Blue Dart Express, the courier and package distribution company, which claims market leadership in the air cargo business with over 40 per cent share, has set its sights on leadership in the ground cargo business in India by 2015.

The organised air cargo segment in the country was estimated at Rs 1,481 crore in 2009. The ground cargo business in the same period was Rs 1,727 crore, of which Blue Dart claims a share of 8.5 per cent.

Performance

Cumulatively, the organised air and ground cargo and air freight businesses are estimated to have touched Rs 3,800 crore in 2010.

Blue Dart Express closed the year-ended December 2010 with revenues of Rs 1,148 crore, with around 95 per cent of its revenues coming from its B2B business.

Cargo handling hubs

The company, which operated with seven hubs for cargo handling in 2007, had grown to have 16 hubs at the end of 2010. By end-2011, it will have 20 such hubs in place.

The hubs range between 30,000 and 1,00,000 sq. ft., with one in Bangalore being the largest at 2,50,000 sq. ft.

freighters

The company operates a fleet of seven freighters — three Boeing 737s and four Boeing 757s.

Its flights take off and land at seven airports currently. The number is set to increase.

Adding airports

“We will add airports in tier-2 and tier-3 towns where we see growth happening.

“We are looking at some cities in the North and some down South,” said Mr Ketan Kulkarni, Vice-President - Marketing, Corporate Communications and Sustainability, Blue Dart Express Ltd.

Ground Cargo

“There are certain industry verticals using a lot of ground cargo handling, such as consumer durables, auto, FMCG IT and pharma. Our ‘Grow India' strategy will see us focusing on these,” said Mr Kulkarni.

The company will strengthen its infrastructure in tier-2 and tier-3 towns which are production and consumption centres, to grow the ground cargo business. There will also be enhanced focus on SMEs, besides on-going design and customisation of products.

The company has over 5,300 vehicles on the roads, with over 170 of them being ‘network vehicles' that travel across the country. A network of 390 retail stores (Blue Dart-DHL stores) is spread across the country, and the number is set to go up to 1,000 by 2015.

Cash On Delivery growing

While the BFSI segments have been traditional strongholds for Blue Dart, growth is being witnessed in other sectors such as pharma, auto and consumer durables, and for its value-added services.

The cash-on-delivery business, where Blue Dart partners shopping networks such as homeshop18, indiatimes, rediff and naaptol, is growing at thrice the rate of the company's growth, informed Mr Kulkarni.

The company grew around 27 per cent in 2010 over 2009.

“Initiatives like the blanket 50 per cent discount on domestic consignments for students and Rakhi Express have been very well received. The top IT tools that we have for tracking have seen 78 per cent of customers (by revenue) adopting them,” he explained.

The Premium Challenge

In the ground cargo business, Safe Express and GATI are said to be market leaders in India, with estimated shares of 22 per cent and 18 per cent respectively.

Blue Dart is priced considerably higher than the cheapest options available in the market, acknowledge its spokespersons, while pointing out that the B2B pricing would be different from the pricing for individual consumers.

The minimum cost of sending a consignment from a Blue Dart retail outlet for an individual consumer is over Rs 250.

“Blue Dart has always operated at a premium price and our consumers have always accepted us at that price, because of the value we deliver. Growing the business will be done without compromising on the premium of delivery or revenue,” surmised Mr Kulkarni.

Related Topics
comment COMMENT NOW