Global Ocean Group Providing holistic solutions and services

Brijesh Lohia, Managing Director, Global Ocean Group

“Many global logistic equipment manufacturers, witnessing the demand from infrastructure and energy sectors, are making inroads into India. This is not only helping the domestic market to get better products at competitive rates, but also improving the overall quality, productivity and safety, and reducing the total cost of ownership,” says Mr. Brijesh Lohia, Managing Director, Global Ocean Group, in an interview with Maria R.

How do you see the growth potential of India’s logistic industry?

The Logistic industry of India is evolving rapidly. It is being driven by the performance of infrastructure, technology and new types of service providers, which also determine whether the logistic industry can provide efficient services to the customers and reduce their costs. India spends around 14.4% of its GDP on logistics and transportation as compared to less than 8 percent spent by developing countries. The industry, which comprises inbound and outbound segments of the manufacturing and service supply chains, is estimated to grow upto $307 billion by 2020, while the global logistics industry is expected to touch $2 billion by 2019. Rise of e-commerce logistics and increased domestic consumption will lead the way for the industry in the coming years.

The logistic sector is seeing enormous demand from infra construction projects such as metro rails, windmills, heavy engineering, etc. How will this impact sales of specialized transport solutions such as trailers in the coming years?

India’s logistics market is different and, hence, the need varies as well. Though Indian trucking is pegged at almost $130 billion, with around 6 million vehicles on road, it struggles with issues like warehousing, storage management issues, untimely deliveries, poor infrastructure and many more. The market is highly fragmented, unorganized and has to deal with language barriers as well. Despite a whopping 4.7 percent contribution to our GDP, there are several loopholes in logistics management. Thinking out-of-the-box solutions can only resolve the pain points of logistics and its traditional ways. It’s high time to think of out-competing the market as the industry is yet quite untouched.

What are the current challenges in the logistic and supply chain management industry? How will the Government’s ambitious Sagarmala programme benefit the sector?

The major challenge faced by the industry today is insufficient integration of transport networks, information technology, warehousing and distribution facilities. Regulations exist at a number of tiers and are imposed by national, regional and local authorities. However, the regulations differ from city to city, hindering the creation of national networks. Trained manpower is essential, both for the third-party logistics sector as well as for the manufacturing and retailing sectors. The disorganized nature of the logistics industry in India, its perception as a manpower-heavy industry, and lack of adequate training institutions has led to a shortfall in skilled management and client service personnel.

Sagarmala by the Ministry of Shipping will help in reducing the logistics cost for both domestic and EXIM cargo with optimized infrastructure investment. An overall cost savings of Rs.35,000 – Rs.40,000 crore per annum by 2025 is estimated from the same. There lies a significant potential in transiting raw materials and finished products using coastal shipping and inland waterways which are 60-80% cheaper than road or rail transport. Although the share of coastal shipping and inland waterways in the country’s modal mix remains low, an emphasis on coastal shipping to complement road and rail transport can lead to overall logistic cost savings.

How do you see the impact of GST on this industry?

The unified tax system is expected to bring change on a larger scale, removing distortions created by different taxes and duty structures imposed across India. In the last couple of years, as PM Modi has made GST a priority, investors have put US$1.5 billion in the warehousing business. Companies that have previously based storage models on tax efficiency, can move to the much more cost efficient, demand-based hub-and-spoke model used globally. The pre-launch of GST itself had boosted the industry’s annual growth rate from 12-15% to 20-22%, and saw plenty of room for a lot more modernization.

Global Ocean is a renowned name in the logistics industry. What are its core strengths that enable it to stay afloat in the current lackluster economic environment?

There is a lot of freight that helps build the bridge between us and our customers. We have a global coverage with top airlines to meet shipping deadlines. We have the best tie-ups with roadways for quick and safe delivery. Our expert team helps in assisting the clients in custom clearance processes. Our link with WCA members in the respective countries enables us to provide proper guidance to clients. We have a 24x7 customer clearance support to track cargo till it reaches the port. Our specialization in deck cargo, bulk cargo, FCL, LCL, perishables, HAZ, sea freight services and project movements ensure that the cargo reaches its destination safely. Another important aspect of our services is the warehousing facility that we provide our customers at affordable rates. We offer both specialized commercial and personal warehousing along with safe pick and drop facility.

With the entry of several global market leaders of heavy-duty modular trailers in India, what impact will this have in the domestic logistic market in terms of quality, productivity, safety, and total cost of ownership?

Many international giants have started manufacturing of logistic equipment in India due to the government’s ‘Make in India’ initiative. Hence, our domestic market is now able to get better products at competitive rates, along with easy availability of original spare parts. So, the overall quality, productivity and safety will improve and the cost of ownership will also be reduced.

Big international manufacturers are eyeing India’s renewable energy sector as well, with many windmill companies going for expansion. These opportunities will lead to increase in demand for transportation of windmill blades, towers, nacelles, etc, and also of other project cargoes such as heavy machinery, transformers, etc. Since a huge fleet of transport vehicles will be required, the logistics Industry has started to add new extendable trailers and multi-modular hydraulics axles to their fleets.