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CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited Building an Efficient Transportation & Supply Chain System AMIT CHAUDHRI CEO - KRIL 09.12.2014 CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited Synopsis • • • • • Introduction. Current Logistics infrastructure in India. Crystal Ball Gazing. Potential areas of new business. The Path Ahead. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited Supply Chain A Supply Chain is a global network to improve the flows of material and information between suppliers and customers at the lowest cost and the highest speed. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited CUSTOMERS Shipping Lines CHAs Exporters / Importers Freight Forwarders Domestic Manufacturers PROVIDERS Indian Railways Container Train Operators Terminal Operators Ports Governments & their Agencies Road hauliers Customs CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited • Railways - Loading in MMT & earnings • Customs – Earnings • Container Train Operators – Earnings & asset utilization • Government – Facilitation & infrastructure Development, Economy indices (GDP/BOP) & Taxes • Customers – Cost and Service levels • Ports – Throughput and asset utilisation CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited No. OF DOCUMENTS REQUIRED FOR EXPORT 10 9 9 8 8 INDIA BRAZIL 8 7 7 6 5 4 4 DENMARK SINGAPORE 4 3 2 2 1 0 FRANCE CHINA PAKISTAN CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited AVERAGE COST TO EXPORT ONE CONTAINER (IN US $ PER TEU) 1800 1600 1540 1472 1400 1200 1000 945 800 744 600 450 456 MALAYSIA SINGAPORE 500 400 200 0 CHINA DENMARK INDIA MEXICO BRAZIL CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited CHANGING FACE OF MULTI-MODALISM -A TESTING TIME • ENHANCED EXPECTATIONS OF CUSTOMERS . • SHIFT FROM RAIL/ROAD BASED MOVEMENT TO TOTAL LOGISTIC SOLUTIONS . • DOOR-TO-DOOR SERVICE THROUGH SINGLE WINDOW SERVICE PROVIDERS . • THIRD PARTY LOGISTICS- INCREASING TREND IN THE DOMESTIC SEGMENT • LOGISTICS COST REDUCTION. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited COST is the prime concern Global Meltdown has made them economize Competition is helping them bargain hard Mckenzie Report – talks of high logistics costs in developing economies (13-14%) as compared to those in US, Europe (around 8%) weighs very heavily on mind of customers Looking to maximize their margins Want better access to information Ease in Transaction & better service levels CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited ISSUES Multiplicity of Ports • Vast coast line • Multiplicity of management • Capacity creation / augmentation Vast Hinterland • Medium and deep inside destinations. • • • • Regional disparity in Export / Import business Door-to-Door service needed Inland Container Depots (ICDs) Container Freight Stations (CFSs) Rail connectivity and road linkages CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited • Vast coast line PORTS • Multiplicity of management • Capacity creation / augmentation Vast Hinterland: • Medium and deep inside destinations. Multiplicity of Ports: • 13 major ports and in India - Calcutta, Haldia, Paradip, Visakhapatanam, Ennore, Chennai, Tuticorin, Cochin, New Mangalore, Mormugao, JNPT, Mumbai Port Blair and Kandla. • About 180 minor and intermediate ports CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited ABOUT ROADS • Indian Road Network - 33 lakh Km • Second largest in the world • • • • • • • Length (In Km) Expressways National Highways State Highways Major District Roads Rural and Other Roads Total Length 200 79,243 1,31,899 4,67,763 26,50,000 33,00,000 (Approx) CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited ROAD Contd…. MODAL SHIFT • About 65% of freight and 80% passenger traffic is carried by the roads. • National Highways constitute only about 1.7% of the road network but carry about 40% of the total road traffic . • Number of vehicles has been growing at an average pace of 10.16% per annum over the last five years. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited ROAD NETWORK • Focus area NHDP – Golden quadrilateral, diagonals Pradhan Mantri Grameen Sadak Yojana • Fragmented • Cost effective over short distances (500 km) CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited RAILWAYS • Bulk commodities • Core sector. • Mover and shaker – key player in connecting hinterland. • Transformation and facilitator. • Unified command. • Faster & cost effective over long haul. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited 1 18 CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited COAST • • • • • • • • • • Bordered by Bay of Bengal, Arabian Sea and Indian Ocean. Coastline of more than 7,000 kms. Extensive network of inland waterways and seaports. Inland waterways include rivers, canals, backwaters and creeks. Total navigable length of inland waterways is 14,500 km. Inland Waterways Authority of India (IWAI) statutory authority Three national waterwaysAllahabad Haldia stretch of the Ganga Bhagirathi Hooghly river Sadiya Dhubri stretch of the Brahmaputra river system Kollam Kottapuram stretch of West Coast Canal along with Champakara canal and Udyogmandal canal. • 13 major ports and in India - Calcutta, Haldia, Paradip, Visakhapatanam, Ennore, Chennai, Tuticorin, Cochin, New Mangalore, Mormugao, JNPT, Mumbai, Kandla and Port Blair. • About 180 minor and intermediate ports CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited THE CRYSTAL BALL CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited INDIA – 2020 An Economic Super Power • GDP to grow at 8% per annum. • India’s GDP will over take the GDP of Italy, France/ Britain, and Germany by 2020. • India will be fourth largest economy after US , Japan and China . • Indian GDP is expected to be about $2.5 trillion . • Change in sectoral Composition of GDP in % 2020 Agriculture 6.0 Industry 34.0 Services 60.0 • International trade in goods as % of GDP will increase to 35. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited INFRASTRUCTURE -2020 • Integrated Transport Policy • Environmental and social consideration. • Port infrastructure : • Addition of port capacity of more than 45 million TEU at Indian Ports. Mumbai area will cross 20 million mark. • Accelerated growth to short sea bridging with development of small/intermediate ports, Sethu Samundram Project. • Inter linking of all weather rivers encouraging Inland Water Transport. • Air Port Infrastructure: • Congestion free dedicated air cargo terminals. • Customised warehousing facilities CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited INFRASTRUCTURE -2020 • • • • • Railways DFC on golden quadrilateral and on diagonals Longer double stack container trains at 100 KM/Hr. No more congestion on IR system- Transit time guarantees . South trans Asian rail connectivity from Singapore-China to Iran moving into Europe . • Piggyback and RORO systems - decongest national highways. • Consolidation in container train operation - maximum six players. • • • • Roads National highways developed to 8 Lanes. Transport Nagar at every 200 KM. State high way developed to 4 lanes. • Initial modal shift to Road – but by 2015 Environmental concerns cause modal shift back to Rail. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited LOGISTICS -2020 Global Customer Global Manufacturing Vertical Integration Movement of Material, Information and Funds across continents. Efficiency, synchronization, and competencies in network The control of logistics is more important than actual execution. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited LOGISTICS -2020 • Changes in legal regimes -- no paper work -- borderless transport across States and Countries • Direct call of Post Panamax vessels. Seamless hinterland connectivity……. • Reduction in shelf life of products, Reduction in bulk transportation, more finished goods--Containerisation … • 3 PL- 4PL Logistics to grow minimum 25% per annum to increase share in logistics from 3% to 23%. • 5PL will be a reality in India. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited LOGISTICS -2020 Chain of SEZs, Large Distriparks outside city limits - provide valueadds, effective distribution management, modern storage, subassemblies, palletisation, retailing etc. Seamless EDI connectivity through Integrated Networking linking to different users and service providers-Data/Document & Fund Flows synchronized through EDI. One point (door to door) liability. Cold Chains spanning the country providing Controlled Atmosphere and Hypo baric Warehouses, Cold Storages, Transport Chains (backend and front-end integration)– Part of Global Supply Chain. Customized containers for different products-Cement and foodgrains in bulktainers in single units. Bulk Logistics CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited “WHEN LOOKING AT FUTURE, IMAGINATION IS MORE IMPORTANT THAN ANALYSIS” -C.K.PRAHLAD CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited POTENTIAL AREAS OF NEW BUSINESS ROAD BASED SERVICES - LOGISTICS PROVIDER, WAREHOUSING “HUB”. “HUB & SPOKE” ARRANGEMENT. TOTAL LOGISTIC SOLUTIONS. MULTI MODAL LOGISTICS PARKS. COASTAL SHIPPING. COLD CHAIN. AUTOMOBILE TRANSPORTATION. TECHNOLOGIES IN MULTIMODALISM SERVICE CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited Warehousing • Modern state - of - art facilities • Adaptability to change / expansion • Boundary wall, fencing, pavements, lights, administrative block, public amenities • Communication system, computerisation, EDI facilities • Accommodation for users & service providers CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited “Hub & Spoke” Concept Transportation to become seamless and “door-to-door” A K A K B L B L TERMINAL 1 TERMINAL 2 C M C M D N D N CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited TOTAL LOGISTICS SOLUTION • Tie-up with an existing road transport player with country-wide network or enter into contractual arrangements with a set of strong regional players. • Target market leaders in specific industries (e.g. Automobiles, FMCG). • Tie up with a supply chain solution provider. • Expand the scope of business with existing customers to help them outsource the entire supply chain management. • Main investments in IT. • Contract and Interface Management Key Issues. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited Integrated Logistics Hub – – – – – – – – – – – Bulk handling yard for normal railway wagons Container handling yard Rail side warehousing Multi user warehousing Warehousing/distribution for Food grains, Cement, etc. Specialised Cold Chain warehousing for perishables Wholesale mart Office complex Specialised cargo distribution centre for Steel, Auto etc. Truck terminus Administrative block CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited TENTATIVE BREAK UP OF AREA TOTAL SIZE 200 ACRES BREAK UP OF AREA % BREAK UP AREA IN ACRES SIZE IN SQ.FT. ICD RAIL SIDING 20% 40 1742400 WAREHOUSING ZONE 30% 60 2613600 BULK HANDLING 15% 30 1306800 TRUCK PARK 2.5% 5 217800 WHOLE SALE MART 7.5% 15 653400 ADMN BLOCK 1% 2 87120 ROADS AND GREENS 24% 48 2090880 100% 200 8712000 CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited Artistic impression…1 CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited Artistic impression…2 CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited Project Development Activities • Obtaining Statutory & Regulatory Approvals – – – – State Level approvals Railway interface for railway siding Local state bodies/authorities MoC – ICD / CFS operations Would require support from the State Government in obtaining the relevant approvals CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited COASTAL SHIPPING Inter linking of all weather rivers encouraging Inland Water Transport. Transit container movement – alternative to Colombo CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited COLD CHAIN POST HARVEST MANAGEMENT Estimated loss of Rs.50,000 crore NEED FOR COLD CHAINS • Controlled Atmosphere Warehouses, Cold Storages, Ripening Chambers • Transport Chains (back-end and front-end integration) GLOBAL SUPPLY CHAIN CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited AUTOMOBILE EXPORT TRENDS Passenger Vehicles Commercial Vehicles Three Wheelers Two wheelers Grand Total 2008-09 335729 42625 148066 1004174 1530594 2009-10 446145 45009 173214 1140058 1804426 2010-11 444326 74043 269968 1531619 2319956 2011-12 508783 92258 361753 1975111 2937905 2012-13 559414 80027 303088 1956378 2898907 2013-14 593507 77056 353392 2083938 3107893 CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited TECHNOLOGIES IN MULTIMODALISM STATE - OF - THE - ART ICDs/CFSs . LATEST HANDLING EQUIPMENTS viz. RMGs/RTGs, REACH STACKERS ETC. DESIGNER WAREHOUSES CC BLOCK PAVING ROAD RAILERS RORO CONCEPT STATE - OF - THE - ART ROLLING STOCK CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited USE OF I T Freight Operation Information System Dedicated communication network through V-SATs Automated Terminal Management System on Centralised Architecture ERP packages for Financial Accounting, Human Resource and Pay Rolls. Customer friendly Web - enabled services Project Monitoring System EDI system with community partners Container Track and Trace System CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited Innovations Innovation to do value addition & provide value for money to customers. Use of appropriate technology. Rewarding the innovations. Provide truly multi-modal choice- land, air and sea -to offer competitive seamless logistic solutions to targeted group of customers. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited The Path Ahead • Avoid duplication of infrastructure and sub-optimal utilization of resources. • Achieve economies through collaboration ensuring optimum use of assets. • Work together to bring about reduction in logistics Costs and provision of cost efficient services to customers. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited The Path Ahead • IR initiatives – to promote clean, fuel efficient movement of cargo to hinterland ports • Relook at the Rail policies with focus on what Dr Robert Schuller, US televangelist, said: Better do something imperfectly than do nothing flawlessly. • Need to bridge the Cost gap between Rail and Road – Approach Environment Ministry for subsidies ? • GOI initiatives – to make a world standard Highways system - as auto trailers will continue to play a major role • Container operator’s efforts to create a better rail based container transit systems • Last but not least an enduring partnership between Manufacturers- Rail – Road for cost effective and clean logistics CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited Quality of Customer Care Create Customer Delight. Infrastructure & Services. Organizational Response. Dissemination of Information. Prompt Redressal of Grievances. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited Cost Effectiveness Need to optimize costs to offer competitive services. Benchmarking of all activities. Effective contract management. Reduce empty haulage. Reduce ‘Over Heads’. Better utilization of assets. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited Business Environment Ability to mould Business Environment. Knowledge of the Market. Collection & Use of market intelligence. Constant evaluation of business environment and resultant changes in existing policies. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited The next five years • Structural Changes in Container Transport Business. • Development of Clusters of ICDs/CFSs. • Possible fragmentation of the market. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited Coping With Uncertainties • Stability of rates. • Service guarantee issues. • Congestion level on important rail corridors. • ‘Dedicated Freight Corridor’ – utility and interface with IR network • Double stack operation – Routes & rates v/s long haul • Port capacities: Operational Issues. CONTAINER CORPORATION OF INDIA LIMITED Kribhco Infrastructure Limited THANK YOU