'Our innovations have played key role in bringing global standards to Indian customers' doorstep'
News Clip: The Economic Times, National
22nd August, 2011.
Anil Khanna , managing director, Blue Dart Express responds to ETSL queries related to developments, both in-house and out in the logistics space.
Of late the logistics/courier/express segments in India are witnessing lot of innovations. Take your own example, in June, you added 4 Blue Dart-DHL retail stores to the chain. Now the company has piloted Smart Truck technology in India. What are the driving forces that make India a platform for all such developments?
The driving factors that add to the growth of the express logistics industry are increase in trade, government policy reforms, increased spending on infrastructure, and the overall economic growth driven by domestic consumption in growing metros and now increasingly in Tier II & III towns.
I would also want to add that at present the express industry in India is still unorganized and fragmented. It faces several issues like high costs, inadequate infrastructure, capacity constraints, low usage of technology, complex tax laws, over regulation, policy issues and lack of skilled manpower.
How have the retail shops changed the paradigm for the industry?
The Blue Dart-DHL retail stores are an additional endeavour to ensure that customers perceive the two brands as one. As part of this endeavour, we currently have 426 retail stores and our focus is to increase the count of the retail stores from 426 to 1000 across India by 2015.
The retail stores leverage the leadership position enjoyed by both the brands. They offer customers the freedom to avail of domestic as well as international products in both Blue Dart and DHL outlets.
Despite these offerings the Indian sector is subject to lot of copy cats?
The Indian logistics sector has come a long way since inception. All the players today are trying to carve a niche for themselves in air or ground, domestic or international. They have also scaled up their operations to meet increased customer expectations.
Customers today are demanding and expect a greater ability from service providers to manage complexity and provide complete solutions - a more strategic partnership to meet common goals, rather than a fleeting transactional relationship.
Customers will think of shifting loyalties to other players only if they are convinced of superior service which generally only an industry leader can provide.
Though a lot of customized services are being offered by players, why is it that the segment has not yet seen full utilization of IT technologies?
The use of technology will continue to be a critical success factor and key differentiator with the service provider having a greater chance at staying relevant, doing good business and being profitable. IT is widely used in logistics and going forward we will witness advances in IT solutions mak-ing tracking and tracing of shipments much more seamless than it is today. Interactions will become much more automated; web-based solutions will provide real time information and better customer management.
Blue Dart was the early adopter of technology. Our technology innovations have played a key role in our premium positioning and in bringing global standards to the Indian customers' doorstep.
In addition, we have also gone a step ahead with the recent launch of Smart Truck that will improve service quality, and reduce time and CO2 emissions.
What has been the experience of Smart Trucks since their launch in Germany last year? And what made the company select India as its next destination?
In Germany, DHL Smart Truck reduced number of miles traveled by 15% and length of average route by 8% during its pilot stage, reducing both fuel consumption and CO2 emissions.
India, one of the fastest growing countries, is a challenging metropolitan area and demographically, urban cities pose logistical challenges such as traffic restrictions, density and clogging. The Smart Truck was identified as a good and innovative opportunity to meet these challenges. With this pilot we can transfer an already proofed effective system to megacities and emerging markets. All this while ensuring environmental protection and also fulfilling customer needs.
Has industry consolidation taken a back seat to innovation?
No, I don't think consolidation has taken a back seat to innovation, they run parallel. The service providers need to continuously innovate as per the customers' requirement and not offer what they have. And with the economy progressing and domestic consumption on the rise there could be industry consolidation also. How do you find the industry moving forward in the near future in the region?
The express industry is a key enabler in facilitating trade and commerce because of the time sensitive nature of most goods and the increasing demand for reliability, efficiency and speed.
The opportunities are aplenty for the express industry here as the current logistics spend in India is 12% of the GDP compared to a notably lesser percentage of the same in more developed economies. The need for the highest levels of efficiencies still exists.
The demand for express services is surging with each passing year and customer expectations have also risen tremendously.
With India recognized as an outsourcing destination, manufacturing sectors are likely to witness increased activities in the medium to long term. Besides, the opening up of banking, insurance, telecom and retail sectors would boost the demand for valueadded express services in India, as these are major user industries.
What is your take on the depressing world economic conditions impacting your segment in India?
Our business is mainly driven by domestic consumption which is unlikely to be affected much due to the crisis hence we don't foresee any impact on the segment.