Think Big IN 2011: Acaai Convention 2010
Think Big IN 2011: Acaai Convention 2010
Vol XI No. 2
                                                                                                           Pages 62
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                                                                                                    A DDP Publication
       COVER STORY                               22
                                                                                                     Wishing you a very
       Recovery and step forward:                                                                            Happy
       The year 2010 persuades to
                                                                                                                 &
       think big in 2011
       After witnessing tremendous challenges to                                                          Prosperous
       keep the business flowing, there was cautious                                                       New Year
       optimism during early 2010. The cargo and
       logistics industry, however, appeared to be                                                             2011
       exuberant at the end of the year.
Universal Freight
Management
An Indian company with global know how
                                               Shesh Kulkarni, the former president of UTi in
                                               India, a few months ago formed a new company
                                               called Universal Freight Management (India) with
                                               an objective to offer a world wide logistics
                                               network. Ratan Kr Paul
I
      n an exclusive interview with Cargo                                                   Cargo talk asked him. He explained, “The
      Talk, Kulkarni, who is the president                                                  thought was simple and I think it happens
      and CEO of the company, made                                                          to everyone— some choose to act on it
      it clear that UFM’s flavour would                                                     and some overlook it. I had peaked at UTi
      be Indian, with a global outlook.                                                     and it was important for me to exit for
He was gung-ho about the success                                                            equal good of UTi and myself, and I felt
company expected to see. He also sent                                                       it was important to move on and explore
a clear and loud message to the aspiring                                                    new opportunities.”
Indian entrepreneurs.
                                                                                            Kulkarni also revealed that he had, over
Kulkarni was candid when talking about his                                                  the years, been pondering with the idea
tenure with UTi, which was very fascinating                                                 of building a logistics organisation, which
from learning, interaction and working                                                      would eventually have its presence in
points of view. “I have enjoyed every          Shesh Kulkarni                               the international domain, with its roots
minute of my association with UTi and I am                                                  in India. “When I reached out to various
very blessed to have the opportunity to have   to watch closely how Peter, Roger and        investor groups with my thought, their
had worked very closely with Tiger Wessels,    Tiger went about building the company        response was amazing. And, this was the
Peter Thorington, Brian Dangerfield, Alan      was an amazing experience in itself and a    first trigger or motivation,” said Kulkarni.
Draper and Raajeev Bhatnagar. All these        rare one too. Having seen closely some of
people have touched my life in some way or     these industry leaders work and operate, I   The second reason was the economy of India,
the other and having joined UTi in the very    think I have a clear advantage at UFM,” he   which has been looking very promising and
early stages and having had the opportunity    shared optimistically. “Why UFM now?”        is apparently going to be positioned in the
Rene Peerboom:
A cargo man fond of cultural heritage of India
                                                 Rene Peerboom, director, Air France - KLM Cargo,
                                                 is a popular air cargo professional not only for his
                                                 warm relationship with the cargo community in
                                                 India, but also for his down- to- earth approach and
                                                 fondness for India’s rich cultural heritage. Ratan Kr Paul
R
           ene was born on April 15, 1971
           in Heerlen, the Netherlands.
           He studied at Eindhoven
           U n iver sit y of Tech nolog y,
           Industrial Engineering and
Management Science. He graduated cum
Laude as Master of Science in 1995.
Recovery and
step forward The year 2010
                                       persuades to think big in 2011
                                                After witnessing tremendous challenges to keep
                                                the business flowing, there was cautious
                                                optimism during early 2010.The cargo and
                                                logistics industry, however, appeared to be
                                                exuberant at the end of the year. Ratan Kr Paul
                                                T
                                                             he industry is now busy making     with a good balance between demand
                                                             their own strategies to spread     and supply. In 2010 Emirates SkyCargo
                                                             their wings thanks to the          achieved 30 per cent growth compared
                                                             winds of changes. Cargo Talk       to 2009 and has a target to maintain the
                                                             presents some observations.        growth trajectory in the following year.
                                                According to Ram Menen, DSVP, Emirates,         “We are fully committed to Indian
                                                “The year 2010 was a year of revival,           market. The country is fast emerging as
                                                during first three quarters in particular.      a lucrative manufacturing hub. High tech
                                                Though the last quarter has witnessed a lull    manufacturing sector is growing very fast
                                                for various reasons, there is no doubt that     in India. In addition, pharmaceuticals,
                                  Ram Menen     the air cargo industry would see an upward      telecom and automobile sectors are the
                                                turn in 2011, post the Chinese New Year.        new areas being tapped by Emirates,”
                                                In the first half of 2010 the worldwide air     Menen pointed out. Emirates has very good
                                                cargo industry has achieved a 23 per cent       track record about handling of perishable
                                                growth. Menen is expecting a 10-13 per          cargo, especially from Delhi and area
                                                cent growth in world air cargo in the whole     and currently focusing on South Indian
                                                year (2010) compared to 2009.                   destinations viz Thiruvananthapuram,
                                                                                                Calicut and Kochi.
                                                In view of the current market trends, Menen     Christoph Remund, CEO - DHL Lemuir
                                                is predicting a 7-9 per cent growth in a good   Logistics, India maintained that Although
                                                case scenario and 4-6 per cent in low in        the circumstances were challenging in 2010,
                                                2011. He made moderate estimates because        DHL Global Forwarding has experienced
                                                of some ensuing challenges before the           a healthy growth in its airfreight volumes
                            Christoph Remund    industry. Hike of oil price, and a weakening    and continues to maintain its market
                                                US dollar would be the major challenges in      leadership position in India. In particular,
                                                this regard, which will have negative effect    the automotive sector did extremely well,
                                                on flow of cargo and revenue.                   with India’s auto industry leading this
                                                                                                growth with a robust order book. “Our
                                                Menen, however, was quite optimistic            focus on SME growth has been rewarding
                                                about the growth from India market. “We         and we are seeing a compelling increase
                                                are constantly developing our products          in this segment. DHL will continue to
                                                and services pertaining to this fast growing    keep SME growth in focus in 2011, ”
                                                market. We are open to enhance our capacity     Christoph said.
                                                to India as well, when there is a demand,”
                                                said Menen. At present Emirates is offering     During the year 2010, DHL re-structured
                                                3200 tonne cargo capacity per week to           its global forwarding business, whereby the
                            Raajeev Bhatnagar   India (by both belly hold and freighters)       South Asia Pacific region was geographically
   LOOKING FORWARD
     In view of the current market trends, Menen is predicting a 7-9 per cent growth in a good case
   scenario and 4-6 per cent in low in 2011
    DHL is focussing on SME growth, which has been rewarding and the company is seeing a
   compelling increase in this segment. DHL will continue to keep SME growth in focus in 2011
    According to Bhatnagar, 2010 was good year for the industry, as everybody saw growth
   without an exception
     For Group Concorde, 2010 was a good year for the air cargo industry in India and a best year
   for the company in particular in respect of expansion of business
great year for the company and expecting         to coal due to the large number of power
a healthy 2011. Apart from strengthening         plants that are being planned in India.
its business, Safexpress has put a strong        However I feel that it would take at least a
logistics infrastructure in place across the     year for the exim trade to come to normalcy
country. In 2010, the company has launched       and be on a growth path,” Sridhar said.
13 logistics parks across the country. The       According to him, the domestic logistics
company is also planning to launch at            will continue to grow.
least 20 more logistics parks by 2012. “We
are planning big for our 3PL services to         “We will continue the consolidation
woo more new customers from different            process for the year 2011 too with more
verticals,” said Kanaujia. According to          and more integration of our services to all
                                                                                                             Samir J Shah
him, IT, researches and development of           our customers and provide end-end
skilled man power through the company’s          solutions especially in our bulk logistics
training centres would be the dividing           business, with focus on a better bottom-
factors as far as offering of quality services   line,” added Sridhar.
is concerned. Safexpress is planning to
invest Rs 1000 crore in 2011-12 and has          According to him, the major challenges
set a target to achieve 20 to 25 per cent        that the industry is likely to encounter are
growth of business. Enhancing of supply          the availability of additional port and road
chain consultancy, massive automation            infrastructure to handle the growth.
pertaining to warehousing, green supply
chain and CSR activities would also top          There was a great turn around. “We are all
the priority list of the company. Kanaujia       up beat about the future, both immediate
added that Safexpress would persuade             and long term. I think this feel good period
                                                 will continue, volumes will grow, and                     Pukhraj S. Chug
the government to implement GST at the
earliest and facilitate the consolidation of     logistics segment will benefit economically
logistics industry in India.                     as well as in acceptance both at government
L R Sridhar, MD, Sical Logistics viewed          and industry level,” said Samir J Shah,
that Indian logistics industry has performed     partner, JBS Group of Companies.
well and it has had a decent growth in
2010. This is mainly due to the strong           He also observed that the challenges remain
domestic market. He highlighted that in          the same—man power and infrastructure.
2010 many PEs also invested in the logistics     “We need to understand that there is also
infrastructure which is a very positive sign     a requirement of short term solution. The
for the logistics industry.                      short term solution would be a better
                                                 utilisation of existing infrastructure and a
“Definitely there will be a significant          better implementation of the systems and
growth in bulk logistics, especially related     policies. This itself would make a huge                    Penta Miyazaki
                                                 are Pune/Chennai and Delhi NCR,” he            handling. He also added that there are
                                                 said. Miyazaki appeared to be optimistic       lots of challenges for Indian government in
                                                 about the upcoming FTA agreements              mitigating the bridge in terms of policies,
                                                 between India and Japan. Investment on         infrastructure mechanism and relaxation
                                                 the set parameters of DMIC will give lots      of barriers to trade.
                                                 of impetus to this economy and thereby
                                                 logistics sector,” he observed.                Samir Hosangady, COO, South Asia
                                                                                                Region, Damco commented that the year
                                                 Yusen Air & Sea Service (India) has complete   2010 was much better when compared
                                                 focus on making itself as much strong          to 2009 for the air freight industry. The
                                                 in domestic (3PL solutions) and travel         turn around in the air freight market in
Samir Hosangady                                  business as it is in international business.   India began in October 2009 and continued
                                                 The company will be having clear cut           strongly for the rest of 2010.
                                                 objective of obtaining warehousing network
                                                 at all the major locations for making it       “2011 promises to be a good year for
                                                 supportive strength to its international       logistics in general and air freight in
For Group, Concorde 2010 was a good year           According to Bhatnagar the biggest challenge is infrastructure in
for the air cargo industry in India and a best     terms of roads, airports, ports as well as warehousing space.
year for the company in particular in respect
of expansion of business. Significantly, in        In Jani’s opinion, the business prospects for 2011 will be good.
November 2010 the company’s subsidiary,            The only concern is that growth will have to face challenges of
Acumen Overseas, was appointed as GSA              infrastructure. “It is imperative that we change customs and port
for Korean Air. In addition, the company           procedures to overcome the need of infrastructure,” he maintained.
is planning to add some other airlines,
mainly from Far East Asia and South East           He felt that the strategy of the industry to keep floating in 2011 would
Asia, in 2011. “After a downturn, it seemed        be in terms of developing infrastructure, simplicity in procedures and
the air cargo industry headed towards the          hiring talent for future demand. “Talent retention will be the biggest
healthy performance level of 2007. We are          challenge,” he cautioned.
expecting a better performance in 2011 as
well,” said Pukhraj Singh Chug, MD,
                                                   According to Vohra, the challenges that the industry has to face
                                                   are various. There are operational issues that need to be addressed
Group Concorde.
                                                   with sincerity, with coordination amongst all airport cargo
Penta Miyazaki, president, Yusen Air               handling service providers. Customs clearance delays, frequent
& Sea Service (India) maintained that              electronic connectivity failures, lack of minimum required
2010 was definitely a re-shaping year
                                                   infrastructural facilities, delay in handling draw back are just some
after the recession in the world economy.
                                                   of the other bottlenecks that the government and the industry
“The industry as a whole is on the rising
                                                   need to resolve.
trend, and especially the focused areas
particular. However there are concerns         on this trade lane and will leverage it to        infrastructure was found struggling to
regarding the economic situation in            build competitive strength in this market.        handle the growth component. The custom
Europe. This can dampen the consumer           At the same time Damco will continue to           system up gradation also had its challenges.
demand and can impact the overall air          focus on the traditional markets of Europe
freight market,” Hosangady pointed out.        and North America as many of its customers        “It is certain that their will be higher
On the flip side he expressed concerns         are moving cargo in these markets. Damco          volumes and more capacity coming in to
over certain areas, which may deter the        is focusing on developing multi modal             handle it. The world has focus on India and
projected growth. “Increased security in       solutions through its air freight products        its potential. To exploit this it is imperative
the air freight market has been a concern      like sea-air and air-sea options which can        the logistics infrastructure and terminal
                                                                                                 infrastructure in the country is upgraded
                                                                                                 with utmost priority and in rigid time
                                                                                                 frames,” he said.
                                              WEIGHT IN TONNES
                                                  GENERAL
                                Export                                            Total
S. No. Airlines                            Perishable     Total     Import
                                General                                         Exp+Imp
ACAAI Convention
2010 Air cargo industry gears up to
                                adopt new world order
                                              The 37th Annual Convention of the Air Cargo
                                              Agents Association of India (ACAAI), which was
                                              held from November 25 to 28 in Bengaluru with
                                              the theme “Air Logistics-Industry Resurgence”,
                                              indicates the great changes in the air cargo
                                              industry in India. Ratan Kr Paul
T
             he ACAAI Convention 2010
             started with cheerful speeches
             from J Krishnan, president,
             ACAAI and S Gurumurthy,
             chartered accountant and
renowned corporate advisor, and key note
speaker of the Convention.
present a new market where consumption        economies also demands doing business                       in embedding himself in the new
is not based on greed. These markets now      differently focusing clearly the consumer                   business paradigm.
offer a stable, long term and safe business   spending sentiment as opposed from the
prospects,” observes Krishnan.                previous western world focused business.                    He also pointed out that technology would
                                              Supply chain and integrated logistic                        remain a key driver to drive down costs
According to the ACAAI president, the new     are the buzz words and the emerging                         and usher in greater transparency and
industry resurgence towards the reasserting   new forwarder sees great opportunities                      operating efficiencies. “The logistics service
U
               PLIFT is a unique platform
               pioneered by air cargo industry
               to facilitate electronic data
               exchange between all the
               stakeholders in the logistics
value chain. T a l k i n g t o C a r g o T a l k ,
Sumeet Nadkar, CEO & MD, Kale Logistics
Solutions, said that with the growth in both
the EXIM and domestic trade in India,
the pressure on logistics infrastructure is
ever increasing. Currently due to manual
operations, there exists lot of inefficiencies
in the system causing delays, penalties
and lack of shipment visibility resulting
in higher cost of logistics for India. This
higher logistics cost pegged at around 13
per cent of India’s GDP creates serious non-
tariff barriers and reduces overall trade
competitiveness. Moreover, the technology
adoption in the Indian logistics industry is                                                 that separates UPLIFT from its global
extremely poor. In fact on an average the                                                    peers is the fact that this platform has
industry spends only about 0.3 per cent                                                      been pioneered by air cargo industry
of revenue on technology whereas the                                                         itself,” asserted. Accirding to him, UPLIFT
global standard for the logistics industry                                                   is ACAAI’s own platform, which is an
is around 3-4 per cent.                                                                      attempt to create history in the Indian
                                                                                             logistics industry.
Considering this current status of Indian
logistics industry, there is a need to have                                                  Prior to the UPLIFT launch, Kale has
an electronic collaboration platform.                                                        conducted various road-shows across the
UPLIFT is an initiative to address these                                                     country, in association with ACAAI, wherein
industry issues.                                                                             the concept of UPLIFT, its functionalities,
                                                                                             features and benefits was shared with the
“We unveiled UPLIFT, a pioneering                    Sumeet Nadkar                           concerned stakeholders. “We have also
initiative in creating a cargo community                                                     planned few road-shows in the coming
platform. The response received from the             very positive and encouraging,” added   months in Mumbai and other cities which
delegates during this convention as also             Nadkar. Nadkar felt that UPLIFT has     will further aid us in reaching to more
during our industry interactions have been           its own niche positioning. “The thing   industry stakeholders,” he informed.
                             Emirates SkyCargo
                              HONOURS TOP AGENTS
    Recently, Emirates SkyCargo hosted three different events in New Delhi, Mumbai and
 Ahmedabad to honour its top agents for their valuable contribution to the airline’s outstanding
    performance in 2010.While Ram Menen, DSVP, Emirates was present at Mumbai and
 Ahmedabad; Pradeep Kumar, senior vice president, cargo revenue optimisation of the airline
                          was present at Delhi to honour the agents.
Chennai Airport
opening Phase III of cargo terminal
                                                Chennai Airport is the main gateway for logistics
                                                requirement of the southern region in a major
                                                way.Though Hyderabad Airport has emerged as a
                                                world standard airport, Chennai Airport is trying
                                                to give a complete face lift to its cargo
                                                infrastructure. CT Bureau
C
                 hennai Airport provides
                 an integrated gateway for                                                   DEVELOPMENT
                 transiting and clearance                                                    PROGRAMME
                 of all export and import
                 consignments by air. The                                                    Phase I & II
present services available at the airport                                                      It is operating for export completed
include a modern and mechanised export                                                       with two Elevators Transport Vehicles
cargo terminal consisting of almost 1,75,000                                                 (ETV) with 176 ULD stations & 18
sqft area. Similarly, the new import                                                         Hydraulic loading stations
terminal, which is under construction, will
have a built up area of almost 4,00,000 sqft                                                 Phase – III (work in progress)
area with modern automatic storage and
retrieval system (ASRS). Apart from this,                                                      More parking bays to be added for
right now the airport has a cold storage                                                     freighters
facility consisting of 500 sqm of area and                                                    3 lakhs sqft area
also another cold storage facility of 78
sqm of different temperature mechanisms.                                                      State of the art ASRS with 8000 storage
The future plan also includes additional                                                     bins of 1300 kgs to 1500 kgs capacity
modern cold storage chambers for keeping
the incoming pharmaceuticals and such                                                         Modern cargo handling equipment
category of cargo.
                                                                                              Expected to be completed by April
At Chennai Airport, Phase-III of the                                                         2011 with annual capacity over 1
development of cargo terminal is                                                             Million for import & export cargo
under process in which ASRS will also be
provided. In addition, 178 storage locations
have been provided in ETV to accommodate        arrangements through Ground                   produce, AAI with the assistance of APEDA
space of 445 MTs.                               Handling Agencies appointed by AAI and        has created state of the art centre for
The introduction of web based EDI system,       bonded trucking facility.                     perishable cargo, to encourage the export
simplification of procedure to expedite                                                       of perishable cargo from the region.
                                                AAI has enhanced the annual capacity of
clearance, was provided to the trade. It also   cargo terminal at Chennai Airport from
resulted into augmentation of the capacity                                                    In addition, the airport is upgrading its
                                                218000 MT to 405000 MT in 2009-10.            cargo handling equipment. For smooth
of the cargo terminal.                          With further expansion, the capacity will     and speedy clearance of cargo AAI has
                                                be further enhanced to 544000 MT.             decided to introduce more automation and
Initiatives by Chennai Airport on
efficient processing, include web enabled       The airport is also putting adequate          mechanisation in the air cargo handling
documentation, pre deposit account which        emphasis on handling of perishable cargo      activities. Therefore, ‘Conveyor Belt for
will be upgraded to e-trade, ASRS with          and temperature sensitive pharmaceuticals.    handling of export cargo’ is proposed at
minimal human intervention, new working         To maintain the cool chain of perishable      export terminal.
I
                                                                                                      speeded up in order to guarantee faster
                                                                                                      transport.
     n view of the fact that India, and
                                                                                                      The agreement says that Lufthansa Cargo
     especially Hyderabad, is emerging                                                                will provide the capacity for the transport
     as an important pharmaceutical                                                                   of temperature-sensitive cargo. To this
     manufacturing centre, HMACPL                                                                     end, the airline will station its own fleet
     has decided to launch the Pharma                                                                 of cooling containers in Hyderabad.
Zone to offer accurate and temperature                                                                “The demand for temperature-
                                                                                                      controlled transport will continue to
controlled care while handling                                                                        grow substantially in the coming years. A
pharmaceutical products.                                                                              strong partnership with GMR Hyderabad
                                                                                                      International Airport will enable us
The pharma zone has dedicated truck                                                                   to offer our local customers, a tailor-
                                               Kiran Kumar Grandhi, business chairman of GMR Group-
docks for acceptance, floor level weighing     Airports inaugrating the Pharma Zone                   made product for the fast and reliable
provisions at acceptance and seamless cold                                                            transport of pharmaceuticals,” said Martin
                                                                                                      Schlingensiepen, vice president, product
chain facility during the entire handling      Hyderabad and the rest of the world.
                                                                                                      management.
process. The facility also has a dedicated     Hyderabad is the main gateway to the
                                                                                                      “Lufthansa Cargo’s extensive expertise
area for products, requiring temperature       pharmaceutical manufacturing hub of the
                                                                                                      and the highly modern infrastructure
control between 02 to 08 degrees celsius,      country. Commenting on the new launch,                 at Hyderabad Airport will enable us to
in examination as well as a sterile area       Paul Smith, CEO of HMACPL said “The                    offer our customers the best and most
for active ingredients and vaccines. Data      distinct and dedicated pharma zone is                  reliable product for cool chain transport
loggers have been provided in all the key      expected to increase the airport’s offering            in South Asia,” expressed P Sripathy, chief
                                                                                                      executive officer of GMR Hyderabad
areas, so that as reports can be provided on   to the industry and thereby bring in mutual
                                                                                                      Airport International”.
need basis to customers.                       growth of 25 per cent per annum.
Orange City
Logistics Park
A world class logistics infrastructure in place
                                                        At this challenging time, modern businesses are
                                                        struggling to reduce the logistics cost to remain
                                                        profitable. In India the cost is much higher
                                                        compared to other countries. Orange City Logistics
                                                        Park (OCLP) is all set to benefit the manufacturers
                                                        and exporters in the country. CT Bureau
O
                   CLP’s warehousing facility
                   is spread over 90 acres of
                   lush green area at Nagpur.
                   One of the most important
                   criteria to select the warehousing
space for DCs or RDCs is the location, and
Nagpur is an ideal location for OCLP.
T
              he logistics courses offered     new trends and challenges. We revise our       go. “UPES is constantly trying to create
              by UPES are open for both        curriculum after every six months to make      awareness about world class logistics
              industry people as well as       it pragmatic and industry friendly. As a       infrastructure, global bench marking,
              freshers. Meanwhile the second   result, 100 per cent of our first batch have   emerging technologies and best practices
              batch is pursuing logistics      got placements in the logistics arena,”        in the world market. We are also doing lot of
Parag Diwan
courses from this university. The course       underlined Diwan. Apart from theoretical       research works and offering consultancy to
curriculum includes MBA for executives         know how, UPSE also offers opportunity         both private players as well as government
and BBA for front-end workers. Also the        to acquire hands on experience from across     bodies,” highlighted Diwan.
university offers full time MBA, and part-     India and the world. The university has tie-
                                                                                              In view of the negative effect of the logistics
time MBA and BBA courses.                      ups with major airport and port operators
                                                                                              industry on environment, UPES is set to
                                               in the country and abroad.
UPES is a statutory university and it is                                                      address the burning issue. “The university
fully autonomous. The board members of         He believes that the future of logistics       runs full fledged M Tech programmes in
the university are predominantly industry      industry in India is very bright, and so are   Health Safety and Environment. Under
players. However, its academic council         the job opportunities.                         these programmes, we are exploring various
consists consisting of academic persons and                                                   aspects of emission control by using green
industry people in equal numbers.              He, however, quickly pointed out that          fuels. University is also involved in many
                                               the existing logistics infrastructure is an    research projects and studies which are
“UPSE’s curriculum is very scientific          area of great concern. Both hard and soft      focused on the mitigation of the CO2
and contemporary, to keep pace with the        infrastructure of the country has miles to     emission,” said Diwan.
Indian Maritime
University Asia Campus
Agreement signed for mutual benefits
                                                       In a bid to strengthen the institutional network of
                                                       marine studies, Scomi Marine Bhd, an oil &
                                                       gas services provider and an associate of Scomi
                                                       Group Bhd, entered into an MoU with IMU,
                                                       IASB & PKFZ. CT Bureau
                                                                                                         INDIAN MARITIME
                                                                                                         UNIVERSITY ASIA
                                                                                                           Diploma in Nautical Studies
                                                                                                           Degree in Shipbuilding
                                                                                                           and Repair
T
             he MoU is expected to establish                                                            K Mohandas, secretary, Ministry of Shipping.
             a framework of cooperation                                                                 They were accompanied by Dato’ Tan Seng
             between the four parties for                                                               Sung, Malaysian High Commissioner. IMU
             the provision of maritime                                                                  is a Central University established by the
             academic programmes like                                                                   Ministry of Shipping, Government of India
training, research, consultancy courses                                                                 under an Act of Indian Parliament 2008, with
and services in Malaysia at a campus to be                                                              its headquarters located in Chennai, India.
established in PKFZ.                                                                                    IMU also has regional campuses in Mumbai,
                                                                                                        Kolkata, Visakhapatnam and Cochin in India.
According to the agreement, the four
parties will undertake the establishment                                                                PKFZ is established under the laws of
o f t he ma r i t i me a c a d e my , w he r e b y a                                                    Malaysia, and it is an integrated 1,000-
joint management committee and a joint                                                                  acre Free Commercial and Industrial Zone
academic committee will be formed to carry                                                              providing facilities for international cargo
out the planning, direction and overall                                                                 distribution and consolidation. IASB is a
management of the project and the academic             connectivity and infrastructure facilities. In   reputed company established and existing
curriculum respectively. PKFZ has been                 conjunction with the signing, recently the       under the laws of Malaysia; carrying on
identified as the ideal location for setting up        Malaysian delegation paid a courtesy visit to    the business of general trading services,
the IMU Asia Campus as it offers suitable              GK Vasan, Union Minister of Shipping and         transportation and management.
T
               he summit was attended by
               global audit and advisory
               firm and premier research
               organisation, KPMG, and
               several supply chain majors in
India. Speaking at the first edition of Food
Retail, Logistics and Packaging Summit
& Awards, Ramesh Srinivas, executive
director, KPMG said, “High growth in food
retail is limited by sub-optimal supply chain
caused by low investment in the sector.”
He added that the food sector, in spite of
its large share of GDP and the consumer
basket, only received 3.3 per cent out of the
gross FDI flows in India, between 2000 and        Gautami Seksaria, Founder & Partner, SCLC      Krisha Shete (RKFL) handing over award to Vineet Jain
2010. KPMG predicted high demand, RoI             speaking at the summit                         (Head - Distribution, Yum Restaurants)
Be a Whistle Blower
                                                       “US Department of Justice fines international
                                                       airlines for price fixing” – The headline that hit the
                                                       global media in the recent past and now its
                                                       extension towards leading global freight
                                                       forwarders as well, is significant to the Indian air
                                                       cargo community. B Govindarajan
M
                   ore than the related                                                                  arm-twist the small and medium native
                   legal issues and the                                                                  freight forwarders and shippers , etc, etc.
                   ramifications, it may
                   be of interest to take
                   a closer look at the                                                                  What happens
learning from the incident.
                                                                                                         in India?
It is interesting to note that none of the                                                               Indian market is not an exception. India
airlines reported in the DOJ scanner,                                                                    voluntarily adopted ‘open sky policy’ for
belong to USA- the home market. By and                                                                   air cargo to support the trade and industry,
large, native airlines do not indulge in                                                                 which in turn facilitated foreign airlines to
cartelization in the home market and it is                                                               come in a big way and grow more than in
the foreign airlines that join hands to exploit                                                          any other market.
the market conditions.                                 B Govindarajan
                                                                                                         To cite a simple example, when they
                                                                                                         grew and gained collective dominant
What prompts                                             THE REMEDY IS IN
                                                         THE HANDS OF ALL
                                                                                                         position, the age old IATA Resolution 512
                                                                                                         (b) that provided fair opportunity to the
the exploitation?                                        STAKEHOLDERS                                    stakeholders, to determine the related
 It i s no thi ng b u t a b u s e o f d o mi n a n t                                                     service charges (Dangerous Goods Fees,
                                                           Indian air carriers to be more pro-
position, by select few in a marketplace,                                                                Delivery Order Fees and other charges and
                                                         active towards air cargo and provide
where the native airlines do not                                                                         surcharges) based on mutual agreement
                                                         required capacity, connectivity and
contribute significantly for the betterment                                                              was given a twenty-one gun salute. Today,
                                                         quality of service for the trade to
and development of the growing home                                                                      what is being witnessed in the market
                                                         accept them as their first choice as it
market. These select foreign airlines play                                                               is total exploitation, which any foreign
                                                         happens in other markets.
a dominant role by being present at the                                                                  airlines will not dare to do either in their
major gateways, offering good capacity and                  Indian freight forwarders to                 homeland or a more watchful market.
good connection to make the market highly                collectively show the way to the
dependent on them.                                       airlines, who try to bully them as was
                                                         recently demonstrated by IATA Agents
                                                                                                         Be a Whistle
Abuse of domi-
                                                         Association of India when some big
                                                         ones refused to pay passenger agents
                                                                                                         Blower
                                                         their rightful commission                       No doubt, “Big is Powerful”. The market
nant position                                               Regulators should show the stick to
                                                                                                         needs big airlines, whether national
                                                                                                         or foreign, to provide capacity and
These select few airlines, enter a market in             the misbehaving ones, to protect the            connectivity. However, when Big becomes
a modest way and provide quality service at              Indian trade and industry and facilitate        Dominant, it should be exposed in the
a moderate price. After gaining individual               its sustainable growth, as it has done          overall interest of the community and for
dominant position, they consolidate;                     for passenger transportation.                   sustainable growth of the country’s trade
create a collective dominant position and                                                                and industry. This is applicable for any
abuse it to reap the best for themselves                                                                 segment of business and or life.
by exploiting the market conditions. The               for allied services; refusal to entertain claim
abuse or exploitation is in the form of                for any deficiency in services provided;           (Bashyam govindarajan is chief operating officer,
indiscriminate pricing; violated surcharges            joining hands with the other big names to                          Tirwin Management Services)