The Indian transportation and logistics industry is emerging rapidly to an efficient level along its growth trajectory. Rising investments, rapidly evolving regulatory policies, mega infrastructure projects, and several other developments in recent times have driven the Indian logistics market to a global extent. As the Indian Government introduces MAKE IN INDIA and PPP model program globally, our country continues to emerge as a biggest manufacturing source/partner.
What are your major achievements in the last one year? How far the market dynamics have changed in the last four years?
The FY 2017-18 has been a mixed year for Tiger Logistics. The last quarter end results were closed with more than 20% growth. The company hopes to keep the growth momentum high in the next year too. This year company has opened two international offices at Singapore and UAE respectively and expanded its footprints in foreign countries. The company has strengthened with some of new employees, a team of young professionals and individuals who have chosen Tiger Logistics from bigger MNC's. We are having many reputed agents and associates around the world. Tiger logistics has also registered itself as an Authorised Economic Operator (AEO) as the 9th Indian registered company in the AEO segment in 2017. Tiger Logistics management has always been keen in growing the corporate customer base in order to give leeway to company to always reinvest its profit for the future organic growth.
Well if you can talk about last four years' experience, you can see the sluggishness in the export market remains a worry, as commodity market is not picking up and the reefer business is also down. The company is looking at new avenues which could be the future growth engine for the company. Demonetisation and implementation of GST thereafter made the market struggle. But GST would be a game changer in coming time and we are optimistic about this. The Indian logistics industry spends around 14% of the GDP on different types of cost incurred in logistics operation. The amount of cost incurred is very high in comparison to the logistics cost incurred by different nations. 3PL logistics market in India is expected to be worth US$ 301.89 billion by 2020. This growth rate is based on the expectation that after the new government had implemented GST, E-way bill and removed Octroi (chungi) tariffs, it would help logistics companies to optimize their operations thereby reducing cost leading to increase in their margins.
The logistics firms are moving from a traditional setup to the integration of IT and technology to their operations to reduce the costs incurred as well as to meet the service demands. The industry as a whole has moved from being just service provider to the position where they provide end to end supply chain solutions to their customers. With the help of GST, the logistics companies, which are currently forced to set up many small warehouses across multiple cities can set up just a few, big warehouses region wise and can follow the hub-and spoke model for freight movement from the warehouses to the different manufacturing plants, wholesale outlets, retail outlets and the various POS.
The Indian transportation and logistics industry is emerging rapidly to an efficient level along its growth trajectory. Rising investments, rapidly evolving regulatory policies, mega infrastructure projects, and several other developments in recent times have driven the Indian logistics market to a global extent. As the Indian Government introduces ‘Make in India’ and PPP model program globally, our country continues to emerge as a biggest manufacturing source/partner.
Could you share with us details about the initiatives taken to improve upon the operational and overall organisational efficiency?
The fields that Tiger Logistics helps clients in the following fields: Automobile, Textile Plants, Retail, Agriculture, Iron and Steel, Cement, Infrastructure, Telecommunication and even Transmission and Distribution. Tiger Logistics will assist their clients in all of the steps that will need to be taken in the shipping and moving process. It all begins with a collaborative consultation approach and continues on until the client's needs have been satisfied and the services are complete.
The client will be in constant contact with their assigned Project Manager who will be familiar with the service being performed as well as the location of the service before departing and where it is being delivered to. The shipping is done with heavy machinery such as forklifts, surveying equipment, barges, cranes and trailers, making it an easy task for Tiger Logistics to perform any type of carry or lifting no matter the overall height and/or weight. Clients also shouldn't stress over the shipping of their items either, Tiger Logistics has a team of trained professionals who are aware of shipping rules domestically and internationally and will assure that your experience is one that will be done timely and efficiently and up to all laws and codes.
What are the challenges before your organisation in the current year? What's your strategy to improve market share of your organisation?
Tiger Logistics has opened 3 more new branch offices in the previous financial year such as Veraval, Vadodara and Hazira. Tiger Logistics has covered almost entire states having port area in India. We are having many reputed agents and associates around the world. Tiger Logistics management has always been keen in growing the corporate customer base in order to give leeway to company to always reinvest its profit for the future organic growth. Tiger Logistics has its own offices at all ICD's and ports in India and reputed agents and associates offices around all over the world. At present Tiger Logistics is listed on BSE main board and are trying hard to list on NSE in October - November 2019.
Being an International logistics company Tiger logistics is one of the leading service providers involved in shipping of equipment and supplies for the project sector throughout the world. The Company plans to enter the Domestic Logistics market in the coming two years. We are in the process of setting up warehouses, participate in container freight stations (CFS), inland container depots (ICD), logistics parks, distribution centres and other facilities to leverage the abundant opportunities. Our aim is to have a 100% reach anywhere and everywhere. Tiger Logistics has major expansion plans, where the company is planning to have a PAN India presence and venture majorly into domestic logistics with warehousing distribution and transportation.
The company plans to invest in the CFS (Container Freight Stations) located in Gujarat, not only to assist in doing the backward integration for our present corporate customer base but also to complement our various north India offices by providing end to end solutions for the entire cargo base moving by road to Gujarat Gateway Ports. The Company would like to enter the Defence Forces arena and be a preferred vendor for Logistics. Today the Defence Forces does not use any Private Logistics Company and spends a huge amount of money in Logistics and Transport.
Could you provide us insight about the emerging trends in your segment?
Commitment towards logistics infrastructure and regulations around rationalization of tax structures are creating an environment of positive change for warehousing and logistics sector in general. 3PL Players like us now have the opportunity to leverage economies of scale, complemented with better infrastructure, to provide integrated logistics solutions which are cost effective. Rapid growth of organized business and the need to reach out to the large untapped markets around the globe are necessitating development of strong back end and front end supply networks of Tiger Logistics.
Tapping into the trends of increasing logistics outsourcing to 3PL companies, future logistics can effectively serve the needs of organized retail. With a pan India network it has the foundation to meet the proximity needs of logistics business. Also with an expertise and facilities of serving reputed customer in categories of Projects, Automobile Goods, Engineering Goods, Yarn & Textiles, Consumer durables, Food Commodities, and Cold - Chain with significant market share. With a robust technology backbone and an accomplished manpower, Tiger Logistics (India) Ltd is projected to have a big growth in terms of revenues in coming time.
What's the overall impact of GST implementation on the Transport and Logistics sector in the last one year? How far your business got impacted?
The introduction of GST incentivises the logistics sector. Goods and Services tax is expected to act as the secondary factor which will build upon the primary foundation of a good infrastructure and the faster adoption of technology in the sector. Tiger Logistics feels GST has ensured that the nascent 3PL further embeds itself in the logistics space. Further, it is the implementation of the GST that would increase productivity and raise efficiency levels in the logistics sector, our organisation and the economy as a whole. According to various industry estimates, freight times will come down by 30-40% and logistics costs are expected to reduce by 20-30%. Tiger Logistics feels it’s a great thing happened in country and found a positive impact on itself.
The quanta of investment from the private sector, government regulation, the investment in infrastructure by the government year on year are all factors that determine whether the logistics sector will grow or be inhibited. The logistics sector in India has been performing well in the last few years growing at a rate of 15% annum. However, it is the implementation of GST which will give the sector a much needed impetus in India. The Goods and Services tax will be a comprehensive nationwide single tax which will subsume the plethora of taxes in the country. GST will be a single tax on manufacture, sale, and consumption of goods and services throughout India. The purpose behind this move is to have one indirect tax for India which will make the country a unified common market.
What needs to be done by all the stakeholders to boost growth as far as Transport and Logistics sector is concerned?
Infrastructure is one of the biggest challenges faced by the Indian logistics sector and has been a major deterrent to its growth. Infrastructural problems like bad road conditions, poor connectivity, inadequate air and sea port capacities and lack of development of modes of transports like railways and alternates like inland water transport and domestic aviation have been constant irritants. Pipelines constitute a very minor proportion. There are other problems also such as complex regulatory compliances and limited adoption and utilization of technology, which has resulted in increased paper work and inability to communicate effectively with customers. Apart from all these issues, lack of skilled labour is also a big hindrance in growth of Indian logistics industry.
The industry feels in the disorganized nature of the logistics sector in India, is a man power heavy industry and lack of adequate training institutions has led to a shortfall in skilled management and client service personnel. For example - the people who lead the company or sitting in senior positions are very knowledgeable and good at what they do but once you go below that top management layer, you can see many lower level people who are less confident about the skills and capabilities they have. This can be easily underscored as a growing concern across the industry, affecting both 3PLs and shippers: a shortage of supply chain and logistics talent. The Indian consumer is in great shape and will be increasing his and her spending levels in 2018. Companies need to have the right levels of qualified labour, working capital, and equipment to successfully manage their growth and be profitable. If they aren't prepared in advance, they're going to find that these key resources (labour, capital, and equipment) are in short supply. Labour is obviously already an issue across many sectors, and you can't get new capital equipment at the drop of a hat. The companies that have to scramble to create capacity won't be as profitable as those that prepare ahead. High logistics cost reversal is also a problem in the industry. Some issues are also very vital to work on like - Upfront efforts and costs to implement solutions, increased emphasis on regulations and requirements and Liquidity crunch.
India has become the prime destination for logistics service providers all over the world. The sector, particularly the shipping and truck hire service providers are now spending a significant amount of money on integrating latest technologies like cloud computing, Internet of Things (IoT), robotics and many more. By deploying these technologies, the companies are now able to streamline their business operations, get live data and get constant updates about the movement of the goods. The good news is with the development of new highways, roads, logistics parks, etc and injection of fresh investments, the industry is expected to grow at the Compound Annual Growth Rate (CAGR) of 16% between financial years 2016-2020. That is not all, as with the Goods and Service Tax (GST) and government's new infrastructure reform schemes, industry hopes to create new opportunities and push growth.
Coordination in infrastructure planning will need to happen not only to truly bottlenecks, but also to avoid overlap and attendant extra costs. Such resultant integration of facilities will help to reduce the high transaction costs prevalent in the economy. Tax regimes and recovery procedures continue to be cumbersome and time consuming. Urban planning today does not appear to factor in the enormous volumes of goods distribution catering to urban conglomerations in terms of road and peripheral infrastructure resulting in traffic restrictions and serious bottlenecks and logjams. This needs to be paid special attention by our planners. Finally the regulatory agencies do not facilitate proactive and participative dialogue with the industry. Blueprints and policy regulations today are a largely one-sided affair with some industry representations sought. This makes policies prone to avoidable trial and error events
Supply chain management has a huge impact on business. Good SCM can directly improve customer service. The right product and the correct quantity must be delivered in a timely manner, to appease both producers and distributors. Consumers want to be able to know the location they must go to obtain the goods that they want. Large corporations value good supply chain managers because they improve the efficiency of plants, warehouses, and transportation vehicles in a supply chain. Cash flow is directly increased because the delivery of a product is in a timely manner, and consumers can purchase their goods.