Allcargo planning to foray into last-mile delivery : Shashi Kiran Shetty

Posted by Daily Shipping Times on 19-07-2017        Tweet

MUMBAI: With the GST boost, Allcargo Logistics is planning an aggressive domestic play by entering the last-mile delivery space and has set a target of trebling its domestic revenue by 2020.

The company, a global leader in the LCL (less than container load) and FCL (full container load) segment through its European arm ECU Worldwide, will also invest around Rs 1,000 crore to double its export-import warehousing/ CFS stations and logistics park capacity to 10 million sqft by 2020.

"We've already set a $2 billion revenue target for 2020. With the enabling environment after the goods and services tax (GST) rollout, I am sure this is easily achievable," Allcargo Logistics Founder and Chairman Mr. Shashi Kiran Shetty said recently.

"Accordingly, we've revised our domestic plans and decided to enter the last-mile delivery space this year itself," he said.

He said the company will focus on the booming e-commerce space under the domestic focus where it already works with all key players as a B2B player, but not into last mile delivery.

It works with auto players like Tata Motors, Ashok Leyland, Eicher and Volvo for domestic freight.

On the impact of the GST on the logistics sector, where Government expects the savings to be around 20 percent, Shetty said the benefits will come over the next three-six months.

"With GST in place, we've decided to invest Rs 1,000 crore into logistics parks and warehouses to double our capacity to 10 million sqft by 2020," Shetty said.

Allcargo is building its largest Multi-Modal Logistics Park at Jhajjar in Haryana on a 180 acre land which will be ready by next March, Shetty said, adding that the company expects the final customs clearance for its 20 acre CFS in Kolkata anytime now and commission it by mid-August.

Allcargo has also acquired land for export-import warehouses/ CFSs in Bengaluru (100 acre), Hyderabad (a 40-acre CFS will be ready soon), Chennai (54 acre) and Nagpur (60 acre) into which it will pump in around Rs 1,000 crore.

Currently it has about five million sqft of warehouses/CFSs - two each at Nhava Sheva/Mumbai, and Mundra; one each at Pithampur (Indore), Dadri near New Delhi and Chennai.

"Of Rs 1,000 crore capex, Rs 600 crore will be to set up Warehouses / CFSs and the rest will go into developing the allied infrastructure like rail lines and racks," Shetty said.

Speaking about investment in the last-mile delivery, he said, “We'll be converting a part of export-import warehouses into domestic warehouses to save on cost and land acquisition troubles."

On his growth plans, Shetty said it will be a three- pronged strategy involving organic and inorganic growth opportunities, hiring world class talent and increasing capacity by global ties-ups or domestic acquisitions.

Founded in 1993, Allcargo is the Country's first Multinational logistics firm and also the largest private sector integrated logistics firm, offering Multi-Modal Transportation, CFS-ICD, contract logistics, e-commerce logistics and Coastal Shipping among others.