DHL to add 10,000 trucks in India, bullish on growth prospects
The company entered the e-commerce solutions market last year and has added 745 trucks since then.
Posted on : 04 Jun 2019
DHL International, one of worlds largest logistics companies, will push for growth in Indias burgeoning e-commerce space with investments lined for buying of new trucks and upgrading to newer technologies.
The company entered the e-commerce solutions market last year and has added 745 trucks since then. As surface road transport commands a share of 60-65 percent of movement of all goods in India, DHL is looking to have a fleet of 10,000 trucks over the course of ten years.
Speaking to Moneycontrol, Malcolm Monteiro, CEO, DHL eCommerce Solutions, said: We will keep adding trucks when we see the need. We will have 10,000 trucks in 10 years. These will be single and multi-axle trucks in the range of Rs 17-35 lakh. Besides this, investments are also going in towards technology.
DHL Group has promised to pump in Euro 200 million (Rs 1,500 crore) in investments into India by 2020. India's logistics spend stands at $200 billion a year as per Monteiro with most of that being unorganised.
Cold chain logistics, which are responsible for transporting perishable goods, is set to witness its market grow to Rs 47,000 crore by 2020, according to Ken Research.
Cold chain logistics is a huge business and its growing phenomenally. Refrigerated trucks cost a lot more than conventional trucks. So, the costs of buying trucks will vary every year, said Monteiro.
Logistics costs in India stand at 13-14 percent of the cost of a product. The industry wants to bring this down to 10 percent to make it cheaper for the end consumer as well as boost operating margins. This can be achievable since developed economies logistics costs only 8-9 percent of the cost of the product.
As per a report prepared by rating agency CARE Ratings, India's logistics market is projected to be worth $215 billion by 2020-21 by recording a 10 percent compounded annual growth rate (CAGR) since 2016-17.
Development of logictics related infrastructure like dedicated freight corridors, logictics parks, free trade warehousing zones and container freight stations, are expected to improve efficiency, the report said.
India is a single digit size to the total global operation of DHL. Growth rates in India are higher than most countries, including China, added Monteiro.
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