Apollo LogiSolutions is keen to play a role of one stop solution in logistics.
Story by: Anirudh Raheja
Logistical needs in India are on the rise. The proliferation of ecommerce is one of the factors among many others that is providing much thrust. Logistics however has a long way to go in India. In a country like India, the linking of logistics industry’s growth with infrastructure should not come as a surprise. The two complement each other like no other. With much scope for road conditions in the country to improve, it is only logical for logistics solution providers to look at addressing the often conflicting needs of their customers, in doing so lies their ability to create a niche for themselves. Keen to play the role of one stop solution, and serve customised solutions, Apollo LogiSolutions (ALS) is bullish about growth. Avers PSS Prasad, President, ALS, that his company is not a mere transporter. “We are into transportation in a very selective way for end-to-end solutions,” he adds. Stressing upon providing CFS, freight forwarding and custom brokerage services, the company, according to Prasad, is looking at creating a niche for itself through a gamut of services that support quicker and healthier growth. With analysts expecting third party logistics to grow by over 20 per cent till 2018, Prasad is right about creating a niche. He comments, “There is good potential in the logistics market, which remains to a good extent unorganised. There’s much opportunity waiting to be tapped.”
End to end solutions
ALS was established in 2009 at Gurgaon, and is a subsidiary of the Raaja Kanwar-led Apollo International Ltd. In a short span of time, the company spread its wings far and wide. Taking on the challenge to provide end-to-end logistics services on the back of its multi-modal capabilities, ALS operates through three verticals. Offering services like CFS, ICD, custom brokerage, freight forwarding, and contract logistics to various companies from diversified sectors under its 3PL business structure, the company is planning to increase its fleet size to 250 trucks in the next six months. Mentions Prasad, “We have patented truck bodies for specialised movement of Hero two wheelers. As of current, 220 trucks have been entrusted with the task.” Keen to move up to 250 trucks in six months by increasing the container capacity by 20 per cent against the standard containers used by others in the industry, without flouting the road safety norms, ALS, by early next year, is looking at growing its fleet to 300 numbers already. “Whereever there is a dry port, we believe in buying the trailers. Depending upon the location we also work with third party operators as well to boost the logistics business pan-India,” explains Prasad.
For regional support, ALS works with two operators. Centrally, up to four operators stay committed to ALS operations informs Prasad. Also undertaking reverse logistics assignments for companies like Samsung, ITC, and Asian Paints, the company, as a 3PL player, offers warehousing services. “Our warehousing services include various services like kitting, labeling, and even specialised operations like fitting a tyre on to the rim of a two wheeler,” avers Prasad. To allow its customers to work on lean inventories, ALS picks up rims from the factory in China and tyres from Vietnam for the Hero Group. After procuring them, ALS gets them custom cleared in India. The two are assembled at the ALS warehouse before being supplied to the Hero factory. ALS, says Prasad, has 50 warehouses the world over. Of these, 35 warehouses are in India. Of the opinion that it is important to expand strategically, Prasad draws attention to ALS’ joint venture with a German logistics player Fiege.
The ALS-Fiege JV was established in 2012. The resultant company, Apollo Fiege Integrated Logistics, focuses on generic business of freight forwarding through air and ocean along with secured short-term storage for valuables in transit, and customs brokerage where the company will assist customers to interface with the customs department during shipment imports or exports as per various classifications, contract logistics and transportation services. Touching upon Fiege bringing with it 140 years of industry experience, Prasad avers that Apollo Fiege Integrated service platform is outfitted with operational expertise and solution capabilities across the entire logistics spectrum catering to freight forwarding, customs clearance, projects and other 3PL logistics requirements through its vast global network. “Enabling us to access the latest technology in logistics, the participation of Fiege also brings with it the advantage of having a presence in 70 countries, and across 200 locations,” says Prasad. Under its asset heavy business, the company has got four dry ports out out of which the one in Panvel is directly owned by the flagship company. For strengthening its presence in Sourthern India, ALS acquired Chennai based logistics company, Kailash Shipping Services, in 2013. ALS has also strengthened its capabilities in handling export-import containers, refrigerated cargo and warehousing. States Prasad, “We also have two dry ports in Tuticorin and Katupalli respectively.” “We are awaiting approvals to commence operations,” he adds. For 3PL logistics and freight forwarding services, ALS acquired a controlling stake in a firm called Freight Reach with presence in the Middle East and Africa. “With most of the automobile manufacturers including Tata Motors and Ashok Leyland exporting to Africa, it made sense to expand our reach,” expresses Prasad.
Applying good deal of emphasis on technology to stay ahead, ALS, according to Prasad, is driving its end-to-end logistics solution business with the help of its joint venture with Lycos. As a technology company, Lycos allows ALS to help its clients with end-to-end logistics solutions in the area of ecommerce especially. Opines Prasad, that in the logistics business, it is more or less similar as far as operations are concerned. What makes a difference is technology. With Lycos on board, ALS is helping global brands to deploy e-commerce platforms that target Indian customers. ALS clients include 612 league and Kyo creations. “Anybody who wants to get on the ecommerce bandwagon, we can hook its operation in a day’s time. This capability of our will indirectly help us with our logistics side of the business. It is no surprise that we would like to be their logistics partner as well,” stated Prasad. For increasing reach in dry port services, ALS acquired Wifin Technologies in 2016. The company has also partnered with CargoWise for freight forwarding. This, says Prasad, is allowing us to develop mobile apps like Mobizee, Billijee, and Purplepatch for ecommerce logistics.
For an improved ecosystem
With increasing radialisation and better roads, Prasad feels that the hub and spoke model in India will gain momentum soon. As the length of the vehicle is increasing, improvement in highways in many parts of India has also reduced time in transit and costs for the cargo movement, he points out. This Prasad opines will get a boost once GST gets fully implemented which may lead to 30-40 per cent fall in frieght times and up to 30 per cent reduction in logistics costs. “Transportation under GST will make more sense as monitoring of the truck at every stage will be much easier. It will also reduce inventories to large extent which will benefit the economy in the long run,” said Prasad. He feels substantial results might not arrive soon as there might be a dip, but things will gradually improve. “It may not affect the cost which we have to see in the long run. But if you are using a good infrastructure you have to pay for it,” stressed Prasad.
Startups and Automation
Highlighting transparency and lack of will as a serious issue in logistics, Prasad points out that real time access to information on goods movement aids building of trust between the company and the clients. “A large part of cargo is still transported by road as it happens to be cheaper than railways. Any reduction in manpower dependence is beneficial,” he states. Mentioning that CFS needs 20 approvals, Prasad opines that there is a need for a single window clearance system. Prasad draws attention to the fact that the logistics industry has its aspects coming under ministries. This, he avers, leads to inefficiencies. With startups in logistics sector coming up and vanishing like wild mushrooms, Prasad is of the opinion that large flow of funds is spoiling startups, and calls for building up of a sustainable business model. Terming the constant change in taxation structure as detrimental to the growth of the logistics industry, Prasad calls for better channeling of forex reserves for faster development
ALS recorded a revenue of Rs.800 crore in FY2016-17. By 2020, the company aims to quadruple it. This, it plans to achieve through organic and inorganic growth. Setting aside Rs.200 crore for acquisitions, the company, according to Prasad, has been growing at a CAGR of 50 per cent for the last few years. With thrust to continue on exim services and freight forwarding, the company is keen to enter the area of cold chain. Avers Prasad, “Cold chain is one area that we are thinking of.” “Without full fledged transport support it is not going to be helpful though,” he adds. Having a cold storage setup at Panvel for select goods that require temperature controlled containers, the company, concludes Prasad, will require to ramp up cold chain infrastructure, which would call for an amount of investment in the future.”