Blue Dart aims for bull’s eye in innovation

To ensure that it continues its growth pattern, Blue Dart Express is creating a new business unit, and investing in technology, infrastructure and automation, reveals Anil Khanna, Managing Director, Blue Dart Express.

How will Blue Dart address the huge growth that will take place in India’s e-tail segment?

In the last three years we have grown in the CAGR of 103 per cent versus the market growth of 60 per cent. We have grown faster than the market. To ensure that we continue this growth pattern, we are taking a lot of initiatives. First of all, we are creating a new business unit. We are investing a lot into technology, infrastructure, and automation. We are the only express company with its own aviation. We had five 757s. We recently inducted a sixth 757, augmenting our capacity to 500 turns a night. All the flights are going full. In fact, during the Diwali peak time we had to fly during the day time too.

We have invested in handheld scanners. So each and every delivery will have them. We are investing into a lot of facilities. We are expanding our reach very aggressively. In the first seveneight months of this year we have added 1,000 pin codes. So from about 4,300 pin codes that we were servicing earlier, we now service 5,300. We know that demand will come more from tier II and III cities.

We are doing a lot of innovations. We were the first ones to put up our parcel locker in Gurugram a year ago. We are now evaluating how and where we can put up more such parcel lockers across the country. We are looking at e-bicycles and e-tricycles for environment-friendly deliveries for e-commerce shipments as well. I spoke about the hand-held devices, apart from the fact that these devices allow couriers to be in touch with the consumers, also be able to talk to them and take alternate delivery instructions. The technology also allows the consumer to see our courier moving on their screen and also to know when their shipment is going to be delivered.

Reverse pick-up is one of the most important services in the e-tail industry. We are launching a product which will meet the requirements of e-tail customers. We are also tying up with Parcelshop as an alternate delivery option. We are also looking at several other alternate delivery options including tie up with Department of Post and how we can use their entire infrastructure. Our GPS facility allows the customers to know our couriers are and track their parcels. We are doing Sunday and holiday deliveries. We have introduced mobile vans and looking at how to add to them. We are also offering slotted deliveries. E-scooters are the next big thing. When can India see them?

We are looking at bringing e-scooters especially for cities like Delhi and Mumbai. They have just been launched in Germany and they are currently in commercial production. It will make a lot of sense for us to bring e-scooters into India as early as possible, not only from a cost perspective but also from environment point of view. I will be speaking to the DHL team. However, right now they are unable to meet their own demand. But we will try and expedite it and see if it is possible to transfer their technology to one of the companies in India who can then manufacture for us here. How soon do you plan to introduce drones in India?

We were the first company in India to apply to DGCA for allowing us to fly drones about one and a half years ago. They had said that they will come out with complete guidelines on usage of drones. But it looks unlikely that they will allow private players to use drones. Our application was based on using drones for remote areas for carrying life-saving drugs. So it was not only from a commercial angle but also from a humanitarian point of view. But it looks unlikely that they will give any permissions because of security concerns and very rightly so. Can you share details about your new Mumbai and Delhi facilities?

To augment our capacity, we are putting up a new facility in Mumbai airport. The current facility was given to us about seven year ago and we have run out of capacity. We are investing about ¼44 million for this new facility which will allow us to not only improve efficiencies but also to carry higher tonnages and connect our shipments faster. We are also investing in a facility in Delhi. The current facility was given to us around seven years ago where we have run out of capacity. It has problem of vehicles docking. We are investing almost about ¼25 million in the new facility which will take away all the pain points we currently experience.

For Mumbai, everything has been finalised as far as agreements with MIAL or DIAL are concerned and facilities have been identified. These will be big facilities so they will take at least a year to 15 months to come up. I expect the Mumbai and Delhi facilities to come up by 2017 end. Will demonetisation affect the industry?

It already has had a big impact on the industry. In India, 70 per cent of the e-tail business is on COD. The moment demonetisation was announced, companies like Amazon, PAYTM, etc announced a total freeze on COD shipments. Companies like Snapdeal brought down the limit to `2,000 `1,000.

and even So it has definitely impacted the industry and in the first two-three days we have seen a huge impact. But I guess it is temporary. E-tailers are trying to switch their customers from COD to prepaid or other modes of payment.

To augment our capacity, we are putting up a new facility in Mumbai airport. The current facility was given to us about seven year ago and we have run out of capacity

Blue Dart is geared up for this challenge in terms of offering e-wallets on our hand-held devices with 13 e-wallets right now for our customers. We are also providing card-swiping facilities to customers. This will help us through the demonetisation period. These are also very convenient payment features for the customer. I expect there would be an impact till such times when other solutions can be worked out. What is your take on GST?

It’s a positive move as far as the logistics industry, specially express, is concerned. With all these toll nakas going, there will be a lot of cost saving, which we will pass on to the customers. Second is in terms of the business volume. Right now, the supply chains are structured because of the VAT.

Now, with all that VAT getting removed, it will be movement from one manufacturing site straight to the customer or maybe to three or four regional warehouses and then to the customer. So the movement from full truckloads essentially would become LTLs or direct to the customer. This would essentially be an express service helping the express companies.