- Arun Khurana, Head - Logistics, JK Cement
There is a huge potential for private terminals, which are designed in such a way that they can be used as multiple operators rather than for a bagged cargo or loose cement cargo, says Arun Khurana, Head - Logistics, JK Cement. Excerpts from the interview...
What is the possibility of using waterway for cement transportation?
In terms of longer hauls for the places wherever it is feasible, water transport is a desirable option. But for the coastal movement and inland waterways in particular, the infrastructure is not good. The coastal movement to a large extent is confined to the west coast of India. Cement manufacturers from Gujarat are shipping cement towards Mumbai and down south. In terms of other land-locked plants, not much of infrastructure is available for inland water movement. However, there is a huge potential if a real thrust is given on developing the required infrastructure for inland water transport. For longer haulage, it will be a cheaper alternative to rail transport. For example, for our white cement business, we have already shifted to coastal movement rather than using railways to service the markets of Kerala and coastal Karnataka. We take the cement to Mundra and from there we use coastal way and then service the markets of Kerala and coastal Karnataka. If you look at the similar way to be explored upon the Tamil Nadu and other east coast markets, there is no proper facility or ship liner available for such services.
What are the challenges in keeping transport costs down?
A major component in cement logistics cost is the handling charges. Whether take it by road or rail, a lot of challenges are there after the rakes are reached the destination station. Practically, most the of the rail heads across are under the hold of trade unions, especially down south and western part of the country. So the cost is prohibitive. Railways has declared most of the high volume goods sheds into a 24x7 operation whereas all of us know that nobody operates in a ship the way it happens in a plant. Typically, after 6 pm, finding labour at the rail head is a big challenge. So indirectly, that adds to the cost. Of course, initial step has been taken in terms of having interaction with railways wherein railways agreeing to permit industry to do the mechanization of loading and unloading activity at the rail heads. A couple of locations have been identified that is submitted to the railway board to take it up and then give us clearances in terms of how this can be taken forward.
Are you investing in any other logistics-related optimization projects?
Definitely, one of the areas we have identified is reducing turnaround time, because it is one of the ways to optimize operational cost. We are using RFID and GPS systems to reduce turnaround time at various stages.
What are your views on outsourcing logistics?
Considering the high value and low percentage cost of logistics, as a percentage of revenue, definitely this is a better model. But with more than 20 per cent of its revenue going into the logistics cost, these operators are not in a position to do at the prevailing rate or rather cost.