The emphasis given by sectoral players to reduce costs andimprove efficiencies has lead logistics players to muscle their expansions


Recent meltdown and its after effects saw more than half adozen logistics companies a lot of developments happening to supply chainsegment in India, thanks to the emphasis given by different sectoral players toreduce their costs and improve efficiencies.


The happenings once again underlined the ample opportunitiesthat are there to value-engineer processes to offer value for money and just intime efficiencies. Some of the companies that developed their 3PL (third partylogistics) and warehousing strength include Allcargo Global Logistics,Safexpress, Shree Shubham Logistics, Transport Corporation of India, Gati, and AFL.


The emerging retail sector, which is considered to be thenext sunrise industry in India, is believed to be the primary mover behind allthese developments. The logistics players knew that the success or credibilityof a participant of the retail sector depends on ensuring continuousavailability of a wide range of products in optimum quantities across a widelyspread operational network, which means a high level of control on logistics.The retail segment also demands the highest quality of service from logisticssolution providers. Global benchmarks are increasingly being applied to retailoperations in India. Not only do the logistic service providers require breadthof transportation network but also strong expertise in storage and value addedservices to cater to such dynamic market.


As pointed by a recent report ''Transforming Landscapes onIndian Warehousing' by CII - Jones Lang LaSalle Meghraj, logistics costs inIndia equals 13% of the GDP, which is significantly higher than those of thedeveloped countries, where it equates to only around 10%. "Even aslightest reduction would result in considerably huge savings for thecountry'', it pointed out.


The report went on to point out that the emergence ofoutsourcing along with the consolidation of 3PL players would result inimproving efficiencies and lowering costs in the supply chain.


The developments also underlined, what, Tushar Jani,chairman of CII western region logistics sub committee and chairman, Blue SeaShipping Agency implied when he said that there was a need to develop a newkind of confidence on the quality of service where people would start trustingin third party logistics.


For example, leading logistics player, Allcargo GlobalLogistics has started offering its customers 3PL solutions as a way to addvalue to their existing supply chain logistics services. With this, Allcargocustomers can now benefit from an integrated network of warehouses to ICD/CFSto the closest gateway port. The 3PL division enables Allcargo to offer full service,end-to-end logistics service package comprising in-house expertise andfacilities for freight forwarding, customs clearance, transport, warehousingand distribution services.


Safexpress, one of the country's largest supply chain andlogistics company has launched its ultra-modern logistics park in Pune. On theoccasion of launching the company's ninth facility in the country in the lastnine months, Vineet Kanaujia, GM-marketing, that the company 'has taken theownership of driving a warehousing revolution in India. We are investing Rs 600crore to develop world-class warehousing at certain strategic locations acrossthe country."


Mr. Kanaujia said, "There is a huge growth opportunityfor warehousing business in India. Special Economic Zones (SEZs) are one of themajor driving forces for the business in the country. A large number ofupcoming SEZs have necessitated the development of logistics parks for thedomestic market as well as for global trade."


According to him, Safexpress plans to develop 5 millionsquare feet of additional warehousing space across the country in the nextcouple of years, adding to the existing warehousing space of 5 million squarefeet. "In all, we plan to launch 32 logistics parks in the next two years.These parks are all set to revolutionize the way supply chain functions in ourcountry today," he said.


VRL Logistics, the logistics division of the country'slargest owner of trucks, is also giving more thrust on giving 3PL &warehousing solutions, which are tailor-made and cater to unique needs ofcustomers. According to company sources, VRL Logistics is expanding its serviceto reach even the remote locations in the country.


Shree Shubham Logistics, a subsidiary of Kalpataru PowerTransmission, is also focused on developing a string of commodity warehousinglogistics parks at strategic locations in states of Rajasthan, Gujarat, Maharashtra and Madhya Pradesh.


Companies like Transport Corporation of India, Gati, and AFL are also developing their 3PL and warehousing muscles to supplement theretail industry.



Originallypublished in The Economic Times dated: January 11, 2010