Complete Logistics Solutions

Massive investments to drive India logistics growth says JLL

Thanks to fresh investments, supply and interest this sector, the Indian logistics industry is set to reach the next level. Although India is down the rungs on the Logistics Performance Index (India stood 35th among 160 countries in World Bank’s 2016 study) in comparison to some of the top regional markets, launch of GST and huge investments from global players will help the sector grow manifold.

Interestingly, logistics in the Asia Pacific region is performing well in comparison to other global counterparts. According to the 2016 World Bank survey on trade logistics, top regional markets such as Singapore, Hong Kong and Japan feature near the top of a global league of 160 countries in terms of logistics performance, alongside markets in Europe and the United States.

Based on JLL estimates, the total amount of stock in seven largest logistics markets in the region currently totals more than 1.5 billion sqm (gross floor area), double the size of the 795 million sqm in the United States and significantly more than the 260 million sqm in Europe. It is more appropriate, however, to look at logistics stock at a local level, as regional economies are at vastly different stages of development.

The warehousing sector in India has already seen CAGR of 20% from 2014 to 2017, fuelled by economic revival, growth of its e-commerce and the third party logistics industries as well as implementation of GST. The existing stock has a potential to grow at an even faster rate going forward, at least until 2022. Investment in infrastructure is also expected to play a significant role, as large planned investments such as MMLPs, dedicated freight corridors (DFC), etc., in road, rails, ports and airways across emerging India will bolster trade – and, consequently, warehousing demand.

Local Logistic Service in Mumbai

Maharashtra Logistics Policy being planned to reap GST gains

The Maharashtra government is all set to release a comprehensive logistics policy in a bid to develop the state as a logistics hub and promote port led development. The government hopes that the goods and services tax (GST) regime will come handy in boosting the logistics sector considering state’s strategic and geographic location. Currently, manufacturing, logistics and construction collectively contribute 35% to the state gross domestic product and the government hopes to increase that share till 2022.

Chief minister Devendra Fadnavis, at the interactive session with investors last week, said Nagpur being a zero-mile centre under the GST regime can now become a gateway for the entry of goods and services in the state and spur logistics development. He said about 70% cargo distribution from the Jawaharlal Nehru Port, which is currently restricted to Mumbai, Thane, Pune, will be expanded to 24 districts with the construction of Mumbai-Nagpur Super Communication Expressway and also with the development of supply chain through setting up of 22 agro processing centres across the state.

Sushil Jiwarajka, president, Infrastructure & Logistics Federation of India, said logistics will become a crucial factor in the growth of economy with the onset of GST. ”A far as Maharashtra is concerned, Nagpur is strategically located at the centre of India and can become a logistics hub for major companies with all India distribution. Also, the Mumbai-Nagpur Super Communication Expressway will create a key linkage for goods from the hinterland to the ports on the west coast.” He, however, suggested that the policy should provide fiscal incentives including tax holidays and allotment of land at reasonable rates.

K V Mahiddhar, head of CII Institute of Logistics, said states are preparing policies to incentivise logistics sector. ”States are also focusing on further strengthening transport infrastructure and connectivity, develop warehousing and cold chains to improve overall logistics. Under the GST regime, the investors, especially from the logistics sector, will make investments based on business requirements,” he said.

Jawaharlal Nehru Port Trust Mumbai

Direct port delivery (DPD) scheme. Advantage or Disadvantage?

What is DPD (Direct port delivery) scheme?

The Central government introduced a programme to speed up delivery of cargo containers to importers/consignees to check extra cost and time involved in the clearances by introducing the so-called direct port delivery (DPD) scheme at the Jawaharlal Nehru Port and Chennai Port, spurred by a report from the World Bank on ease of doing business.

DPD allows importers/consignees to take delivery of the containers directly from the port terminals and haul them to factories without taking them first to a CFS and from there to factories. An importer is thus assured clearance of cargo in less than 48 hours under DPD as against an average of seven days if routed through a CFS. A CFS is an off-dock facility licensed by the Customs Department to help decongest a port by shifting containerized cargo and carrying out customs-related activities outside the port area. Due to Customs procedures and space constraints at many of India’s ports, Customs clearance happens at the CFS. JNPT was designed on the CFS model. In late 2016, the government directed JNPT and Customs to raise the proportion of DPD first from 3 per cent to 40 per cent and later to 70 per cent.

DPD Advantage or Disadvantage?

Top logistics firms, including listed entities that have invested thousands of crores to set up and run container freight stations (CFSs) near India’s container ports, face an uncertain future. Firms such as Allcargo Logistics Ltd, Navkar Corporation Ltd, Gateway Distriparks Ltd, Container Corporation of India Ltd (Concor) and Balmer & Lawrie Co Ltd are among the 33 CFSs operating near JNPT. In fact, Navkar went public in 2015 purely on the strength of its CFS business.

 

Most of the stakeholders in the export-import logistics chain say that the DPD is an excellent concept, but are critical of the way it is being implemented, mainly because it will hurt their business. The government has targeted CFSs to fasten import clearances because this intermediary, it feels, takes the longest time, as much as 8-9 days, in completing all procedures. The long cargo dwell time in CFSs automatically adds to transaction costs, says the government. CFS operators say that the longer dwell time attributed to them is not of their own making. “Importers prefer to keep containers in the CFSs and move them to factories according to their inventory requirements. CFS is the safest and cheapest way of storing containers,” says a CFS executive.

There are some 33 CFSs in Nhava Sheva and another 150 across India. “What’s going to happen to the CFS business, which has seen some ₹10,000 crore investment as a sector, generating employment of a couple of lakhs? The government is saying that CFSs are bad and overnight they have to change. It’s become a completely unviable model. So, what do you do with it? How do you re-engineer? Has the government given that a thought,” asks a CFS operator.

On its part, the government wants CFSs to transform into modern warehouses for doing value-added services, which the CFS industry says would require more floor space index (FSI). ”We dont have the FSI for it,” said the chief executive of a privately run CFS in JNPT area. CFSs, mostly large yards for stacking containers, have a FSI of 0.3 or 0.4. Will the government permit us to have more FSI? Will we be treated again as a sunrise sector by offering tax breaks so that we can re-invent our business model from scratch or should we become terminally sick,” he asked.

Warehousing Space in Bhiwandi

Warehousing & Logistics space leasing increased by 50 percent in H1 2017: CBRE

According to a report by CBRE the leasing of industrial and warehousing space rose 50 per cent in January-June at 7.3 million sq ft in eight cities and absorption may touch an all-time high in 2017 on positive sentiments after GST rollout. The report further says that the companies from third party logistics, engineering, manufacturing and FMCG sectors contributed about 75 per cent of the leasing.  Leasing activities grew in all sectors except pharma, which absorbed 20 per cent less space in the first half of 2017 as compared to the second half of 2016.

Bengaluru, Delhi-NCR and Chennai were the preferred markets for leasing space. Mumbai’s share was 13 per cent of the total leasing in first half of 2017, while Kolkata, Ahmedabad, Hyderabad and Pune constituted 23 per cent of the demand. “The leasing activity continued to witness strong growth during the first half of 2017, as close to 7.3 million sq ft was leased across cities. The transaction activity grew by almost 50 per cent when compared to H2 2016,” CBRE said.

Among the prominent deals during January-June period, LP Logistics leased about 2 lakh sq ft in Bhiwandi, Mumbai, Honda Two-Wheelers 1.9 lakh sq ft in Bengaluru, HUL 1.8 lakh sq ft in Delhi-NCR and P&G 2 lakh sq ft in Chennai. CBRE Chairman India and South East Asia Anshuman Magazine said the country’s growing economy has helped in increased activities in industrial and warehousing segment over the past few years.   “The sustained growth of the segment, coupled with the implementation of the landmark Goods and Services Tax (from July 1), will result in efficient supply chains and lower compliance costs, the benefits of which will eventually trickle down to make the reform a much needed incentive for businesses in India,” he said.

The deal size rose to 65,000 sq ft during January-June 2017 from about 50,000 sq ft in second half of 2016. The number of transaction above 2 lakh sq ft also doubled during the period under review. “Sustained demand coupled with limited quality supply led to a steep appreciation in rentals (11-13 per cent) in micro- markets like Ghaziabad, Kundli/Murthal in Delhi-NCR, western corridors of Hyderabad and Bhiwandi in Mumbai,” the report said, adding that rentals dipped in Chennai on higher supply.   The consultant projected that rentals in select micro- markets would rise on strong demand.

Jawaharlal Nehru Port Trust Mumbai

Mumbai Port impacted by Cyber Attack

The Union government on Wednesday confirmed that one of the terminals at the Jawaharlal Nehru Port Trust (JNPT) near Mumbai has been impacted by the latest malware attack.

Officials said the attack has affected all software operations of Gateway Terminal India (GTI). Danish shipping giant AP Moller-Maersk, one of the affected entities globally, operates the GTI, which has a capacity to handle 1.8 million standard container units.

It is anticipated that there could be bunching of in-bound and out-bound container cargo and the Ministry of Shipping and the JNPT were taking steps to ensure minimum disturbance to trade, transporters and more importantly local citizens.

“In reality, nothing could be done manually in that system. You have two options, either work with software or stop it. Thus because of this attack, virtually no work is being conducted at GTI since last night. This attack will have a worldwide impact as thousands of companies from across the globe send and receive containers from this terminal,” the official said.

Maritime conglomerate Maersk group confirmed that its operations were hit by the cyber attack. “We can confirm that on Tuesday, June 27, AP Moller-Maersk was hit as part of a cyber attack named Petya, affecting multiple sites and select business units,” Maersk said in a tweet.

It said, “We are responding to the situation to contain and limit the impact and uphold operations.”

The group is “assessing and managing” the situation to minimise the impact on its customers and partners.

Warehouse in Bhiwandi

Warehouse in Bhiwandi

Benefits of our Warehouse in Bhiwandi

  • Expertise In Storage & Handling Of All Types Of Material
  • Storage of material in a clean environment
  • Systems for keeping Proper documentation & detail record
  • All warehousing & local logistical services under one roof.
  • 1 Lakh sq ft space for warehousing & local logistical support.
  • Secured & Safe premises for storage

Future expansion plans of Akash Warehousing Company

WE WILL BE STARTING 5 STORIED RACKING WAREHOUSING FACILITY AT BHIWANDI

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