The Hindu Business Line : Retail supply chain cos eyeing third party logistics biz

Mumbai, Oct. 13 The Mukesh Ambani-owned Reliance Logistics is looking at expanding its scope of operations within the group, especially for Reliance Retail. Currently, the 15-year-old logistics company serves certain categories such as groceries and consumer goods alone, but would now like to take on more volumes from the retail business.

Said an official from Reliance Logistics, “Not much volumes are done by us currently for Reliance Retail. Certain categories such as apparel and wellness are not managed by us and ideally we would like to handle more categories for our group’s retail company.” Reliance Retail has been using the services of other express distribution and supply chain solution providers.

“Our operations are rather insignificant in the retail business compared with the petroleum business. Most of the work has been limited to parcel delivery and some amount of transportation in categories such as FMCG, fruits and vegetables,” said the official.

At the same time, Reliance Retail is looking at increasing its business outside the group, especially in the area of secondary transportation (from the warehouse to the distributor).

“We are already doing secondary transportation for companies such as Pepsi and ITC and would also like to do more warehousing distribution for non- Reliance clients,” stated the official.

In fact, there are others such as Diesl (the logistics arm of the Tata Group) and Future Logistics, which are looking at getting business from outside their respective groups.

Diesl (Drive India Enterprise Solutions Ltd) already caters to companies which wish to outsource their logistic services. While it caters to Tata group companies such as Croma and Voltas, it also services companies such as Colgate and Castrol.

“Currently, the non-Tata Group companies contribute 40 per cent of the business. We would like to have equal revenues generated from both the Tata and non-Tata Group companies in the future,” stated a manager from Diesl.

Mr R. Srinivasan, Head, Supply Chain Solutions (New Business), Future Logistics, said, “We are looking at becoming third-party logistics providers and believe in serving non-retail clients well. In the next three years, we expect 50 per cent of our business to come from external consumers outside the Future group.”

Having been spun off as a separate company, Future Logistics is now geared to get new business outside the group.

“We are also open to servicing smaller retail chains which are in the same line of business as our retail formats,” added Mr Srinivasan.

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