Tapping into e-commerce logistics

Mr. Shashi Kiran Shetty, Chairman, Allcargo Logistics

Mr. Shashi Kiran Shetty, Chairman, Allcargo Logistics: Surge in online purchases will drive demand for e-commerce logistics and warehousing in India. We are now in a position to leverage the express logistics major GATI’s first-mile and last-mile delivery capabilities to offer specialised solutions to tap into the e-commerce logistics segment.

 

Congratulations on completing the acquisition and being elected as Chairman of GATI. Now what is the integration plan and what synergies you look forward to bringing in between both the companies?

Thank you. I have always had a firm belief in the potential of Gati and it’s a proud moment for us to be associated with the company. Gati has gained a market-leading position in the express logistics segment as a result of its unmatched service and vast network that will add value to Allcargo’s services portfolio.

The acquisition brings forth a number of opportunities for Allcargo and Gati to collaborate and offer seamless logistics services to customers

How does GATI fit into your long-term strategy and what does this acquisition mean to Allcargo customers?

We believe there is a great scope and lot of potential for us to succeed in the flourishing consumption space of India. Although the economic scenario appears to be restrained at the moment due to the impact of the COVID-19 pandemic, the India growth story remains intact for the long run, fuelled by promising GDP growth prospects and demographic dividends. The strategic acquisition of Gati has given us a significant opportunity at just the right time. We are now in a position to leverage the express logistics major’s first-mile and last-mile delivery capabilities to offer specialised solutions to tap into the e-commerce logistics segment.

Coronavirus lockdown has affected GATI’s operations. What is the outlook for Q2 and beyond?

Post-lockdown, the business volume of Gati has gone up significantly of the pre-COVID-19 level and the numbers are improving. This trend is likely to continue in the following quarters.

In addition, a result-oriented, focused transformation effort is currently in progress at Gati. So, the outlook is very positive.

In the backdrop of Coronavirus impact what is your medium-to-long term perspective of transportation and logistics opportunities?

The logistics industry has weathered the COVID-19 impact and the business is getting back on track. The impact on our global NVOCC business operated via wholly-owned global subsidiary ECU Worldwide was evened out during the lockdown thanks to varying demands from regions like China, Europe and the US that went in and out of lockdowns at different points in time. Going forward, freight levels are expected to increase as Coronavirus rescue packages announced by the US, EU and China will offer the much-needed fiscal stimulus to drive those economies forward.

As manufacturing sectors in India are showing signs of recovery, Exim volume is likely to go up and the trend will positively impact the CFS business. With global companies exploring ways to de-risk their supply chain by moving operations to India, Exim trade will get further boost. Moreover, the surge in online purchases at the consumer-end will drive demand for e-commerce logistics and warehousing in India. Although the asset utilisation level had decreased recently due to the COVID-19 pandemic and impacted our project and engineering transportation segment, it is poised for revival with the urban and rural infrastructure development, power plant construction, etc., picking up pace.