Shipping Industry & Ports in India
(Source: IBEF)
According to the Ministry of Shipping, around 95% of Indias trading by volume and 70%
by value is done through maritime transport. In November 2020, the Prime Minister, Mr.
Narendra Modi renamed the Ministry of Shipping as the Ministry of Ports, Shipping and
Waterways.
India has 12 major and 205 notified minor and intermediate ports. Under the National
Perspective Plan for Sagarmala, six new mega ports will be developed in the country. The
Indian ports and shipping industry play a vital role in sustaining growth in the countrys
trade and commerce. India is the sixteenth-largest maritime country in the world with a
coastline of about 7,517 kms. The Indian Government plays an important role in supporting
the ports sector. It has allowed
Foreign Direct Investment (FDI) of up to 100% under the automatic route for port and
harbour construction and maintenance projects. It has also facilitated a 10-year tax
holiday to enterprises that develop, maintain and operate ports, inland waterways and
inland ports.
Market Size
Indias key ports had a capacity of 646.10 million tonnes per annum (MTPA) during
April-January, 2023. From April-October 2022, all key ports in India handled 446.50
million tonnes (MT) of cargo traffic. Indias merchandise exports in FY22 were at US$
417.8 billion, up 40% from the previous year. In Financial Year 2023 (Until September
2022), Indias merchandise exports reached US$ 231.88 billion.
The Government has taken several measures to improve operational efficiency through
mechanization, deepening the draft and speedy evacuations.
Investments
• India has plans to invest US$ 82 billion in port projects by 2035.
• Indian ports received cumulative FDI inflow worth US$ 1.63 billion between April
2000 and June 2021.
• In October 2021, the Syama Prasad Mookerjee Port, Kolkata, gave importers the
opportunity to bring in vessels at the deep drafted anchorages located at Sagar, Sandheads
and X Point.
• In October 2021, Adani Group announced that it wants to make Adani Port a
net-zero carbon emitter by 2025 and power all its data centres with renewable energy by
2030.
• Jawaharlal Nehru Port Trust (JNPT) Special Economic Zone (SEZ) became the first
of its kind operational port-based multi-product SEZ in India.
• The Competition Commission of India (CCI) approved Adani Ports and Special
Economic Zones proposed acquisition of 10.40% equity investment in Gangavaram Port in
September 2021. The 10.4% equity shareholding will be bought from the government of Andhra
Pradesh.
• APSEZ (Adani Ports and Special Economic Zone) plans to become the worlds
largest private port company by 2030 and carbon neutral by 2025.
Government Initiatives
Some of the major initiatives taken by the government to promote the ports sector in
India are as follows:
• In Union Budget 2023-24, the total allocation for the Ministry of Shipping was
US$ 1,813.16 million (Rs. 2,218.74 crore).
• In October 2022, Cabinet Committee on Economic Affairs approved the development
of a container terminal at Tuna-Tekra, Deendayal Port, the terminal will be built on a
Build, Operate & Transfer (BOT) basis under Public-Private-Partnership (PPP) mode.
• In August 2022, Minister of Road Transport and Highways Mr. Nitin Gadkari,
Minister of Ports, Shipping & Waterways and Ayush, Mr. Sarbananda Sonowal, and
Minister of State for Road Transport & Highways, Gen (Retd) VK Singh signed a
tripartite agreement for swift development of modern Multi Modal Logistics Parks (MMLP)
under Bharatmala Pariyojna across the country.
• In December 2021, India and Russia are talking about collaborating on
shipbuilding and inland waterways.
• In November 2021, the Union Minister for Ports, Shipping and Waterways &
Ayush, Mr. Sarbananda Sonowal, inaugurated the new Radars and Vessel Traffic Management
System of Cochin Port Trust. The VTMS (Vessel Traffic Management System) commissioned in
Cochin Port in 2009 has been upgraded with a state-of-the-art system consisting two new
radars, one AIS Base station, three VHF Radios and associated software & hardware.
• In November 2021, Union Minister for Ports, Shipping & Waterways and Ayush,
Mr. Sarbananda Sonowal, inaugurated the simultaneous launching of five vessels at Cochin
Shipyard Limited (CSL).
• In November 2021, the Union Minister of Culture and Tourism, Mr. G Kishan Reddy,
announced that the centre has sanctioned Rs. 100 crores (US$ 13.31 million) for the
Visakhapatnam port cruise terminal.
• The Draft Indian Ports Bill 2021, which was circulated in July 2021, aims to
centralise the administration of minor ports that are currently managed by state
governments.
• The Inland Vessels Bill 2021 was approved by the Lok Sabha in July 2021. Instead
of distinct regulations created by the states, the bill attempts to include a single
legislation for the country. The registration certificate issued under the new law will be
valid throughout the country and state approvals will not be necessary. The bill also
establishes a single database for recording vessel and crew information on an Internet
portal.
• In July 2021, the Marine Aids to Navigation Bill 2021 was passed by the
Parliament, incorporating global best practices, technological developments and Indias
international obligations in this field.
• In June 2021, the Gujarat government provided approval to build a new jetty
worth an estimated ~Rs. 192 crores (US$ 25.77 million) at Navlakhi port which has been in
operation since 1939.
• In June 2021, the Ministry of Ports, Shipping and Waterways and Ministry of
Culture sign an MoU for cooperation in development of National Maritime Heritage Complex
at Lothal, Gujarat • In June 2021, the Ministry of Ports, Shipping and Waterways and
Ministry of Civil Aviation signed a memorandum of understanding (MoU) to develop sea plane
services in India. • On May 10, 2021, JNPT and New Mangalore Port handled 120 tonnes
of medical oxygen on a priority basis owing to the COVID-19 pandemic.
• India is expected to begin full operations in Irans Chabahar Port by the end of
May 2021. India is building two terminals at the port and will operate them for 10 years.
Road Ahead
Increasing investment and cargo traffic point towards a healthy outlook for the Indian
ports sector. Providers of services such as operation and maintenance (O&M), pilotage
and harbouring and marine assets such as barges and dredgers are benefiting from these
investments.
The capacity addition at ports is expected to grow at a CAGR of 5-6% till 2022, thereby
adding 275-325 MT of capacity.
Domestic waterways have found to be a cost-effective and environmentally sustainable
mode of freight transportation. The government aims to operationalize 23 waterways by
2030.
As part of the Sagarmala project, more than 574 projects worth Rs. 6 lakh crores (US$
82 billion) have been planned for implementation between 2015 and 2035.
In Maritime India Summit 2021, the Ministry of Ports, Shipping and Waterways identified
a total of 400 projects worth Rs. 2.25 lakh crore (US$ 31 billion) investment potential.
Indias cargo traffic handled by ports is expected to reach 1,695 million metric tonnes
by 2021-22 according to a report by the National Transport Development Policy Committee.
Overview
Timescan Logistics (India) Limited, is an ISO 9001:2015 (Quality Management Services)
certified company and catered into the business of Logistics involving land, air and sea
transportation as Multimodal Transport Operator and Third-Party Logistics Provider. We
provide complete range of services like Freight Forwarding (Sea & Air freight), Custom
Clearance, Warehousing, Multimodal Transportation, Project cargo, Third Party Logistics,
Packaging, loading/ unloading and unpacking of items to facilitate our customers with
end-to-end solutions and other related value-added services. This asset-light business
model allows for the scalability of services as well as the flexibility to develop and
offer customized logistic solutions across diverse sectors. We have set an ambitious goal
to become Indias largest integrated transport utility company.
Industry Structure and Developments
The recent logistics industry in India comprised of inbound and outbound sectors of the
production and services supply chains. Lately, the logistics infrastructure has achieved
the much-needed attention from business companies as well as policymakers. The way the
logistics marketplace behaves these days has changed a lot. With the implementation of
advanced technology and refined processes, the planning, implementation, and control of
the goods movement have become faster and efficient. The Modern processes and activities
offer support in various supply chain processes. The innovative logistics activities boost
knowledge, improvements and new strategies to attain profitability for the businesses that
offer transport services in various parts of the country.
The India logistics industry is growing, due to a flourishing e-commerce market and
technological advancement. The logistics sector in India is predicted to account for 14.4%
of the GDP. The industry has progressed from a transportation and storage-focused activity
to a specialized function that now encompasses end-to-end product planning and management,
value-added services for last-mile delivery, predictive planning, and analytics, among
other things. One of the key drivers of this expansion is projected to be the rise of
Indias logistics industry, which employs 22 million people and serves as the backbone for
various businesses. The logistics sector in India was valued at US$ 250 billion in 2021,
with the market predicted to increase to an astounding US$ 380 billion by 2025, at a
healthy 10%-12% year-on-year growth rate. Moreover, the government is planning to reduce
the logistics and supply chain cost in India from 13-14% to 10% of the GDP as per industry
standards.
The industry is crucial for the efficient movement of products and services across the
nation and in the global markets. The logistics business is highly fragmented and has over
1,000 active participants, including major local players, worldwide industry leaders, the
express division of the government postal service, and rising start-ups that focus on
e-commerce delivery. The industry includes transportation, warehousing, and value-added
services like packaging, labelling, and inventory management. With the advent of
technology-driven solutions such as transportation management systems (TMS) and warehouse
management systems, Indias logistics industry has witnessed tremendous development in
recent years (WMS). These solutions have assisted logistics firms in increasing
operational efficiency, lowering costs, and improving customer service.
Logistics management is a subject of research that has been grabbing the attention of
educators, professionals and practitioners over the past two decades. Efficient logistics
management and online transport service can lead to reduced operational costs, better
delivery performance and enhanced customer satisfaction levels, henceforth, making an
organization more competitive in terms of quality, cost, flexibility and delivery.
With rising consumer demand and the subsequent growth in global business, the role of
infrastructure support concerning to roads, rails, ports and warehouses has become crucial
for the success of the Indian economy. The bottom-up approach of many logistics companies
in Chennai has introduced a culture of innovation in the industry and has produced over a
hundred ideas so far, many of which have been executed or are in development. These ideas
incorporate an automated purchase-order system, GPS technology, a box-on-demand system,
warehouse management system, drone technology and many others.
Due to globalization and digitization, the demand for logistics has increased more.
Numerous multi-national companies are sourcing, manufacturing and supplying on an
international level, making their supply chains very intricate to manage. However,
outsourcing their logistics and transport operations to professional logistics service
providers has assisted the businesses to get tailored logistical support while enabling
them to focus on their core organizational activities.
At present, many large multi-national providers that deliver complete supply chain
solutions across multiple countries in terms of their political and socio-economic
environments. In addition to main logistical activities such as transportation,
warehousing, and supply chain, these service providers also offer value-added services
such as freight forwarding, customs clearance, import/ export management, inventory
management, packaging and labeling, assembly/installation, distribution, reverse
logistics, after-sales support, and so on. By outsourcing logistics, businesses in the
logistics industry can leverage the expertise of large multi-national service providers
while focusing on their key competencies.
The demand for today and the future is integrated end-to-end Logistics solutions. This
would encompass integrated infrastructure / assets platform, integrated services platform
and integrated digital platform. There is a wide spectrum of players in the domain ranging
from the very small exporters and importers, to medium-sized and large traders to MNCs.
Hence, the sector would continue to witness consolidation, process standardization,
technological upgradation and digital transformation for more agility and integration not
only between modes of transportation but also the users and third-party service providers.
SWOT Analysis
Logistics is one of the supply chain management areas and it focuses on forward and
backward flow and movement of goods and products from the production unit to the end
consumers. The increase in online shopping and prioritization of medical supplies were
just a couple of the reasons that led the global logistics industry to quickly adapt its
operations so demand could be met. The challenges that started will most likely leave an
everlasting footprint for many years to come. However, said challenges are also bringing
many opportunities for the near future.
The success of a modern-day business enterprise depends on its ability to adapt to the
new trends that are ruling industries, shaping and influencing their future. And the
industry of logistics is no different.
Like other sectors, Indian logistics too has transformed drastically. In this, the
pandemic played a major role by disrupting industries with burdensome restrictions on
movement of goods and services. The effectiveness of the supply chain was thoroughly put
to test. Logistics created ways to manage this situation.
| Strengths |
| • Diverse customer Portfolio |
| • Expertise in emerging economies |
| • End to End Logistics Services |
| • Wide Network |
| • Skilled Workforce |
| • Strong Management |
| Weakness |
| • Huge Capital Outlay |
| • Lack of fully organized system of Control |
| • Weak Supply chain |
| • Poor presence in developed economies |
| • High Labour Outflow |
| • Large number of Unorganized Players |
| Opportunities |
| • Digitization |
| • Online Market |
| • Introduction of New Technologies |
| • Rapid growth rate target |
| • Open new markets through Government Agreements |
| • Economic Recovery |
| Threats |
| • Fierce Competition |
| • Increase in fuel cost |
| • Frequent changes in Government policies |
| • Changing competitive landscape |
| • Taxation |
Segment–Wise or Product-Wise Performance
The Company is mainly engaged into logistics and related allied services. Therefore,
there are no separate reportable segments
Outlook
The transport and logistics sector will see growth of 4% in 202 3 and 3% in 2024.
While the extremes of the Covid-19 pandemic supply shock have faded, the sector is
still witnessing the ripple effects of normalization in consumer behavior and prolonged
capacity issues. At the same time, the economy is slowing and industrial production is
slumping.
The supply shock from the pandemic and the impact of the war in Ukraine have also left
their mark on various parts of the transport and logistics sector. Either long because of
excess capacity after a historic boom (in container shipping) or short because of lagging
deliveries of aircraft and capacity-absorbing rerouting because of sanctions (in
shipping).
The logistics industry isnt going anywhere. As long as there are businesses creating
products for consumption, there will be a need to move those products. Not only that, but
with the predicted growth of the global economies, its likely that this market will
expand along with that growth.
Risks and Concerns
The Companys ability to foresee and manage business risks is crucial in achieving
favorable results. The Company operates in an environment that is affected by various
risks, some of which are identifiable and controllable. Some others are unexpected and
cannot be controlled. Under these conditions, proper identification and management of
risks is very important in determining the ability of the organization to sustain value
creation for its stakeholders. The impact of the key risks, which are potentially
significant are listed below have been identified through a formal process by the
management. Your Company recognizes that every business has its inherent risks and the
Company has been taking a proactive approach to identify and mitigate them on a continuous
basis. The logistics industry faces numerous risks that can impact our business in various
ways:
• Continued Economic Growth: Demand for our warehousing and transportation
services is dependent on economic growth and/or infrastructure development. Any slowdown
in economic growth affects our growth.
• Economic Risk: Now risk is very familiar word for all of us after
experiencing demonetization, pandemic, lockdown and Russia Ukraine crisis which had
affected the whole logistics sector. The world has suffered huge losses and many other
issues so as the whole logistics sector. So far as economic risk is concerned, it is
essential to consider what we have faced in recent years. On any of the above-mentioned or
any similar events, Carriers or shipping lines or other vendors can be expected to charge
higher prices to cover higher operating expenses.
• Our Client Base: The Company depends on its limited clients for a
majority of its revenues. This exposes the company to a risk of client concentration. The
Company continues to take steps to create a larger client base, while continuing to
benefit from the already strong long-term association it shares with its current
customers.
• Risks from Competition: In a post-pandemic world, digitalization and the
effective use of technology to remain future-ready, continue to remain key parameter
differentiating resilient organizations from the rest. Adopting future ready technology
solutions has enabled your company to remain ahead of the curve in a highly competitive
industry. However, as the trend accelerates, it also raises the bar for innovation with
numerous players solely leveraging the digital platform to reduce operating costs and
increase profit margins.
Moreover, peaked interest from global players and heavily funded third-party logistics
players who can work with competitive pricing, impacted revenues with added pressure on
margins. E-commerce continues to gain prominence and express logistics gains with it
however, the ability for E-commerce players to increase the share of their captive arms
thus reducing the addressable market, further impacts traditional companies.
• Ability to pass on increasing cost: Ability to pass on increasing cost in
a timely manner depends upon the demand-supply situation and competitive activities and
there has been a general reluctance as seen in the past, to make significant price hikes.
• Cyber Risk: Supply chains are part of a complex global system where data
and information are shared through cyberspace. The interconnection of the logistics
industry may be an attractive target for cyber-attacks. The more links in a supply chain,
the more vulnerable it becomes, which augments the importance of secure handling and
storage of data. The effects of cyber-attacks on the supply chain can be detrimental to
all parties involved. With companies focusing on digitalization, cyber risk is here to
stay and risk associated with the cyber-attack cant be ignored.
• Planning risks: Errors in the forecast of consumption, supply plans, late
reporting of serious changes in demand to those responsible, problems of cross-functional
coordination, long supply cycles that prevent timely adjustment of purchase plans.
• Transportation Risk: Delay of Material Resources and Finished Goods
During Transportation (Transit).
• Storage Risks: Expiration of shelf life of stored material resources,
detection of damage, loss of material resources in warehouses, absence of material
resources in fact (if present in reporting documents) at the moment of demand initiation
(request from internal consumer).
• Supplier interaction Risks: lack or lack of material resources at the
supplier, violation of shipment dates, delivery of poor quality, incomplete or
inappropriate in product characteristics.
Internal Control Systems and Their Adequacy
The Company has robust internal controls systems (including Internal Financial
Controls) that facilitates efficiency, reliability and completeness of accounting records
and timely preparation of reliable financial and management information. The internal
control system ensures compliance with all applicable laws and regulations facilitates
optimum utilization of resources and protect the Companys assets and investors
interests. The Companys well-defined organizational structure and internal controls
ensure efficiency of operations, compliance with internal policies and applicable laws and
regulations as well as protection of resources.
The Audit Committee, composed of Independent and Non-Executive Directors, regularly
reviews significant audit findings, adequacy of internal controls, audit plans, reasons
for changes in accounting policies and practices, if any, and monitors the implementation
of audit recommendations. Internal auditors ensure that preventive and detective controls
are embedded in all the business processes. Significant audit observations and follow-up
actions thereon are reported to the Audit Committee.
| Particulars |
Ratio as on 31st March, 2023 |
Ratio as on 31st March, 2022 |
Change in percentage of ratio as compared to previous year |
| Debtors Turnover Ratio |
8.41 |
5.77 |
45.75% (Increase) |
| Current Ratio |
1.52 |
1.41 |
7.82% (Increase) |
| Operating Profit Margin |
7.29 |
6.83 |
6.64% (Increase) |
| Net Profit Margin |
1.83 |
1.73 |
6.14% (Increase) |
Notes:
1. Debtors turnover is a measure of a companys effectiveness in collecting receivables
from its customers. The receivables turnover ratio improved during the Financial Year
22-23 due to further improvement in billing and collection processes.
2. There are no significant changes (i.e. change of 25% or more as compared to the
immediately previous financial year) in the other key financial ratios.
3. The Company is service-based industry. So, Inventory Turnover Ratio is not
applicable to the Company.
Developments in Human Resources
At Timescan, our relentless focus is on attracting, retaining and nurturing the best of
talents to lead the organization towards achieving its strategic goals. We ensure a work
culture free of discrimination and bias and provide equal opportunity to all. Timescan
considers its people and culture as a competitive advantage, offering a superior
proposition to customers and career opportunities to its employees. The company aims to
enhance its businesses and expand into new areas while providing a conducive work
environment.
In the past, training was the only planned way of developing human resources. But now
Human Resource Management has emerged as an interdisciplinary and integrated approach to
the development of human resources.
In the organizational context, human resource development may be described as a
continuous and planned process by which employees of an organization are helped to:
(a) Acquire or sharpen capabilities required to perform various functions associated
with their present or expected future roles.
(b) Develop their general capabilities as individuals and discover and exploit their
own inner potential for their own and/or organizational development purpose.
(c) Develop an organizational culture in which superior-subordinate relationships,
teamwork and collaboration among sub-units are strong and contribute to the professional
well-being, motivation and pride of employees.
Human Resource Development for Timescan in brief is transformation of potential human
resources into kinetic human resources for optimization of the potential capacity of
employees.
Human rather than capital is the key to development. Human Resource Development is
needed by any organization that wants to grow continuously. No organization can grow and
survive in the present-day environment without the growth and development of its people.
The scope of Human Resource Development is not limited to the development of the
organizational role of the employees but extends to the individuals inner feelings,
genius and latent potentialities of those working in the organization. Individuals in an
organization have unlimited potential for growth and development and this can be
multiplied and channelized through systematic efforts. The company views human resources
as the total knowledge, skills, creativity, abilities, talents and aptitudes of an
organizations workforce as well as the values, attitudes and beliefs of the individual
involved.
The highest standards of safety and precautionary measures were established and Work
From Home policy was deployed wherever possible. In order to uphold the values of ethical
conduct and compliance, the Company ensured all employees followed detailed and structured
training and awareness to familiarize themselves with the standards and expectations on
ethics. The Timescan family consists of 49 employees including 5 Key Managerial Personnel.
Cautionary Statement
This document contains statements about expected future events, financial and operating
results of Timescan Logistics (India) Limited, which are forward looking. By their nature,
forward-looking statements require the Company to make assumptions and are subject to
inherent risks and uncertainties. There is a significant risk that the assumptions,
predictions and other forward-looking statements will not prove to be accurate. Several
factors that could significantly impact the Companys operations include economic
conditions affecting demand, supply and price conditions in the domestic and overseas
markets, changes in the government regulations, tax laws and other statutes, climatic
conditions and such incidental factors over which the Company does not have any control.
Readers are cautioned not to place undue reliance on forward looking statements as a
number of factors could cause assumptions, actual future results and events to differ
materially from those expressed in the forward-looking statements. Accordingly, this
document is subject to the disclaimer and qualified in its entirety by the assumptions,
qualifications and risk factors referred to in the Managements Discussion and Analysis of
Timescan Logistics (India) Limiteds Annual Report, for FY 2022-23.
| For and on behalf of Board of Directors of |
|
| Timescan Logistics (India) Limited |
|
| Moulana Taufeek Islam |
Sundarraj Arun Kumar |
| Managing Director |
Whole-time Director |
| DIN: 02125126 |
DIN: 07985890 |
| Date: September 01, 2023 |
|
| Place: Chennai |
|
+91-9892691696
