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Container Logistics (CFS & ICD) –
Container Logistics (CFS & ICD) India
March 2009
Executive Summary

                Estimated worth INR 75 bn in 2008 & INR 125 bn in 2013
  Market        ICD: Handles 60 % of containerized cargo
                CFS: Handles 40% of containerized cargo
                P id
                 Provides various services : Cargo consolidation, distribution as well as custom clearance activities
                             i        i      C          lid ti    di t ib ti        ll       t    l          ti iti

                ICD/CFS facilities are beneficial for importers/exporters as well as for port authorities
 Benefits & 
                Inter‐Ministerial Committee (IMC) is the regulatory authority monitoring the growth of CFS/ICD
   Set up 
   Set‐up
                All the proposals are considered by the Inter‐Ministerial Committee 
Requirements
                Proposals submitted should include feasibility report, Land requirements, Design and lay‐out, 
                 Equipping the facility


                Drivers: Growth in port traffic, custom clearance activities, high profit margins in comparison to 
  Drivers &      other activities in the value chain, and the construction of dedicated freight corridor
 Challenges     Challenges: High costs entailed for the development of a facility, archaic procedures for the 
                 movement of containerized cargo

                Container Corporation of India (CONCOR) is the largest player in the market and is a government 
                 owned establishment
Competition     The number of private players entering the market has been rising due to the market scenario
                  – Gateway Distriparks Ltd
                    Gateway Distriparks Ltd
                  – Allcargo Global Logistics


                                         CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                    2
•Market Overview
•ICD/CFS ‐ Functions and Benefits
    /
•Set‐up Requirements
•Drivers & Challenges
 Drivers & Challenges
•Competition
•Key Developments
•Key Developments



         CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT   3
Container logistics market gaining momentum due to growth in 
 EXIM trade
 Container Logistics                                                           Cargo Break‐up
 •Logistics cost in India is 13% of GDP                                        In 2008: EXIM cargo – 519 mn tons
 •Container cargo level is estimated at 143 mn
  Container cargo level is estimated at 143 mn 
                                                                                 Container Cargo
  tons in 2008
                                                                                                   28%
 •The container logistics market comprises of ‐
     Container Haulage – Movement of containers 
      between port and CFS by road and ICD by either                                                          82%
      road or rail                                                                                                  General and Other Cargo
     ICD/CFS – Custom bonded in transit facility
                                                                               Container Logistics segments
     Multimodal Transport Operator – Primary 
      operations are consolidation and transportation of  
      LCL and FCL forwarding via sea, rail and road                                                 Container 
                                                                                                     Logistics
 •Containerization levels in India are 18% 
  compared to the world average at 70%
  compared to the world average at 70%
 •Low containerization levels exist due to the 
                                                                                                                           Multimodal 
  lack of appropriate infrastructure                                       Container Haulage             CFS/ICD            Transport 
                                                                                                                          Operator (MTO)
NOTE: ICD – Inland container depot, CFS – Container freight station
LCL – Less than container load, FCL – Full container load



                                                   CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                             4
Demand for ICD/CFS facilities increasing with the rising 
international trade scenario
ICD and CFS                                                             Market Size
•ICD/CFS market estimated worth INR 65 bn in                               INR bn
 2008                                                                   150                         +14%
                                                                                                                            125
•ICD/CFS facilities have been rising due to                                                                        108
                                                                        100                               97
 increase in port traffic and containerization level                                      74       85
                                                                                   65
 in India
                                                                          50
•CFS accounts for 40% of the container load while
 CFS accounts for 40% of the container load while 
 ICD accounts for 60%                                                      0
                                                                                 2008 2009 2010 2011 2012 2013
•ICD/CFS act as transit facilities 
•It offers handling and temporary storage services                      Difference between ICD and CFS
 for containerized cargo being imported and 
 f       t i i d           b i i      t d d                                         ICD                              CFS
 exported                                                                                          Location
   Less than container load – Cargo arriving from                      In the interiors, away      It is an off dock facility located near 
    different consignors; has to be stuffed/de‐stuffed                  from the servicing ports    the servicing ports
    into/from containers
    into/from containers                                                                           Function
   Full container load  – Containers that are stuffed in               Largely deals with full     Deals with break‐bulk cargo 
    factories and are ready to be shipped                               container load which is     originating/terminating in the 
                                                                        aggregated for onward       immediate hinterland of a port; 
•These establishments also act as a custom                              movement to or from the     also serves as a destination for 
 clearance hub
 clearance hub                                                          ports
                                                                           t                        custom related activities
                                                                                                       t      l t d ti iti



                                            CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                                   5
The logistics industry is extremely fragmented in terms of 
services offered and each player specializes in a particular sector
                      Logistics                                                Freight               LCL 
   Exporter                                       CFS/ICD
                      Provider                                             Forwarding Agent       Consolidators

                                                                             Complete custom 
                                                                             Complete custom
                   Co‐ordinates with          Custom clearance  
                                                                                 clearance       Consolidation of 
                         various                activities are 
Chooses provider                                                              procedure and      cargo into single 
                   intermediaries in              executed
                                                                             forward cargo to     container load
                    the supply chain
                                                                               shipping lines




                                                                                                                      Shipping Line
                                                                                                                                 n
   Importer           Logistics                    LCL                         Freight
                                                                                                   CFS/  ICD
                                                                                                   CFS/ ICD
                      Provider
                           id                   Consolidators
                                                C    lid                   Forwarding Agent
                                                                                 di

                                               Segregate the 
                   Transport goods                                            Completion of       Shipped goods 
  End segment                                  container load 
                   from ICD/CFS to                                           custom clearance    undergo custom 
     users                                   based on importer 
                      importer                                                    activity          formalities
                                              and destination



                                        CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                                   6
•Market Overview
•ICD/CFS ‐ Functions and Benefits
     /
•Set‐up Requirements
•Drivers & Challenges
 Drivers & Challenges
•Competition
•Key Developments
•Key Developments



         CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT   7
ICD/CFS provide various services which range from storage of 
containers to consolidation and distribution of cargo as well as ..

                          • Provides storage between various transportation modes
     Intermediate 
                          • Special provisions are available for the storage of containers which require 
                             p      p                                     g                        q
    storage facility
    storage facility
                            refrigeration services as well as for cargo that may be potentially dangerous 



                          •   This includes activities such as weighing, inspection of seals and damages, 
                              This includes activities such as weighing, inspection of seals and damages,
  Receipt and delivery 
      i     d d li
                              sticker and safety plate control 
     of containers
                          •   Consolidation and dispatch of LCL cargoes brought in directly by shippers  



                          • If the container cannot be received or delivered directly to the final consignee, 
   Consolidation and 
                            there are provisions for containers to be stuffed with or de‐stuffed for LCL which 
  distribution of cargo
                            is dependent on the direction of movement of the cargo



                          • Provides space for the storage of empty containers as well as for the temporary 
    Depot functions         storage of loaded containers yet to be dispatched out of the facility




                                   CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                    8
.. acts as a custom clearance facility for containerized cargo 
being exported and imported

                          • Transportation from road, rail and barges to a temporary storage area container 
                            yard
  Handling Containers
         g                • The transport of containers under bond to ICDs/CFSs from deep sea ports is a 
                                     p                                                    p     p
                            necessary feature of well‐developed multi modal transport systems because this 
                            has proved to be a time and cost saving function

                          • Custom's clearance activities at inland terminals could help to decrease the 
                            dwell time of containers in deep sea ports
                            dwell‐time of containers in deep‐sea ports
   Custom Clearance       • Checking of LCL cargo prior to stuffing or after stripping
                          • Checking container seals
                          • Assessment and valuation of cargoes


                          • Distribution of the finished products 
  Physical Distribution   • Certain value added services such as price tagging, bottling and packing may 
                            also be available


                          • Container cleaning services
                          • Pretrip trials of reefer containers to check if refrigeration equipment is functional
    Other Facilities
                          • Maintenance and repair services for containers, container handling equipment, 
                            refrigeration equipment, road chassis
                              fi     ti        i      t    d h i



                                   CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                      9
The development of ICD/CFS has benefited players in the 
industry, importers and exporters as well as port authorities

                                    Port authority receiving ready‐to‐
                                      load containers hiking ports 
                                      productivity and profitability 




    Allows exporters and 
               p                                                                                 Linkage to the port by rail 
                                                                                                      g         p     y
 importers to lower inventory                                                                  resulting in quick transit and 
             costs                                Exporter/Importer,                              low transportation cost
                                                     Custom house 
                                                    agent, shipping 
                                                    companies use 
                                                    companies use
                                                   ICD/CFS facilities 




      Owned and operated by a public 
                                                                                      Consolidation of cargo has made 
       or private company, provides 
                                                                                       it a logistics hub for LCL cargo
       services at competitive rates 




                                        CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                              10
•Market Overview
•ICD/CFS ‐ Functions and Benefits
    /
•Set‐up Requirements
•Drivers & Challenges
 Drivers & Challenges
•Competition
•Key Developments
•Key Developments



         CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT   11
The proposals for setting up of such facilities include a feasibility 
report, land considerations, the design and lay‐out as well as ..

 • Inter‐Ministerial Committee (IMC) is the regulatory authority which monitors the growth of CFS/ICD
 • It comprises representatives from the Department of Revenue, Ministry of Surface Transport, Ministry of 
   Railways and the Ministry of Commerce 
 • The Committee considers the proposals submitted by the public and private sector entrepreneurs for setting up 
   of new ICDs/CFSs at different centers in the country and monitors their progress


                             • The facility must be economically viable for :  users, railways for full train 
                               movements, other transport operators and shipping lines
                             • Tariff rates levied by operators for ground rent, cargo storage, loading and 
                               unloading, and transportation of containers to ports are also considered
  Feasibility Report
                             • Minimum level of traffic volume (two‐way) is: 
                                 ICD ‐ 6,000 TEUs/yr
                                 CFS ‐ 1,000 TEUs/yr




                             • Outside limits of major cities: minimum of 3 acres
 Land Requirements
                             • Inside city limits /port area: minimum area of 1 acre




                                         CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                12
... equipment consideration which is examined by the Inter‐
Ministerial Committee on the basis of certain guidelines

                      • Design and lay‐out should be state‐of the‐art, equipped with mechanical/electrical 
                        facilities of international standards
 Design and Lay‐out
 Design and Lay‐out   • The lay‐out should allow smooth flow of containers, cargo and vehicles through the
                        The lay out should allow smooth flow of containers, cargo and vehicles through the 
                        ICD/CFS and it should take into account initial volume of business, estimated 
                        volume in 10 years and the type of facilities exporters would require




                      • The ICD/CFS should plan for the most modern handling equipment for loading, 
                        unloading of containers from rail flats, chassis, their stacking, movement, cargo 
                        unloading of containers from rail flats, chassis, their stacking, movement, cargo
                        handling, stuffing/de‐stuffing 
 Equipping CFD/ICD    • Players interested to set up a rail based ICD must provide all infrastructure facilities 
                        at their own cost  
                             p                  y                    g y
                      • An up‐to‐date inventory control and tracking system to locate containers/cargo  g




                                  CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                       13
•Market Overview
•ICD/CFS ‐ Functions and Benefits
    /
•Set‐up Requirements
•Drivers & Challenges
 Drivers & Challenges
•Competition
•Key Developments
•Key Developments



         CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT   14
Drivers & Challenges




  Drivers                                                                Challenges
                                                                         High costs for the development of a 
  Growth in port traffic                                                 facility

  Custom clearance activities in ICD/CFS                                 Archaic procedures for the movement 
                                                                         Archaic procedures for the movement
                                                                         of cargo
  Higher margins  in comparison with 
  other logistics activities 
  Construction of dedicated freight 
  Construction of dedicated freight
  corridor




                                        CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                             15
The rise in containerized cargo  traffic has led to the growth in 
CFSs and ICDs
Growth in containerized cargo                                                                                                          Impact
•Growth in containerized cargo and opening up of container rail transport has boosted 
 CFSs and ICDs
•Containerized cargo capacity is expected to rise to 21 mn TEU by 2016
   ‘000 TEUs          % of Total Traffic                      %           ‘000 TEUs              Projected Containerized Traffic
 8,000                Containerized Traffic                       20   20,000
                                                      6,712
                                              5,541                                                    +16%                   15,630
 6,000                              4,744
                                    4 744                         15   15,000                                       13,480
                                                                                                           11,620
                  3,900   4,233                                                                  10,020
 4,000    3,366                                                   10   10,000            8,710
                                                                                 7,570

 2,000                                                            5     5,000

    0                                                             0        0
         2002‐03 03‐04    04‐05     05‐06     06‐07   07‐08                     2008‐09 09‐10     10‐11    11‐12     12‐13    13‐14

 •The increase in container traffic has led to the development of ancillary facilities:
      Providing a facility for speedy evacuation of import containers from the port
      Providing a set up where the activities like unitization (standardized packing), stuffing, de‐
       stuffing and regulatory clearances like customs formalities can be undertaken
      Acting as a warehouse to ensure safety & security of air and sea cargo during in‐transit 
       storage
      P idi
       Providing a secure place for storage and transport of empty and loaded marine containers
                             l    f t          dt          t f      t   dl d d       i        t i



                                                          CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                           16
Traffic at major ports has grown dynamically in recent years with 
JNPT topping the list in the container segment
Container traffic handled at major ports
                                                                                                     CAGR 
         Ports        2000‐01   01‐02   02‐03      03‐04       04‐05      05‐06      06‐07   07‐08
                                                                                                       (%)

 Kolkata                2011    1410    1498        1746       2357       3234        4003   5139     14

 Hadia                  806     1522    1850        2275       2029       1711        1918   2242     16 

 Paradip                 7        7      33          60         31          45         31     54      34 

 Visakhapatnam          278     320     296         277         635        630        799    1133     22

 Chennai                5769    5857    7218        8628       9864       11756      14166   18049    18

 Tuticorin              1570    2199    2301        2687       3205       3428        4011   5630     20

 Cochin                 1790    1899    2070        2125       2315       2539        2949   3239     9

 New Mangalore           20      37      84          96         136        149        265     319     49

 Mormugao                44      58      90         103         117        105        127     135     17

 Mumbai                 4363    3684    3143        2816       2571       1957        1580   1632    ‐13

 JNPT                  14277    18484   22864      27785      28747       33777      40810   51923    20

 Kandla                 1287    1752    2225        2404       2754       2311        2778   2639     11

NOTE: Figures in  000 tonnes
NOTE: Figures in ‘000 tonnes




                                              CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                    17
Ports face inherent structural and procedural challenges, 
transforming ICDs and CFSs into custom clearance facilities
Shift of custom activities outside the port area                                             Impact
         The Past               Shift in custom activity               The Present

 Custom clearance within                                           Customs clearance 
    ports themselves                                              facility available near 
                                                                  centers of production 
                                                                    and consumption
                                                                        d           i
            Issue
                                                                  Fast processing using 
 Ports unable to contend                                          high‐tech equipment 
 with the increase in cargo 
 with the increase in cargo                                             increasing 
                                                                        i      i
           levels                  Establishment of                    profitability 
                                       ICD/CFS
         Led to…                                                    Available space for 
                                                                      inspection of 
                                                                          p
                                                                        containers
      Inefficiencies in 
   operations leading to                                            Proper handling of 
    delays in EXIM trade,                                            goods minimizing 
  reducing  profitability of 
  reducing profitability of                                         damage during de‐
                                                                    d        d      d
       the companies                                               stuffing and stuffing

                                          CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                 18
Strong growth and high profit margins are acting as incentives 
for existing and new players to make large investments
High margins in comparison with other logistics activities                                                    Impact

                    Road                    Coast‐to‐        Container Haulage 
                              Express                                                      CFS/ICD    MTO
                    Freight                   coast                 (rail)
                                                               Growth‐ capital 
  Scenario         Mature     Growth         Growth                                        Growth    Mature
                                                                  intensive
Entry Barrier       Low         High             High                 High                 Medium     Low
   Growth          5‐10%      20‐22%             15%                  20%                   35%      10‐15%
   EBIDTA 
                    3‐5%       8‐10%             25%                  30%                   40%       4‐6%
   margins

• Fi
  Firms are keen on capitalizing on the growing demand for ICD/CFS and are investing towards the 
            k          i li i        h      i d      d f ICD/CFS d         i     i        d h
  same
• Between 2015‐2018, 50 more facilities are expected at an investment of INR 75 bn

 Company
    p y                               Location                                    Expected Timeline
                                                                                    p
Gateway         Faridabad, Ludhiana                                        FY2009 end
Allcargo        Goa, Bangalore, Nagpur, Hyderabad                          NA
                Rourkela, Durgapur, Kuder (Gujarat), Madhosingh 
Concor                                                                     FY 2009 end
                (UP), Ratlam, Baddi (MP), Khemli (Rajasthan)
                (UP) Ratlam Baddi (MP) Khemli (Rajasthan)



                                             CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                               19
The development of a dedicated freight corridor running across 
India is expected to be beneficial for CFS/ICD providers
Construction of a dedicated freight corridor                                                               Impact
•The dedicated freight corridor project has been undertaken by the Dedicated 
 Freight Corridor Corporation of India and is expected to be completed by 2015‐16
   Estimated level of investment is between INR 280‐370 bn
   The project will span over 2762 km; connecting  Sonnagar to Ludhiana in the eastern corridor 
    and from Mumbai to Tughlakabad‐Dadri in the western corridor with interlinking of two 
    corridors at Khurja
   The corridor will have the facility to run longer and heavier trains and reduce the cost of 
    transportation
•This is expected to boost the ICD/CFS market as this freight corridor will be 
 beneficial for exporters/importers
   Delays at port facilities, custom clearance etc., can be avoided as goods can be easily 
    transported to ICD/CFS facilities which will be cost efficient
   From a distributional aspect, it will allow players to transport large loads from these facilities, 
    across the country and will also enhance distributional capabilities




                                             CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                            20
Large set up costs and cumbersome procedures for transporting 
containerized cargo are the major barriers
High costs entailed for the development of a facility                                                                 Impact
• Setting up ICD/CFS facilities require high capital cost  
• High land costs act as a deterrent for investors to set up large facilities which is required in the 
  Indian market 
    The inability of the government to make land available, when required by investors, in a short period of time 
     acts as a disincentive to players. This also poses a problem during expansion of projects undertaken by 
     players




Archaic procedures for the movement of containerized cargo
• To transfer inland containers directly to an ICD an application must be filed by the shipping
  To transfer inland containers directly to an ICD, an application must be filed by the shipping 
  agent. After the transfer has been sanctioned by the Collector of Customs the cargo can be 
  transported
• The movement of containers between the dock, container yard, rail terminal and shed needs to 
  be preceded by permission from port and Customs authorities. This leads to delays in 
  movement which costs the importers/exporters




                                                  CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                  21
•Market Overview
•ICD/CFS ‐ Functions and Benefits
    /
•Set‐up Requirements
•Drivers & Challenges
 Drivers & Challenges
•Competition
•Key Developments
•Key Developments



         CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT   22
CFS/ICD facilities are located across India and the major players 
 in this segment are CONCOR and CWC
 ICD/CFS aggregation 
                                                                                                         CONCOR     CWC           Others
                                                                                      North                4          7              19

              Total: 30                                                               South                5         10              76
              F: 21                                                                   East                 5          2              4
              UI: 9
                             13%                                                      West                 20        13              58
                                                                                      Total                34        33             157

Total: 91                                                 5%
F: 51
F: 51          41%
UI:40                                                                                 •The North‐West corridor accounts for 70% of 
                                                     Total: 11
                                                     F: 8                              total traffic 
                                                     UI:3                             •Jawaharlal Nehru Port Trust (JNPT), located 
                                                                                       off Mumbai coast is the busiest port
                                                                                       off Mumbai coast is the busiest port
                                                                                           Accounts for 60% of port traffic
                                              Total: 91                                    Traffic expected to grow from 3.81 mn TEUs in 
                                              F: 53                                         2007‐08 to 6.08 mn TEUs in 2013‐14
                                              UI:38
Note: Data as of 31st October, 2008
Note: F – Functioning;  UI – Under Implementation


                                                           CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                       23
Company Snapshot : Allcargo Global Logistics (1/2)

Corporate Information                                                         Financial Performance
Headquarters       Mumbai                                                       Revenue          Revenue                   Profit
Employees
  p y              2273                                                          INR mn          Profit / Loss
                                                                                                        /                 INR mn
                                                                                                                     3,645
Services           MTO, cargo handling, airfreight,                         4,000                                               600
                                                                                                 2,749
                                                                                                             2,293
                   transport logistics, equipment hiring,                   3,000
                                                                                        2,321                                  400
                   oil rig & supply vessels management                      2,000
                                                                                                                               200
Key People
Key People         • Shashi Kiran Shetty(Chairman &MD)
                     Shashi Kiran Shetty(Chairman &MD)                      1,000
                                                                            1 000
                   • Adarsh Hegde ( Executive Director)                          0                                             0
                                                                                      2004‐05    05‐06       06‐07   07‐08
Business Highlights                                                           Revenue breakdown
• I 2008 i à i 2007
  In 2008 vis‐à‐vis 2007
    CFS throughput increased by 58%  
                                                                                                      7%                      CFS
    CFS margins expanded to 57% led by an increase in dwell                                            4%
     time at JNPT and Chennai port                                                                                            Others
    CFS division registered a growth of 51 % due to  increased                                                               MTO
     traffic in Chennai and Mundra port
• CFS segment accounts for <30% of sales but 
  contributes ~70% of EBIT
• Heavy operating expenses in the MTO segment, high                                             89%
  employee costs due to recent acquisitions has led to 
      l          d                 iii      h l d
  lower EBIT margins 

                                                  CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                          24
Company Snapshot : Allcargo Global Logistics (1/2)

Facilities
                                                    ICD/CFS
North 
North                        ‐
South                        1 ; Hyderabad
East                         ‐
West                         2 ; Mundra, Pitampur 
                             2 ; Mundra, Pitampur
                                                                                           Data as of 31st October, 2008


Business Strategy 
 • E t d i t JV ith C
   Entered into a JV with Concor to establish a CFS at its Dadri ICD, located at Greater Noida and 
                                  t     t bli h CFS t it D d i ICD l t d t G t N id              d
   covering an area of 40,000 sq. mt with a capacity to handle 84000 TEUs pa; it is expected to 
   commence operation in 2009
 • Plans to set up 8 ICDs across the country at an estimated investment of INR 3.2 bn for which 
   land has been procured at Pithampur, Bangalore, Nagpur, Goa and Hyderabad
   land has been procured at Pithampur, Bangalore, Nagpur, Goa and Hyderabad
 • Blackstone Group is planning to invest around INR 2400 to purchase 10.38% stake in Mumbai‐
   based logistics firm Allcargo Global
 • It acquired a 5.97% stake in Gateway Distripark for INR 290 mn




                                             CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                   25
Company Snapshot : Central Warehousing Corporation (1/2)

Corporate Information                                                  Financial Performance
Headquarters    Mumbai                                                   Revenue                 Revenue                   Profit
Employees
  p y           6059                                                      INR mn                 Profit / Loss
                                                                                                        /                 INR mn
                                                                                                                 7,762
Services        Storage and handling ,                               8,000               6,864                                 1,500
                disinfestations services, consultancy                6,000
                                                                                                                               1,000
                services                                             4,000
                                                                                                                               500
Key People
Key People      • B B Pattanaik (Chairman and MD)
                  B.B.Pattanaik (Chairman and MD)                    2,000
                                                                     2 000
                • D.K.Panwar ( Chairman and MD)                           0                                                    0
                • Naveen Prakash( Joint Secretary)                                  2006‐07                      07‐08

Business Highlights                                                    Revenue breakdown
• The company handled 941872 TEUs in ’08 against                                          4%                             Market
  773536 TEUs handled in the previous year,                                                                              Facilitation
  registering a growth of 21.8% at their CFSs / ICDs                           2% 10%                27%
                                                                                                                         Container
• Strong marketing efforts on the part of the
  Strong marketing efforts on the part of the                                                                            Rail Transport
  Corporation coupled with strategic alliances and the                                                                   Warehousing
  operation of new Rail fed ICD at Loni made handling                                                     6%             Charges
  of large shipments possible                                                                                            Interest Income
                                                                                   51%
                                                                                                                         Others
                                                                                                                         CFS/ICD



                                           CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                                     26
Company Snapshot : Central Warehousing Corporation (1/2)

Facilities
                                                   ICD/CFS
North 
North                        7; Kanpur, Varanasi, Saharanpur, Loni, Bhadohi, Surajpur, Jammu
                             7; Kanpur Varanasi Saharanpur Loni Bhadohi Surajpur Jammu
South                        10; Madhavaram, Coimbatore, Tuticorin, Chrompet, Mangalore, Karwar, 
                             Whitefield, Kannur, Verna, Visakhapatnam
East                         2; Kolkata, Haldia
West                         13; Dronagiri Node, Nasik, Waluj, Bhendakhal, Dronagiri Node, Navi Mumbai, 
                             Udaipur, Kandla, Surat, Deshrath, Vapi, Mundra, Kundli 
                                                                                          Data as of 31st October, 2008
Business Strategy 
 • It i l
   It is planning to set up a modern state‐of‐the art CFS facility on the land of the Fertilizers and 
               i t      t        d     t t f th     t CFS f ilit      th l d f th F tili            d
   Chemicals Travancore (FACT) which is a Government of India undertaking. 
 • This facility is expected to be developed near the Kochi Port towards which an MOU has already 
   been signed with FACT




                                            CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                   27
Company Snapshot : Container Corporation of India (1/2)

Corporate Information                                                  Financial Performance
Headquarters    New Delhi                                                                      Revenue
                                                                         Revenue                                         Profit
Employees
  p y           1134                                                     INR mn                Profit / Loss
                                                                                                      /                 INR mn
                                                                    40,000                                 31,219   35,118   8,000
Services        LCL hub services, air cargo 
                movements, warehousing, reefer                      30,000                 24,892                            6,000
                                                                                20,517
                services, stuffing/destuffing, coastal              20,000                                                   4,000
                shipping, cold chains
                                                                    10,000
                                                                    10 000                                                   2,000
                                                                                                                             2 000
Key People      • V.N. Mathur (Chairman)                                  0                                                  0
                • Rakesh Mehrotra(MD)                                           2004‐05        05‐06       06‐07    07‐08

Business Highlights                                                    Revenue breakdown
• Operating turnover registered a growth of 9.48% in 
                                                                                                                             Domestic
  07‐08 increasing from INR 30573.4 mn to INR 33473                                                      20%                 EXIM
  mn
• In 07‐08 total expenditure increased by 13 43%
  In 07 08, total expenditure increased by 13.43% 
• Net profit grew by 6.88% in 07‐08 over the previous 
  year
• Operating  margins  has been over 25% in FY08                                          80%




                                           CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                               28
Company Snapshot : Container Corporation of India (1/2)

Facilities
                                                   ICD/CFS
North 
North    4 ; Agra, Dadri, Kanpur, Madhosingh
         4 ; Agra Dadri Kanpur Madhosingh
South    4 ; Tuticorin, Madurai, Tirupur, Irugur, Cochin, Visakhapatnam
East     5; Cossipore Road, Ballasore, Jamshedpur, Raipur, Fatuha 
West     20; Jaipur, Jodhpur, Kota, Indore, Gwalior, Mandideep, Nagpur, Aurangabad, Miraj, Bhusawal, 
           ; p ,         p ,      ,       ,        ,         p, gp ,         g    ,     j,         ,
         Dronagiri Node, Desur, Nasik, Gurgaon, Alkeshwar, Vadodara, Gandhidham, Khodiyar, Ratlam, 
         Dronagiri
                                                                                          Data as of 31st October, 2008
Business Strategy 
 • It i l
   It is planning to enter into a JV with FACT to set up a CFS in Kochi, expanding over 20‐30 acres, 
              i t      t i t JV ith FACT t          t      CFS i K hi         di        20 30
   located 10 km from Vallarpadam island, where an international container transshipment 
   terminal is under construction
 • The company is also planning to have rail connectivity near the joint venture project to move its 
   international and domestic containers to hinterland areas and vice versa
   international and domestic containers to hinterland areas and vice‐versa
 • Entered into a JV with Maersk India, APL India, Transworld Group, CMA‐CGM Global India 
   towards setting up an ICD at Dadri
 • JV with Gateway Distriparks for operating an ICD at Garhi and run container trains 




                                            CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                   29
Company Snapshot : Gateway Distriparks Ltd (1/2)

Corporate Information                                                         Financial Performance
Headquarters       Navi Mumbai                                                  Revenue           Revenue                         Profit
Employees
  p y              1134                                                          INR mn           Profit / Loss
                                                                                                         /                       INR mn
                                                                                                               1,604         1,758
Services           Sorting and labeling, re‐bagging,                        2,000                                                     800
                                                                            1,500                    1,420                            600
                   palletization, wrapping, inspection 
                   services, GDL mobile tracking                                         950
                                                                            1,000                                                     400
Key People
Key People         • Gopinath Pillai (Chairman)
                     Gopinath Pillai  (Chairman)                              500                                                     200
                   • Prem Kishan Gupta (MD)                                      0                                                    0
                                                                                       2004‐05    05‐06        06‐07         07‐08
Business Highlights                                                           Revenue breakdown
•C t i
  Container traffic handled increased from 220,413 
             t ffi h dl d i         df     220 413
  TEUs to 330,834 TEUs; CFS business achieved robust                             100        100     100        100
  growth of 48%                                                                             3%
                                                                                                    7%
                                                                                                          5%           11%
• Two major initiatives were undertaken towards                                                                19%
  diversification and expansion
  diversification and expansion
                                                                                100%        97%                              Cold Chain
    Through its subsidiary, Gateway Rail Freight Limited (GRFL),                                  88%
                                                                                                               70%           ICD & Rail Haulage
     it commenced container rail operations with the 
     acquisition and deployment of container rakes on the                                                                    CFS
     Indian Railways network
    Upgrading of the Punjab Conware CFS which led to two
     Upgrading of the Punjab Conware CFS which led to two                       2005       2006    2007        2008
     large CFS facilities at JNPT 



                                                  CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                               30
Company Snapshot : Gateway Distriparks Ltd (2/2)

Facilities
                                                           ICD/CFS
North 
North                              ‐
South                              1 ; Chennai 
East                               ‐
West                               3 ; Garhi Harsaru, Village Piyala/ Asaoti, Dronagiri 
                                   3 ; Garhi Harsaru, Village Piyala/ Asaoti, Dronagiri
                                                                                                       Data as of 31st October, 2008


Business Strategy 
 •N l
  Newly commissioned CFS at Visakhapatnam through a JV with Suri Group 
            i i    d CFS t Vi kh t        th    h JV ith S i G
        Expected to provide services such as bonded, field and buffer storage, export/import warehousing, reefer 
         container storage and allied services
 • Planning to set up new CFS at Kochi
 • ICDs at Ludhiana and Faridabad are expected to be operational in FY 2009‐2010
   ICDs at Ludhiana and Faridabad, are expected to be operational in FY 2009 2010




                                                    CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                        31
•Market Overview
•ICD/CFS ‐ Functions and Benefits
    /
•Set‐up Requirements
•Drivers & Challenges
 Drivers & Challenges
•Competition
•Key Developments
•Key Developments



         CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT   32
Key Developments

Date        Development
19‐Nov‐08   UK‐based Eredene Capital Plc is planning to invest INR 400 mn towards the development of a new CFS close to the Ennroe 
            Port. The investment is a JV with Chennai‐based Sattva Business Group. The area chosen for the proposed CFS is near the 
            Ponneri town, north of Ennore. The land will be purchased in phases, with an initial acquisition of around 35 acres. It will be 
            initially used for warehousing operations and will be converted into a fully functional CFS by 2011
17‐Oct‐08   The Himachal Pradesh government signed a MOU with the Container Corporation of India (CONCOR) for setting up a CFS 
            and ICD at Sheetalpur village in tehsil Baddi of Solan district. The investment in this project is estimated to be in the tune of 
            INR 530 mn. 
06‐Sep‐08
     p      Kerala‐based Periyar Chemicals Ltd is planning to set up a CFS near Edayar at an investment of INR 300 mn. The facility will 
                             y                    p      g         p               y                                              y
            expand over 8 acres of land and will be equipped to handle 10000TEUs of container per annum.
04‐Jan‐08   Kerala’s first private sector CFS with end‐to‐end facilities for stuffing, de‐stuffing and in‐house customs clearance, set up by
            the Kalamassery‐based Falcon Group at Eloor near Kochi became operation in 2008. An investment of INR 250 mn was 
            made towards this project. The facility handles handle 1,200 TEUs per month. 




                                                CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                                    33
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                                                    CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT                                               34

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Market Research India - Container Logistics (CFS & ICD) Market in India 2009

  • 2. Executive Summary  Estimated worth INR 75 bn in 2008 & INR 125 bn in 2013 Market  ICD: Handles 60 % of containerized cargo  CFS: Handles 40% of containerized cargo  P id Provides various services : Cargo consolidation, distribution as well as custom clearance activities i i C lid ti di t ib ti ll t l ti iti  ICD/CFS facilities are beneficial for importers/exporters as well as for port authorities Benefits &   Inter‐Ministerial Committee (IMC) is the regulatory authority monitoring the growth of CFS/ICD Set up  Set‐up  All the proposals are considered by the Inter‐Ministerial Committee  Requirements  Proposals submitted should include feasibility report, Land requirements, Design and lay‐out,  Equipping the facility  Drivers: Growth in port traffic, custom clearance activities, high profit margins in comparison to  Drivers &  other activities in the value chain, and the construction of dedicated freight corridor Challenges  Challenges: High costs entailed for the development of a facility, archaic procedures for the  movement of containerized cargo  Container Corporation of India (CONCOR) is the largest player in the market and is a government  owned establishment Competition  The number of private players entering the market has been rising due to the market scenario – Gateway Distriparks Ltd Gateway Distriparks Ltd – Allcargo Global Logistics CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 2
  • 3. •Market Overview •ICD/CFS ‐ Functions and Benefits / •Set‐up Requirements •Drivers & Challenges Drivers & Challenges •Competition •Key Developments •Key Developments CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 3
  • 4. Container logistics market gaining momentum due to growth in  EXIM trade Container Logistics Cargo Break‐up •Logistics cost in India is 13% of GDP In 2008: EXIM cargo – 519 mn tons •Container cargo level is estimated at 143 mn Container cargo level is estimated at 143 mn  Container Cargo tons in 2008 28% •The container logistics market comprises of ‐  Container Haulage – Movement of containers  between port and CFS by road and ICD by either  82% road or rail General and Other Cargo  ICD/CFS – Custom bonded in transit facility Container Logistics segments  Multimodal Transport Operator – Primary  operations are consolidation and transportation of   LCL and FCL forwarding via sea, rail and road Container  Logistics •Containerization levels in India are 18%  compared to the world average at 70% compared to the world average at 70% •Low containerization levels exist due to the  Multimodal  lack of appropriate infrastructure Container Haulage CFS/ICD Transport  Operator (MTO) NOTE: ICD – Inland container depot, CFS – Container freight station LCL – Less than container load, FCL – Full container load CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 4
  • 5. Demand for ICD/CFS facilities increasing with the rising  international trade scenario ICD and CFS Market Size •ICD/CFS market estimated worth INR 65 bn in  INR bn 2008 150 +14% 125 •ICD/CFS facilities have been rising due to  108 100 97 increase in port traffic and containerization level  74 85 65 in India 50 •CFS accounts for 40% of the container load while CFS accounts for 40% of the container load while  ICD accounts for 60% 0 2008 2009 2010 2011 2012 2013 •ICD/CFS act as transit facilities  •It offers handling and temporary storage services  Difference between ICD and CFS for containerized cargo being imported and  f t i i d b i i t d d ICD CFS exported Location  Less than container load – Cargo arriving from  In the interiors, away  It is an off dock facility located near  different consignors; has to be stuffed/de‐stuffed  from the servicing ports the servicing ports into/from containers into/from containers Function  Full container load  – Containers that are stuffed in  Largely deals with full  Deals with break‐bulk cargo  factories and are ready to be shipped container load which is  originating/terminating in the  aggregated for onward  immediate hinterland of a port;  •These establishments also act as a custom  movement to or from the  also serves as a destination for  clearance hub clearance hub ports t custom related activities t l t d ti iti CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 5
  • 6. The logistics industry is extremely fragmented in terms of  services offered and each player specializes in a particular sector Logistics  Freight LCL  Exporter CFS/ICD Provider Forwarding Agent Consolidators Complete custom  Complete custom Co‐ordinates with  Custom clearance   clearance  Consolidation of  various  activities are  Chooses provider procedure and  cargo into single  intermediaries in  executed forward cargo to  container load the supply chain shipping lines Shipping Line n Importer Logistics  LCL  Freight CFS/  ICD CFS/ ICD Provider id Consolidators C lid Forwarding Agent di Segregate the  Transport goods  Completion of  Shipped goods  End segment  container load  from ICD/CFS to  custom clearance  undergo custom  users based on importer  importer activity formalities and destination CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 6
  • 7. •Market Overview •ICD/CFS ‐ Functions and Benefits / •Set‐up Requirements •Drivers & Challenges Drivers & Challenges •Competition •Key Developments •Key Developments CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 7
  • 8. ICD/CFS provide various services which range from storage of  containers to consolidation and distribution of cargo as well as .. • Provides storage between various transportation modes Intermediate  • Special provisions are available for the storage of containers which require  p p g q storage facility storage facility refrigeration services as well as for cargo that may be potentially dangerous  • This includes activities such as weighing, inspection of seals and damages,  This includes activities such as weighing, inspection of seals and damages, Receipt and delivery  i d d li sticker and safety plate control  of containers • Consolidation and dispatch of LCL cargoes brought in directly by shippers   • If the container cannot be received or delivered directly to the final consignee,  Consolidation and  there are provisions for containers to be stuffed with or de‐stuffed for LCL which  distribution of cargo is dependent on the direction of movement of the cargo • Provides space for the storage of empty containers as well as for the temporary  Depot functions storage of loaded containers yet to be dispatched out of the facility CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 8
  • 9. .. acts as a custom clearance facility for containerized cargo  being exported and imported • Transportation from road, rail and barges to a temporary storage area container  yard Handling Containers g • The transport of containers under bond to ICDs/CFSs from deep sea ports is a  p p p necessary feature of well‐developed multi modal transport systems because this  has proved to be a time and cost saving function • Custom's clearance activities at inland terminals could help to decrease the  dwell time of containers in deep sea ports dwell‐time of containers in deep‐sea ports Custom Clearance • Checking of LCL cargo prior to stuffing or after stripping • Checking container seals • Assessment and valuation of cargoes • Distribution of the finished products  Physical Distribution • Certain value added services such as price tagging, bottling and packing may  also be available • Container cleaning services • Pretrip trials of reefer containers to check if refrigeration equipment is functional Other Facilities • Maintenance and repair services for containers, container handling equipment,  refrigeration equipment, road chassis fi ti i t d h i CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 9
  • 10. The development of ICD/CFS has benefited players in the  industry, importers and exporters as well as port authorities Port authority receiving ready‐to‐ load containers hiking ports  productivity and profitability  Allows exporters and  p Linkage to the port by rail  g p y importers to lower inventory  resulting in quick transit and  costs Exporter/Importer,  low transportation cost Custom house  agent, shipping  companies use  companies use ICD/CFS facilities  Owned and operated by a public  Consolidation of cargo has made  or private company, provides  it a logistics hub for LCL cargo services at competitive rates  CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 10
  • 11. •Market Overview •ICD/CFS ‐ Functions and Benefits / •Set‐up Requirements •Drivers & Challenges Drivers & Challenges •Competition •Key Developments •Key Developments CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 11
  • 12. The proposals for setting up of such facilities include a feasibility  report, land considerations, the design and lay‐out as well as .. • Inter‐Ministerial Committee (IMC) is the regulatory authority which monitors the growth of CFS/ICD • It comprises representatives from the Department of Revenue, Ministry of Surface Transport, Ministry of  Railways and the Ministry of Commerce  • The Committee considers the proposals submitted by the public and private sector entrepreneurs for setting up  of new ICDs/CFSs at different centers in the country and monitors their progress • The facility must be economically viable for :  users, railways for full train  movements, other transport operators and shipping lines • Tariff rates levied by operators for ground rent, cargo storage, loading and  unloading, and transportation of containers to ports are also considered Feasibility Report • Minimum level of traffic volume (two‐way) is:   ICD ‐ 6,000 TEUs/yr  CFS ‐ 1,000 TEUs/yr • Outside limits of major cities: minimum of 3 acres Land Requirements • Inside city limits /port area: minimum area of 1 acre CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 12
  • 13. ... equipment consideration which is examined by the Inter‐ Ministerial Committee on the basis of certain guidelines • Design and lay‐out should be state‐of the‐art, equipped with mechanical/electrical  facilities of international standards Design and Lay‐out Design and Lay‐out • The lay‐out should allow smooth flow of containers, cargo and vehicles through the The lay out should allow smooth flow of containers, cargo and vehicles through the  ICD/CFS and it should take into account initial volume of business, estimated  volume in 10 years and the type of facilities exporters would require • The ICD/CFS should plan for the most modern handling equipment for loading,  unloading of containers from rail flats, chassis, their stacking, movement, cargo  unloading of containers from rail flats, chassis, their stacking, movement, cargo handling, stuffing/de‐stuffing  Equipping CFD/ICD • Players interested to set up a rail based ICD must provide all infrastructure facilities  at their own cost   p y g y • An up‐to‐date inventory control and tracking system to locate containers/cargo g CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 13
  • 14. •Market Overview •ICD/CFS ‐ Functions and Benefits / •Set‐up Requirements •Drivers & Challenges Drivers & Challenges •Competition •Key Developments •Key Developments CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 14
  • 15. Drivers & Challenges Drivers Challenges High costs for the development of a  Growth in port traffic facility Custom clearance activities in ICD/CFS Archaic procedures for the movement  Archaic procedures for the movement of cargo Higher margins  in comparison with  other logistics activities  Construction of dedicated freight  Construction of dedicated freight corridor CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 15
  • 16. The rise in containerized cargo  traffic has led to the growth in  CFSs and ICDs Growth in containerized cargo Impact •Growth in containerized cargo and opening up of container rail transport has boosted  CFSs and ICDs •Containerized cargo capacity is expected to rise to 21 mn TEU by 2016 ‘000 TEUs % of Total Traffic % ‘000 TEUs Projected Containerized Traffic 8,000 Containerized Traffic 20 20,000 6,712 5,541 +16% 15,630 6,000 4,744 4 744 15 15,000 13,480 11,620 3,900 4,233 10,020 4,000 3,366 10 10,000 8,710 7,570 2,000 5 5,000 0 0 0 2002‐03 03‐04 04‐05 05‐06 06‐07 07‐08 2008‐09 09‐10 10‐11 11‐12 12‐13 13‐14 •The increase in container traffic has led to the development of ancillary facilities:  Providing a facility for speedy evacuation of import containers from the port  Providing a set up where the activities like unitization (standardized packing), stuffing, de‐ stuffing and regulatory clearances like customs formalities can be undertaken  Acting as a warehouse to ensure safety & security of air and sea cargo during in‐transit  storage  P idi Providing a secure place for storage and transport of empty and loaded marine containers l f t dt t f t dl d d i t i CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 16
  • 17. Traffic at major ports has grown dynamically in recent years with  JNPT topping the list in the container segment Container traffic handled at major ports CAGR  Ports 2000‐01 01‐02 02‐03 03‐04 04‐05 05‐06 06‐07 07‐08 (%) Kolkata 2011 1410 1498 1746 2357 3234 4003 5139 14 Hadia 806 1522 1850 2275 2029 1711 1918 2242 16  Paradip 7 7 33 60 31 45 31 54 34  Visakhapatnam 278 320 296 277 635 630 799 1133 22 Chennai 5769 5857 7218 8628 9864 11756 14166 18049 18 Tuticorin 1570 2199 2301 2687 3205 3428 4011 5630 20 Cochin 1790 1899 2070 2125 2315 2539 2949 3239 9 New Mangalore 20 37 84 96 136 149 265 319 49 Mormugao 44 58 90 103 117 105 127 135 17 Mumbai 4363 3684 3143 2816 2571 1957 1580 1632 ‐13 JNPT 14277 18484 22864 27785 28747 33777 40810 51923 20 Kandla 1287 1752 2225 2404 2754 2311 2778 2639 11 NOTE: Figures in  000 tonnes NOTE: Figures in ‘000 tonnes CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 17
  • 18. Ports face inherent structural and procedural challenges,  transforming ICDs and CFSs into custom clearance facilities Shift of custom activities outside the port area Impact The Past Shift in custom activity The Present Custom clearance within  Customs clearance  ports themselves facility available near  centers of production  and consumption d i Issue Fast processing using  Ports unable to contend  high‐tech equipment  with the increase in cargo  with the increase in cargo increasing  i i levels  Establishment of  profitability  ICD/CFS Led to… Available space for  inspection of  p containers Inefficiencies in  operations leading to  Proper handling of  delays in EXIM trade,  goods minimizing  reducing  profitability of  reducing profitability of damage during de‐ d d d the companies stuffing and stuffing CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 18
  • 19. Strong growth and high profit margins are acting as incentives  for existing and new players to make large investments High margins in comparison with other logistics activities Impact Road  Coast‐to‐ Container Haulage  Express CFS/ICD MTO Freight coast (rail) Growth‐ capital  Scenario Mature Growth Growth Growth Mature intensive Entry Barrier Low  High High  High Medium Low Growth 5‐10% 20‐22% 15% 20% 35% 10‐15% EBIDTA  3‐5% 8‐10% 25% 30% 40% 4‐6% margins • Fi Firms are keen on capitalizing on the growing demand for ICD/CFS and are investing towards the  k i li i h i d d f ICD/CFS d i i d h same • Between 2015‐2018, 50 more facilities are expected at an investment of INR 75 bn Company p y Location Expected Timeline p Gateway Faridabad, Ludhiana FY2009 end Allcargo Goa, Bangalore, Nagpur, Hyderabad NA Rourkela, Durgapur, Kuder (Gujarat), Madhosingh  Concor FY 2009 end (UP), Ratlam, Baddi (MP), Khemli (Rajasthan) (UP) Ratlam Baddi (MP) Khemli (Rajasthan) CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 19
  • 20. The development of a dedicated freight corridor running across  India is expected to be beneficial for CFS/ICD providers Construction of a dedicated freight corridor Impact •The dedicated freight corridor project has been undertaken by the Dedicated  Freight Corridor Corporation of India and is expected to be completed by 2015‐16  Estimated level of investment is between INR 280‐370 bn  The project will span over 2762 km; connecting  Sonnagar to Ludhiana in the eastern corridor  and from Mumbai to Tughlakabad‐Dadri in the western corridor with interlinking of two  corridors at Khurja  The corridor will have the facility to run longer and heavier trains and reduce the cost of  transportation •This is expected to boost the ICD/CFS market as this freight corridor will be  beneficial for exporters/importers  Delays at port facilities, custom clearance etc., can be avoided as goods can be easily  transported to ICD/CFS facilities which will be cost efficient  From a distributional aspect, it will allow players to transport large loads from these facilities,  across the country and will also enhance distributional capabilities CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 20
  • 21. Large set up costs and cumbersome procedures for transporting  containerized cargo are the major barriers High costs entailed for the development of a facility Impact • Setting up ICD/CFS facilities require high capital cost   • High land costs act as a deterrent for investors to set up large facilities which is required in the  Indian market   The inability of the government to make land available, when required by investors, in a short period of time  acts as a disincentive to players. This also poses a problem during expansion of projects undertaken by  players Archaic procedures for the movement of containerized cargo • To transfer inland containers directly to an ICD an application must be filed by the shipping To transfer inland containers directly to an ICD, an application must be filed by the shipping  agent. After the transfer has been sanctioned by the Collector of Customs the cargo can be  transported • The movement of containers between the dock, container yard, rail terminal and shed needs to  be preceded by permission from port and Customs authorities. This leads to delays in  movement which costs the importers/exporters CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 21
  • 22. •Market Overview •ICD/CFS ‐ Functions and Benefits / •Set‐up Requirements •Drivers & Challenges Drivers & Challenges •Competition •Key Developments •Key Developments CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 22
  • 23. CFS/ICD facilities are located across India and the major players  in this segment are CONCOR and CWC ICD/CFS aggregation  CONCOR CWC Others North 4 7 19 Total: 30 South  5 10 76 F: 21 East  5 2 4 UI: 9 13% West 20 13 58 Total 34 33 157 Total: 91 5% F: 51 F: 51 41% UI:40 •The North‐West corridor accounts for 70% of  Total: 11 F: 8 total traffic  UI:3 •Jawaharlal Nehru Port Trust (JNPT), located  off Mumbai coast is the busiest port off Mumbai coast is the busiest port  Accounts for 60% of port traffic Total: 91  Traffic expected to grow from 3.81 mn TEUs in  F: 53 2007‐08 to 6.08 mn TEUs in 2013‐14 UI:38 Note: Data as of 31st October, 2008 Note: F – Functioning;  UI – Under Implementation CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 23
  • 24. Company Snapshot : Allcargo Global Logistics (1/2) Corporate Information Financial Performance Headquarters Mumbai Revenue Revenue Profit Employees p y 2273 INR mn Profit / Loss / INR mn 3,645 Services MTO, cargo handling, airfreight,   4,000 600 2,749 2,293 transport logistics, equipment hiring,  3,000 2,321 400 oil rig & supply vessels management 2,000 200 Key People Key People • Shashi Kiran Shetty(Chairman &MD) Shashi Kiran Shetty(Chairman &MD) 1,000 1 000 • Adarsh Hegde ( Executive Director) 0 0 2004‐05 05‐06 06‐07 07‐08 Business Highlights Revenue breakdown • I 2008 i à i 2007 In 2008 vis‐à‐vis 2007  CFS throughput increased by 58%   7% CFS  CFS margins expanded to 57% led by an increase in dwell  4% time at JNPT and Chennai port Others  CFS division registered a growth of 51 % due to  increased  MTO traffic in Chennai and Mundra port • CFS segment accounts for <30% of sales but  contributes ~70% of EBIT • Heavy operating expenses in the MTO segment, high  89% employee costs due to recent acquisitions has led to  l d iii h l d lower EBIT margins  CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 24
  • 25. Company Snapshot : Allcargo Global Logistics (1/2) Facilities ICD/CFS North  North ‐ South 1 ; Hyderabad East ‐ West 2 ; Mundra, Pitampur  2 ; Mundra, Pitampur Data as of 31st October, 2008 Business Strategy  • E t d i t JV ith C Entered into a JV with Concor to establish a CFS at its Dadri ICD, located at Greater Noida and  t t bli h CFS t it D d i ICD l t d t G t N id d covering an area of 40,000 sq. mt with a capacity to handle 84000 TEUs pa; it is expected to  commence operation in 2009 • Plans to set up 8 ICDs across the country at an estimated investment of INR 3.2 bn for which  land has been procured at Pithampur, Bangalore, Nagpur, Goa and Hyderabad land has been procured at Pithampur, Bangalore, Nagpur, Goa and Hyderabad • Blackstone Group is planning to invest around INR 2400 to purchase 10.38% stake in Mumbai‐ based logistics firm Allcargo Global • It acquired a 5.97% stake in Gateway Distripark for INR 290 mn CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 25
  • 26. Company Snapshot : Central Warehousing Corporation (1/2) Corporate Information Financial Performance Headquarters Mumbai Revenue Revenue Profit Employees p y 6059 INR mn Profit / Loss / INR mn 7,762 Services Storage and handling ,   8,000 6,864 1,500 disinfestations services, consultancy  6,000 1,000 services 4,000 500 Key People Key People • B B Pattanaik (Chairman and MD) B.B.Pattanaik (Chairman and MD) 2,000 2 000 • D.K.Panwar ( Chairman and MD) 0 0 • Naveen Prakash( Joint Secretary) 2006‐07 07‐08 Business Highlights Revenue breakdown • The company handled 941872 TEUs in ’08 against  4% Market 773536 TEUs handled in the previous year,  Facilitation registering a growth of 21.8% at their CFSs / ICDs 2% 10% 27% Container • Strong marketing efforts on the part of the Strong marketing efforts on the part of the  Rail Transport Corporation coupled with strategic alliances and the  Warehousing operation of new Rail fed ICD at Loni made handling  6% Charges of large shipments possible Interest Income 51% Others CFS/ICD CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 26
  • 27. Company Snapshot : Central Warehousing Corporation (1/2) Facilities ICD/CFS North  North 7; Kanpur, Varanasi, Saharanpur, Loni, Bhadohi, Surajpur, Jammu 7; Kanpur Varanasi Saharanpur Loni Bhadohi Surajpur Jammu South 10; Madhavaram, Coimbatore, Tuticorin, Chrompet, Mangalore, Karwar,  Whitefield, Kannur, Verna, Visakhapatnam East 2; Kolkata, Haldia West 13; Dronagiri Node, Nasik, Waluj, Bhendakhal, Dronagiri Node, Navi Mumbai,  Udaipur, Kandla, Surat, Deshrath, Vapi, Mundra, Kundli  Data as of 31st October, 2008 Business Strategy  • It i l It is planning to set up a modern state‐of‐the art CFS facility on the land of the Fertilizers and  i t t d t t f th t CFS f ilit th l d f th F tili d Chemicals Travancore (FACT) which is a Government of India undertaking.  • This facility is expected to be developed near the Kochi Port towards which an MOU has already  been signed with FACT CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 27
  • 28. Company Snapshot : Container Corporation of India (1/2) Corporate Information Financial Performance Headquarters New Delhi Revenue Revenue Profit Employees p y 1134 INR mn Profit / Loss / INR mn 40,000 31,219 35,118 8,000 Services LCL hub services, air cargo  movements, warehousing, reefer  30,000 24,892 6,000 20,517 services, stuffing/destuffing, coastal  20,000 4,000 shipping, cold chains 10,000 10 000 2,000 2 000 Key People • V.N. Mathur (Chairman) 0 0 • Rakesh Mehrotra(MD) 2004‐05 05‐06 06‐07 07‐08 Business Highlights Revenue breakdown • Operating turnover registered a growth of 9.48% in  Domestic 07‐08 increasing from INR 30573.4 mn to INR 33473  20% EXIM mn • In 07‐08 total expenditure increased by 13 43% In 07 08, total expenditure increased by 13.43%  • Net profit grew by 6.88% in 07‐08 over the previous  year • Operating  margins  has been over 25% in FY08 80% CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 28
  • 29. Company Snapshot : Container Corporation of India (1/2) Facilities ICD/CFS North  North 4 ; Agra, Dadri, Kanpur, Madhosingh 4 ; Agra Dadri Kanpur Madhosingh South 4 ; Tuticorin, Madurai, Tirupur, Irugur, Cochin, Visakhapatnam East 5; Cossipore Road, Ballasore, Jamshedpur, Raipur, Fatuha  West 20; Jaipur, Jodhpur, Kota, Indore, Gwalior, Mandideep, Nagpur, Aurangabad, Miraj, Bhusawal,  ; p , p , , , , p, gp , g , j, , Dronagiri Node, Desur, Nasik, Gurgaon, Alkeshwar, Vadodara, Gandhidham, Khodiyar, Ratlam,  Dronagiri Data as of 31st October, 2008 Business Strategy  • It i l It is planning to enter into a JV with FACT to set up a CFS in Kochi, expanding over 20‐30 acres,  i t t i t JV ith FACT t t CFS i K hi di 20 30 located 10 km from Vallarpadam island, where an international container transshipment  terminal is under construction • The company is also planning to have rail connectivity near the joint venture project to move its  international and domestic containers to hinterland areas and vice versa international and domestic containers to hinterland areas and vice‐versa • Entered into a JV with Maersk India, APL India, Transworld Group, CMA‐CGM Global India  towards setting up an ICD at Dadri • JV with Gateway Distriparks for operating an ICD at Garhi and run container trains  CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 29
  • 30. Company Snapshot : Gateway Distriparks Ltd (1/2) Corporate Information Financial Performance Headquarters Navi Mumbai Revenue Revenue Profit Employees p y 1134 INR mn Profit / Loss / INR mn 1,604 1,758 Services Sorting and labeling, re‐bagging,  2,000 800 1,500 1,420 600 palletization, wrapping, inspection  services, GDL mobile tracking 950 1,000 400 Key People Key People • Gopinath Pillai (Chairman) Gopinath Pillai  (Chairman) 500 200 • Prem Kishan Gupta (MD) 0 0 2004‐05 05‐06 06‐07 07‐08 Business Highlights Revenue breakdown •C t i Container traffic handled increased from 220,413  t ffi h dl d i df 220 413 TEUs to 330,834 TEUs; CFS business achieved robust  100 100 100 100 growth of 48% 3% 7% 5% 11% • Two major initiatives were undertaken towards  19% diversification and expansion diversification and expansion 100% 97% Cold Chain  Through its subsidiary, Gateway Rail Freight Limited (GRFL),  88% 70% ICD & Rail Haulage it commenced container rail operations with the  acquisition and deployment of container rakes on the  CFS Indian Railways network  Upgrading of the Punjab Conware CFS which led to two Upgrading of the Punjab Conware CFS which led to two  2005 2006 2007 2008 large CFS facilities at JNPT  CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 30
  • 31. Company Snapshot : Gateway Distriparks Ltd (2/2) Facilities ICD/CFS North  North ‐ South 1 ; Chennai  East ‐ West 3 ; Garhi Harsaru, Village Piyala/ Asaoti, Dronagiri  3 ; Garhi Harsaru, Village Piyala/ Asaoti, Dronagiri Data as of 31st October, 2008 Business Strategy  •N l Newly commissioned CFS at Visakhapatnam through a JV with Suri Group  i i d CFS t Vi kh t th h JV ith S i G  Expected to provide services such as bonded, field and buffer storage, export/import warehousing, reefer  container storage and allied services • Planning to set up new CFS at Kochi • ICDs at Ludhiana and Faridabad are expected to be operational in FY 2009‐2010 ICDs at Ludhiana and Faridabad, are expected to be operational in FY 2009 2010 CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 31
  • 32. •Market Overview •ICD/CFS ‐ Functions and Benefits / •Set‐up Requirements •Drivers & Challenges Drivers & Challenges •Competition •Key Developments •Key Developments CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 32
  • 33. Key Developments Date Development 19‐Nov‐08 UK‐based Eredene Capital Plc is planning to invest INR 400 mn towards the development of a new CFS close to the Ennroe  Port. The investment is a JV with Chennai‐based Sattva Business Group. The area chosen for the proposed CFS is near the  Ponneri town, north of Ennore. The land will be purchased in phases, with an initial acquisition of around 35 acres. It will be  initially used for warehousing operations and will be converted into a fully functional CFS by 2011 17‐Oct‐08 The Himachal Pradesh government signed a MOU with the Container Corporation of India (CONCOR) for setting up a CFS  and ICD at Sheetalpur village in tehsil Baddi of Solan district. The investment in this project is estimated to be in the tune of  INR 530 mn.  06‐Sep‐08 p Kerala‐based Periyar Chemicals Ltd is planning to set up a CFS near Edayar at an investment of INR 300 mn. The facility will  y p g p y y expand over 8 acres of land and will be equipped to handle 10000TEUs of container per annum. 04‐Jan‐08 Kerala’s first private sector CFS with end‐to‐end facilities for stuffing, de‐stuffing and in‐house customs clearance, set up by the Kalamassery‐based Falcon Group at Eloor near Kochi became operation in 2008. An investment of INR 250 mn was  made towards this project. The facility handles handle 1,200 TEUs per month.  CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 33
  • 34. Thank you for your time For an updated report or any customized research requirements, please contact: Gaurav Kumar E‐Mail: gaurav.kumar@netscribes.com; sales@netscribes.com Phone: +91 33 4064 6214; +91 983 030 9715 Netscribes’ Services: RESEARCH & ANALYTICS RESEARCH & ANALYTICS MARKET INTELLIGENCE MARKET INTELLIGENCE CONTENT SOLUTIONS CONTENT SOLUTIONS Investment Research Market Monitoring & Competitive  Social Media Marketing Enterprise Market Research Intelligence Marcom Support Services Patent Research Sales & Prospect Intelligence Content Management Services Syndicated Market Research S di t d M k t R h Listening & Media Monitoring Li t i & M di M it i Book Packaging Services B kP k i S i Brand Surveillance For further details, visit us at: www.netscribes.com About Netscribes Netscribes supports the organic and inorganic growth objectives of global corporations through a combination of Enterprise Market,  Investment & Patent Research, Market & Sales Intelligence, Social Media Monitoring & Management and Custom Publishing solution. Disclaimer: This report is published for general information only. High standards have been used for preparing this market research report;  Disclaimer: This report is published for general information only High standards have been used for preparing this market research report; however, Netscribes, Inc. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole  property of Netscribes and prior permission is required for guidelines on reproduction. CONTAINER LOGISTICS (CFS & ICD) – INDIA.PPT 34