Mahindra Logistics Ltd, one of the largest integrated third-party logistics service providers, plans to scale up its warehousing capacity in Tamil Nadu to 3.5 million square feet in the next 3-4 years.
“Tamil Nadu accounts for about 14 per cent of the country’s manufacturing GDP. Our perspective is that Tamil Nadu should contribute that much to our business as well. So, in the next 3-4 years, Tamil Nadu should get about 3.5 million square feet,” said Rampraveen Swaminathan, MD & CEO, Mahindra Logistics Ltd.
He was addressing a press conference here on Friday to announce Mahindra Logistics’ collaboration with e-commerce giant Flipkart for integrated line haul solutions. Under the partnership, Mahindra Logistics will provide a dedicated fleet of heavy commercial vehicles, assistance in route management and network operations, and advanced analytics for Flipkart’s pan India operations to enhance operational efficiency and consistency.
Mahindra Logistics has 19 million square feet of warehousing capacity across the country. Of which, 8 per cent or 1.3 million square feet of warehousing space is located in Tamil Nadu. It has a total of 19 warehouses, including Chennai, Coimbatore, and Cuddalore. These include both large multi-client warehouses as well as individual warehouses for specific customers.
In November 2020, Mahindra Logistics set up a 3.50-lakh sq ft multi-client warehousing facility in Kancheepuram district. Swaminathan said the company is in the process of identifying one more facility, work on which should complete in the next 2-3 months.
“In Chennai alone, we want to take it to a million sq ft in the next 2-3 years,” said Swaminathan. He added that the company operates on an asset-light model. “We don’t build anything, we lease it out.”
At present, 60 percent of its total business comes from the automotive sector followed by other consumer goods and manufacturing (22 per cent), e-commerce (15 per cent) and cross border logistics (3 per cent).
He added that the company is seeing diversification and growth opportunities in sectors like FMCG, consumer durables, pharmaceuticals, and e-commerce.
On the Flipkart partnership, he said, Mahindra Logistics will operate 32 ft single axle heavy commercial vehicles for Flipkart in collaboration with Daimler India Commercial Vehicles, which will run on multiple national routes, across the country. He said the integration of connected vehicle technology empowers the Mahindra Logistics control tower to monitor fleet efficiency. The solution helps improve turnaround times and service quality, reducing the total cost of operations and customer service levels.
Swaminathan added that over a period of time, the company will add 300 such large fleets to cater to Flipkart as well as other customers.