All about the Global Logisti

The Global Lighthouse Network (GLN) is a World Economic Forum initiative that examines the future of operations and how Fourth Industrial Revolution (4IR) technologies are shaping production. The GLN is a community of leading manufacturers that use advanced technologies to speed up the adoption of 4IR technologies in their industries. The network includes manufacturing sites that are leaders in the adoption and integration of cutting-edge 4IR technologies. 

To qualify as a lighthouse, manufacturers must meet high standards across four categories:

Significant impact achieved

Successful integration of several use cases

Application of one or multiple 4IR technologies in a real production environment to address a business problem 

Some examples of companies that are part of the GLN include:

Schneider Electric Hyderabad

ACG Capsules (Pithampur), India

ReNew (Ratlam, Madya Pradesh)

Unilever (Sonepat), India

Mondelez

Dr. Reddy's

Cipla 

Nearshoring: A New Era for Resilience

Nearshoring and reshoring have gained significant attention as effective ways for businesses to rethink operations while mitigating risk and increasing speed to markets to optimize operations. What are the benefits and challenges?

What Is Nearshoring?

If you haven't heard of nearshoring, you're probably familiar with offshoring, the practice of shipping jobs like manufacturing and assembly overseas to lower-cost markets like China, India, or Mexico. The practice, a form of outsourcing, gained momentum in the 1970s and 1980s, hollowing out once-strong U.S. industries like steel and textiles.

These days, there may be more talk about nearshoring, which is a cousin of offshoring. Rather than outsourcing jobs to distant countries, nearshoring refers to outsourcing jobs closer to home, in nearby countries.

What is nearshoring, exactly?

Nearshoring is the practice of bringing jobs closer to the home country of the employer and to the end consumer. The central idea is similar to offshoring. Jobs are being outsourced, but the company sends them to a nearby country rather than one across the world.

For example, in the U.S., nearshoring could refer to moving jobs from China back to Mexico, a low-cost country that is much closer to the U.S. than China. It could also mean simply directly outsourcing them to Mexico.

Companies that practice nearshoring tend to do so around the world. If they operate in Europe, they may outsource to a neighboring country and adopt a similar practice in other parts of the world.

Why are companies nearshoring?

Nearshoring has arisen in response to some of the challenges with offshoring, in particular those that came up during the COVID-19 pandemic, such as supply chain delays.

The gap in labor costs has also narrowed since the first wave of offshoring in the 1970s, and ocean freight costs have gotten more expensive as well, further incentivizing the return of manufacturing and assembly jobs.

Nearshoring gives a company more control over its workforce, the ability to manage the work in question, and the cost of other factors of production, whether it's manufacturing or something else.

For example, it's easier for a manager in the U.S. to visit Mexico than China. The distance to ship between the two countries is closer, and while cultural and language barriers still remain between the U.S. and Mexico, they are lower than with China.

Additionally, the similarity between time zones makes communication easier, and China's regulatory environment has become more challenging for U.S. companies.

What kinds of jobs are being nearshored?

The types of jobs that are being nearshored are similar to the same ones that were taken offshore. Information technology jobs, for example, are among those being nearshored, including semiconductor manufacturing.

Logistics and supply chain management is another example of a job that is being nearshored as companies look to avoid the earlier supply chain delays that cost businesses billions of dollars.

Finally, there are also some manufacturing jobs being nearshored as companies see more benefits to bringing production closer to home, where they can save on shipping and better oversee manufacturing and assembly since it's closer to home.

The trend is likely to continue in the wake of the pandemic as companies look to avoid the uncertainty around outsourcing to faraway locations where they are exposed to more risk and have less control.

Nearshoring strategies 

Nearshoring strategies can help de-risk supply chains and bring predictability and stability back to operations. However, companies that have spent years creating global, complex supply chains might be intimidated by the prospect of “undoing” all of this work and moving operations closer to home, which could be costly and time consuming

Nearshoring comes with its own set of challenges including political and regulatory implications, infrastructure and logistics considerations, and risks associated with intellectual property and data security.

Additionally, given the inevitably higher costs of the different inputs (such as labor) in nearshore territories, sourcing will almost always come at a higher base cost—especially for western organizations.

Depending on where the company is based, risks in the geopolitical landscape can also introduce new challenges, as we saw with Russia’s invasion of Ukraine, which impacted not only resource availability but also fuel costs, making it difficult for companies to reshore their operations. Companies must be mindful of political and geographic disruptions when nearshoring to remain secure and confident in their supplier relationships and supply chains.

PRACTICAL STRATEGIES

Choosing the right location is critical to the success of nearshoring operations. When selecting a location, companies must consider factors such as labor availability and costs, infrastructure, regulatory environment, and proximity to the home country.

Whether you’re nearshoring or offshoring, the most fundamental parameter has not changed. Selecting the right supplier partnerships are crucial to nearshoring success. Additionally, it’s important to note the need for a diverse supplier base and avoiding sole-supplier situations. It’s crucial to build close relationships with a focused set of strategic suppliers in the nearshore destination, as they enable stronger supply chains.

Having a set of transparent, mutually aligned performance goals is key. When buyers and suppliers work toward agreed performance goals together—by sharing data, insights, and ideas—risks decrease, innovation opportunities are uncovered, and costs can be optimized.

Close relationships also allow for suppliers to collaborate and be involved in product innovation and design as well as supply chain planning and sustainability-related projects.

Building strong supplier relationships can be also highly beneficial during challenging economic and political times. For instance, during the pandemic and energy crisis, positive relationships proved to be invaluable due to the high level of established trust.

Another practical strategy to adopt when nearshoring is analytics-driven supply chain monitoring. Having access to ongoing insights into suppliers of suppliers and emerging demand-supply situations allows companies to see the bigger picture, analyze details and take appropriate action. Organizations using analytics driven solutions are generally more successful in managing supply chain disruptions.

It’s essential for businesses to navigate the practice of nearshoring strategically to reap potential benefits.

Free Trade Warehousing Zone (FTWZs) : A Game Changer for India

Free Trade Warehousing Zone (FTWZs) : A Game Changer for India 

Free Trade Warehousing Zone (FTWZs) are a special category of Special Economic Zone, offer services such as speedy delivery of cargo, one-stop for Customs clearance capability; integrated solutions, such as packing management, sorting, inspection, re-invoicing, strapping and kitting, assembly of complete and semi-knocked down kits, and taxation benefits. Basically, the Free Trade & Warehousing Zones (FTWZ) is a special category of Special Economic Zones with a focus on trading and warehousing.

Free trade warehousing zones (FTWZs) have been a phenomenal success in Jebel Ali, Singapore, and Rotterdam. One has to visit these zones to see their sheer size and contribution to the regions they are located in becoming major logistic hubs.

As per The Hindu (March 6, 2011), The Jebel Ali Free Zone (Jafza) accounts for 25 percent of all container throughput at Jebel Ali port and 12 percent of all air freight at Dubai International Airport. Established in 1985, it covers a 48 sq km area and is home to over 6,400 companies from across the world. It sustains over 160,000 jobs in the UAE through its companies and accounts for over 50 percent of Dubai’s exports

Genesis of FTWZ:

In India, Free Trade and Warehousing Zone was introduced in the Exim Policy with the objective to facilitate the import and export of goods and services. Each Zone was considered to have Rs. 100 crores outlay and 5 lakh sq. its built-up area. The government of India introduced the FTWZ Policy as a part of Foreign Trade Policy (FTP) 2004-2009 governed by the SEZ ACT, 2005 and SEZ Rules, 2006 to leverage India’s strategic geographical location and cost and skill arbitrage.

For the development and establishment of FTWZ, the government has permitted 100% Foreign Direct Investment.

Concept of Free Trade Warehousing Zone:

FTWZ is a ‘Sanitized Zone’ designated as Foreign Territory for carrying on a business.  FTWZ’s are envisaged to be Integrated Zones & to be used as ‘International Trading Hubs’. Each Zone would provide ‘World Class’ Infrastructure for:

1. Warehousing for various kinds of products
2. Handling and Transportation Equipment
3. Commercial office space
4. All related utilities – telecom, power, water, etc
5. One-stop clearance of Import and Export of goods
6. FTWZ would be a key Link in Logistics and Global Supply chains – servicing both India and the Globe.

Objective:

The objective of FTWZ is to create trade-related infrastructure to facilitate the import and export of goods and services with the freedom to carry out trade transactions in free currency. The scheme envisages the creation of world-class infrastructure for warehousing of various products, state-of-the-art equipment, transportation, and handling facilities, commercial office-space, water, power, communications, and connectivity, with one-stop clearance of import and export formality, to support the integrated Zones as ‘international trading hubs’. These Zones are planned to be established in areas proximate to seaports, airports, or dry ports so as to offer easy access by rail and road.

Free Trade and Warehousing Zones (FTWZs) are envisaged to be essential logistics infrastructure to facilitate EXIM trade and to root out inefficiencies associated with the movement and valued addition of EXIM cargo in India.

Envisaged Benefits of Free Trade Warehousing Zone :

Envisaged benefits for Imports in India

Flexibility to clear cargo in part consignments (unlike in the case in other Container Freight Station (CFS)/ International Container Depot (ICDs) thus allowing flexibility towards consumption/end distribution duty deferment benefits (freeing up working capital and reduction in costs) de-stuffing and stuffing of cargo from shipping line containers into other containers for avoiding Shipping Line detention charges and customized delivery. The same product could also be stored in the warehouses within the FTWZ at much lower costs as compared to detention charges that plague users. 

A few of the envisaged benefits for imports into India are listed as below:

• Quality control prior to duty payment, hence no duty to be paid on rejected products
• Exemption of SAD, VAT & CST on imports through FTWZ Service
• Tax exemption for Handling & Transportation of containers from Port to FTWZ
• Availability of state-of-the-art Container Storage Yard with World Class Safety, Hazardous Storage and Maintenance and Repair Facilities within the FTWZ with Service Tax Exemption
• Free foreign exchange transaction capability for the services rendered including CY/Container Freight Station services.
• Value addition services can be provided like labeling, packing, kitting, bar-coding, palletization, and other authorized services.
• All such activities are exempted from service tax as well as any purchases of packaging material, labels, and the like from DTA into the FTWZ would be treated as exports from such suppliers

 

Envisaged Benefits for Exports from India

A few of the envisaged benefits for exports from India are listed below

1. Factory stuffed containers entering the FTWZ are treated as deemed export providing immediate export benefits
2. Local Tax Exemption (e.g. CST, Sales Tax, Excise & VAT) on all activities conducted inside the FTWZ
3. Increased efficiency through lowered reverse logistics activities through quality control before dispatch from India
4. Lowering ‘back to town’ costs with better aggregation and consolidation
5. Facilitating consolidation of cargo with other users of the FTWZ for cost optimization through last-mile distribution
6. Value addition services can be provided like labeling, packing, kitting, bar-coding, palletization, and other authorized services with all fiscal and regulatory benefits
7. Availability of state-of-the-art Container Storage Yard with world-class safety, hazardous storage, maintenance, and repair facilities within the FTWZ with service tax exemption
8. Free foreign exchange transaction capability for the services rendered including ICD/CFS services

Envisaged Benefits for Re-Exports from India

A few of the envisaged benefits for re-exports using FTWZ are listed below

• Income tax exemption on all profits generated through re-exports activity through the FTWZ
• Hassle-free re-export process by routing cargo through FTWZ integrated with ICD/CFS services
• Ability to leverage India’s cost, skill, and geographic positioning advantage as a hub for regional/global distribution post value addition activities
• Service tax exemption on services availed by routing containers through FTWZ integrated with ICD/CFS services
• Permission of 100% FDI for the set-up of units by the unitholder of the FTWZ
• Value addition services as described below can be provided with all fiscal and regulatory benefits
• The value-added services that can be performed in the FTWZ are packaging, re-packaging, labeling, re-labeling, strapping, refurbishment, crating, carbonization, fumigation, choking, lashing, tagging, shrink/stretch / bubble wrapping, palletization, bagging, re-bagging, quality assurance, kitting, de-kitting, sorting assorting, making combination pack, consolidation, agglomeration, washing, cleaning, processing, repairs & maintenance, CKD/SKD assembly, bottling, blending, cutting, polishing, painting, coating, filming, re-sizing, splitting, threading, coupling and the like.

Thus, FTWZs is a comprehensive infrastructure required for improving India’s container volumes and enabling Importers-Exporters to efficiently and cost-effectively carry warehousing, trading, and value addition activities.

Details Free Trade and Warehousing Zones (FTWZs) SEZs in India
S. No.	Name of the developer	Location	Area (hectares)	SEZ status
1	Arshiya International  Limited	Taluka Panvel, District Raigad, Maharashtra	57.898	Notified/Operational
2	J. Matadee  Free Trade Zone Private Limited	Sriperumbudur Taluk, Kancheepuram District, Tamil Nadu	40	Notified/Operational
3	Arshiya Northern FTWZ Limited	Moujpur, Bulandshar,  Uttar Pradesh	51.4394	Notified/Operational
4	Arshiya International Ltd.	Taluka & District Nagpur, Maharashtra	43.26	Notified
5	Lepakshi Knowledge Hub Private Limited	Chillamaturu Mandal, Ananthapur District, Andhra Pradesh	40	Formal approval
6	ISPRL FTWZ Padur (Indian Strategic Petroleum Reserves Ltd.)	Padur, Karnataka	41.20	Formal approval
7	Cochin Port Trust	ThoppumpadyRamesaram Village, Cochin, Kerala	40.85	Formal approval
8	Venkatesh Coke & Power Ltd.	Ponneri Taluk, Thiruvalur District, Tamil Nadu	46.71	Formal approval

Source: Ministry of Commerce, Parliament Q&A, 2019.

Examples of FTWZ

1. ARSHIYA INTERNATIONAL

Arshiya currently operates two FTWZs — Panvel near Mumbai spread over 165acre, catering to western India; and Khurja near Delhi spread over 135acre, catering to north India.

Free trade warehousing zones are a category of special economic zones set up to improve logistics infrastructure and facilitate and promote cross-border and international trade. Arshiya’s FTWZs serve as mega trading hubs with integrated logistics infrastructure such as special storage areas, world-class material handling equipment, container yards, inland container depot, customs office and commercial complex.

Panvel FTWZ (Mumbai): Located at Sai village in Panvel on the outskirts of Mumbai, the free trade warehousing zone is located 24km from Jawaharlal Nehru Port Trust, India’s main commercial port.   Spread over 165acre, the Mumbai FTWZ provides easy access to western freight corridors. 

Khurja FTWZ (near Delhi): Located about 80km from India’s capital, Khurja FTWZ is strategically located close to the eastern and western dedicated freight corridor (DFC). The free trade warehousing zone is a part of the 315acre mega logistics hub which also includes a 50acre rail siding and 130acre distribution hub and 60acre ICD set up by the company.

2. Sriperumbudur FTWZ or JMFTZ is a prominent multi-sector Special Economic Zone. It boasts top-tier Grade-A warehousing facilities and state-of-the-art industrial infrastructure, catering perfectly to the requirements of global operators and manufacturers. This makes it a top destination of choice and the zone’s occupiers include industry leaders DHL, DB Schenker, Kerry Indev, TVS Supply Chain, and Seaways Supply Chain.

Singapore-based Xander Investment Management acquired an additional one million square feet of premium warehousing space within the confines of Sriperumbudur FTWZ in 2021.

Sriperumbudur FTWZ enjoys a strategic location along the Chennai-Bengaluru Industrial Corridor (CBIC), boasting exceptional connectivity to key maritime hubs—Chennai, Ennore, and Kamrajar Ports. Collectively, these ports handle roughly 20 percent of India’s container traffic. Additionally, the FTWZ is conveniently situated in close proximity to significant industrial clusters, including Oragadam, Maraimalai Nagar, Tiruvallur, and Kanchipuram. These areas are renowned for hosting a substantial concentration of electronics, automotive, and auto ancillary companies.

What are the advantages of doing business in an FTWZ?

FTWZ units are permitted to maintain inventory on behalf of both foreign suppliers and domestic buyers. Further, FTWZ rules allow multiple ownership transfers—but only within the zone and without movement of goods outside the FTWZ. This strategic approach aims to maintain the trading chain as closely connected as necessary, preventing the accumulation of indirect taxes and compliance burdens while also avoiding an increase in transaction costs.

Units within the FTWZ have the ability to import goods into the zone without incurring duty charges. They can store these goods in the FTWZ and subsequently re-export them without any duty obligations. Furthermore, they are allowed to procure goods from the Indian market exempt from excise duties. This exemption applies not only to the goods that the unit deals with but also extends to items necessary for the growth, functioning, and upkeep of the zone.

Activities allowed in an FTWZ

An FTWZ is a distinct area designated for activities, such as warehousing and trade. Within FTWZs, the following activities are permitted:

• Storing goods on behalf of foreign suppliers for dispatch according to the owner’s instructions.
• Trading, whether with or without labeling, packing, or repacking, without the need for processing.
• Employing refrigeration for storage purposes.
• Assembling completely knocked-down or semi-knocked-down kits.
• Reselling, re-invoicing, or re-exporting imported goods.
• Trade transactions in foreign currencies are permitted.
• FTWZ units also reap the benefits of indirect tax advantages when engaged in non-Domestic Tariff Area (DTA) sales.

Customs Authority for Advanced Ruling (CAAR)

When goods are placed in the Free Trade Warehousing Zone, they are not acquired by a unit or developer. Consequently, the transfer of goods between the Domestic Tariff Area and FTWZ, or vice versa, does not fall within the definitions of ‘procure’ or ‘import,’ per the CAAR. As a result, such transfers or supplies of goods cannot be considered as ‘re-import’ in the context of the procedures and conditions that typically apply to the re-importation of goods from outside India. Therefore, the act of transferring goods from FTWZ to DTA cannot be categorized as ‘import/re-import,’ and it is thus not covered under Section 7 of the SEZ Act. Consequently, no exemption from duties or taxes is granted.

Utilizing the FTWZ market entry model in international trade

According to analysis from Flanders Investment & Trade, FTWZs provide various advantages for businesses, such as retail chains, manufacturers, and international traders. These zones eliminate regulatory constraints, offering cost-effective solutions for consolidating products from multiple suppliers in Asia. Companies can store and distribute products with lower costs and quicker payment to suppliers.

For example, for industries such as automobile manufacturing and IT hardware production, FTWZ permits the duty-free storage of spares for seamless, low lead time supply to the Indian market. It also offers the flexibility to test spares before actual supply and duty payment. Surplus or defective spares can be re-exported without financial loss.

Foreign rubber suppliers can take advantage of FTWZ by procuring and storing materials from countries like Indonesia, Thailand, or Malaysia during production seasons, aligning with the requirements of Indian tire manufacturers.

Additionally, utilizing forward trading for foreign exchange hedging and cost equalization enhances the cost-effectiveness of FTWZ operations.

How can companies operate through an FTWZ in India?

Companies interested in operating through FTWZs have two options:

Trading Unit: This option allows companies to engage in authorized activities within the FTWZ, which may include trading, warehousing, labeling, consolidation, and more.

Service Unit: Alternatively, companies can opt to utilize the services provided by an authorized Trading Unit.

Companies registered as Trading Units must be Indian entities involved in activities such as import-export, trading, shipping, and other related fields. The specific authorized operations are outlined in the Letter of Approval (LOA), which is granted by the Unit Approval Committee. These LOAs have a standard validity of five years, with the possibility of extending them for an additional five years.

Advantages of FTWZ for Importers

FTWZ imports offer a range of advantageous benefits. Firstly, they provide a high degree of flexibility when it comes to the final distribution of goods within India. This flexibility enables businesses to adapt to changing market demands and streamline their supply chains.

Moreover, FTWZ imports come with duty deferment benefits, which can significantly benefit businesses. This means that working capital is freed up, allowing companies to invest in other aspects of their operations, ultimately leading to increased sales and growth.

Quality control is another advantage offered by FTWZ imports. Companies can ensure the quality of their products before paying duties, minimizing financial risks and maintaining high standards.

Furthermore, FTWZ operations enjoy an exemption from the Goods and Services Tax (GST) on both purchases and services. This exemption extends to various areas, including transportation, reducing the financial burden on businesses.

For businesses dealing with temperature-sensitive products, such as medicines and other human consumption items, FTWZ provides access to temperature-controlled storage facilities. This capability ensures the integrity of these products during storage and transportation.

Another significant benefit is the reduced need for maintaining buffer stocks. With FTWZ imports, businesses can optimize their inventory management, leading to lower product costs.

FAQs about Free Trade Warehousing Zone (FTWZ)

Q: What is a Free Trade Warehousing Zone (FTWZ)?

A: FTWZ is a designated area within a country that provides infrastructure and facilities for storing, handling, and distributing goods with ease of customs clearance. It aims to promote international trade and facilitate export-import operations.

Q: What is the genesis of FTWZ in India?

A: The concept of FTWZ in India was introduced as part of the Foreign Trade Policy (FTP) to enhance trade competitiveness and attract foreign investment. It is a strategic initiative to boost export-oriented industries and improve India’s position in the global supply chain.

Q: What is the primary concept behind FTWZ?

A: The main concept behind FTWZ is to create an integrated facility that offers value-added services, efficient logistics, and customs-related benefits to businesses engaged in international trade. It aims to provide a one-stop solution for trading activities, thereby reducing transaction costs and improving supply chain efficiencies.

Q: What are the objectives of establishing FTWZ in India?

A: The key objectives of FTWZ in India include:

• Promoting and facilitating global trade
• Attracting foreign direct investment (FDI)
• Simplifying customs procedures and reducing bureaucratic hurdles
• Enhancing the ease of doing business
• Encouraging export-oriented industries and manufacturing activities

Q: What are the envisaged benefits of FTWZ for trade in India?

A: FTWZ offers several benefits, including:

• Duty deferment and exemption on re-exported goods, promoting export-led growth
• Consolidation and deconsolidation of cargo, optimizing logistics and reducing costs
• Efficient customs clearance and reduced documentation requirements
• Centralized storage and distribution facilities, improving inventory management
• Integration with global supply chains, increasing India’s competitiveness
• Attracting foreign investment and boosting economic growth
• 
  

Q: Are there any eligibility criteria for businesses to operate within FTWZ?

A: Yes, businesses must meet certain criteria to operate within FTWZ. These may include being engaged in export-import activities, complying with customs regulations, and adhering to the guidelines specified by the relevant authorities.

Q: How does FTWZ contribute to India’s economic growth?

A: FTWZ plays a crucial role in India’s economic growth by attracting foreign investment, encouraging export-oriented industries, and improving the overall efficiency of international trade. It enhances India’s competitiveness in the global market and strengthens its position in the supply chain.

Q: Can domestic businesses also benefit from FTWZ facilities?

A: Yes, domestic businesses can also benefit from FTWZ facilities. They can use FTWZ for storing and processing goods meant for export or import, taking advantage of the customs-related benefits and improved logistics services.

Q: How does FTWZ contribute to the ease of doing business in India?

A: FTWZ simplifies customs procedures, reduces paperwork, and offers a single-window clearance system, making it easier for businesses to engage in international trade. This streamlined process contributes to the ease of doing business in India.

Q: Are there any specific industries that benefit the most from FTWZ?

A: Various industries can benefit from FTWZ, including manufacturing, pharmaceuticals, textiles, automotive, electronics, and consumer goods. Export-oriented industries that require efficient logistics and customs facilitation can particularly benefit from FTWZ services.

Q: What role does FTWZ play in promoting India’s exports?

A: FTWZ plays a significant role in promoting India’s exports by offering duty deferment and exemption on re-exported goods. It enables businesses to optimize their supply chain, reduce costs, and access international markets more effectively.

Q: How does FTWZ contribute to foreign investment in India?

A: FTWZ attracts foreign investment by providing a favorable business environment, efficient logistics, and customs facilitation. The seamless integration with global supply chains makes India an attractive destination for foreign companies looking to expand their operations in the region.

Amazon India to use Sustainable Transport Modes for transporting packages

Amazon India to use Sustainable Transport Modes for transporting packages: 

Signs agreement with govt, to be first e-commerce player to use inland waterways 

Inland Water Transport (IWT) is a fuel efficient and environment friendly mode of transportation. IWT for passenger and freight movement involves lower operating costs and environmental pollution than road, rail or air options.

Amazon India and state-run Inland Waterways Authority of India (IWAI) have signed an agreement that allows the e-commerce firm to use inland waterways for transporting customer packages.

The company, which will become the first e-commerce player in India to use inland water transport, said it was committed to strengthening its transportation infrastructure in the country. It will work together with IWAI to build a network of inland waterways for cargo shipment. And, using the support of IWAI and its carriers, it will do a pilot run on Patna-Kolkata waterways.

Sarbananda Sonowal, minister for ports, shipping and waterways, which runs IWAI, said: “Our focus is on increasing cargo movement through river systems, which is a more sustainable and economical mode of transport… This initiative is a reflection of the importance of sustainable logistics solutions in India’s rapidly expanding e-commerce sector.”

Inland waterways transport would ensure quicker, sustainable and more reliable delivery of customer packages and widen the reach of sellers, said Amazon India. “This will open up new possibilities for all e-commerce companies,” said Abhinav Singh, vice-president, operations, Amazon India. “We seek to harness the potential of the country's rivers, canals, and other water bodies to enhance logistics and transportation efficiency for the Indian e-commerce industry at large.”

Amazon India called this initiative a reinforcement of its commitment to building capacity to meet the increasing customer demand. “The aim is to also collaborate with government authorities to explore mutually beneficial projects for the e-commerce industry,” it said.

India's e-commerce sector is poised to see a five-fold growth — from $59 billion in 2022 to an estimated $300 billion by 2030 — fuelled by value-seeking mass consumers, according to a report by Redseer Strategy Consultants.

The report emphasises the burgeoning adoption of e-commerce in Tier-II cities and beyond. This, combined with a growing base of mass consumers and the expansion of 3PL (third-party logistics) serviceability, is catalysing shipment volumes. The volumes are projected to rise more sharply than growth in gross merchandise volumes (GMV).

Amazon recently expanded its flagship cross-border logistics programme, SEND, by enabling a hassle-free ocean freight logistics solution. At competitive rates and with end-to-end trackability, this allows exporters to better plan their inventory. Launched last year, SEND has been providing air carrier services for small parcel delivery, and offering Indian exporters cross-border logistics services from multiple third-party service providers across the air and ocean

How ammonia will fuel the ships of Asia

How ammonia will fuel the ships of Asia

The shipping industry knows it has a problem with emissions and it's been looking at ways to reduce them for years. But fossil fuels still accounted for more than 99% of its total energy consumption in 2021, the latest International Energy Agency (IEA) data shows, contributing to the industry being responsible for around 2% of global energy-related CO₂ emissions.

To get on track for net zero emissions, alternative low- or zero-carbon bunker fuels — any fuel used to power a ship — must be introduced into the mix, according to the IEA.

While there are several viable alternatives, ammonia has some unique benefits that mean it could emerge as a vital compound for fueling the cleaner ships of tomorrow, particularly in Asia.

Progress in developing greener fuels is already underway in the shipping sector. The Global Maritime Forum's report Mapping of Zero Emission Pilots and Demonstration Projects shows a near-doubling in project numbers to 203 between 2021 and 2022, with ammonia fuels taking an increasingly large share.

Ammonia's supply chain is already in place thanks to its global usage in fertilizer production

Ammonia's risks and rewards

Ammonia has many advantages for shipping. It can be used as a carrier for hydrogen, it has a higher energy density than hydrogen, and it is easier to store and transport. At the same time, its importance in global fertilizer production means a supply chain and infrastructure to transport it are already in place.

Ammonia can also be used for fuel in internal combustion engines and does not produce carbon dioxide, sulfur or particulate emissions. In the case of green ammonia, there are also potentially unlimited resources to power its production in the form of renewable energy.

But ammonia is also corrosive and toxic, meaning it requires careful management. Exhaust gas from ammonia-fueled engines contains nitrogen oxides and nitrous oxide, so technology is required to remove these harmful substances, such as Mitsubishi Power's new combustor and selected catalytic reduction system.

Availability and scalability

Because of its relationship with fertilizer production, ammonia is produced in many countries, with China the leading producer.

Annual production capacity reached almost 240 million tonnes in 2022, with 4% average annual growth predicted between then and 2027, according to a GlobalData report.

But almost all existing ammonia production is “conventional”, meaning it derives from carbon-emitting natural gas. In order to meet the increasing demand as a clean fuel, the industry needs to shift to green ammonia, derived from renewable energy sources, or to blue ammonia, derived from natural gas and combined with carbon capture, utilization and storage (CCUS).

Blue ammonia and hybrid green ammonia — which is ammonia produced in plants that use both fossil fuels and renewable electricity — are both necessary components of the journey to net zero, providing a cost-effective transition to green ammonia production, according to a Haldor Topsøe report.

But transitioning will take time. Global merchant trading fleet numbers are in the high tens of thousands, and replacing high-emitting fossil fuels with cleaner alternatives won't happen overnight.

Conceptual shipping fuel projects are increasingly focusing on ammonia

Asia as a future ammonia hub

The global bunker fuel market is predicted to be worth $170 billion by 2030, with an annual growth rate of 5.2%, a Market Research Future report notes.

At its heart sits Singapore, the world's largest bunkering port by sales and a major hub linking east and west trade routes. Any significant adoption of ammonia or other new bunkering fuels there will impact global shipping.

In Singapore and across Asia, several initiatives are underway that support ammonia as a bunker fuel of the future.

Singapore plans to embark on hydrogen pathfinder projects as part of its National Hydrogen Strategy, beginning with the use of ammonia. In line with this, the Energy Market Authority and the Maritime and Port Authority of Singapore have called for proposals on a non-binding Expression of Interest to build, own and operate an end-to-end low- or zero-carbon ammonia power generation and bunkering solution on Singapore's Jurong Island.

Japan's Mitsubishi Heavy Industries (MHI) is also exploring the potential of ammonia in Asia, having concluded a memorandum of understanding to look into developing a 100% ammonia direct combustion power plant on Jurong Island. This will study the possibility of setting up a plant that could produce carbon-neutral electricity and help stimulate ammonia demand in preparation for the expected need for ammonia bunkering.

Meanwhile, trading firm Itochu has signed an initial agreement with power producer Malakoff Corporation Berhad to potentially develop an ammonia terminal in the Johor Straits between Singapore and Malaysia.

And in Australia, Kanfer Shipping and Oceania Marine Energy have signaled their intention to bring the world's first ammonia-ready LNG bunkering vessel to the country, as they look to develop the zero-emission shipping industry.

Dual-fuel technology 

Dual-fuel technology is expected to be an efficient method of progressively introducing ammonia as a bunker fuel. Mitsubishi Shipbuilding, an MHI group company, has completed the conceptual design of an LPG-powered very large gas carrier that can be converted to run on ammonia, allowing shipowners fuel flexibility and lowering costs by enabling smaller-scale retrofitting.

Ammonia's bunker fuel pathway

The path to ammonia-powered ships is not without obstacles: issues relating to costs, safety and the need for a full and sustainable value chain will need to be addressed. But ammonia is increasingly seen as a potential bunker fuel of the future.

And given Asia's extensive ammonia terminal network and the flurry of commitments from industry, ammonia could become a sustainable alternative that helps marine vessels break their long-held dependence on fossil fuels.

ONE LINE adds new SIG service from Southeast Asia to India and Gulf

ONE LINE adds new SIG service from Southeast Asia to India and Gulf

Ocean Network Express (ONE) has announced a new addition to its extensive service network connecting Southeast Asia with India and the Middle East. 

The new SIG service will provide its customers with more frequency and comprehensive connections to and from India West Coast and Middle East. 

The SIG service rotation is as follows: Singapore - Nhava Sheva - Mundra - Dammam - Jebel Ali - Cochin - Colombo - Singapore

The SIG service will commence with a westbound ETA in Singapore on November 16, 2023.

 

The WCO presents its new mobile application "HS Browse & Check

The WCO presents its new mobile application "HS Browse & Check"

The World Customs Organization (WCO) presented its new mobile application "HS Browse & Check", a mobile application designed to provide customs professionals and international trade enthusiasts with convenient access to the Harmonized System (HS) 2022. 

Complementing WCO Trade Tools (wcotradetools.org) which provides tools for quick classification and other complimentary content, the mobile app has been designed to ensure a quick verification of any H.S. code and the navigation within the entire HS 2022

Developed by the WCO, the HS Browse & Check App provides a user-friendly platform to quickly access the content of HS 2022, including Legal Notes, Explanatory Notes, and Classification Opinions, all from the convenience of your mobile device. Say goodbye to the hefty 15kg of the paper version and have now everything at your fingertips! 

The app's intuitive search feature allows users to swiftly verify HS codes, and access instantly its associated content in its most recent version. This functionality ensures customs professionals and traders have immediate access to accurate information, providing valuable guidance and clarification on the interpretation and application of HS codes.

Mastering the HS is crucial for efficient trade operations, compliance with international regulations, and well-informed decision-making. The HS Browse & Check App aims to equip users with the knowledge and tools required to achieve these objectives seamlessly. whenever and wherever you need it. This application is available free of charge. Explanatory notes and Classification Opinions are accessible exclusively to users that already have a subscription on www.wcotradetools.org ensuring uninterrupted access to the Harmonised System.

Whether users are on the move or at their desks, this app will keep them connected to the latest updates of the HS content.

HS 2022 app is available now for download on both the App Store and Google Play!

For more information about the HS Browse & Check App visit www.wcotradetools.or