Business Line : Deccan Express to raise funds worth $200 m

Deccan Express Logistics, an air and ground distribution network company formed by Capt. G.R. Gopinath, plans to raise $200 million to fund the project, which is expected to become operational by the first quarter of the next financial year.
The company has appointed Edelweiss, an investment banking and financial services company, to arrange for funding from private equity and help it with a business model to run its fully integrated logistics service.
Capt Gopinath told Business Line that he hopes to raise $70 million in the next four months, while the remaining funds were expected to be arranged within three years with the help of Edelweiss.

Tie-ups
Deccan Express signed a memorandum of understanding with GMR Group on August 13 for setting up express cargo operating facilities at Delhi and Hyderabad International Airports. The GMR Group has invested in the two airports with the licence to operate them.
Last month, Deccan Express had also signed an MoU for establishing a cargo hub at Nagpur Airport. With the three airport hubs and the road and rail linkage, the company would strengthen its distribution network for efficient logistics support.
The company will be taking delivery of two cargo aircraft from Airbus soon, while it plans to acquire eight more carriers to strengthen its fleet, said Capt. Gopinath.
He said with a large number of special economic zones expected to take off in the next two years, the company was looking to provide connectivity for the cargo from the SEZ through its multimodal express distribution network. The company was working out a franchise model for the road network.

Business Line : Perishable cargo centre in Hyderabad

Sensing huge potential for movement of perishable cargo such as horticulture, poultry and pharmaceutical products, the GMR Hyderabad International Airport Ltd will set up a 13,000-tonne cargo facility for perishable commodities at the Rajiv Gandhi International Airport (RGIA) at Shamshabad. "The Rs 40-crore facility will help both exporters and importers of these commodities," Mr A Vishwanath, Chief Commercial Officer (CMO), said in a press release.
The APEDA (Agricultural and Processed Food Products Export Development Authority) would give a subsidy of Rs 20 crore. The CPC (Centre for Perishable Cargo) would give a boost to horticultural activity in Andhra Pradesh. The centre would have an initial capacity of 13,000 tonnes a year. This would go up to 25,000 tonnes a year in the second phase (2013-2014). "We have estimated that there is a potential of 5,000 tonnes in the short term. We also expect huge demand from the retail and pharma industries. The potential in the latter segment is put at 3,000 tonnes," he said. - Our Bureau

Business Line : Express cargo hubs at Delhi, Hyderabad airports

GMR Hyderabad International Airport Ltd (GHIAL) and Delhi International Airport Pvt Ltd (DIAL) have signed memoranda of understanding with Deccan Cargo & Express Logistics Pvt Ltd (Deccan Express) for developing express cargo hubs in Hyderabad and Delhi.
A release from GHIAL said that Deccan Express will initially utilise the cargo terminal operated by Hyderabad Menzies Air Cargo Pvt Ltd (HMACPL).
“HMACPL will offer over 300 sq. m within the domestic wing of the cargo terminal for the exclusive use of Deccan Express, which will develop the express cargo facility at the airport as a hub for its business in the central and southern regions of India,” the release added.
DIAL will also offer over 2,000 sq. m to Deccan Express at the Delhi Airport for setting up of the facility and the latter will develop the express cargo facility at the Delhi Airport as a hub for its business in North India.
The operations of Deccan Express are expected to commence from January 1, 2009, and shift to the proposed Integrated Express Terminal at both the airports when ready.
“The MoU with the GMR Group will enable us to establish modern express cargo hubs in Hyderabad and Delhi which together with our central hub at Nagpur will function as a distribution model facilitating effective consolidation and dispatch to destination in the metros and the interiors,” the release quoted Capt G.R. Gopinath, Founder and Chairman, Deccan Express Logistics.
He added that the setting up of infrastructure at these strategic locations will enable Deccan Express Logistics to establish an extensive multi-modal (surface and air) storage, transportation and delivery network.

Expressindia.com: 'Logistics has huge job opportunities'

Ashok Kumar Posted online: Saturday , August 09, 2008 at 17:36 hrs

All India Management Association (AIMA), in association with JK Business School organised a global summit on Supply Chain & Logistics Management in New Delhi. Ashok Kumar of Expressindia.com speaks to prominent speakers at the event.
Dr. Nallan C Suresh, professor & chairman (Dept. of Operations Management and Strategy) from the School of Management, State University of New York, Buffalo called logistics as the most important segment of the Industry.
Terming logistics as ‘underrated’ in India, Dr Suresh said in western countries this trade enjoys the industry status.
Emphasising on the potential of the more than one billion strong population of India he said, “If we remove all kinds of hurdles that comes across logistics, we can drive costs down to our advantage.”
“If the logistics prices come down we can minimise the exploitation of both the producers as well as the consumers to a great extent as it will reduce the margins of the middlemen”, Dr. Suresh added.
Dr Reena Ramachandran Director General of JK Business School said, earlier, logistics management was just a support function. Most of the innovations happened in the past in this field were at the level of a company.
Since education and the industry are linked with each other it is prudent to teach strategic solutions to the students and give them hands on experience of the challenges that lie ahead, Ramchandran elaborated.
Outlining the importance of teaching logistics as a discipline Dr. Reena said, “Being a part of the system, we cannot escape reality. We need to work the logistics to manage the industry effectively.”
Another prominent speaker, SL Ganapathi, CEO, Logistics Plus India Ltd, said Logistics was always in the industry and was commonly known as the transport department. Now it has an integrated look. Calling it the backbone of supply Ganapathi said, “No industry could afford to run without efficient management of logistics.”
Explaining about the high costs of logistics in developing countries he said it is around 13% of the cost of the product paid by the consumers, which is significantly higher compared to the logistic expenditure of around 8% in the western economies.
Talking about the prospects of logistics management as a discipline Ganpathi maintained that Logistics has a huge potential for job opportunities. Not only that, “With better transport and infrastructure we can bring down the cost of logistics,” he added.
Colonel Faiz-ur-Rahman, chairman of the Sri Lanka based DHL Global Forwarding, commenting on the historic value of logistics said, “Genesis of Logistics could be found in the Bible also. It’s a synergy of various functions like packaging, transport etc. It’s a challenge for the modern industry to cut down the logistics’ expenditure and if we are able to do that, it will be a win-win situation for both the producers and the consumers.” Rahman stressed

Business Line : Andhra Pradesh drive to boost sea-borne trade

by K.V. Kurmanath

Andhra Pradesh is set to emerge as a major hub for sea-borne trade, within the next four-five years, thanks to the initiative of the State Government to develop facilities along the State’s 978-km long coast line.
The initiatives, as Mr K.V. Brahmananda Reddy, Special Secretary, Infrastructure & Investments (Ports), Government of Andhra Pradesh, explained to Business Line, would include development of non-major ports on public-private partnership (PPP) model and modernisation and upgradation of existing facilities.
A beginning had already been made with the first phase commissioning of four berths of the Rs 1,200-crore Krishnapatnam Port in July and the launching of trial operation of Gangavaram Port, a deep water port, a few days ago, he said.
The traffic throughput of the ports in Andhra Pradesh (excluding Visakhapatnam port), it is estimated, will reach the level of 145 million tonnes (mt) by 2011-12, the final year of the Eleventh Plan, as against 21 mt in 2007-08. The commissioning of the Krishnapatnam and Gangavaram ports is to double the throughput to 42 mt in the current financial year itself and further to 65 mt in 2009-10 and 95 mt in 2010-11 as more and more berths will be added to these ports. In fact, more than one-third of the projected 145 mt of traffic by 2011-12 is to be handled by Gangavaram and Krishnapatnam ports — Gangavaram port 35 mt and Krishnapatnam port 27 mt.
These ports, as Mr Brahmananda Reddy pointed out, would trigger industrial activity around them as well as in the hinterland. A case in point was the upcoming large capacity power plants around Krishnapatnam Port. A special economic zone too would come up to cash in on the facilities to be offered by the port, he said.
But, then, building capacity is one thing and utilisation is another. The pertinent question that arises is: will there be enough business for these ports? Or will they indulge in unfair practices to cut into one another’s business?‘Business for all’
According to Mr C. Sasidhar, Director (Administration) of Krishnapatnam Port, there will be business for all. The existing ports suffer from capacity constraints, leading to very high turnaround times for vessels, causing losses to the exporters and importers, he said, emphasising the need for additional port facilities.
A senior executive of Gangavaram Port said the growth prospects in the region being bright, there must be enough port facilities to meet the growing demand of importers and exporters. He cited the example of Visakhapatnam port, where pre-berthing delays varied from seven to 14 days.
On the other hand, Gangavaram port, the country’s deepest port, has installed a 800-mt conveyor to carry imported raw material directly from the port to the Visakhapatnam Steel Plant. “It will become much cheaper for exporters and importers operating out of our ports,” he said.
Andhra Pradesh, with one major port and 14 non-major ports, ranked number two in cargo handling in the last three years, with cargo handling capacity having increased substantially between 1998 and 2008. The State Government has initiated steps to help several non-major ports come up in the State under private initiative and these include Gangavaram, Krishnapatnam, Machilipatnam, Vodarevu, Nizampatnam, Meghavaram (Srikakulam district) and Kakinada (deep water port), the last two being captive ports.
While the Meghavaram port would be captive port of East Coast Energy and Power Systems, Kaninada port would be captive port for the Kakinada SEZ.
Machilipatnam port is to be developed by a consortium comprising Maytas Infra and Nagarjuna Construction Company. The concession agreement for the Rs 1,580-crore project was signed in April 2008. Dr Y.S. Rajasekhara Reddy, the Chief Minister, laid the foundation stone for the project in the same month.
In March 2008, the State Government signed an agreement with Ras Al Khaimah (RAK) for developing two ports at Vodarevu (Prakasam district) and Nizapatnam and an industrial corridor connecting the two. A special purpose vehicle with Matrix Enport as a joint venture partner was signed.The shipyard proposal
Meanwhile, the Union Government wants to have a shipyard of international standard come up at Vodarevu, on the east coast.
Responding to the proposal mooted by the Union Minister for Shipping, Road and Highways, Mr T.R. Baalu, in April this year, the Chief Minister offered to make available 2,000 acres of land within six months for the proposed shipyard which, when ready, is to give a major boost to the proposed port corridor.
“The total private investments in various port projects will be about Rs 21,710 crore, including Rs 16,800 crore for the Nizampatnam and Vodarevu ports and the corridor,” Mr Brahmananda Reddy said, adding that “the port development programme of Andhra Pradesh fits well into the revised National Maritime Development Programme, which aims to develop total port capacity of 1,500 mt in the country by 2011-12.”

Business Line: ‘Rakhi’ bonds courier cos with consumers

by Shubhra Tandon on 09 Aug 2008

When physical distances keep loved ones apart, festivals become occasions to express emotions. And courier companies are doing their bit, designing innovative gift packs to bridge distances and to be part of the festive season.
Celebrations get underway, starting with Rakshabandhan next week, and Blue Dart with its ‘Rakhi Express’, Gati’s ‘Rishton ki Dor’ and XPS’ ‘Anmol Rakhi’, look to make the festival special for siblings separated by distances.
These gift packs contain sandalwood or designer rakhis, and ornate boxes of ‘roli and chawal’. In fact, there are even special envelopes to beat any weather condition and keep your rakhi safe!
Depending on whether you are sending your gift to domestic or international locations, the gift packs are priced between Rs 100 and Rs 3,000.
Though courier companies say that these special offerings during festivals cannot be viewed as an outright business opportunity, they do enable companies to create brand awareness and target new customers.
Speaking to Business Line, Mr Ketan Kulkarni, Blue Dart’s Head of Marketing, Communications and Sustainability says, “Products like our ‘Rakhi Express’ become innovation platforms for us to reach the young future consumers. It gives customers a chance to experience the brand and enables us to tap newer segments.”
Echoing his thoughts is Mr Anil Atri, Gati’s Chief of Sales and Marketing. “Festivals become special occasions to bond with the customers. One can establish the brand value by creating linkages between consumers and the company,” he said.
Gati has seen an annual growth of 10 to 15 per cent in its Rakhi product, and Blue Dart’s ‘Rakhi Express’ expects to grow by 40 per cent every year.
In the past too, companies have distributed cakes on Christmas and Haleem during Ramzan, says Mr Atri.
Blue Dart’s Mr Kulkarni adds, these products have an emotional side to them and go beyond “pure commercial gains”.

The Sentinel: Customs Secure Crores in aircraft duty case

The Sentinel, Aug 6, 2008

In one of the biggest crackdown on duty evasion in aircraft purchases, the customs department has collected nearly Rs 1000 crore in bonds from India Inc and individuals who shopped for planes for charter purposes and used them for personal needs.Since early July, the customs department had started seizing aircraft imported under “Non-Schedule Operator Permit” but were being used for personal purposes.“In all, nine aircraft and four helicopters were seized. Six aircraft and two helicopters have been released provisionally on execution of Bonds, totally valued at Rs 863 crore and Bank Guarantee valued at Rs 196 crore,” a spokesperson of the Central Board of Excise and Customs said.Explaining that the bonds cannot be regarded as revenue accrued to the government, the official said, “Bond is an undertaking given by a taxpayer that in case of any duty liability, in that event, the same will be paid by him. Bank guarantee is merely for security for the same purpose.”Earlier, tightening the noose, the government had seized aircraft of leading corporate houses like Reliance Industries, Anil Dhirubhai Ambani Group, GMR, Oberoi and IndiaBulls among others, bringing under scanner over 250 such planes acquired since 2007 to detect duty evasion.Anybody found guilty of acquiring aircraft with duty exemption under NSOP Scheme is liable to pay a penalty of up to five times the duty evasion, a Finance Ministry official said.Customs official said some business houses had taken ‘advantage’ of the duty exemption announced last year on import of aircraft meant for chartered flights. But it has been found that many of these were later being used for personal purposes. The aircraft imported for private purposes attract 28 per cent duty as against zero duty for scheduled and non- scheduled operators. According to sources in the department, many are now eager to pay up to save their aircraft from being seized by the Air Intelligence wing of the Customs Department. (PTI)

The Economic Times: Air India to cut flights on international routes

The Economic Times, 05 Aug 2008

In a move to curtail mounting losses, national carrier Air India plans to withdraw some flights on international sectors. A decision to this effect was taken in a board meeting of the company held in Mumbai on Sunday. The company has already reduced capacity in the domestic market by nearly 15%. Air India has also reduced air fare on international routes ranging from 5% to 20% to improve its load. “We are planning to cut some flights on international routes to contain losses. The final decision on the number of sectors where we would withdraw operation would be taken shortly,” an Air India official said. According to industry sources, Air India would soon withdraw its services on Delhi-Los Angeles sector. Some of the flights on India-Africa sector would also be pulled out. The Delhi-Los Angeles service was launched in June 2004. Air India operates three flights a week to Los Angeles. The Union civil aviation minister, Praful Patel, recently said Air India would save about Rs 1,000 crore in the next 12 months by undertaking an exercise of rationalising routes. Currently, the airline is running up a loss of Rs 13 crore per day on account of high jet fuel price and significantly low load factor — which is below industry average of about 60%. It’s estimated that the public carrier lost upwards of Rs 2,000 crore in the calendar year of 2007-08.

Singapore Airlines To Launch Second Daily Service Between Singapore And Delhi From 1 September 2008

05 August 2008
Singapore Airlines will increase its frequency on the Singapore-Delhi route to double daily (14 times weekly), up from the current nine flights a week, with effect from 1 September 2008.The increase in frequency offers greater choice and more connection options for Singapore Airlines customers travelling on its global network. The new schedule will provide for a daily early morning arrival into Delhi, in addition to the existing late evening arrival. On the return from Delhi, the new schedule provides a morning departure that arrives into Singapore in the late afternoon.The increase in frequency reflects the strong interest and demand for flights to and from Delhi, and the importance of the Indian market to Singapore Airlines.To introduce the new second daily flight, Singapore Airlines is offering a special Economy Class online fare from Singapore, on the SQ406 flight to Delhi. Return tickets are priced at S$798, inclusive of all taxes and surcharges (subject to currency fluctuations) and are for a minimum of two people travelling together. The offer is valid for outbound travel till 31 October 2008 and bookings can be made up till 8 August. For more details, full terms and conditions which apply to this fare, and other promotional deals, please visit singaporeair.com.Singapore Airlines has begun operating one of its daily flights between Singapore and Delhi (SQ407 and SQ408) using the new Boeing 777-300ER aircraft. This aircraft is fitted with the Airline’s new-generation award-winning cabin products, including the biggest Business Class seat in the world and the most advanced inflight entertainment system ever developed, featuring over 1,000 entertainment options and a suite of office applications.

IATA : Freight Traffic sees its first decline since 2005

IATA 04 Aug 2008
International freight traffic declined -0.8% in June. This is the first decline seen since May 2005 and follows several months of falling manufacturing sector confidence indicators.
Asia Pacific airlines led the contraction with a -4.8% year-on-year decline for June traffic.
Latin American airlines recorded the largest contraction (12.7%) as the region’s cargo sector continues to re-structure its capacity.
European carriers saw freight demand growth fall to 0.7% in June from 1.4% in May.
North American carriers also saw freight demand growth slow to 4.0% in June from 4.6% in May.
Middle Eastern carriers delivered the strongest performance with 12.1% growth (up slightly from the 10.7% recorded in May).
African airlines recorded a -1.9% year-on-year decline in June.
“The airline sector is in trouble. Losses this year could reach US$6.1 billion, more than wiping out the US$5.6 billion that airlines made in 2007. Falling demand and rising costs are re-shaping the industry,” said Bisignani. “To survive the crisis, urgent action is needed. Airports and air navigation service providers must come to the table with efficiencies that deliver cost savings. Labour must understand that efficiency is the only path to job security. And governments must stop crazy taxation and give airlines the freedom to merge and consolidate where it makes business sense.”

The Economic Times: Tuscan Ventures picks up 12.45pc stake in LCL Logistix

4 Aug, 2008, 1535 hrs IST, PTI (The Economic Times)

Tuscan Ventures on Monday said it has picked up 12.45 per cent stake in Mumbai-based freight forwarder firm, LCL Logistics, for an undisclosed sum. "This investment will fund LCL Logistix's rapid expansion plans and further poise them to provide as well as command outstanding value to and from all its stakeholders," Tuscan's Managing Director Vishal Sharma said in a release here. Tuscan Ventures specialises in value creation through operational excellence in supply chain, logistics and transportation infrastructure. LCL Logistix's core product and service offering includes tailored containerised logistics solutions to all major destinations globally. It operates warehouses in Mumbai, Nagpur, Haldia and New Delhi, the release said.

Times of India: Courier cos raise tariffs

Reeba Zachariah TNN (Published in TOI on 05 Aug 2008)

India's largest logistics company Blue Dart has revised prices in its retail air and ground express services by 15% and air freight services by 10%, effective this month, owing to rising operational costs. Elbee Express too has hiked tariffs by 20-25%. Fuel prices coupled with the double-digit growth rate of inflation has compelled companies to hike rates, making courier services costlier. Says Nikhil Shah, executive director of Elbee Express, ‘‘We were not in a position to absorb the kind of increase in aviation turbine fuel and diesel prices and so decided to step up prices.'' He added that this is the first price revision this year in a business driven by banking, insurance and financial services sectors followed by e-commerce. Last Thursday, public sector companies raised aviation turbine fuel by around 3%. Increase in jet fuel rates has also resulted in carriers upping their fares to boost yields and chop losses. Sonjoy Roy, GM, AFL-Wiz, said, ‘‘The price increase to the customer is partial. The single largest cost component in our business comes from the air and surface line haul--both of which had major impact due to increase in fuel cost. We continuously work on our route optimization, productivity mapping and hence are able to minimize the cost.'' He said the cost of sending a 500gm shipment from Mumbai to Delhi has now increased by approximately 10-12%.

PTI : NACIL turns passenger aircraft into cargo carriers

Press Trust Of India / New Delhi August 04, 2008, 5:32 IST
The National Aviation Company of India (NACIL) , the entity formed after the merger of Indian Airlines and Air India, is converting a number of its passenger aircraft into freight carriers as part of its plans to make cargo operations a strategic business unit.

Out of the nine airplanes that would be readied to fly under the Air India Cargo banner by first week of next month, five have been already converted into freight carriers.
“Consulting firm Accenture had suggested that making the cargo division as a strategic business unit (SBU) as part of giving NACIL a new avatar which has been accepted by the company. Hence, there is also a new focus on the business stream,” a NACIL spokesperson said.
While two Airbus A310s have already been converted, another two would be done by the end of this month.
Similarly, four Boeing 737-200s have been converted into freight carriers and another one would be completed by the beginning of next month, the spokesperson said.

SpiceJet Cargo takes off

Announcement / Corporate July 30, 2008, 21:13 IST (Business Standard)
Domestic Cargo Operations of SpiceJet, India's "best low cost airline"*, is now successfully running in nine cities. This includes the major metros like New Delhi, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad. Among the secondary cities are Ahmedabad, Pune and Coimbatore.
SpiceJet is aggressively looking at the cargo business and has already put in place the necessary infrastructure requirements manned by trained personnel who ensure a high level of service.
Commenting on the market enthusiasm, Samyukth Sridharan, Chief Commercial Officer, SpiceJet said, "The response from the market has been very positive and encouraging. In the month of June alone we have uplifted in excess of 1320 tonnes that has generated revenue of over Rs 3.5 crores. We see a huge demand for our specialized services across industries with special emphasis on auto and garment. There is a huge demand for perishables like food and flowers."
"The domestic cargo industry is estimated to grow in excess of 15% annually. We see a tremendous potential in this business and for us we are confident of touching a magic figure of 100 crores annually within the first three year of cargo operations. "he further added.
SpiceJet will soon start its cargo operations from Guwahati and Bagdogra.
With the new generation Boeing 737 – 800/ 900ER fleet, SpiceJet can carry between 2 tons to 3.5 tons of cargo on each of its flight. SpiceJet operates 94 flights every day to 16 destinations and can offer a capacity of over 300 tons per day.
In the ancillary services space, SpiceJet is already present in onboard advertising, home delivery of tickets, in-flight contests and travel insurance.
About SpiceJetSpiceJet is India's 'best low cost airline' *, delivering the lowest air fares with the highest consumer value. We operate 94 flights daily to 16 cities viz. Ahmedabad, Bangalore, Bagdogra, Chennai, Coimbatore, Delhi, Guwahati, Goa, Hyderabad, Jammu, Kolkata, Mumbai, Pune, Srinagar, Varanasi and Vizag. Our on-time performance is amongst the best in India, at 82%, coupled with a Technical Dispatch Reliability of 99.6% making us an airline with least cancellations. SpiceJet's new generation fleet of 15 Boeing 737-800 / 737-900ER aircraft are backed by cutting edge technology and infrastructure to ensure the highest standards in safety and operating efficiency.
*SpiceJet was recognized as Best Low Cost Airline for 2007 by TAFI (Travel Agents Federation of India)-Abacus, awarded at Kota Kinabalu, Malaysia.
SpiceJet voted the Best Low Cost Airline by a reader's survey conducted nationally by India's leading travel magazine Outlook Traveller. (Feb 2008)