The Hindu Business Line : Logistics, safe and express

After investing about Rs 350 crore to set up infrastructure across the country in the last eight years, the company is set to invest Rs 150 crore in the next two years to establish warehouses in various cities, including Chennai, Bangalore, Indore and Ludhiana, says the company's Chairman and Managing Director, Mr Pawan Jain. "The logistics market is opening up in a big way in India."

The transportation sector is worth Rs 1,50,000 crore, and is mostly in the unorganised sector dominated by a number of regional players. However, of late a number of companies are moving towards organised logistics players, he said.

The buoyancy in the logistics market would help the company achieve a turnover of Rs 300 crore for the year ending March 31, 2005 against Rs 210 crore in 2003-04, he said. According to Mr Jain, Safexpress, which has 1,800 employees on its rolls and about 9,000 on contract, will add ten Volvo trucks to its fleet this month. Containers from PC Haulwel in Pondicherry are also on the agenda, he said.

The company, which already has three million sq. ft. of warehouse space, is adding another one million sq. ft. in major cities such as Chennai, Bangalore, Ludhiana, Nagpur and Indore, he said.

According to Mr Jain, Safexpress today covers 522 destinations across 28 States and seven Union Territories. The company has over 3,000 weatherproof vehicles, and over 1,000 routes are linked by 37 hubs and super-hubs. The company delivers about 2.5 million packages a month, and all its vehicles cover about 5 lakh km a day.

"We are adding a truck a day, and in 2004 we added 310 vehicles. We have one of the youngest vehicle fleets in the country, and phase out a vehicle that is 36 months old," he says. Every vehicle is monitored through a GPS (Global Positioning System) from Delhi, he said.

Safexpress, a private company, which started off in April 1997 as a door-to-door high-value cargo distribution service with four routes, nine offices, 12 container mounted vehicles and 20 employees, is today growing at more than 40 per cent annually.

The company goes to customers with the promise "we know India really well," and offers one-stop solution for all logistics requirements such as Customs clearance, consultancy on packaging, logistics centres and warehousing, inventory management, invoice generation and money management.

For instance, Safexpress distributes products of Color Plus, which is part of the Raymond group, across retail shops in 110 India. Since the garment industry is seasonal and fashion-oriented, Color Plus launches new designs every 15 days, and these garments have to be delivered across the country in three days, says Mr Jain. The Color Plus consignment is moved from Chennai to a warehouse in Delhi and then distributed all over North.

For United Colors of Benetton, Safexpress receives, stores, packs and despatches garments to exclusive stores in more than 25 cities across India. Similarly, for Madura Garments, which has over 20 distributors, 3,000 retail outlets and over 100 exclusive showrooms, Safexpress is involved in receipt, storage, pack and despatch across the country, he said.

According to Mr Jain, Safexpress helps companies eliminate sunk costs and bypass branch set-up costs. Safexpress caters to the needs of 16 verticals, including automobile, FMCG, readymade garments, IT, telecom and publications. Last year, the highest growth for the company came from IT hardware and apparels which contributed 40 per cent of the turnover, he said. Some of Safexpress' IT clients include IBM, Acer, HP Printers and Dell Computers.

In the automobile sector, Safexpress is a principal transporter of spare-parts to Ford's 58 dealers across the country. It has also tied up with General Motors to provide 70,000 sq. ft. warehouse space in Mumbai, he said.

Mr Jain said Safexpress recently expanded its offering to `in-site' management, wherein customers want Safexpress to manage their entire logistics from their premises. For instance, Kirloskar Oil has mandated Safexpress to manage its entire logistics, including inventory management and finished products, at the Pune plant. Safexpress is likely to sign a similar deal with Canon for its office in Noida, he said.

And, with VAT (value added tax) round the corner, Safexpress has introduced corporate warehousing model offering clients centralised warehousing operations to maximise cost savings in the form of uniform tax in the states. "Safexpress will work toward providing its customers an infrastructure facility to enable them to cut down 4-10 per cent of their supply chain costs," Mr Jain said.

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