FedEx Takes Over India Legend

     In a move that could spell competition for the combined Blue Dart-DHL in India, FedEx announced on November 3, 2010 that its business unit was acquiring the logistics, distribution and express businesses of AFL Pvt. Ltd. and its affiliate, Unifreight India Pvt. Ltd., for an undisclosed amount. The acquisition would provide FedEx with a more robust domestic ground network and added capabilities in India. FedEx expects that the transaction, which is subject to customary closing conditions, will close in its third fiscal quarter (ending February 2011).
     Founded in 1945, AFL Pvt. Ltd. is a recognized leader in the transportation and logistics industry in India. A privately held company by the Guzders, the AFL business offerings include a comprehensive range of distribution and logistics services through a well-established network across India.
     Specifically, this acquisition includes the purchase of AFL Logistics and Distribution, which consists of a wide range of products and services, including supply chain management, warehousing, and a ground distribution network that provides day-definite ground transportation for small packages and heavyweight shipments through more than 200 daily scheduled routes. Additionally, FedEx will take over AFL WiZ Express, which offers express services through more than 160 Express Service Centers servicing more than five thousand PIN codes (zip codes) across 144 cities in India.
     According to Michael L. Ducker, COO, FedEx Express, “The acquisition supports our long-term strategy to grow our international business and better serve our customers seeking to expand or enter the Indian market… This will provide customers with more service options such as domestic ground and value-added services, including warehousing, logistics solutions and third party logistics, while allowing them to take advantage of an increased coverage area.”
     For his part, Chairman of AFL, Cyrus Guzder, said that the “transaction provides AFL with an opportunity to offer its customers an enhanced level of service, new service offerings and the adoption of global best practices in its core businesses of air express delivery and ground distribution. While our extensive network and logistics infrastructure will enable FedEx to deepen its penetration of the Indian market, I believe AFL’s customers will be excited by the prospects of AFL’s service offering being strengthened under the leadership of a global leader in express delivery and transportation. AFL’s employees will also greatly benefit from joining the global family of one of the world’s most admired employers.” Guzder will assume the role of Executive Advisor to FedEx after the acquisition is completed.
     AFL has pioneered and established benchmarks for the Indian logistics industry over the last six decades. It started with airfreight forwarding in 1945. In fact, Tata Airlines (Air India’s predecessor) appointed the company as its first cargo agent. In 1979, AFL started domestic express couriering.
     Fedex has been bullish over the last year or so about India. Last November, it announced the launch of FedEx India, a next-business-day domestic express service for the Indian market. The launch followed the company's domestic express service launches in China, Mexico and the UK. Today, FedEx has added more cities into its next-day express network, and plans to add more in the near future. According to FedEx, these service enhancements were part of an ongoing project to strengthen its foothold in India while bolstering the Asia-Europe trade lane.
     At that time, Robert W. Elliott, President, FedEx Express, Europe, Middle East, Indian Subcontinent and Africa, had said that FedEx was committed to supporting Indian businesses by providing a competitive service to key markets across the country. “Adding a domestic express service to our broad portfolio of international products increases our ability to further facilitate commerce for customers doing business in India, demonstrating our continued commitment to the market and our confidence in its future growth," Elliot said.
     The acquisition of AFL will lead to a consolidation in the Indian logistics sector. Kenneth F. Koval, (right)Vice President, Operations, FedEx Express, India, said that the move by FedEx would increase the market coverage of its existing portfolio and introduce ground services to boost its 200-odd daily scheduled routes. Incidentally, AFL has a distribution tie-up with the US-based United Parcel Service. According to sources, this tie-up will end after the acquisition by FedEx.
     Way back in 2005, DHL Express took the first step towards consolidation when it acquired 81.03 percent of the Mumbai-based Blue Dart Express. In 2006, Netherlands-based TNT took over Speedage Express Cargo Services, a road express company based in Secunderabad, near Hyderabad. In the same year, FedEx acquired Prakash Air Freight (PAFEX), one of its more than two-decade old franchises, and entered into India’s small parcel market.
Tirthankar Ghosh

Obama Trip Recalls Pan Am 73

     On the eve of U.S. President Barack Obama’s visit to India, the families and victims of Pan Am 73 approached the U.S. government and requested a meeting with the President. Pan Am 73 was hijacked 24 years ago and involved the killing of 13 Indians, including air hostess Neerja Bhanot.
     “America needs to value the lives of Indians and not treat us like cannon fodder,” stated the Indian victims who were hijacked on the U.S.-carrier Pan American Airways Flight 73 (PA73). The victims asked President Barack Obama to reverse the order of the previous Bush Administration, which was unjust to Indian victims.
     The Bush Administration had excluded the Indian victims from receiving compensation after Libya gave funds to the U.S.A. in 2008 expressly to compensate victims of various Libya-related terrorist crimes. The funds were to go to all victims who had filed suits against Libya in U.S. courts. The Indian victims were a part of a Group of 178 plaintiffs who had filed a case in the Washington, D.C. Court. However, the Bush Administration decided that the funds would only be given to American passengers who were part of this case.
     “Are our lives not as precious as those of the Americans?” asked the Indian passengers.
     In a letter to the President, they pointed out that the Libya-backed terrorists who hijacked PA73 were seeking revenge against America in retaliation for the Tripoli bombings by American war planes, and that the Pan Am 73 hijacking was the first “unsuccessful take” of the Pan Am Lockerbie attack two years later in 1988. The Indian victims have urged the President to treat their case like that of the Pan Am 103 (Lockerbie) case, where passengers of all nationalities were provided compensation by way of the Libyan Claims Resolution Act.
     Coming from Mumbai, Pan Am 73 had landed at Karachi Airport early in the morning on September 5, 1986 (en route to New York via Frankfurt), and was hijacked on the tarmac by four heavily armed Libya-backed terrorists. An Indian air hostess alerted the all-American cockpit crew, who escaped from a hatch in the cockpit.
     In fact, the lives of the American passengers were saved thanks to the courage and heroism of the Indian cabin crew. When the terrorists asked the Indian air hostesses to collect the passports of all passengers so that they could identify the Americans, the air hostesses hid the passports of the U.S. citizens. They did this at grave risk to their own lives, because if the terrorists had found this out, they would certainly have killed the Indian air hostesses.
     “It is a terrible turn of events,” says 83-year-old Rama Bhanot, mother of Neerja Bhanot, (right) the Senior Purser on Pan Am 73. “My daughter died while saving American passengers. She was an employee of an American airline, on an American plane when she died… yet the American Government disowned all responsibility towards her and other Indians.”
     Among the victims was Gopal Dadhirao, whose pregnant wife was blown apart before his eyes when the terrorists tossed grenades at the couple's seats. “Every day I wake up to that horrendous sight of my wife… a serene face on one half and a scorched skeleton on the other half," Dadhirao says.
     Khanjan Dalal, just a child then and traveling on the plane with his mother Trupti Dalal, who died in the final shoot-out says, “I miss my mother all the time. You can imagine how difficult it is for a child to not have his mother by his side in his formative years. The horrendous scene in the plane still gives me nightmares today,” Khanjan says.
     The targets of the terrorists were American. In the beginning, they forced an American national to kneel near the front exit, where they shot him dead, demanding that the flight crew be asked to come back. They then threatened to kill a passenger every 10 minutes and asked the Indian air hostesses to collect the passports of all passengers so that they could identify the Americans. In an amazing act of courage and compassion, the Indian airhostesses hid the passports of the Americans on board and saved their lives.
     The hijacking lasted for nearly 17 hours and ended in a bloodbath. The terrorists herded all the passengers into one section of the aircraft, sprayed them with machine gun fire and lobbed hand grenades at them. Twenty people died, thirteen of them Indians. Over 120 Indians were injured, some very seriously.
     Incidentally, in 2007, The U.S. Government honored the entire flight crew with America’s highest courage award for their heroism.
Tirthankar Ghosh

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