Patel Integrated Logistics, which has been in the road transportation sector for the past 50 years, is now planning to enter e-commerce logistics. Riding on ₹589 crore in annual revenues, it wants to invest ₹50 crore in the next three years to create a separate division to handle e-commerce cargo.

The company is already a B2B player, shipping goods for all major e-commerce players, from one warehouse to the next. With the latest expansion, it will reach the goods to customers making online purchases.

The new business will be built on its existing network of offices and warehouses, which are spread across the country.

The company’s Executive Vice-Chairman Areef Patel told BusinessLine that out of about 30,000 pin code areas in the country, it wants be present in at least 20,000 by 2018. In the first phase 75-100 stations will be covered by e-commerce delivery centres, and this will increase to 500, he said.

“Ours is a light asset model — we will not be making huge investments. Some transport companies have raised investments in the range of about ₹400 crore but they are loss-making ventures. We already have the infrastructure on the ground, it just needs to be extended further,” Patel said.

He further said some market gurus have predicted that the e-commerce business is not going to last long in India.

Risky venture

“Our decisions to enter this risky venture is based on research data and discussions with e-commerce giants such as Amazon, Flipkart and Snapdeal. For us it is a leap of faith; whether we will land on our legs or on our knees, only time will tell,” he added.

The company will outsource the manpower and smaller trucks required on the ground, and retain quality and managerial control with itself.

Hiring talent

“We will be recruiting a new young team of managers but at the same time we will have old hands who know the terrain of the logistics business very well. Merely hiring a

25-year-old smart manager is not going help, understanding of distant locations is also essential,” Patel said.

The company is talking to tech vendors about the management of parcels.

It is evaluating various technology options that are being used by competitors and even e-commerce companies, said Patel.

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