ISSUE 2 2010


continued from previous page adapt,” says McCole. “There


are 1.1bn people in India, of whom 700m rely on agriculture – and 300m survive on less than $1 a day.” It’s this reluctance by India to


move too far too fast that has partly held up progress of the Doha Round of liberalisation talks at the World Trade Organisation. India will therefore open up


to the outside world at its own pace. For those with the time, resources and patience, it is a tantalising prospect. Most people may be poor by any measure, but if you can somehow crack a market of over a billion people – even ones with pennies not pounds to spend – the potential rewards are massive. India


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is predicted to be the world second or third biggest economy by 2050. One or two firms have managed


it – two out of three Indians use Hindustan Unilever products, even if it is just a monthly sachet of shampoo. Some of the mobile phone companies are looking at how a single handset, shared between half a dozen villagers, can handle several calls on several different numbers. At the moment, India is struggling a little. Annual economic growth has dipped from 9% just before the recession to 5.7%, which may seem still a creditable performance, but, McCole explains, “to actually lift people out of poverty, they need 9% growth - 6% is no good.”


For the moment, India can


weather the world financial storm. Although it has opened up, it is far less dependent on the world economy than export- driven countries like China or Vietnam. “Indian business people also tell me that, for big investment projects like ports, they can manage without major foreign capital for two years. That may be a bit optimistic, but there is some leeway,” says McCole. “Also, economic growth looks to be recovering back to 9% next year.” As ever in this agriculturally


dependent country, the monsoon holds the key to whether it will be good times or bad this year – but the weather forecasters are optimistic.


Red tape is still a headache Fastest yet


Richard Mansell, general manager at courier firm UCS, which offers express, air and seafreight services to India, says: “The Indian market can be problematic as customs clearance can be arduous and it is essential that shippers check importers always have relevant clearance paperwork prior to shipping.” Often, the Indian consignee will have preferred routings and


relationships and if they are not used, it can often lead to major delays and, at worst, failure to deliver altogether. “If goods end up being stuck because they can’t be cleared, the shipper faces the cost of getting them delivered back to the UK which can be very costly and can also take months,” says Mansell. There have been cases of shippers paying Indian import duties themselves in


desperation which can be an expensive business, as duties may be up to 50% of the total value of the goods. Despite decades of trade liberalisation, getting some categories of goods into India – including many high tech items – can still be a headache. Mansell adds that often, it is


advisable to move the cargo to airport only as consignees can then


DHL first to take space in southern free trade zone


DHL is promising streamlined customs procedures and easier trading for its customers when it opens its $10 million logistics and warehousing facility in the new Free Trade Warehousing Zone (FTWZ) in Tamil Nadu, southern India. It says it will be the first global logistics company to operate a facility within the FTWZ, offering a duty free zone coupled with high quality infrastructure. DHL Global Forwarding’s chief executive officer for the region, Amadou Diallo said the new facility will considerably improve quality standards while reducing overall logistics and storage costs, especially for companies without


their own set-up in India. His colleague, Amit Dawar,


director of customs brokerage and compliance at DHL Lemuir Logistics, added: “This is the first time that businesses in India will have access to such a facility. They will gain significant benefits from the simplified trade processes.” The 260,000 sq ft FTWZ is one


of India’s new-generation logistics hubs. It is 32km from Chennai International Airport; and 38km from the seaport. FTWZs are being treated as a priority by the Government which sees them as engines of economic growth and helping to increase foreign exchange reserves.


DHL Global Forwarding is claiming first mover advantage by setting up in the new facility. Benefits include one-stop customs clearance, bespoke services for industries such as aviation, apparel, IT, oil & gas or telecommunications and a range of integrated solutions such as packing, inspection, kitting or assembly. Taxation benefits of the zone


include exemption from customs and countervailing or excise duty and service tax on goods while they are stored there. DHL is also considering further


similar facilities in the west and north of India, though at present none are yet available there.


use their own broker for customs clearance and also arrange end delivery locally, which is almost always more cost effective. While it is normally possible to get smaller goods delivered to door, for heavier airfreight it is usually much easier and cheaper to deliver to the nearest major international airport and then have the consignee make their own arrangements.


CMA CGM and Maersk Line are claiming the fastest timings on the market with their new service between China and India and Pakistan. The CIMEX 2 service links Shanghai and Pipavav in 15 days and is operated by a fleet of six 5,500teu vessels.


The full rotation is Kwangyang, Busan - Shanghai - Hong


Kong - Da Chan Bay - Tanjung Pelepas - Colombo - Pipavav - Nhava Sheva - Port Qasim - Port Klang - Tanjung Pelepas – Singapore - Hong Kong – Kwangyang. It also services inland container depots at Dadri and Nhava Sheva with connections to all destinations in India.


Wallenius works to cut carbon


Wallenius Wilhelmsen Logistics (WWL) says that a new project with Indian car maker Tata Group and energy consulting group Xyntéo to reduce carbon emissions could also reduce supply chain costs. The project looked at cars leaving the


Tata Motors factory in Pune, India to their arrival at dealers in South Africa and found that overall carbon emissions and costs could be reduced by as much as 17% and 8% respectively. WWL does not operate a service from


India to South Africa and has no commercial relationship with Tata Motors, but it believed that this was an important project to get involved in. “India is behind the world on low-carbon growth,” says Tata director Dr. Jamshed Irani. “However, Scandinavian companies have been more conscious about environmental challenges and we


are looking for the experience of other global conglomerates to help us achieve our environmental aims.” The team concluded that it was not just


a matter of changing one component of the supply chain, but harnessing a number of short, medium and long-term factors for Tata Motors to reduce its carbon impact and costs. For example, instead of fully fuelling new


cars prior to shipment from the factory they found that if they were filled with just enough for pre-shipment movements they could reduce lead times for delivery and improve car transporter capacity. The research also showed that improved


planning and scheduling would reduce the length of time cars needed to be stored at Mumbai port prior to shipment, which would reduce storage costs and handling damage.


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