Mahindra logistics to deploy EVs for last mile operations

Post By : Karvi Rana
Post Date : December 28, 2020
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Mahindra Logistics, which is on an ambitious growth path with a target of achieving INR 10,000-crore revenue by FY26 through inorganic and organic routes, is planning to deploy electric vehicles (EVs) for last-mile delivery shortly, a top company official has said.

The plan comes after online retailer Amazon India’s move to deploy EVs for last-mile delivery. The company is reportedly in touch with Mahindra Electric and Kinetic Green for vehicle supplies.

As per reports, furniture retailer Ikea (through Gati Logistics) and online grocery store Bigbasket also use EVs for their last mile operations.

“A key part of the near three-fold growth drive in five years includes adding 2 million sq ft of warehousing annually over the next few years with each of the yards spanning 4-5 lakh sq ft. The company has 16 million sq ft space now. In Q3 alone, it added 0.75 million sq ft space in Chennai and Hyderabad.”

~Rampraveen Swaminathan, managing director and chief executive, Mahindra Logistics

Mahindra, one of the largest 3PL service providers, offers 13 services and one of the new services it is keen to enter is deploying EVs for last-mile delivery. The company will be launching this soon, Swaminathan said.

He also said that the other leg of the INR 10,000-crore revenue push from INR 3,800 crore in FY20 involves entering new services and scaling up existing verticals.

Mahindra at present is planning a large expansion of the freight forwarding business, which is a money spinner now (it is already growing at 20 per cent) and to achieve scale, the company is also open to acquisitions, Swaminathan informed, adding that expansion will also see widening of its business-to-business (B2B) and business-to-consumer (B2C) verticals.

Furthermore, Mahindra Logistics is also looking at new markets and new geographies, including taking its freight forwarding business overseas, he said.

However, nothing has been finalised on this front, and there is no hurry to go international as the domestic market is very large, he added.

“It will be a critical business for the company as the nation is being driven to an all-EV market in a decade or so down the line.”

~Swaminathan on the launch of EVs for last-mile delivery

For successful operations of EVs, what is of critical importance is optimising the cargo weight, he said.

The company is trying to push the industry, which currently uses mostly electric two-wheelers, into larger adoption of EVs for last-mile delivery, Swaminathan said.

He said another strategy for faster growth is to pivot the company away from its over dependence on auto segment, especially the parent group, and shift revenue focus to the consumption story being played out now by pharma, e-commerce and food supply chains, thus offering end-to-end fulfillment logistics.

He informed that even after so many years, 50 per cent of the company’s revenue still comes from auto segment only.

Moving away from auto segment will see the company focusing more on FMCG, pharma, e-commerce, and international exim business, he added.

Reflecting the changes taking place in the economy, which is a faster and deeper embrace of consumption, the company will also focus on service-level integration to offer end-to-end solutions or what is called fulfillment services, Swaminathan added.

Mahindra Logistics was founded over four decades ago as an in-plant logistics arm of Mahindra’s automotive business. The company today serves over 400 corporates across automobile, engineering, consumer goods and e-commerce segments

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