Rampraveen Swaminathan, MD & CEO, Mahindra Logistics shares the company’s strategy of providing clients cutting-edge technology and cost-effective solutions to help them become more agile, and the sustainable initiatives being taken at their facilities for resource preservation, carbon neutrality, and circularity.
What is the current status of India’s Logistics sector and what are the challenges hampering its faster growth?
India's logistics sector is currently at its most active and dynamic phase. The demand and growth trajectory of the logistics industry looks very promising for the next 5 to 8 years. The National Logistics Policy (NLP) and infrastructure developments with improved roads, railways, and port connectivity, coupled with the deployment of technology for optimizing operations, will result in bringing more efficiencies in logistics.
However, poor infrastructure in ports, railways, and roads have a direct impact on how commodities are transported. Fuel prices and regulatory changes lead to an increase in the cost of freight and its transportation. The Indian marine trade has been hampered by the container constraint issue. According to the Federation of Indian Export Organization (FIEO), lack of containers has caused sea freight prices to rise by 300 to 350 percent. Removing the constraints on carrying goods in shipping containers or car carriers can optimize reverse hauls. Having an ample number of containers for ocean carriers will help the logistics companies to speed up movement of goods both for imports and exports.
All these factors have an adverse impact on the ability of logistic companies to conduct business profitably and sometimes even their survival can become difficult.
In India, the logistics cost is 13-14% of GDP while it is 7-9% in developed economies. How can the government and the industry improve the country’s ranking in the Logistics Performance Index?
India aims to be a $5 trillion economy by 2024–2025. To accomplish this, connectivity and robust infrastructure is key. NLP will give a significant boost to the Logistics industry, which aims to decrease the cost of logistics from the current 14% of GDP to below 10%. Additionally, it will increase warehousing capacity and help in identifying gaps to lower logistics cost for traders.
We, at Mahindra Logistics, support the government's goal of making India a better and simpler place with ease of doing business in the country.We continue to be laser-focused on providing our clients with value through cutting-edge solutions that help them become more agile and cost-effective.
What are the other measures that the government should take to support the Logistics industry?
The Logistics industry is essential for maintaining the country's economic environment and balancing domestic and international trade. The Government should, therefore, actively support the development of manufacturing hubs in India. This will increase demand and lower overall logistics costs.
Other measures include making the processes easier for transport movement across the country, providing standard trucks, compulsory GPS, and Electronic Proof of Delivery Systems (ePODS).
What services does Mahindra Logistics provide and to which sectors?
Mahindra Logistics is one of the leading integrated logistics & mobility solutions providers with over a decade of experience. With a strong presence across the country, we are offering supply chain solutions to diverse industries like Automotive, Engineering, Consumer Goods, Pharmaceuticals, Telecom, Commodities, and E-commerce.
Besides, we provide integrated employee transportation solutions to enterprises across IT, ITeS, Manufacturing, Banking, Financial Services, Insurance, and Consulting. We have an asset-light business model with a focus on technology and emphasis on customer-centricity. We create customised, and technology-enabled logistics solutions that offer flexibility and scalability.
Please tell us about MLL’s BTS and warehouses.
Currently, MLL has a total of 13 Built-to-Suit (BTS) facilities across India, covering 4.30 mn sqft, with an extensive capacity of 1,805 kWp. Their sustainability standards include usage of recycled construction material, liquid discharge management, renewable energy, waste management, and automation. The facilities’ solar power generation meets the entire energy requirements and also provide solar charging for cargo vehicles and personal mobility. These facilities not only run entirely on solar energy and battery storage, but also feed any extra energy produced back into the grid, making them truly net zero.
We are building new facilities that adhere to IGBC/LDEED certification standards. Designed with a sustainable warehousing architecture with use of renewable energy sources, resource conservation, and green cover, these state-of-art warehouses are an important part of MLL's pan-India network of multi-user facilities that support customers inbound activities, manufacturing, and fulfillment operations.
How is Mahindra’s recent acquisition of B2B express business Rivigo Services helping the company expand its reach?
Our existing MLL Express Services (MESPL) and the overall customer value proposition of MLL will be strengthened with the integration of Rivigo's network, technology, and process capabilities.
Over 19,000 pin-codes are currently being covered by Rivigo's B2B express network nationwide, which is expanding Mahindra Logistics' reach significantly. Rivigo’s 250+ processing centres and branches will further strengthen the operations of MESPL by covering an area of more than 1.5 million sqft.
With rising digital adoption, growing delivery networks and the emergence of quick commerce, last mile delivery and fulfillment is no longer experiencing strong headwinds. With an electric fleet of over 1200 vehicles covering 19+ cities, we are enabling clean and green last mile logistics for our clients.
Our last-mile delivery service ‘eDeL’ specifically caters to growing requirements from our e-commerce, consumer goods, pharma, and retail clients. It is currently serviceable in 1,100+ pin codes, with more locations planned for the future. Our growth strategy includes extending technology-based last mile services which will hasten adoption of technology, expand geographic coverage, and enhance our operational capabilities.
How do you leverage technology to provide a seamless logistics experience to your customers?
At Mahindra Logistics, we strive to provide a seamless customer experience from start to finish. We have advanced software to track shipments in real-time basis, and provide customers with quick and accurate updates on their orders. Automated processes streamline the order fulfillment process and reduce delivery times. Additionally, we use data and analytics to identify areas of improvement and further optimize our operations. By leveraging technology, we aim to provide our customers with the most efficient and stress-free logistics experience.
What does Mahindra’s fleet of equipment and vehicles comprise of?
Our vehicles are deployed on the supply chain side and another category is used for mobilizing people. Every month, we deploy around 16,000 vehicles in our Logistics business. Furthermore, we deploy 2,500-3,000 vehicles every month, of which a significant portion is comprised of e-vehicles. We have further invested in about 700 e-vehicles for logistics and about 300 for mobilizing people. We believe that the below 4-ton logistics category can be completely electrified if the infrastructure for charging, EV manufacturing, and EV resale are put in place.
We are very bullish on the prospects of electric vehicles in the last-mile delivery sector. Deploying these many vehicles creates a good value for the logistics ecosystem. We are also bringing in business for other people, including fleet and vehicle owners.
How is MLL working towards Environmental, Social, and Governance (ESG) principles?
It's critical now more than ever for tech-enabled companies to link their business practices with ESG principles because technology is playing an increasingly important role in the logistics sector's ability to innovate and improve customer experiences.
At Manindra, sustainability is a key part of our operations, and we are well on our journey towards reducing carbon footprint for a greener world. We have created a strong electric ecosystem for our supply chain and enterprise mobility businesses as part of the same.
In fact, MLL has been encouraging partner fleets to adopt CNG-powered cargo and mobility vehicles. We believe that by committing to green practices, the logistics and supply chain management ecosystem can have a significant impact on climate change. Improving the environment will also boost business productivity, competitiveness, and employee engagement.
What are the initiatives being taken to achieve carbon neutrality by 2040?
Mahindra Logistics has not only joined the "Science Based Targets Initiative" (SBTi), which is in line with our commitment and strategy to achieve carbon neutrality by 2040. We received validation from them for our carbon emission reduction target in 2021.
To achieve our objective of becoming carbon neutral by 2040, we have outlined a number of strategic steps:
- Ensure our business adheres to EP100 and RE10 by 2040 (EP100 is a global collaborative initiative on energy productivity and RE10 aims to bring together influential businesses committed to 100% renewable electricity, both led by The Climate Group).
- Continue our commitment to Science Based Targets Initiative (SBTi), an initiative intended to increase corporate ambition on climate action by mobilising companies to set greenhouse gas (GHG) emissions reduction targets.
- Undertake tree plantation programmes to set the remaining carbon footprint.