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“The e-commerce retail market is one of India’s fastest growing markets”

Mar 01, 2016
“The e-commerce retail market is one of India’s fastest growing markets”

TCI XPS, a division of Transport Corporation of India (TCI), is one of the leading door-to-door express distribution specialists in India. TCI XPS is well equipped to handle diverse express delivery requirements including domestic courier and international courier services.

Chandar Agarwal, Joint MD, TCI-XPS, shares his views on the share of logistics in this e-commerce boom. Excerpts...

TCI XPS’ entry into e-commerce. When did it exactly begin and trace the developments till now.

TCI XPS was established in 1996 as one of the division of India’s most reliable logistic company, Transport Corporation of India (TCI). E-commerce business has grown extensively in last three years for TCI XPS.

Today, TCI XPS is known as the specialist in express cargo distribution. It is specialised in offering day definite solutions with strength as being the only cargo company in India having company own set up across India topped with more than 2,000 professionals and over 13,000 delivery points. Our esteemed clientele includes likes off Flipkart, Snapdeal, HS18, and Shopclues, to name a few. Our delivery performance for e-commerce is in line with the market expectations, with minimum RTO percentages. For e-commerce, TCI XPS provides both B2B and B2C services, and the company follows ‘Hub and spoke model’ of distribution of the shipment.

Major activities include: handling both DROP SHIP and MARKETPLACE pick-ups models with ease, primary distribution – warehouse to warehouse, secondary distribution – warehouse to last mile delivery, zero damages and pilferages to goods being delivered, COD reconciliation with the customer on a weekly basis, maintaining the best-on-time attempts strike rate in surface network, and maintaining returns TAT for RTO shipment as per the agreed SOP.

What are the major transformations that TCI XPS has undergone these years? And what are the investments?

TCI XPS has invested hugely on the digitalisation of network operations in last few years. This includes: advanced GPS tracking of the vehicle, real time tracking system is enabled through mobile application, 100 per cent scanning of the PODs within 24 hours of the delivery, and Operation Command Center (OCC) wherein 37 major hubs are monitored by team sitting at the centralised location.

All the aforementioned factors and elements help TCI XPS to deal with the dynamics of the industry like e-commerce, automobile, pharmaceutical, telecom and retail.

Please give us more details on the digital initiatives of TCI XPS.

TCI XPS provides some smart and new-age technological solutions and features to its customers. These include:

* Customisable BILL/Auto MIS format: With help of in-house IT support, TCI XPS can provide specific Bill/MIS as per the requirement of clients. The e-billing element proves helpful for the customers as well as the service provider.

* SMS alerts: Immediate SMS goes to concerned operation staff if any diversion of route happen or not following the standard transit hours.

* EPOD: Scanned POD image available on the web on same day of delivery of the shipment.

* CCTV: Major warehouse is covered under CCTV surveillance to create awareness among labour and staff that material handling is being supervised. It reduces the damages, pilferages and shortages. It is covered under TCI XPS’ OCC.

* Electronic Data Interchange (EDI): This enables seamless flow of information across partner networks.

*Advanced GPS integration with website: TCI XPS’ tracking system is installed in all the vehicles, which enables real time tracking of the deliverable goods. It gives operational team a tool to check whether the vehicles are running on specified routes or not.

* Customer portal: XPS Intranet is available for key customers to check booking/delivery/billing/tracking data of their shipments.

* Web Integration: XPS website is integrated with client’s website to speed up docket updation.

* Mobile app- pick up n delivery enables faster processing of shipment.

What do you think is the share of logistics in this boom?

The e-commerce retail market is one of India’s fastest growing markets. It is expected to be worth $36.7 billion by 2020, from $3 billion in 2014, growing at a CAGR of approximately 52 per cent.

The growing prominence of e-commerce with rising internet penetration and consumer confidence in online shopping has come as a big boon for the logistics service providers. This is due to the fact that despite commerce moving online there is still the need to address the issues like warehousing, packing, shipping and tracking.

The logistics sector specific to e-commerce retailing in India was valued at $0.2 billion in 2014 and is projected to witness a CAGR of 48 per cent in the upcoming five years to reach $.2 billion by 2020. Logistics in e-commerce retail is evolving with growing business requirements, and is acting as an important lever for business growth.

The express segment in India forms an important part of the logistics industry. By providing an integrated time-bound door-to-door delivery services, the industry is catering to the requirements of businesses as well as retail customers to deliver shipments under tight timelines.

In addition, the industry makes significant contribution towards employment and exchequer. It is witnessing a demand boost due to the above average growth of industry segments like organised retail, e-commerce, consumer durables, electronic products and healthcare.

The segment is also receiving a fillip from the higher level of consumption demand in the country for items like electronics, garments, etc, in turn creating additional demand for express industry.

TCI XPS is fully geared to cater to the logistics requirement of e-commerce sector and can provide to the specific warehousing requirements of sector due to its ability to deliver products to customers in a safe, secure and cost effective manner across the country. For its B2B customers, it offers Forward Movement Service portfolio management, which includes last mile delivery from warehouse and inter-warehouse transfer. Further, it also handles Reverse movement Service Portfolio, which includes movement from vendor to warehouse, vendor to fulfillment centre and packaging from vendor locations. For its B2C customers, it offers warehouse to customer, vendor to customer and bulk and break services through its unique Hub-and-spoke model for delivery. It also handles reverse logistics for its B2C category, which includes customer to warehouse and customer to vendor movement. With the new focus, TCI XPS is now capable of handling 10,000-12,000 shipments per day without much of fuss.

What are the future plans & strategies of TCI XPS to give fresh impetus to its drive in this e-commerce?

E-commerce is the fastest growing business for TCI XPS and we are expecting it to even further expand at a tremendous pace. TCI XPS is doing exceedingly well in the large business category. The company is also providing PNP services (pick & pack services) in the large business category. For the coming year, TCI XPS will focus more on small packages starting 500 gm.

Tier 3 and 4 cities have a huge potential and are a big contributor in the growth of e-commerce sector. TCI XPS is the only logistics company that is providing impeccable last mile deliveries to the smaller cities; this is due to the company’s deep penetrating network.

What today is the global pattern vis-vis the Indian modus operandi and are we in tune with the global changing scenario?

The launch of ‘Make in India’ initiative has acted like a catalyst in the growth of logistics sector. With factors like GDP revival, ramp up in transport infrastructure, e-commerce penetration and impending GST implementation; India’s logistics sector is poised for accelerated growth.

Building of dedicated rail freight corridors will promote efficient haulage of containerised cargo by rail. This, along with, setting up of various industrial corridors will boost the warehousing business.

The government’s plan to implement GST is a positive step toward simplifying the tax structure on sale of goods and services. Experts believe that the proposed new GST regime and e-commerce boom will face-lift the landscape in warehousing, supply chain management and third party logistics business. This would prove to be a game-changer for the organised logistics players especially.

Infrastructural hiccups across modes (rail, road, waterways) have stifled the sector’s growth. Other than these, administrative delays are also proving to be bottlenecks in the growth of the logistics sector. Also, low penetration of new technology in the supply chain process is resulting in damage of goods. India has the least warehouse capacity with modern facilities, and given the fragmented industry state, investment in IT infrastructure is almost absent at required scale.

Logistics is a vast sector that includes a wide array of services like transportation, storage, distribution and integrated allied services. Logistics providers could expand strategically and functionally to capture the opportunities emerging out of an e-commerce proposition. The growth of the sector would depend upon the growth of all the aforementioned sub-sectors and elements.