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K.V. Kurmanath

Hyderabad, June 23 Gati, a leading player in express cargo and supply chain management solutions leader, will make the Nagpur hub ready by next year.

The Central Distribution Centre at Nagpur, when opened, would connect several cities and towns, forming a hub-and-spoke mechanism for the company. “This will significantly increase the efficiency of our distribution system,” Mr Mahendra Agarwal, Managing Director and Chief Executive Officer, told Business Line.

Taken up as part of the $100-million expansion, the hub would help the company cut costs and bring down time-to-delivery by connecting at least 19 Express Distribution Centres being set up across the country.

“The hub-and-spoke model will also help address under-utilisation of capacities on certain destinations,” he added.

The company has recently inducted a custom-made vessel at Bangkok. The 7,000 DWT (the total capacity of a ship in tonnes) vessel would increase the total capacity of coast-to-coast wing to 33,000 DWT among the five vessels. “The current fleet consisted of second-hand vessels. The fifth one is specifically designed, keeping in mind our needs,” Mr Agarwal said.

“We have spent $13 million on this. It would have cost 30 per cent more if we were to buy it now (after the steep rise in steel prices). Using this vessel, we will expand the scope of the coast-to-coast business to Thailand,” he said.

The company is also contemplating launching more exclusive trains to different destinations for transhipment of parcels. It had started the Mumbai-Guwahati parcel service, a first in the country. “Besides, cutting time-to-delivery by half, it insulates the business from the constraints (such as floods) the surface transport usually face,” he pointed out.

“We are mulling more such exclusive services,” he said.

The $100-m expansion plan, which is expected to be completed next year, included establishment of 2 million sq ft of mechanised warehousing space in major cities and re-engineering of internal processes.

“After completing the phase-I expansion plan by the end of next year, we will chalk out the phase-II plan,” Mr Agarwal said.

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