AU­TO­MO­TIVE LO­GIS­TICS

Ser­vice providers gear­ing up with cau­tious op­ti­mism

Cargo Talk - - Front Page - Ratan KR Paul

Though presently slug­gish, In­dia is an emerg­ing mar­ket for the au­to­mo­bile in­dus­try. How­ever, are the 3rd party lo­gis­tics ser­vice-providers in this coun­try ready to cater to the de­mand from this sec­tor?

Car­gotalk presents the per­spec­tive of lead­ing lo­gis­tics ser­vice-providers in the au­to­mo­tive sec­tor.

re­cent re­ports re­veal that twowheeler mar­ket will be the only seg­ment to reg­is­ter marginally pos­i­tive de­mand growth in the near term. The sales of two wheel­ers have in­creased by 18 per cent in Septem­ber and Oc­to­ber 2013. Re­ports also un­veiled that the auto com­po­nent in­dus­try has been hit hard, ex­cept for the two-wheeler seg­ment. The com­mer­cial bus and truck seg­ment has suf­fered the most with sales fall­ing 32 per cent yearon-year in Oc­to­ber to 14,261 units. The seg­ment has been see­ing neg­a­tive sales for the past 20 months.

How­ever, from the long-term per­spec­tive, In­dia would be the lu­cra­tive mar­ket for au­to­mo­bile/ au­to­mo­tive man­u­fac­tur­ers and lo­gis­tics ser­vi­ce­providers for the same. Pro­jec­tions say In­dia will be the world’s 3rd largest au­to­mo­tive mar­ket by 2016 ahead of Ja­pan, Ger­many and Brazil, rid­ing on its do­mes­tic au­to­mo­tive sales. Ac­cord­ing to IHS Au­to­mo­tive, a global mar­ket in­for­ma­tion provider, though the eco­nomic growth vul­ner­a­bil­ity and lower sen­ti­ment re­sulted in the mar­ket slow­down in 2012 and 2013, In­dia is ex­pected to re­gain strong growth trend from 2014 on­wards.

“Yes, we are fac­ing the pinch of the present slow­down pre­vail­ing in the mar­ket. The only growth is vis­i­ble from twowheeler seg­ments,” said Vipul Nanda, MD, Mer­cu­rio-Pal­lia, the lead­ing name in the au­to­mo­bile lo­gis­tics arena. Ac­cord­ing to him, thanks to new prod­uct ranges added to the com­pany’s ac­count, they have not seen any slide in per­for­mance. Com­ment­ing on the re­vival of the mar­ket, he said, “We are all wait­ing for the Par­lia­ment elec­tions in the coun­try due to take place next year. Till then, we will have to wait and watch. I think the pe­riod from Jan­uary to March 2014 would be a very crit­i­cal time for the en­tire in­dus­try,” he ob­served.

Ac­cord­ing to Nanda, an early im­ple­men­ta­tion of GST would be the game-changer for the lo­gis­tics in­dus­try. Af­ter in­tro­duc­tion of the pro­posed GST, the com­pany is ex­pect­ing a quan­tum jump in long-haul goods move­ment in the coun­try. To tap the lo­gis­tics and ware­hous­ing mar­ket in post-GST era, the com­pany has de­cided to launch ‘Car Com­pounds’ to cater to the de­mand of car-stor­age in dif­fer­ent re­gions in In­dia. The first one is likely to be ei­ther in East or North In­dia.

Mer­cu­rio-Pal­lia is also plan­ning an ex­pan­sion of its op­er­a­tional area glob­ally, ini­tially with South and South-East Asian coun­tries viz. Nepal, Bangladesh, Thai­land, In­done­sia and Viet­nam. Al­ready, the com­pany has a li­ai­son of­fice in Sin­ga­pore to ex­plore busi­ness op­por­tu­ni­ties in that re­gion.

Pol­icy Frame­work & Cus­tomers’ Ex­pec­ta­tions

Ac­cord­ing to Areef Pa­tel, Ex­ec­u­tive

We are fac­ing the pinch of the present slow­down pre­vail­ing in the mar­ket. The only growth is vis­i­ble from two-wheeler seg­ments” Vipul Nanda Man­ag­ing Di­rec­tor Mer­cu­rio-Pal­lia

Vice-Chair­man, Pa­tel In­te­grated Lo­gis­tics, though In­dia is emerg­ing as a mar­ket for the au­to­mo­bile in­dus­try, the gov­ern­ment du­ties/ levies is­sues need to be ironed out, if In­dia is go­ing to be­come a hub for this busi­ness. More­over, the truck­ing in­dus­try, which has shown nearly dou­ble-digit growth for sev­eral years now, has slowed down for the past cou­ple of years. The slow­down is due to the fact that the In­dian au­to­mo­tive sec­tor has not been able to keep pace with cus­tomer ex­pec­ta­tions. “The op­por­tu­ni­ties are tremen­dous, but if In­dia can re­ally gain from them is yet to be seen,” he said.

Pa­tel In­te­grated Lo­gis­tics is con­cen­trat­ing on di­rect to-and-fro ser­vices to all ma­jor mar­kets with spe­cial fo­cus on au­to­mo­bile man­u­fac­tur­ing hubs like

Cus­tomers to­day are ever-de­mand­ing, very cost-con­scious and want the best in qual­ity & ser­vices from the lo­gis­tics provider” Areef Pa­tel Ex­ec­u­tive Vice-Chair­man Pa­tel In­te­grated Lo­gis­tics

Pune, Chen­nai and Gur­gaon. “We are also quickly ramp­ing up our de­liv­ery cen­tres to cater to the ever-ex­pand­ing spare-parts sec­tor. The idea is to pro­vide just-in-time ser­vices, which is the need of the hour, and is be­ing im­ple­mented across the au­to­mo­bile in­dus­try,” Pa­tel added, in­form­ing that the com­pany is cur­rently cov­er­ing nearly 80 per cent of the mar­ket.

“Cus­tomers to­day are ever-de­mand­ing, very cost-con­scious and want the best in qual­ity & ser­vices from the lo­gis­tics provider. One should study the cus­tomer’s re­quire­ments cor­rectly, should be flex­i­ble and pro­vide a so­lu­tion which fits his needs,” Pa­tel pointed out.

Akash Bansal, Head-Lo­gis­tics, Om Lo­gis­tics, a core player for au­to­mo­tive

All 3PLs are ready to cus­tomise their net­work and de­liv­er­ables to what is ex­pected by the cus­tomers” Akash Bansal Head-Lo­gis­tics Om Lo­gis­tics

lo­gis­tics, ob­served that In­dian 3PL or­gan­i­sa­tions in In­dia are also gear­ing them­selves to cater to the de­mand­ing need of the au­to­mo­tive sec­tor. Though there are many chal­lenges, but the or­gan­ised 3PL in­dus­try in In­dia is all set to bring in all pos­si­ble im­prove­ments and are also ready to take up any in­no­va­tive changes as it is a cus­tomer-driven mar­ket. “All 3PLs are ready to cus­tomise their net­work and de­liv­er­ables to what is ex­pected by the cus­tomers,” he said.

“We at Om Lo­gis­tics are ready to adapt to any pos­si­bil­ity that comes to us from our cus­tomers, which can be a win-win model. We try to in­cor­po­rate best prac­tices from our global part­ners and also from our cus­tomers to en­hance our de­liv­er­ables,” he added. He stressed that Om Lo­gis­tics pro­vides a sin­gle-win­dow so­lu­tion to all the el­e­ments of sup­ply chain, i.e. road, train and air trans­porta­tion and a com­pre­hen­sive 3PL man­age­ment which pro­vides its cus­tomer with a sin­gles­o­lu­tion provider con­cept for all el­e­ments of their value chain.

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