Varuna Integrated Logistics is transforming itself from a mere transporter to a provider of complete transport solutions.
Story by:
Anirudh Raheja
Delhi-based Varuna Integrated Logistics (VIL) is on an expansion spree. It is transforming itself from a mere transporter to addressing the various needs of its clients. VIL is thus turning into an integrated logistics solution provider. According to Sudipt Juneja, Associate Director, Varuna Integrated Logistics, his company has begun adding 12-wheeled trucks to its fleet in order to serve the customers better. “This is in response to the growing demand for cost effective transportation,” he adds. The current fleet size of VIL is 1300 trucks. Almost 80 per cent of these are of Ashok Leyland make. Serving FMCG and tyre industry prominently, 32-feet multi-axle trucks constitute 80 per cent of VIL’s fleet. Single-axle, 32-feet trucks make up 15 per cent of the remaining fleet apart from the 24-feet single-axle trucks. Operating pan-India, VIL serves FMCG clients like Hindustan Unilever, Proctor & Gamble, MRF Tyres, Apollo Tyres and Michelin India among others. “We were the first to transition the logistics needs of Hindustan Unilever Ltd. (HUL) from open body to a closed container shipment. We were the first vendor to carry out material in a containerised vehicle out of HUL’s Haridwar factory,” Juneja quips.
Managing in-bound as well as out-bound logistics on an annual basis, VIL has been growing at a rate of 20 per cent. Trucks are added to the fleet every month, and in-line with the fact that the company serves seven to eight clients as of current. Juneja is frank in stating that it is important to understand the need of the clients, and offer them the right size of vehicle at the right time. “This helps to keep the costs in check,” he adds. Rather than expanding their customer base, VIL, according to Juneja, is concentrating upon serving the existing clients well. To ensure this, VIL has taken a decision to grow with their clients while serving their need and requirements. Avers Juneja, “We have also developed palletised side loading containers for one of our customers in the FMCG sector.” Without losing sight of the specific needs of its clients even as it supports their needs to transport goods from the factory to the warehouse and from the warehouse to the distributors, retailers, etc., VIL is eyeing to set high service standards. To achieve this, the company, as the need be, ropes in the support of specific vendors as well. Staying away from the need to compete on price points, VIL is banking on long term contracts instead. Keen on freight optimisation, the company, in FY15, earned Rs. 345 crore as compared to Rs. 290 crore in FY14.
Operating with the help of five strategically located hubs across the country, VIL, to achieve high operational efficiency, has set up specialised teams at the hubs for the management of specific set of trucks assigned to every hub. The teams also take care of operations and tracking regardless of the fleet movement across the country. Targeting to maximise uptime, VIL has the necessary infrastructure to service its fleet in-house. Apart from fitting its fleet with GPS, which is closely supported by a MIS system, the company is able to keep track of its fleet movement and share the information with the client about the movement of its consignment. In fact, VIL has made arrangements for reports to be sent automatically to customers to keep them updated. “Before sending any truck, efforts are taken to geotag the routes. This is to ensure that the truck driver does not miss the route. Any deviation is reported on a real-time basis,” expresses Juneja. While reports are sent by the assigned centres irrespective of the movement of the truck, efforts by VIL have ensured that the vehicle can be serviced at any of the five hubs in case of an emergency and reduce downtime. Various services like parking, washing, cleaning and rest room for drivers are available at the hubs. The five hubs are thus a one stop shop. To ensure that the drivers are of good calibre, VIL subjects them to rigorous training at regular intervals. Trainig sessions take place at the hubs, as drivers come in to get their trucks serviced.
Contract Logistics to expand the horizon
Established in 1996 with the acquisition of two 6-wheeled Tata trucks to transport heavy goods like Cement and TMT bars by two brothers, Vikas Juneja (Sudipt’s father) and Vivek Juneja, VIL grew to bag a contract from Elbee Logistics. Others like Safe Express, Gati and TCI kept on adding to the list. In 2011, the Juneja family decided to start 3rd party logistics services under a new brand called ‘Contract Logistics’. Contract Logistics operates under an open ended model. Rental warehouses are managed according to the customer’s requirements. Close to seven-lakh sq. ft. area is currently in operation as warehouses with Contract Logistics working on asset light model. Interestingly, the company also provides value added services like reverse logistics, supply chain design solutions, refinishing of products and time bound last mile deliveries. Juneja opines that customers today are consolidating and closing down their small warehouses and moving to bigger spaces. As part of the contract logistics thrust, VIL wants to stay a step ahead in offering customised solutions. Says Sudipt, “Under Contract Logistics, we are offering the next step in warehousing where we are setting up multi-user (MUF) warehouse hubs. Many customers can use the same facility and pay for the space that they require rather than paying for the entire facility.”
Though there have been rounds about the implementation of Goods and Service Tax (GST) for quite a while now, Juneja feels that there is still a lot of homework that needs to be done by the government if GST is to rope in benefits for transporters. He expresses that if the industry average is undertaken, it is only for 15 days that a truck operates. For 10 days it is found to be stuck at toll points during inter-city goods movement. Stating that his company is also on its way to serve the pharma industry, Juneja says, “There is a need for radical measures to ensure seamless travel across states. We need to pay tax at every entry and exit point of the state, which the GST can help to do away with. Ensuring stability in the process.” “Revenue per asset will improve with GST but there would be a lot of issues if which taken seriously by the government will be beneficial for transporters like us,” concludes Juneja.
