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Ram C Menen Divisional Senior Vice President Cargo Emirates. Mumbai. 17 th November 2006. Source: Boeing WACF 2006/07. For India, the time is right and the environment is right!. Current Scenario. India’s strengths are language and highly advanced and skilled pool of labor force.
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Divisional Senior Vice President Cargo
17th November 2006
India’s strengths are language and highly advanced and skilled pool of labor force
Government’s priority is to develop the
Value of exports:
1995 : US$ 31 billion
2005 : US$ 57 billion
India’s FDI is only 1% of the total GDP
[about US$5 billion].
Cultural: Some of India’s old traditions can slow and impedes growth. However, the good news is that the younger generation is breaking through the barriers led by being on the receiving end of outsource in the services sector.
Unlike China, India has not had the benefit of political continuity which has resulted in greater bureaucracy and slow decision making process. This has led to less confidence and lower FDI than China. India’s FDI is only 1% of the total GDP [about US$5 billion]
The good news is that the new approach of the government is inclusionary and consensual.
Inputs on the road project – National highway authority of India ( NHAI ).
NHDP - NATIONAL HIGHWAY DEVELOPMENT PROGRAMME has 7 phases in all.
1 & 2 PHASE : NORTH - SOUTH Corridor and EAST - WEST Corridor will be 100% complete by 2007.
PHASE 3 : 9 Projects of 10,000 kms of 4 lane traffic.
PHASE 4 : 20 Projects of 1,000 kms of 2 lane expressways.
PHASE 5 : of 1,000 kms of expressways.
PHASE 6 : of 5,800 kms of Golden Quadrilateral of 6 lanes.
It will not even meet today’s
India needs highways with six
lanes on each direction , i.e. 12
The new dedicated freight corridor (DFC) for rail freight is a good start. However, this only connects the cosmopolitan points (slide) and not very efficient for transportation of air cargo as it adds on more processes which will add to the overall costs.
Today, because of the lack of proper distribution capability, Indian imports are better served via hubs in Dubai and Singapore, reaching the internal industrial areas directly from these hub. e.g. it is quite difficult to distribute from the current airports like Bombay to Bangalore or Hyderabad … cumbersome transit procedure as well as time taken to truck between any two points in India.
Flying domestically is expensive
because of higher costs .. viz.
cost of fuel etc.
Trucking in India & Europe
Pax & Freighter
Air cargo is used as a planned tool in today’s supply chain management.
Time is a very critical part of any business decision and the higher cost of airfreight adds economies to the over all supply chain.
Growth in air freight is roughly twice the growth in the GDP of a country. At the current GDP growth of 8-10% air cargo should be growing at 16-20%. If facilities are not provided to cater to this growth, India’s economic growth will be stunted.
Ground infrastructure is critical to developing air logistics activity. Proper investment in air side facilities as well as a proper road infrastructure is very essential to create a seamless distribution network. China is an ideal model to follow where the infrastructure was built before the opening up the market for growth.
Creating an air cargo hub in Nagpur is a great idea. Along side this, there has got to be an industrial development which in itself will create origin/destination traffic. Ideally a major free trade zone is a good catalyst. It will be a greenfield development, hence, can be developed quite quickly.
Manufacturing and assembly plants
Special economic zone
World class health city
MRO and training facilities
Attractive fiscal and tax incentives
with friendly labour laws
India has now opened up its skies, however, it has not invested in infrastructure at airports and cargo areas. Unless the task force created by the Civil Aviation Ministry moves in a fast-forward mode, it will always be in a catch up mode. This is less than ideal environment for developing freight.
Use Dubai & Singapore as a Hub
The air logistics in India will now have to transition from traditional forwarding to that of supply chain management. Multinationals are going to change the scene in the logistics industry.
India has now got the chance to leapfrog technology. It should refrain from recreating the past and focus on creating a new future.
Other commodities: Chemicals, pharmaceuticals, auto parts, textiles, IT, biotechnology and now also microchips and semiconductors.
Supplier Manufacture Customer
India is becoming an integral part of the
global pharmaceuticals value chain in a
Clinical trials accelerating – 30-40% lower
cost compared to US/Europe
Indian government stimulating the
development With tax and customs
Multinationals cooperating with Indian
“Efficient Inventory Control Is Very Critical To Attaining Cost Efficiency In The Supply-Chain”
Transportation modes can be leveraged to attain cost efficiency at market entry level
In this millennium TIME has integrated with the other three dimensions. Time is now firmly the 4th dimension.
Time as a dimension results in lack of shape or form, i.e. results in fluidity.
The state of fluidity can be seen in inventory and resource management.
of scope by leveraging available economies
Custom Clearance Warehousing
Custom Clearance Warehousing
VALUE CHAIN–TOTAL SOLUTION
Providing total solution to the customer through commercial alliances with various service providers