The Indian logistics sector is undergoing a rapid change. From leveraging technology to building new infrastructure to moving towards sustainability, the industry is making every possible effort to gain efficiency and utilise every opportunity coming its way. In this regard, V-Trans has been a major player as it continues to contribute to the industry’s transformation by making necessary investments and bringing in innovation. Aditya Shah, Executive Director of V-Trans (India) Ltd. sheds light on the transformations of the transportation industry, the implementation of technology in the complex Indian market, the company’s newly launched SAARC operations, the future of sustainable fuel in India and much more. Edited excerpts:
The northeast region of India which comprises of the seven sister states is believed to be full of opportunities for the transportation and logistics industry, especially because of its geography which allows it to share its boundaries with countries like Bangladesh, Bhutan, Nepal and Myanmar. Do you share the same view? Please elaborate.
This echoes the strategy that we have launched, a couple of months ago, seeing the potential in the area and the connectivity with BBIN countries primarily. We had kept a focus on the area for the past couple of years. To venture into the international market, we selected the northeast part of the country and launched our SAARC operations last year on our foundation day i.e. 21st Nov 2021.
The northeast economy has emerged into a new dimension of cross-border trade (informal trade) with neighboring nations and that increases integration benefits from the various regional and sub-regional initiatives that neighboring countries have created. There are vast opportunities in trade in sectors like agriculture, horticulture, floriculture, processed food, engineering, automobiles, garments, pharmaceuticals, agro-processing sectors or natural resource areas etc. The states in the NER are also encouraging startups which are exporting processed food, organic fruits, and vegetable, high-end fashion products through borders. Government is also exploring opportunities for logistics parks projects all across the major trading points which in turn will have a positive impact on the local economy and livelihoods.
Companies are leveraging AI-enabled technology to deliver packages faster. Shippers are adopting smart tech for tracking and using analytics to decrease their cost to serve. How easy or difficult is it to implement such emerging technologies in a complex market like India?
AI already has a profound impact on the way we interact with all stakeholders. AI applications are disrupting processes and standards in the logistics sector and are set to play a significant role to save time, reduce costs and increase productivity and accuracy with cognitive automation.
Speedy technological development in the fields of big data, algorithmic development, connectivity, cloud computing, and processing power have made the performance, accessibility, and costs of AI more favourable than ever before and gradually logistics in India is able to take the benefit of these technologies. The emergence of technologies such as AI, machine learning, and blockchain has started transforming the chaotic and fragmented logistics market. Majorly logistics and supply chain operators manage large fleets of vehicles and networks of facilities nationwide. For instance, our group has a network of over 750 branches and 50 hubs to enable the hub & spoke distribution model. We have a fleet strength of above 1300 owned & attached trucks and hire more as required daily from the market. At any point in time, we have over 8000 trucks plying on the roads of the country. We have over 3000 dedicated people working round the clock to drive operations with excellence. With all these strengths, the role of technology is unquestionable, and we understand this.
V-Trans is one of the few companies from the logistics sector which has used technology extensively in its various operations. This includes optimisation of routes and networks, scheduling and placement of vehicles, forecasting seasonality, and best use of data analytics and AI & ML. The company prides itself on the fact being the only player from the industry which has the capabilities of furnishing all logistics needs of a customer be it primary transport, secondary transport, warehousing, express movement, multimodal or project cargo, reverse logistics, city-run or 3PL. All these services are neatly integrated at the back end with our indigenous ERP eCargo.
We empower our clients with data and insights that they get through our MIS reports. We are utilising the power of data to the fullest for ourselves as well as for our clients. Technology for us has been a great support and we are determined to explore it to the fullest.
Q] On an average, out of the total cost of shipping, last mile deliveries comprise of 28% of the cost. What are the factors that contribute most to this high-cost?
Yes, last-mile consists of substantial cost. It may vary slightly from company to company, but it is a significant portion of overall logistics cost. The most important factors are fuel, reverse logistics, labor & delivery cost, storage
and idling cost, etc.
1. Fuel: Needless to mention that fuel comprises the most significant part of the total cost, and the skyrocketing prices are a big concern for everyone in the logistics business. In our country, fuel is above 40% of the total cost.
2. Labor cost: Smaller loads multiple stoppages and loading-unloading at several places add to higher labor costs in the last mile. Adding to it is the perpetual shortage of skilled laborers.
3. Reverse logistics: For various reasons reverse logistics adds up to the overall cost. In addition to the cost, it becomes critical for many other factors like inventory management, brand reputation, etc.
4. Infrastructure: To deliver the last mile, the infrastructure is much different from the highways. The logistics player has to deliver in the city traffic to different locations. Often appointment deliveries become very challenging to optimise the time and effort to deliver in a specific area. Due to different time slots, route planning goes for a toss.
5. Resources requirements: A logistics player requires many resources to handle last-mile delivery. We have a network of branches and delivery partners to support the intense requirements of the last mile.