DELHI: The logistics industry is in for good times. In spite of the temporary slump in the economy, huge investments in infrastructure, rise in domestic consumption and retail markets, and the potential growth offered by the manufacturing sector promises huge opportunities for the logistics industry in the NCR.
The size of this industry in the country has been estimated to be worth US $80- $100 billion. And players say that it has shown a growth at around 15 per cent CAGR in the last few years. The players in the areas, in and around Delhi and the rest of NCR are trying their best to gain the maximum out of this opportunity.
“The industries in Gurgaon, Noida and Faridabad have opened new opportunities for us. Out of the 460 offices we have across the nation, 10 are in Delhi,” said Akash Bansal, country head of Om Logistics, which has its headquarters in Delhi.
The company, founded in 1983, started operations by carrying completely built units (CBUs) for vehicle manufacturers of the NCR, Maruti Suzuki being one of them. It still provides services to NCR-based vehicle manufacturers, such as Honda Siel Cars India (Honda Cars).
Bansal added, “We do a top line of Rs 800 crore approximately. Out of this 35 per cent comes from north India, a major chunk of which is from Delhi-NCR. The other areas are Punjab, Himachal Pradesh and Haryana.” He added that the industry has been growing at the rate of 15 to 20 per cent year-on-year and this growth rate is expected to continue.
Om Logistics is not the only company to have benefited from the opportunities. There are numerous others, both from the organised as well as the unorganised sector. However, in the absence an association it is not possible to put a figure to that.
Sky Packers and Movers India Pvt Ltd, a decade-old company owned by Ashwini Kumar, is another company, which sees opportunity in the rising retail sector in the NCR as well as the rest of the country.
“The rising retail sector offers immense potential,” Kumar of Sky Packers and Movers, who has been in the business for around 10 years said. In a month his company does 60 to 100 relocations and employs around 200 people both directly as well as indirectly. Most of the logistics companies in the NCR have operations across the country. They hold that NCR is one of the best performing geographical regions, which gives a big boost to the logistics industry in the nation. “The number of local shifting that we do is very high. There are several projects that we are doing in Ghaziabad,” Kuldeep Singh of Niico Packers and Movers said.
Most players agree that Noida is bringing out the maximum opportunities for them. Ashok Kumar, who has been in the business for the past 10 years, and has a set-up in Gurgaon said, “Noida is offering the best business for us, if we talk of the NCR. We do a total of 60-70 relocations in a month in the whole of NCR.”
While the potential offered by the industry in India is tremendous and has attracted several international players and medium and small players constitute a major portion of it. Some experts claim that unorganised segment account for 80 per cent of the revenue generated across the value chain. The major players can be broadly put in categories of full-fledged transport providers; transporters, who provide certain value-added services like warehousing; and completely integrated players, who provide third-party logistics facilities and services.
However, organised players say that with the passage of time, the industry will very soon move towards being dominated by organised players as their number is increasing day by day. “Around 99 per cent of the industry is unorganised. But the changing trend will be that it will move towards getting itself organised like it happens with every industry that is growing,” Bansal of Om Logistics said.
Citing reasons for this, he further added, “The small service providers are not able to provide end-to-end solutions to the customers. Also, smaller ones are technologically behind and with the awareness about advanced software and technology, the customers now prefer to get services like time-tracking. The smaller companies cannot provide such services. Hence, in the next decade, the direction which we will be heading towards is getting ourselves organised.”