Tamil Nadu emerges as prime destination for Global Capability Centres in the Logistics Sector

An increasing number of logistics companies are considering Tamil Nadu as their preferred location for establishing Global Capability Centres (GCCs). Notable firms like CMA CGM, DHL, Maersk, and Mediterranean Shipping Company have already established their GCCs in the state. In 2023, Hapag Lloyd and United Parcel Service (UPS) joined the list by setting up operations in Tamil Nadu. Recent reports suggest that additional logistics GCCs are actively exploring opportunities in Chennai.

Guidance, the pivotal agency driving investments into the state, highlights that Chennai, strategically positioned along the East Coast, provides outstanding connectivity through ports, airports, rail, and road networks. The availability of high-caliber tech talent, a conducive ecosystem, and the presence of global logistics giants collectively position Tamil Nadu as the ideal choice for establishing GCCs.

These centers are strategically located in areas such as Ambattur, Thoraipakkam, Perungudi, and Porur. They focus on developing innovative software solutions for the maritime industry and are engaged in cutting-edge technologies, including AI and robotics.

Jerry Kingsley, Head-Strategic Consulting & Value & Risk Advisory India, Jones Lang LaSalle, said: “Chennai is the largest logistics GCC hub of the country.. with top 5-6 global logistics and shipping players having a combined portfolio of above 500K sy ft occupancy in Chennai.”

Subramani Ramakrishnan, vice-president, of UPS Technology centers in India, said: “The decision to establish our first technology center in Chennai was guided by three considerations — opportunity, business needs, and talent requirements. With some of the best educational institutions in the country, there is no shortage of talent in Chennai.”

UPS had recently signed an MoU with the Chennai Institute of Technology to drive academic and research initiatives.

Vikash Agarwal, Managing Director, Maersk South Asia, said Chennai provided a conducive environment for GCCs and a supportive ecosystem. “Our involvement with Tamil Nadu is not limited to our commercial business in shipping and logistics. We have a very strong Global Service Centre in Tamil Nadu that employs over 3,700 persons in global functions and supporting technology capabilities,” he added.

Ramkumar Ramamoorthy, Partner Catalincs, who has been tracking the GCC sector in Tamil Nadu said: “Decades of deep capabilities across port logistics, manufacturing, and technology has attracted some of the biggest names in global supply chain to set up their GCCs in Chennai. This includes three of the five largest container shipping companies, Mediterranean Shipping Company, Maersk and Hapag-Lloyd, and multi-modal players such as DHL, UPS and Expeditors…”

He further said: “While the earlier GCCs started with business process management and transitioned to technology services, the newer ones have embraced the city for deep digital capabilities, specifically data analytics and AI, to help re-imagine their business, financial and operating models.” He, however, said a lot more was needed on the academic front.

“We need to shape talent at a massive scale. While some efforts have been taken through the Naan Mudhalvan program, the government can also work closely with the Madras Chamber of Commerce and Industry and Confederation of Indian Industry, which have decades of experience in curating logistics programs for students and working professionals, leveraging the deep expertise of its members. These courses need to be embedded into the curriculum with credit equivalence across colleges in the State to create talent at scale.”

The 2023 GCC Guide, published by Lang LaSalle, indicates that the current pre-commitment for the projected supply until 2023 is at 10 million square feet, with Chennai leading in terms of GCC occupiers. As outlined in the guide, Chennai has demonstrated its prowess by attracting GCCs operating across diverse sectors, encompassing IT/ITeS, BFSI, and Engineering Research and development (ER&D) in both Manufacturing and Industrial domains.

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