The Hindu Business Line : ‘Outlook is bright for express sector’

The face of the logistics industry is changing, feels Mr Rajesh Subramaniam, Senior Vice-President, International Marketing, FedEx Services. “Previously logistics managers were focused on reducing costs. The decision today has become more marketing-focused, with enhanced services and customer satisfaction being the key,” he explains during the course of a recent interaction with Business Line.

FedEx has had a direct presence in India for over 10 years and continues to expand with the company currently connecting nearly 4,400 cities and towns in the country. Last year, the company acquired Prakash Air Freight Pvt. Ltd. (PAFEX), one of the largest domestic express companies operating in India, thus creating additional value to its international service. India is a key market for the company, says Mr Subramaniam. And, on the outlook for the industry, he is bullish: “The express sector in India has a bright outlook and we will continue to innovate and create solutions to match pace with this ever growing economy.”

Excerpts from the interview:

What have been the highlights of your India presence?

FedEx leads the air express transportation market in India, with 16 flights into and out of India – more than any other express company. In 2007, we acquired our local GSP, Prakash Air Freight Pvt. Ltd. (PAFEX), one of the largest domestic express companies operating in India. We are connecting nearly 4,400 cities and towns across India, and almost 100 per cent of the key import/export market in India.

We are the only express transportation company to provide two gateways into and out of India, located in Mumbai and Delhi. We recently provided increased connectivity to northern India, through the launch of our new Delhi gateway, whereby customers in the North will enjoy later cut-off times, allowing them additional manufacturing / production time.

We have also made investments in infrastructure in Delhi, Chennai and Bangalore, showcasing our commitment to businesses in India. We currently have 4,100 employees in India, inclusive of PAFEX employees.

Your service offering for India customers…

Offering a robust portfolio is critical because operations within the industry are gradually undergoing change. Previously, logistics managers were driven by the need to identify the most cost-efficient way of transporting a package to its destination, the focus being on reducing costs.

Today, the decision has become more marketing-focused, especially in the larger companies, where distribution models are constantly scrutinised to enhance services and customer satisfaction.

We offer customised packaging for some of India’s key exports segments, including pharmaceutical, textiles, and gems and jewellery, and are deploying technology to make it easy and convenient for Indian exporters to access global markets.

What’s your view on the growing competition and your strategy to take on competition?

We believe in being ahead of the market cycle and will continue to maintain our position through the introduction of innovative products and services in India. Our initiatives are in line with our customer-driven strategy and have expanded our reach to the second-generation markets.

Our strategy includes a commitment to facilitating the growth of Indian businesses into the global business environment. FedEx will provide this support to more and more businesses across the country, with fast and reliable connectivity and access to key global markets through our unparalleled air and ground networks.

Our strength is our intercontinental network. We offer time-definite delivery to more than 220 countries and territories, connecting markets that comprise more than 90 per cent of the world’s GDP, typically within 1-3 business days. We are making the world’s largest international express network available to each and every Indian customer.

What about your eCommerce solutions?

Transportation is what links the retail and e-commerce supply chain together and keeps it strong and intact. Customers can create a strong link between their supply chain partners with our shipping services that meet retail and e-commerce demands.

Businesses can better manage customer-delivery expectations (or provide alternatives in the event of delays) with FedEx InSight, a free Web-based application that provides a status of goods in transit. This displays the current status on all shipments matched to the shipping account number and/or address; monitors shipments through reliable status updates for all incoming, outgoing, and third party shipments; provides immediate notifications about clearance delays, attempted deliveries, proofs of delivery, and more — via e-mail, Internet, or wireless. As a result, businesses save time by having real-time information about their shipment status and can more efficiently plan manufacturing or distribution resources, thereby decreasing costs.

What are your India growth plans?

India is a key market for us, and we cover almost 100 per cent of the country’s export and import centres. India’s logistics industry is set to see tremendous growth. According to estimates, the logistic business is expected to reach a market size of over $125 billion in year 2010. We are bullish about India and will continue to maintain our position through the introduction of innovative products and services in the region.

The estimated size of the Indian express industry is Rs 7,100 crore ($1.6 billion). We saw the potential of India as an economic superpower early on and have invested accordingly, particularly in the intra-Indian market. By acquiring PAFEX, we have created additional value to our international service.

What is your outlook for the India market?

The express sector in India has a bright outlook. As a fast-growing, market-driven economy, we believe India is poised to take a leading role on the world’s stage. We will continue to innovate and create solutions to match pace with this ever-growing economy.

How much technology have you brought into your offering?

FedEx Express was the first express delivery company to introduce the concept of the ‘hub-and-spoke’ system, and it remains central to the company’s distribution network today, which includes 10 air-express hubs.

More than 20 years ago, we pioneered bar coding and tracking for packages. This has given us the capability to track product movements and provide complete transparency that empowers customers with information.

In the early 1990s, we became the first company to make tracking information available online. Today, there are over 15 million unique visitors monthly and more than 3 million package tracking requests daily.

Trends in tracking shipment (online) in the last few years…

On a broad level, we are using Web services to create “connections,” where customers can embed features and technologies in their own applications. Our Web services contain functionality that can assist in order entry, customer service, reverse logistics, billing as well as shipping operations.

Our Web services will lead to the development of new tracking products and services for us as well as providing customers the ability to create their own for their businesses.

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