2017: A year that witnessed ups and downs

As the year comes to end, delves into the year that was and the projections by eminent industry experts of what the upcoming new year has in store for the logistics industry.

Dileepa B.M India Cargo Award Winner 2017 & CEO - Bonded Trucking Shreeji Translogistics

2017 was very good as compared to the previous years. There is growth in tonnage and turnover. After two to three years down fall, we have seen some growth in cargo movements this year. We are expecting the same growth in future also. At the same time, we need some relaxations from customs side to operate bonded trucking. Rules for bonded trucking are not friendly to trade. We have bought this matter to the concerned custom officials. We are planning to start our bonded trucking operations from Amritsar and Jaipur in 2018. In November 2017, we started our bonded trucking movements from Vishakhapatnam to various other airports in India to achieve 25-30 per cent growth in tonnage and turnover compared to 2017. Transportation industry is one the most affected industries after demonetisation. We need cash of two to three lakh daily in each station, to give amount to drivers for their diesel and toll charges. As cash withdrawal limit was there, our business became stand still. But, somehow immediate arrangement was made with Petrol Pump Owners to give diesel to our trucks. We made payments to Petrol Pump Owners directly by bank. Later it got streamlined. After GST implementation, the transit time has drastically reduced, as there is the any check post in the state borders. Earlier, our trucks use to stand hours together to cross the check post, verifying the documents, etc. Now, it’s been removed and free flow of trucks into the city has helped us a lot.

R Shankar CEO TVS Logistics Services India

2017 has been a roller coaster year for logistics industry but for the most part I would say it was positive. GST has been a progressive step in the right direction and the recent announcement to grant infrastructure status to warehouses is encouraging. Barring the initial uncertainties during the early implementation of GST, overall it has been a good year for TVS Logistics. In terms of revenue, we had a high-teen growth spurted by the underlying volumes of our customers and also due to the new contracts signed in this period. TVS Logistics also realigned their India structure to consolidate the business in this region and provide a stronger seamless supply chain suite to our customers. We were recognised for our operational excellence and expertise in supply chain management by the industry and our peers in the form of 12 awards in the last 8 months. From an auto sector perspective, we are growing faster than the industry. India is the fastest growing economy in the world and as the reform impetus continues, the surging GDP is expected to grow even faster in the coming months. I expect 2018 will see stronger 3PL performance, and realignment of supply chain in favour of optimisation of warehousing space and network capabilities to drive greater efficiency – in line with GST. In the long term the government and industry should partner to introduce initiatives to reduce the cost of logistics and bring it on a par with international standards at 8-9 percent of GDP. I therefore, look forward to more investment in better road networks, higher adoption of rail networks and waterways, more mechanised operations and development of supply chain professionals and skilled ground staff across all levels.

Stanley Gomez Managing Director – Indian Subcontinent Navigator Visa Global Logistics

For NVGL, it had been a fantastic year with our new Joint Venture with the Visa Global Group. We surpassed our own record by growing almost 35 per cent in the first half of 2017 so for us the reforms worked out as a blessing and positive. Of course, we also expanded with own offices in over 12 countries, becoming one of the largest freight forwarder specially in Italy – India trade lane. An easy CAGR growth of around 35-40 per cent is very well planned and established with long term contracts and projects we have signed with our global clients. We will continue to grow and expand our network in Indian subcontinent, specially Colombo and Bangladesh, etc. 2017 was not a very endearing year for the industry as a whole with various new changes and reforms by the government especially with demonetisation and GST all being enforced in very short intervals, but I personally feel these measures are aimed towards building a more structured and well stable and regularised economy, so I think it would be very beneficial for India and recovery and growth should be good in 2018.

Jaideep Raha Managing Director Jetex Oceanair

2017 was very turbulent for the entire industry. We had to cope up with lots of unpresented issues like demonetisation and GST. This impacted the industries cash flow systems greatly. There has been a slowdown. 2018 seems to be better and much steady as we don’t have any more bouncers from the government in 2018. I feel that the next year will be a beginning of a turnaround for the freight Industry, though the total turn around would take least five years. We expect to have a steady growth of about 20 per cent in turnover and better yield. Despite challenges like demonetisation and GST, we are still carrying on our business and being on track is the biggest achievement.

Rahat Sachdeva India Cargo Award Winner 2016 & Vice President Rahat Continental

2017 has been a great year. The industry has experienced better volumes and higher revenues as compared to the last year. There is a lot of positivity around and speculations are that 2018 will be even more better. DIAL has opened doors for transit shipments via Delhi airport which was the most excellent move. It made Delhi airport transit hub for freight generating out Bangladesh, Sri Lanka and China to Europe and USA. This opened doors for many airlines in and freight forwarders holding capacity to cater more beyond the local originating freight. I am predicting at least 15 per cent growth in air freight and 10 per cent growth in ocean freight segment in terms of tonnages, whereas the revenue would be approximately 25 per cent in 2018 as compared to this year. India as a country is going strong and has great years lined up ahead for the manufacturing and supply chain industry.

Kushal Nahata Co-founder & CEO FarEye

Technology revolution has taken over every industry and supply chain is no exception. Although 2017 has seen logistics companies experimenting with PUDOs, rising demand for time-slot deliveries and parcel lockers, the adaptation to these models have not been faster as expected, especially in India. With the advent of AI & digitalisation, logistics & supply chain industry is getting a makeover, altogether. Most of the trends in 2018 have been started in 2017 itself, the once-future technology like google glasses and drones have are already hit the industry and making progression for improving speed, convenience and delight to the customer. The industry is expected to grow at the CAGR of 16 per cent between 2018 to 2020. With a new government, many policies are expected to be implemented which will give a fresh impetus to India’s growth engine particularly in the corporate and SME sector which in turn will expand demand for the logistics sector. Overall, the trend is moving towards simplifying the cumbersome process, eliminate mundane and repetitive tasks to enhance the effectiveness of the organisation and improving customer delight. To handle the changing demand and the fluctuations in the orders, logistics companies are making their operations elastic to plan the capacity according to the requirement. This has emerged the need for elastic logistics.

Puneet Srivastava Regional Manager Cargo Aeeroworld Aviation India

Cargo industry saw growth in 2017 after two consecutive years of slowdown. Specially, air cargo increased due to congestion at port. India has good export for pharma/leather goods/spare parts to Russia and CIS. We in Uzbekistan Airways saw around 25 per cent growth of these products to Russia. 2018 again looks promising for export and we are hopeful to increase our market share in the next year. The next year seems very promising for air cargo trade. Industry will see more reforms in coming months. Exporters are hopeful to increase the orders. Pharma export is going to increase ex-India to Russia and CIS sectors. Though introduction of GST and demonetisation made some effect on cargo industry, but, for a time being only. In my view, if government can decrease the GST rates on air export, it will be more beneficial to promote export in India. Uzbekistan Airways is a leading carrier for CIS, in 2017 we were fully focused to increase our market share and position of product. We have seen remarkable growth in cargo tonnage ex-India. We also operated charter flights which made us carry extra tonnage.

Ajay Khosla Business Head Emiza Supply Chain Service

In 2018, companies will need to make thoughtful changes into processes and SOPs to match with the pace of these trends. This ever-big competitive environment putting company’s culture on alteration and the backbone of all industries, the ‘LSPs’, are not expectations, here it can be tough to change where traditional ways are being fundamentally changed or even vanished. LSPs are now focusing on digital suitability, cost competence, asset yields and innovation so they can meet changing expectations of trade.

GST implementation will also support LSPs by consolidation of warehousing locations and move towards 'hub and spoke' system. LSPs are now spending a significant amount of money on adaptation of cloud computing, Internet of Things (IoT), robotics. The development of transportation and logistics infrastructure, dedicated freight corridors, logistics parks, free trade warehousing zones, port modernisation, development of inland waterways are adding to competence and will be the driving force to growth.