|Vol. 21 No. 29||
Monday July 25, 2022
InterGlobe Starts Up With UPS
Even as IndiGo, India’s largest airline, is all set to induct its first freighter plane – FT reported some time ago that IndiGo was keen to start his freighter airline, on the heels of the air cargo boom that was ushered in the pandemic – InterGlobe Enterprises, the parent company has gone ahead to craft a 50:50 joint venture with Atlanta-based logistics giant United Parcels Service (UPS) for an initiative in the Indian logistics market.
In fact, UPS had been looking for an Indian partner to boost its India business. UPS, incidentally, is challenged by the likes of DHL and FedEx in India and is, in fact, way behind both. It is not that UPS had not tried to push its India business. In 2021, it had floated Iris Transportation Service, where InterGlobe Enterprises had a 50 percent stake.
Also, UPS had, some years ago, a joint venture with an affiliate of Jet Airways. When Jet Airways stopped operations, the JV died. India has been on the cards of global logistics giants. This time around, the JV will venture into anything connected with logistics like warehouses, transportation and inventory management as well as shipments of goods by air, land and sea.
The India market holds potential. It may be mentioned that FedEx invested USD$100 million in logistics start-up Delhivery in 2021. DHL, perhaps, understood the importance of India way back, when it took over Blue Dart in 2004 and today holds 74 percent stake in the company.
Even though Interglobe Enterprises holds 37.82% stake in IndiGo airlines and despite air cargo watchers pointing out that IndiGo’s cargo business could reap dividends from the JV with UPS, the joint venture was completely separate from the airline’s operations. “The cargo arrangement between Interglobe Enterprise and UPS has nothing to do with us. That’s a standalone operation. They have their own agreements which have no impact on IndiGo,” CEO Ronojoy Dutta said some time ago in a post-results call with analysts. In fact, CEO Dutta emphasized that IndiGo’s cargo business would continue to service all its customers and not be selective about UPS. “The business of UPS is more likely to focus on small shipments and surface transport. We are into consolidated shipments. These are two ships passing in the night. We don’t signal each other. We have nothing to do with each other,” he said.
FT spoke to J. B. Singh, Director, InterGlobe Enterprises, in charge of the new JV with UPS that has been named MOVIN.
FT: Why do you think this is the right time for a logistics company like MOVIN to start operations?
JBS: Today, the logistics sector is at its most dynamic embodiment and is expected to grow more than 10% in the next couple of years with an estimate reach of USD$320 million by 2025. The credit goes to the big investments in the infrastructure development, therefore creating more opportunities for the logistics sector with improved efficiencies at optimized cost. At MOVIN, we bring in the operational excellencies with world-class technology across the sectors for different stakeholders. We are certain that our foray into logistics will enable the businesses to expand their footprints across India and the globe.
FT: How will UPS help MOVIN to become a major player in the logistics sector?
JBS: Entering the logistics market with a globally reputed partner like UPS is a logical extension of our long-term business strategy of creating best-in-class brands to serve the Indian market. The values of prioritizing customer needs, people focus, and future mindedness is something both UPS & InterGlobe identify with, and these common values will surely be beneficial to this partnership. We are confident that our understanding of the Indian customers and their preferences, as well as UPS’s global expertise in logistics, transportation, and delivery solutions, will help make this partnership a grand success.
FT: Supply chain problems have been in the headlines around the world. How much of a factor has increased demand for physical goods been due to the pandemic?
JBS: The biggest lesson from the pandemic is the urgent need to improve supply chain resiliency to mitigate business risks. Supply chain visibility available today is rich set of technologies such as IoT, barcodes, RFIDs, and data analytics. The growth of e-commerce and business demand has contributed to an increase in digital financial services provided to small businesses and consumers.
FT: With high fuel prices, do you think the situation at present is difficult for MOVIN?
JBS: The rising fuel cost is a matter of concern; however, we are hopeful that the Government will be taking the helpful measures that will help in curbing the price inflation of fuel. We are committed to meet the business expectations and adopting the alternative transport mediums as our geographical presence increases in the market.
FT: Do you think the logistics industry in India has not been quick enough to adapt to changing circumstances?
JBS: The Logistics sector has evolved with time and in fact has adopted technologies and solutions ahead of the time. Express deliveries, AI driven technologies, real time monitoring with the help of IoT enables seamless efficiencies. Consequently, better tools and strategies are being sought by firms in order to enhance their decision making. At the firm level, the logistics focus is moving towards reducing cycle times in order to add value to their customer experience. The industry continues to evolve with the demand and continues to customize the experience based on consumer behavior and requirement.
FT: What would MOVIN like the government to do to ease supply chain bottlenecks?
JBS: Supply chain challenges in India mainly relate to poor infrastructure, complex tax infrastructure, weak distribution system, fragmented market, and lack of technology adoption. Though the complexities of India's supply chain may appear overwhelming, understanding and mastering them is a critical success determinant for a business attempting to serve customers in India. An efficient review of supply chain design will help better position companies in what is becoming an increasingly competitive marketplace.
FT: Do you plan to use IndiGo’s cargo planes or are there plans to start a dedicated cargo carrier like Blue Dart?
JBS: We will hold cargo space with several partners and vendors as per our needs and IndiGo will be one of the service providers.
FT: How dependent is MOVIN on technology?
JBS: Our ambition is to provide a suite of services matching the needs of B2B customers by bringing in higher levels of efficiencies, stronger distribution channels, advanced innovative technology, along with global best practices. With time as our operational excellence becomes complex with expanding routes, we plan to invest heavily on technology as our systems and processes are built to be agile and drive efficiency; thereby enhancing customer experience throughout the shipment journey.
FT: Can you talk about the services provided by the company?
JBS: We understand that speed is fundamental to a logistics company, and we work hard to stay agile across every location that we serve. We cater to B2B businesses with express logistics needs on the basis of our key strengths mentioned as follows:
• Standard Premium Day Definite: We have day-definite Standard Premium service offering by surface for guaranteed day delivery.
• Express Time definite: - We have 3 time-definite Express service offerings ie Express Early Morning – before 10:30AM, Express Mid-day - before noon and Express End of Day only available for Air Express customers.
FT: What makes MOVIN different than its competitors?
JBS: We are the first in the logistics business to completely digitize the whole customer journey with paperless transaction. The features like e-POD, customer repository of invoices, shipping reports etc. will surely be something new to experience in the B2B logistics industry. With new and differentiating features, the pricing hypothesis and its rationale has been set based on the existing incumbents in the market. We are confident that the feature versus price is aptly planned/ pegged and will make us stand out from the competitor.
Thank you for the suggestion and for raising the need for post event monitoring and communication where cases were identified/spread at an event. We monitored the AMS event and it seems we had zero cases identified by participants. This was reassuring then I went on holiday and my entire family contracted it on a cruise ship in the Norwegian Fjords, so I agree we are not yet done and considering the Autumn season may see yet another surge, particularly considering the increased transmitability of the latest variant I will certainly ask Rachael to look into options and will discuss with Messe München (event partner). I attended an ACI event last December which also had a similar service.
Glyn Hughes, Director General, TIACA
If You Missed Any Of The Previous 3 Issues Of FlyingTypers
Access complete issue by clicking on issue icon or
Access specific articles by clicking on article title
Vol. 21 No. 26
The Human Rhapsody Of
Publisher-Geoffrey Arend • Managing Editor-Flossie Arend • Editor Emeritus-Richard Malkin
Film Editor-Ralph Arend • Special Assignments-Sabiha Arend, Emily Arend
Send comments and news to email@example.com