Trade war between US and China could benefit Indian markets: Agility CCO

In Conversation With Satish Lakkaraju

Agility is a global logistics company with $5.1 billion in annual revenue and 22,000+ employees in more than 100 countries. It is one of the world’s top freight forwarding and contract logistics providers, and a leader and investor in technology to enhance supply chain efficiency. In an exclusive interaction with Logistics Insider, Satish Lakkaraju, Chief Commercial Officer, Agility Logistics discusses how India’s position in the global market has transformed in the past few years. He also gives a glimpse of the new offerings of the company to stay on top of its game. Excerpts:

In recently released Agility Emerging Markets Logistics Index, India has been ranked as the emerging market with the greatest potential and ranked number 2 in the index. What factors have helped India to achieve this feat?

The primary factor contributing to this recognition is the continuous year on year economic growth registered by India, despite the global slowdown. India was the fastest growing economy in the world last year dethroning China from the pedestal. The economy has been booming and that’s getting reflected by the confidence the industry is placing on India as the emerging market with the greatest potential in the Agility Emerging Markets Logistics Index and ranking it number 2 in the overall index.

E-commerce is largely fueling growth in the Indian logistics industry. What impact does the new e-commerce policy is going to create on the industry?

E-commerce as a percentage of the total trade is still very small in India as compared to the likes of America and Europe. There is still a lot of scope for growth in tier 2 and tier 3 cities for e-commerce companies. Hence, we foresee the aggressive growth of e-commerce to continue which will consequently continue to fuel the demand for the Indian logistics industry.

The changes in e-commerce policy will surely change the way behemoths such as Amazon and Flipkart procure from some small vendors. Companies operating in India are aware of the changes and known to tweak their business models based on the changes in the regulatory environment. Hence, I don’t see the new e-commerce policy having any major impact in the long run.

In National Air Cargo Policy, the ministry of civil aviation has kept the ambitious target to rank India in top 5 global air freight markets by the year 2025. Do you think India has required infrastructure to achieve this target?

The demand for air freight has been rising steadily in India as we have been moving up higher in the value chain by exporting more complicated goods to the world instead of just basic raw materials. The government has undertaken various initiatives to expand air freight infrastructure capacities by adding more capacities to existing airports and undertaking projects to develop second greenfield airports from key exporting locations. Indian airports are looking to run operations 24/7 starting with Delhi Airport, which will improve the efficiency in handling the air freight cargo. The ease of doing business has been the new motto for Indian customs who are undertaking various initiatives like going online for major services and improving turnaround times, this will be helpful for the country in the long run. I am sure the target for 2025 is achievable.

Will the Indian logistics industry be impacted by the looming tension of trade war between the US and China? If yes, how would it impact the Indian market?

The looming trade war between USA and China could actually be beneficial for India as the companies in the USA will start looking at secondary sourcing options similarly Chinese companies exporting to the USA will look to develop facilities in India to service their customers in the USA. We should see the looming trade war as an opportunity for India rather than as a threat.

Which unique strategies Agility follow to maintain a competitive edge over its competitors?

We are known to offer customized, unique solutions to our customers that give us a competitive edge as compared to our competitors. We have undertaken several product launches/industry initiatives for our customers over the last couple of years to increase the ease of doing business with us.

Is Agility India coming up with any new service offering to enhance its service levels for clients?

We are launching a new “Agility +” box, a temperature controlled passive co-branded packaging solution developed with Pluss Technologies and Tagbox. The unique box will be available in 7, 14 & 28 Litres capacity and will be used for shipping cargo in temperature range of 2 to 8°C, 15 to 25°C and -25 to -15°C. With backup duration of up to 120 hours, the box can be used for shipping critical temperature controlled products in an economical manner.

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