In interaction with Aneel Gambhir, Chief Financial Officer, Blue Dart Express Limited
The importance of the logistics industry was understood when the lockdown was first enforced, and facilitating the business of any kind was only possible with support from logistics players.
"With the second wave causing widespread chaos and damage, we have formed Blue Dart Med-Express Consortium with a single goal in mind and that is, to deliver vaccines and other critical medical equipment in a reliable manner that helps us reach every village & city in India. " says Aneel Gambhir, CFO, Blue Dart Express Limited.
What is your outlook on the Indian logistics industry?
Logistics in India continues to be a highly fragmented space with many unorganised players and a high logistics cost. However, the importance of the industry was understood when the lockdown was first enforced, and facilitating the business of any kind was only possible with support from logistics players. Blue Dart’s air & ground express, backed by its market differentiator-Boeing 757-200 freighters, 11,000+ vehicles, and 19,000+ workforce supported all its customers throughout this challenging period. Our teams also supported the nation in facilitating the movement of essential supplies across the nation as well as cross–border, as part of the Government of India’s ‘Lifeline Udan’ mission.
The logistics industry in India is set to grow by leaps and bounds, given the numerous initiatives the government has in place to ensure a seamless flow of goods across the nation. Policies like National Logistics Policy, National Air Cargo Policy, the planned dedicated freight corridors as well as the new initiatives announced in the Union Budget for FY 2021-22, all point towards making the logistics industry more streamlined and efficient; thus, bringing down the logistics cost altogether.
Blue Dart is keen on using these opportunities to our advantage and further passing on the benefits to all our customers. We are doing everything we can, from leveraging our aircraft to actualising the power of drones, to reach the Indian heartland and fulfil our role as the trade facilitator to the nation.
How has the current pandemic impacted your business profitability and outlook?
The pandemic, while a difficult terrain to navigate around did bring out the best in Blue Dart; as they say, ‘when the going gets tough, the tough get going’. As the initial shock waves wore off, we began seeing an upward growth trend in our business from the second quarter of 2020 and recorded an increase in sales by 21 per cent and 35 per cent in the third & fourth quarters, respectively of the financial year 2020-21. FY2020-21 ended with a Rs 96.31 crore profit after tax (previous year Rs 38.29 crore loss).
Business profitability grew during the pandemic because our teams worked round-the-clock ensuring business continuity. As the unlock phases began, with a number of industries coming back on to the path of recovery and with the festive season in full swing, Blue Dart registered impressive growth in the topline.
We are cautiously optimistic about what the future holds. The year 2021 did begin on a positive note; however, the second wave has set us back as a nation. Logistics will always be crucial to business continuity, pandemic or no pandemic and we are doing everything in our power to contribute to bringing the nation and the economy back on its growth path. The Central Government in its Budget 2021 provided further impetus for improvement in infrastructure namely roads, railways, and airport facilities to facilitate the movement of goods for the success of the ‘Make in India’ initiative.
How important is digitisation in your business? What is your digital spend?
Logistics is an extremely customer-centric business. In order to provide a seamless express logistics experience, leveraging technology and digitisation is a must. We have always advocated the use of tech and digitisation to help our operations become leaner and in turn, achieve high-quality service levels at a short notice.
From a robust supply chain to ensure a smooth first-mile, middle-mile, and last-mile delivery; from facilitating an internal network to ensure that we operate like a well-oiled machine to increasing visibility for our customers, technology plays an important role in our business.
An indigenous network modelling system has been developed and implemented, which has enabled Blue Dart to dynamically respond to changes in network schedules and recommend fast & reliable network routes linking shipment origin with destinations. Our website has been revamped to engage with customers for additional touchpoints like exception handling with alternate instructions, dashboards for greater visibility on performance along with billing information.
A control tower has been built to facilitate proactive ‘track & trace’ of shipment movement within the network. Teams operating using this real-time solution can control nationwide activity, which involves first-mile, middle-mile, and last-mile delivery. Application programming interface (API) based solutions for our customers have been enhanced for exchanging manifest at detailed levels to ensure an automated and seamless supply chain, from pre-pick up to post-delivery (inclusive of collections).
An optimised network infrastructure with secure access into Blue Dart's internal digital resources ensured our operations as well as working from home (WFH) right from the start of the pandemic-enforced lockdown. A shift to microservices-based architecture for our core systems with an underlying AI-based engine has been made to drive agility in meeting business requirements with speed and also ensuring smarter & more efficient ways of working.
Contact-less delivery (CLD) is also made a reality by allowing access to 14 digital wallets, net banking, credit & debit card, UPI, and BHIM. Our recently formed Blue Dart Med-Express Consortium will also operate experimental drones to help us increase our reach into the Indian heartland.
At Blue Dart, our core values include a ‘right first-time’ principle wherein we strive to remain error-free and bring great value to our service quality offerings; technology helps us achieve this level of reliability and therefore, it is a critical part of our business.
What are the key growth opportunities, going forward?
I believe this year will follow suit of the last wherein there will continue to be a succinct focus on the pandemic. We are putting our best foot forward and providing our responsive, reliable, and resilient services to all our customers during this challenging period. COVID relief medical and pharmaceutical equipment will be a priority along with transporting other essentials. We are already carrying oxygen concentrators, oxymeters, Remdesivir, ventilators, etc. to aid the nation in its fight against the second wave.
The pandemic has also put the spotlight on e-commerce, digitisation, and logistics – all three industries playing a central role in the ‘new normal’. I believe growth opportunities would lie as all three industries collaborate to find effective, reliable and future-ready solutions.
What strategic initiatives have been taken recently in order to increase the market share of your company?
Many initiatives were launched keeping in mind the situation in which India was and is currently facing. We launched the ‘Fight COVID-19 Price’ that offered a 25 per cent discount to all MSME and retail customers. We facilitated the movement of essential medical and pharmaceutical equipment by flying cross-border as well as shipping medicines to NRIs. Contact-less delivery to ensure safe and healthy pickup & delivery of shipments was made a necessity. We ramped up our temperature-controlled logistics services to be ready when the vaccine candidates were manufactured. We are also leveraging our air capacities by offering domestic and international charter facilities for urgent cargo movement.
Through the festive season last year, we launched various festive season offers namely, Rakhi Express, Diwali Express, Merry Express, etc. All these aimed at keeping our customers close to their loved ones by providing discounted shipping rates for their gifts.
With the second wave causing widespread chaos and damage, we have formed Blue Dart Med-Express Consortium with a single goal in mind and that is, to deliver vaccines and other critical medical equipment in a reliable manner that helps us reach every village & city in India.
Our initiatives were launched keeping in mind our valuable customers and their needs while an increase in the market share was a mere by-product of that.