vizag. To Ajay Jain, Vice Chairman, AP Economic become a logistics hub Andhra IAS, Principal Development Board, shared Pradesh will need trained manpower, Secretary to the vision of Chief Minister, N simplified laws for companies to set Govt - Energy, Chandrababu Naidu to develop up base here, financial support system, Investment & Andhra Pradesh into a logistics hub faster decision making and turnaround Infrastructure, not only for India but also for South time should be standardised for Government of Asia. Citing example of Singapore all things. State highways are Andhra Pradesh. he said, the city nation has emerged planned coming from Kurnool, Primary sector as a logistics hub decades back due Ananthapur upto Amaravati. Areas has its own to favourable policy structure, use of where warehousing, godowns are

0838 MARITIME GATEWAY / JANUARY 2019 limitations, due to mechanisation logistics is developed,” revealed J Krishna Kishore, CA, IRS, and automation not many jobs are V Kalyana Rama, CMD, CONCOR. CEO, APEDB & Ex-Officio being created in the manufacturing In India logistics is disjointed and Secretary to Government of Andhra sector. Further our products can an integrated solution is required. Pradesh, looked compete globally if their cost is Elaborating on logistics services back into the less, which again points at reducing of CONCOR in Andhra Pradesh memory lane at the logistics cost. This way India he said, an MMLP is developed in the difficulties can also be promoted as a global Visakhapatnam on 100 acres along faced when the manufacturing hub like China. AP with road and rail connectivity at a sunrise state of has ideal location on east coast with CAPEX of 420 crores. The idea is to Andhra Pradesh one major and 5 non-major ports promote aggregation and distribution was newly formed and another 4 ports are coming at through modal shift from road to in 2014. The state Bhavanapadu, Srikakulam, Kakinada rail and reduce the logistics cost. It then had a budget deficit with only and Machilipatnam. The existing will have three EXIM warehouses 43 per cent of its revenues and assets major ports have posted 9 per cent of 5075 sq.mts each, bonded area of were lesser than the liabilities. But the growth and private ports have put 1211 sq.mts and state-of-the-art cargo state has covered a long revival journey double digit growth. Along with ports handling equipment. Nepal is using in a short span of time and is surging this facility in moving its exim cargo. to become the top state in India by MMLPs are required and CONCOR CONCOR is operating another 2020. By 2050, Andhra Pradesh aims has developed facilities at Vizag, CFS facility in Vizag since 2005, to become a leading global economic Kakinada and Krishnapatnam. The which is spread on 89.35 acres and destination. In the past four years VCIC and CBIC corridors will boost developed at a CAPEX of 9.6 crores. Andhra Pradesh has not witnessed further industrial growth, to support An MMLP in Krishnapatnam is being any power cuts which is a major which a comprehensive logistics developed on 153 acres, at a CAPEX achievement. Coming to economic policy is required. of 70 crores. In Guntur CONCOR growth, from 1947 to 2014 the state “Logistics sector has become has taken over an ICD from Indian had an economic growth of $80 vibrant for the past 3-4 years across Railways. The vision of CONCOR is billion, where as in the past four years the country and there has been a lot to graduate from terminal operations (2014-2018) there has been a 60 per of improvement in the ports sector, to distribution logistics, as such cent rise in economic growth touching connecting directly into the hinterland services are still not well developed in at $124 billion. The percapita income and waterways,” said Dr Koya India. In India a lot of agri-produce of the state has also increased by 60 Praveen, IPS, Director of Ports, is wasted and this sector is in urgent per cent and by 2028 the state plans to Government of Andhra Pradesh. need for good distribution logistics. become a trillion Dollar economy. The cement cluster of Jaggampeta Another initiative of Concor To develop Andhra Pradesh into is being connected to Amaravati Kalyana Rama informed was to one of the best logistics hub in the and Vijayawada. Six months back expand non-rail business of Concor world, four airports are already under the first Ro-Ro in the state has been by expanding warehousing. The plan development, 14 seaports are being operationalized between Vijayawada is to grow warehousing operations developed and 20,000km of roads are and Amaravati. This is also saving the from 3.5 million sq.ft to 50 million being layed. About 888kms of inland transportation cost in construction sq.ft on distribution logistics model. waterways are being made navigable of the new capital city. To succeed Warehouses will also be set up and the state is already the no.1 in as an export-led economy, a robust through PPP mode and facilities will ease of doing business. manufacturing sector is required be hired on revenue sharing basis. “Industrialisation is the corner which can be competitive if logistics India still has a huge requirement stone for economic development. cost is low. Logistics cost in India for warehousing and additional one Industry, infrastructure and logistics accounts for 17 per cent whereas billion sq.mts of warehousing needs to need to be interconnected as growth in the world average is 12 per cent. be developed. industries will result in more business A comprehensive logistics policy He also hinted at the need to that will generate greater profits and needs to be developed for port-led fully exploit the potential in coastal revenue generation,” revealed K V development with forward and shipping. Cargo can be moved from Satyanarayana, IAS, Managing backward integration. 50 per cent of Kandla to Tuticorin by developing Director, Andhra Pradesh State cargo movement from India is east a north-south movement model Warehousing Corporation. Most of the Indian economy comprises of bound but is moving from west coast using rail, road and coastal shipping. Another initiative of Concor is to informal sector (about 60 per cent), of India, so Andhra Pradesh needs to develop an Integrated Logistics which includes logistics as well. The be connected to Central and Northern Manufacturing Zone (ILMZ) that will state government is creating a separate India. support for complete in-bound and department for logistics sector. The “Using the coast line and out-bound logistics – procuring raw state has warehousing capacity connecting it to the hinterland can material and shipping out finished of 13 lakh tonnes and additional help in making Andhra Pradesh a goods. A MoU with the government 5 lakh tonnes will come up soon logistics hubs. Logistics cost in India of Andhra Pradesh has been signed that will house all types of cargo – cannot come down unless end-to-end for this purpose. containerised, bulk, break bulk, liquid.

JANUARY 2018 / MARITIME GATEWAY 39 BUSINESS SESSION – I

(L to R) H N Ramaprasad, Vice President - Exports & Supply Chain, ITC Limited - Indian Leaf Tobacco Division; Jayavaradhan Sambedu, Co-Founder & CTO, Curl Analytics; Dr Rakesh Paras Singh, Chairman, Institute of Supply Chain and Management; J A Chowdary, Special Chief Secretary & IT Advisor to the Chief Minister, Government of Andhra Pradesh; K Sunitha, IAS, Executive Director & Chairman i/c, Tobacco Board; Vivek Aiyar, Director, SATTVA Logistics Group; Anil Arora, Partner, Aetos Growth Partners LLP; Surendra Lingareddy, Director APAC, Volteo

H N Ramaprasad, Vice President Building an Ecosystem for - Exports & Supply Chain, ITC Limited - Indian Leaf Tobacco Division. The company aims to Global Logistics Hub become the largest provider and exporter of agricommodities in Development of infrastructure and connectivity, the state. Sharing details on the agricultural production of Andhra formulation of logistics policies, skill development Pradesh Ramprasad said, the state has a huge agricultural landscape and need for promoting digitalisation was voiced and is the fourth largest agricultural by the panel members commodity producer in India. It is also the number one producer of several commodities including obacco being a major export the excise department. turmeric and chilli. But the sector is commodity from Andhra Out of the 185000 tones being facing certain challenges in the form TPradesh, K Sunitha IAS, exported from Andhra Pradesh, 55 per of lack of skilled labour, in sufficient Executive Director & Chairman i/c, cent moves through Krishnapatnam infrastructure like warehousing. To Tobacco Board, shared the challenges Port and the remaining 45 per ensure India maintains its position in faced by the industry in the form cent moves through Chennai and agri-exports, end-to-end connectivity of stricter regulations and taxes to Kattupalli Ports. Sunitha emphasised needs to be provided from the source discourage production of tobacco. that the cost of exporting through of production to the port through road About 45.7 million people in India Krishnapatnam Port is less than and rail. This needs to be supported are dependent for their living on Chennai Port. Major export by formulating logistics policy tobacco cultivation. India accounts destinations are Russia and China framework. for 13 per cent of the global tobacco and the Tobacco Board is focusing Currently more than 50 per cent production and is the third largest more on improving exports into of agri-exports from the state of exporter in the world behind Brazil the Chinese market. Sunitha voiced Andhra Pradesh happen through and China, exporting to 113 countries. the need for more warehouses near Chennai Port and dependence on The highest peak in the commodity Krishnapatnam Port and availability feeder vessels for connecting to the exports was recorded in 2013-14 at of empty containers for convenience mother vessels remains an issue. The 1007 million tonnes, which declined of exporting tobacco. government should establish FSSAI to 859 million tonnes in 2017-18. The “Agriculture is the backbone testing facilities near ports and free production cost of tobacco in India of Indian economy and ITC has a trade zones need to be developed in a is less than other countries and it vision of improving its agribusiness radius of 30km from the ports where generates `20,000 crores of revenue to to `10,000 crore by 2030,” revealed a lot of value addition can happen to

0840 MARITIME GATEWAY / JANUARY 2019

BUSINESS SESSION – I

the exim cargo. Ramprasad voiced his opinion for integration of ports in the state through formation of AP Ports Trust which will help in improving the performance of the ports. “The exim community should focus on the value addition services the logistics service providers offer rather than focusing on the costs,” a tedious process and involves large link the geographies of production, suggested Samir number of people, but this process consumption and distribution. Shah, former can be simplified, made error proof Reflecting on the Indian state of Chairman, using Blockchain technology. Today, logistics, he said, our country ranks FFFAI. He drones are used in many countries 133 out of 140 on the depth of voiced the need for monitoring the quality of roads, logistics index. He pointed at the for recognising similar applications can also be made Chinese Silk Route that helps China to the logistics sector in India. reach across the globe in the most cost as a stand-alone sector. In spite of the Anil Arora, Partner Aetos effective manner. In similar manner formation of the Gujarat Maritime Growth Partners LLP, focused on to become a global logistics hub Board and Port-led development focus the entrepreneurial opportunities India needs to strengthen and make of the state government of Gujarat, available in the logistics sector. economical its connectivity with the the state never recognised logistics Indian economy is growing and with global countries rather than focusing as a stand alone sector. He expressed it demand for logistics is also set to only inwards. Another area of focus the need to define logistics and rise. Logistics sector in India employs he pointed was building of scale to differentiate the various segments to 22 million people and is growing improve the competitive advantage ensure efficiency can be improved in annually at a CAGR of 7.8 per cent. and this could be done by integrating the service offered. Development of While we compare the logistics ports with production clusters using standards and certification process for cost of India and manufacturing technology. logistics service providers can help in capabilities of our country with “Logistics industry was never improving the quality of logistics. China, but a major issue in the Indian digitised before. Up to 2013-14 A major challenge the logistics logistics sector, Anil pointed out, funding in technology startups in the industry is facing today is the lack was the lack of consistency in transit logistics sector was low, but it has of skilled workforce. He emphasised time – be it through road, rail or ship. suddenly shot up in 2018,” noticed on the need to educate students at China has a very high consistency Surendra Lingareddy, Director the school level about the potential in the logistics services offered by all APAC, Volteo. In the supply chain employment options in the shipping modes of transport. Another area technology can help in setting things and logistics sector. Promoting where India lags behind is in the right by planning workflows, creating employment of women in this adoption of new technologies. Indian and assigning tasks and delegating male dominated sector was another businesses are slow in catching up responsibility. But while planning challenge highlighted by Samir with newer technologies and one digitalisation one must make sure to Shah. He recommended the state of the reasons is the inadequate keep the customer at the center of the governments offer tax exemptions technology infrastructure which strategy, else digitalisation will fail. to logistics companies who employ leads to high installation cost and Towards the conclusion of the women and professional tax underperformance. Technology session, J A exemption for ladies working in the can be a major enabler in utilising Chowdary, logistics sector. This will help in the maximum potential of ports by Special Chief promoting the employment in the plugging the gaps. It will help in Secretary & IT shipping and logistics sector. reducing the turnaround time for Advisor to the “Technology can be used to ships as a result more ships will call Chief Minister, generate trust among trading at the ports. Towards the conclusion Government of partners,” revealed Jayavaradhan of his address, Anil called for scaling Andhra Pradesh, Sambedu, Co-Founder & CTO, up infrastructure with growing cautioned about Curl Analytics. Blockchain can play demand. the risk of a crucial role in generating trust “Skill development is an area hacking and data being stolen when among known parties in the business. neglected for long by the shipping operations are digitalised. Hence there Using technology shippers can benefit and logistics industry,” informed Dr is need to develop trust among the with upto 30 per cent of efficiency Rakesh Paras Singh, Chairman, user community along with firewalls. gains in obtaining letter of credit. Institute of Supply Chain and Andhra Pradesh government is the Blockchain is a platform for seamless Management. In order to become a only state in India which is 100 per integration of data. For instance, global logistics hub, India needs to cent paperless and digitalisation verification of documents at Banks is promotes transparency.

0842 MARITIME GATEWAY / JANUARY 2019

BUSINESS SESSION –I I

(L to R) Ramprasad Ravi, Editor in Chief and Publisher, Maritime Gateway; Vinita Venkatesh, Director, Navayuga Container Terminal Private Limited; Mittapalli Umaaa Maheswara Rao, President, The Indian Tobacco Association; V Sudhakar Chowdary, Managing Director, Mohan Spintex India Limited; Shivaram M, Chief Operating Officer, Jyothi Granite Exports EXIM Growth, Cargo Transportation and Connectivity Chowdary, Managing Director, Shippers of major commodities from the state Mohan Spintex India Limited said, cotton textiles from India are doing voiced their logistics concerns and improvements good globally and have a very large share. India is the second largest needed in infrastructure and connectivity were exporter in the world after China. Of highlighted the total cotton produced in Telangana and Andhra Pradesh, about 35-40 per cent is exported. Compared “ untur is the anchor cargo service to Kolkata and Haldia. 85 per to the second half of 2017, in the for Krishnapatnam Port,” cent of all the major commodities, second half of 2018 there has been a Ginformed Vinita Venkatesh, except tobacco, moving from the east 3 per cent drop in exports. A major Director, Navayuga Container coast are via Krishnapatnam Port. competitor to Indian textile is China Terminal Private Limited. CVR The port has 2 sailings every which has duty free production units Navayuga Ports also operates week to China and Korea, four in Vietnam, but India has a duty of the port of Machilipatnam and feeder services every week connect to 3-5 per cent on cotton exports, which Krishnapatnam, which due to their Colombo. A door-to-door shipping make our products less competitive. proximity serve the Vijayawada- company called Ocean2Door has been Another logistics challenge faced by Guntur cargo hub. The third established that moves cargo from the cotton exporters is that cargo is not concession agreement is for the port door of the customer abroad to the being loaded onto the intended vessel at Astaranga that will attract the importer’s door in India. which is delaying the exports. cargo from North India and NCR “Andhra Pradesh should be “Tobacco production and exports region. All cargo coming from eastern transformed into a logistics hub using have been a vital contributor to the locations like China, Korea and south the strengths of its coast line,” voiced Indian economy,” revealed Mittapalli east Asia will come to Astaranga Port. Shivram, COO, Jyothi Granite Umaaa Maheswara Rao, President, Navayuga Container Terminal is the Exports. To accomplish this vision The Indian Tobacco Association. largest terminal in AP, its container land side infrastructure such as SEZs But government initiatives in the form volumes moved are in fact more than need to be developed near cargo of stricter regulations to discourage and it is also generation and consumption centers, tobacco farming due to health issues the largest transhipment terminal on connected through rail and road to has put the industry in an adverse the east coast. The services coming ensure cargo moves in the shortest position. Earlier tobacco exports from from China and Korea are actually possible time and in a cost-effective free of sales tax and VAT, but now dropping the boxes in Port Klang and manner. Warehousing zones should be it has been brought into the ambit Singapore from where feeder vessels developed where a lot of value-added of GST, due to which exports have bring them to Kolkata and Haldia. But activities can happen for the cargo that declined from 70 per cent to 30 per now mainlines from China and Korea is being imported or exported. cent. He urged the government to are coming to Krishnapatnam Port, Explaining the scenario of remove restrictions atleast on exports from where boxes are moved by feeder the textile industry, V Sudhakar of tobacco.

0844 MARITIME GATEWAY / JANUARY 2019

SLS AMARAVATHI- AWARDS

Winners Take it All Industry leaders and representatives from the government stood together to cheer for the star performers who raised the bar higher in whatever services they offer

t was a windfall of some moments of glory and glamour for the logistics and EXIM fraternity SMART LOGISTICS AWARDS WINNERS Iof Andhra Pradesh. There was something for everyone to cherish towards the year end. It was that Smart Forwarder: Leaap International Pvt Ltd moment in the Smart Logistics Summit & Awards 2018 which called upon the best in the business to be Smart Forwarder: Seashell Logistics Pvt Ltd recognised for what they have achieved for trade. The event was not only about some thought provoking Smart Transporter: Seaport Logistics Pvt Ltd business sessions, but there was also equal passion for Smart Exporter - Granite: Anjalee Granites Pvt Ltd some serious business networking and laidback mo- ments appreciating the galaxy of smart achievers of Smart Exporter - Granite: Krishnasai Granites (India) Pvt Ltd Andhra Pradesh. A day filled with deliberations has to be followed by celebrations and that is what the Smart Exporter - Granite: Jyothi Granite Exports Smart Logistics Awards were all about - to honour Smart Exporter - Cotton Yarn: Sri Nukala Rama Koteswara Rao and encourage the movers and shakers of the indus- try that make logistics in the state smart. Awards Smart Exporter - Cotton Yarn: Mohan Spintex India Ltd were given in 18 categories to star performers who walked away with trophies in their hand and a big Smart Exporter - Cotton Linter: Kallam Agro grin on their face. And those off the dais applauded Smart Exporter - Cotton Linter: Thirumala Cotton & Agro Products Ltd with equal vigour every time a name was announced. Appropriate recognition and applause was Smart Exporter - Chilli: Nandyala Satyanarayana handed to the achievers not only encouraging them to move ahead, but they inspired many others to go Smart Emerging Exporter - Chilli: G K Trading on and achieve new milestones. The awards also Smart Exporter – Tobacco: ITC Limited acknowledged the good practices the companies followed, the technological innovations they used in Smart Exporter – Tobacco: Polisetty Somasundaram Tobacco Packers & Exporters their business and the quality conscious systems they put in place for their firms to function as a well-oiled Smart Exporter – Tobacco: Godfrey Phillips India Limited machinery. The awards ceremony concluded with Smart Importer - Furniture: Daxer Trading Pvt Ltd a sumptuous feast befitting only the best as glasses clinked in celebration and appreciation. Maritime Smart Importer - Bitumen: Spads Redfields EXIM Pvt ltd Gateway’s continual passion to strive for excellence, and its relationship with the global clientele was sym- Smart Terminal: Navayuga Container Terminal Pvt Ltd bolised yet again through this event.

0846 MARITIME GATEWAY / JANUARY 2019

SAMUDRA MANTHAN AWARDS 2018

Recognising excellence in maritime services The symposium focused on the steps that could be taken to ensure Ease of Doing Business. The Awards night felicitated the best among the best in the maritime fraternity

LOTS; Capt. BVJK Sharma, JMD & CEO, JSW Infrastructure; Ashish Chandana - MD & CEO- Speedy Mul- timodes; Vinita Venkatesh, Director, Navayuga Container Terminal Pvt Ltd & Managing Director, Ocean2Door; Sameer Bhatnagar, Global Sector Leader of Ports, KPMG and Capt. Dinesh Gautama, ED & CEO, Navkar Corporation Ltd. The need for standardisation and transparency in training for mariners was stressed by Gen V.K. Singh, PVSM, AVSM, YSM, ADC (Retd.) Hon’ble Minister of State for External Affairs, Govt. of India. he 6th edition of Samudra istry of Shipping, Ravindra Kumar, The symposium was followed by Manthan Awards 2018 was IAS, Private Secretary to Hon'ble a glittering award function recognis- Tgraced by the who’s who in Minister of Drinking Water and ing the best amongst the best from the the maritime and logistics fraternity. Sanitation in Government of India, industry. “I am glad to be among the mari- Capt T Srinivas Deputy Conservator, Some of the Samudra Manthan time fraternity who are the pillars of Marine, Deendayal Port Trust, Dr C Award winners: the economy,” claimed Chief Guest Unnikrishnan Nair, Chief Manager • K M Sheth founder & Chairman Hon'ble Shri Deepak Kesarkar, (T), Jawaharlal Nehru Port Trust and of the Great Eastern Shipping Minister of State for Home (Rural), Dr K L Raju, General Manager, Zonal Company was conferred the Life- Finance & Planning, Government of Head, Union Bank of India, P K Soni, time Achievement Award. Maharashtra. He emphasised on the DGM, Regional Head, Union Bank • Capt. Vivek Singh Anand, Direc- importance of the maritime industry of India, Jainendra Kumar Prabhakar, tor, NYK Line (India) Pvt Ltd from historical times and how it has Chief Manager, Branch Head, Ma- was given the mentor of the year made Mumbai the economic capital him, Union Bank of India. award. of India. He further said that Nitin This was followed by a Sympo- • Dr. Sujata Naik Tolani, Chair- Gadkari, Minister for Shipping had sium on “Ease of Doing Business - person, Tolani Shipping Ltd. was taken the Maritime Sector to a truly Propelling the Maritime Industry.” given the award for Empowered different level. It focused on the steps that could Women of the Year. The function was inaugurated with be taken to ensure Ease of Doing • Sanjuktta Dutta was felicitated for lighting of lamp by esteemed guests of Business in the shipping & logistic being the first “Women Entre- honour including ADG K Natarajan, industry. KPMG knowledge partners preneur in the last mile delivery PTM, TM, CGC Western Seaboard, also provided inputs from its analysis. services.” Vice Admiral Anup Singh, PVSM, The eminent panel members were: • Ravindra Kumar IAS “The first AVSM, NM (Retd.) Former C-in- Kailash Kumar Aggarwal, Joint mariner turned IAS officer to scale C, Eastern Naval Command, Capt. Secretary, SAGARMALA, Ministry mount Everest” was also felici- Anoop Kumar Sharma, CMD, SCI, of Shipping; Capt. Harish Khatri, Ad- tated. Subhash Agarwal, Commissioner of visor, Maharashtra Maritime Board; An IMDG mobile app of Bhan- Customs, Jawaharlal Nehru Custom Subhash Agarwal, Commissioner of darkar Publications was launched House, Kailash Kumar Aggarwal, Customs, Jawaharlal Nehru Custom by Chief Guest Hon'ble Deepak Joint Secretary, SAGARMALA, Min- House; Capt. Phillip Mathews, MD, Kesarkar.

5008 MARITIME GATEWAY / JANUARY 2019