Ram Ratan Agarwal. MD, Globe Ecologistics, discusses with Maria R, the growth prospects and challenges in India’s Logistics Industry, and emphasizes digital transportation solutions across states.
What major technological changes in the logistics market have you seen in the recent past?
Major changes in the last decade include upgradation of technology of Vehicles & GPRS Technology with IT software, which have given better output/intime to logistical services. Even road infrastructure has improved a lot. At present, GPRS is mandatory and is required to be in line with the Government's GST portal. We too have invested in purchase of new technology vehicles and ERP software with GPRS to track vehicles. Our vehicles all over India are under the Vahan-4 software, which has all the data online. This helps transporters to deal on-road with RTO / Government authorities for smoother movement of cargo. Digital transportation solutions will bring huge benefit to the warehousing and supply chains in the retail segment.
How has GST impacted growth of the Logistics industry?
The Indian Logistic Industry is under pressure due to implementation of GST as well as higher cost of fuel. As 5% RCM and 12% FCM are optional for the Logistics industry, industries with 12% FCM have benefited. Logistics players with FCM have also invested in new infrastructure, but major Logistics business is still under RCM.
What challenges do you envisage?
About 75% of India’s Logistics sector is unorganized presently. Though many companies have become organized gradually, the transformation is very slow due to Government regulations at State levels. Other issues are the RTOs, lack of skilled manpower, driver working hours, GST bottlenecks, and highway tolls, all of which are a hurdle for smooth movement of goods and consignments of industries. In my view, it will take another 10 years for the Logistics sector to become better organized.
While mega projects like Bharatmala and Sagarmala will help the industry move smoothly to heavy dimension cargo, industrial heavyweight industries will have to plan production facilities in the vicinity of these projects. Also, Logistics in projects requires a huge skilled manpower as there is high capital cost of equipment (capex) and also due to the federal system in India. Transportation regulations in states is very important, so there must be online permission at the state level too.
What cost-effective solutions for ODC movement are being provided by modular trailer manufacturers?
In India, the Modular Trailer manufacturer segment is limited in number. VMT is the oldest in the market. TIl, earlier known as Tratec, is a multinational manufacturer. Indian trailer manufacturers offer cost- effective solutions, but their quality standards do not meet international levels. Customers here demand lower freight rates, so, commercial viability is important. There is a lot of scope for improvement by the manufacturers.
What is the core competitiveness of Globe Ecologistics?
We have established core competitiveness in wind projects and in_ transformers up to 175 MT. We recently undertook transportation of 63-meter blades of Suzlon from the west to the south of India. Besides windmill project transportation and transformers, we provide transportation solutions to the Oil & Gas sector. We also undertake container transportation with our trailers and trucks.
We have an annual turnover of Rs. 400 cr. With our fleet of 375 vehicles, we are operating across major parts of India and have skilled manpower to undertake all kinds of challenging assignments.
What is your vision and action plan for 2020?
We are planning to make maximum investments in heavy-duty vehicles as legal load movements are set to increase. Industries will also upgrade their product offerings to higher tonnage capacities to reduce their production costs. We are waiting for new projects to be launched and will plan accordingly. We also have plans for setting up warehousing and supply chains for industries to meet their internal logistical needs.
