Ex­plor­ing mar­ket with con­tract lo­gis­tics

With the eco­nomic en­vi­ron­ment ripe to bring in­ter­na­tional pro­fes­sional lo­gis­tics sce­nario in the coun­try we turn fo­cus to the joint ven­ture be­tween Apollo Group and FIEGE Group of­fer­ing com­pre­hen­sive ser­vices since Novem­ber 2012. Heinz Fiege, Man­ag­ing Par

Cargo Talk - - Front Page - CT BUREAU

Q What op­por­tu­ni­ties do you see in cur­rent In­dian lo­gis­tics mar­ket?

Heinz: In­dia is grow­ing fast and has a lot of po­ten­tial. China’s lo­gis­tics sce­nario is much ad­vanced and the same struc­ture can be built by In­dia within the next few years. How­ever, this needs proper plan­ning and tie ups with suc­cess­ful for­eign com­pa­nies for quick ser­vices.

In my un­der­stand­ing, lo­gis­tics providers are strate­gic part­ners work­ing jointly with their cus­tomers to im­prove pro­cesses in the value chain and to meet and ex­ceed cus­tomer ex­pec­ta­tions. This in­cludes ad­just­ments and spec­i­fi­ca­tions of prod­ucts to cer­tain mar­ket de­mands. Fiege's value added ser­vices and its holis­tic lo­gis­tics ap­proaches cre­ate com­pet­i­tive ad­van­tages and give you the time to fo­cus on your core busi­ness.

Jan: We are ex­cited about In­dia as a mar­ket as it is de­vel­op­ing fast. I am con­vinced with the gov­ern­men­tal changes, new leg­is­la­tion, in­vest­ment into in­fra­struc­ture which is badly needed and GST and other bu­reau­cratic en­vi­ron­ment which will help lo­gis­tics sec­tor to grow.

On the other side, cus­tomers are also de­vel­op­ing and In­dian com­pa­nies are be­com­ing more open to that idea of out­sourc­ing part of their sup­ply chain know how which can bring in­ter­na­tional pro­fes­sional lo­gis­tics sce­nario in the coun­try. In or­der to ben­e­fit from th­ese changes 3PL lo­gis­tics or con­tract lo­gis­tics is needed in a part­ner­ship.

QDo you feel that we are ready for GST im­ple­men­ta­tion?

Raaja: No. We have a long way to go be­cause there is too much of work that has to hap­pen in the back­ground. We have to fig­ure out all the state taxes or city taxes and oc­trois and all those kind of bar­ri­ers for the free flow of goods. It is im­por­tant to fig­ure out who will get taxed where and will the goods get taxed at source or cross­ing a bor­der or in the mar­ket. GST will be ben­e­fi­cial when all other cru­cial fac­tors fall into the right place, then there will be bet­ter plan­ning. Man­u­fac­tur­ing com­pa­nies or con­sumer led com­pa­nies will plan their prod­uct in a bet­ter man­ner. How­ever, with bet­ter plan­ning there will be cost sav­ing.

QWhat is your strat­egy to tackle the cost is­sues in In­dia?

Raaja: In­fra­struc­ture has to play a very im­por­tant role and com­pa­nies like Fiege come in and help peo­ple like us to give good so­lu­tions to the client.

Heinz: It’s not the lo­gis­tics com­pany on its own but it re­ally has to be a joint ef­fort to an­a­lyse and un­der­stand where are the goods com­ing from, where they are go­ing, is it a two-level dis­tri­bu­tion sys­tem or three-level, how im­por­tant is trans­port cost and so on. All th­ese ques­tions need to be asked and tai­lor­made so­lu­tions need to be de­signed. Other than cost, an­other im­por­tant fac­tor is ef­fi­ciency in value chain. Thus, good IT sys­tems can give you visibility, trace­abil­ity and can man­age your whole sup­ply chain bet­ter and will also be able to re­duce cost.

QWhat is your rev­enue ex­pec­ta­tion for next fi­nan­cial year?

Jan: $80-90 mil­lion. This year we have closed at $40 mil­lion. We are a young com­pany and the first step is to lay the ground work, to have an all In­dia net­work, to get good peo­ple in the board, to have the ca­pa­bil­i­ties and then we will be able to pro­vide cost ef­fec­tive so­lu­tion. At the mo­ment we feel ready for growth.

QHow

has the growth curve of Apollo Fiege been since 2012?

Raaja: It has been great. We are dou­bling our top line on yearly ba­sis and in­creas­ing the client base. We are now bit more fo­cused on what we are look­ing for, go­ing more af­ter cor­po­rate for in­no­va­tive so­lu­tions be­cause cock­pits in In­dia are also wak­ing up to the fact that now is the time to re­duce the con­stantly mount­ing lo­gis­tics costs.

Jan: How­ever, Apollo is also al­low­ing us to bring our so­lu­tions on ground with their ex­per­tise and strong foothold in In­dia oth­er­wise we won’t be able to en­ter in the In­dian mar­ket in such a way.

(L-R) Jan Fiege, Man­ag­ing Direc­tor Real Es­tate Board Mem­ber Apollo Fiege In­dia, Heinz Fiege, Man­ag­ing Part­ner, Fiege Lo­gis­tik Hold­ing Stiftung and Raaja Kan­war, Vice Chair­man & Man­ag­ing Direc­tor, Apollo In­ter­na­tional

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