"Our expertise lies in the express logistics space, backed by a hub and spoke model"
In this interview, Aneel Gambhir, CFO, Blue Dart, outlines the operational strategy of the company in the logistics sector that is increasingly tilting towards providing sustainable solutions and cost-efficient delivery
Could you discuss in brief the recent announcement made by the company regarding the 9.6 per cent increase in average shipment price from January 1, 2022?
Our persistent need to consistently update our systems and processes has ensured that we remain one step ahead of the curve even during unprecedented times. To continue providing a resilient, reliable and efficient solution to customers, Blue Dart adjusts its prices annually, taking into account inflation, currency dynamics, fuel cost fluctuations, rising regulatory costs and other mandatory costs such as expenses related to compliance for the workforce with enhanced security regulations across the 35,000+ locations it services.
The general price increase (GPI) will be effective from January 1, 2022, with a shipment price increase of 9.6 per cent as compared to 2021, dependent on the shipping profile. Customers signing up from October 1 to December 31, 2021 will not be impacted by the price increase. We want to make sure that our customers receive high-quality service and the annual increase enables us to sustain service quality and various cost increases.
According to the global outlook on the logistics industry, companies will be focusing more on ‘green logistics’. How does Blue Dart plan to adopt this trend?
Blue Dart has always been working towards being a ‘sustainable provider of choice’ for all our stakeholders. We are amongst a selected few companies world over that invest wisely in safeguard the planet for future generations. As early as 2011, we were the first in the nation to launch an end-to-end ‘go green’ solution across all the products we offered domestically and internationally, called the Carbon Neutral Service (CNS). CNS offers all our customers an ecologically friendly shipping option to offset the carbon emissions generated during their shipments’ journey.
Moreover, Blue Dart, as a part of the Deutsche Post DHL Group, firmly aligns itself with the group’s credo of ‘Connecting People, Improving Lives’ and makes an active effort, year on year, to improve carbon efficiency by leveraging greener solutions supported by digitisation. Our sustainability roadmap guides the organisation towards creating positive change for all our stakeholders by calling for cleaner operations for climate protection by ensuring that we remain a great company to work for all as well as building a highly trusted company. We have launched many initiatives to aid the world in its battle against climate change and global warming.
We also aim to achieve zero carbon emissions by 2050 under the ‘Mission 2050’ target set by the Deutsche Post DHL Group, wherein our goal is to limit global warming to less than 2 degrees Celsius and drive the business towards zero emissions logistics. Blue Dart is also the first to set a quantified carbonefficiency target. Our goal was to increase our CO2 efficiency by 10 per cent by the year 2012 and 30 per cent by the year 2020. Against the 30 per cent target, we have achieved 36 per cent CO2 efficiency in 2020. Thus, we are setting the standard for the future of the logistics sector and doing our part to help the world.
A carbon credit is a permit that allows the company that holds it to emit a certain amount of carbon dioxide or other greenhouse gases. Blue Dart’s carbon credits go to a biomass power plant in India, amongst others, for the generation of electric energy as per the Certified Emission Reduction (CER) Gold Standard. Under the Mission 2050 initiative, for over four years, Blue Dart has contributed to over 10 per cent of the DPDHL Group’s global target of planting 1 million trees every year.
Apart from our tree plantation drive that would offset over 9 million kg of carbon emissions on maturity and our digital initiative to go paperless, we also incorporate various green practices to improve our CO2 efficiency. This includes introducing a fleet of electric vehicles and our soon-to-be operated drones to incorporate dynamic route planning and improve efficiency which helps reduce our carbon footprint. We also improve our load factor utilisation, use bicycles for pickup and delivery wherever possible, reduce emissions through energy-efficient fixtures, equipment and temperature control, and ensure that even our packaging is eco-responsible.
Setting up micro warehouses to cater to the increasing demand for same-day and next-day delivery is gaining attention. Do you plan to set up some micro warehouses for faster and efficient last-mile logistics?
Blue Dart’s expertise lies in the express logistics space, backed by a hub and spoke model. A hub and spoke model is a distribution model that can be best explained using an example of the shape of a bicycle wheel. In the middle of a wire-spoke wheel is what is known as the hub. It is this hub that allows each of the spokes, sprawled out in all directions around the wheel, to meet at a centralised location at the centre of the wheel. This model enables us to provide efficient and reliable services to our customers in a time-definite manner, thereby tying in with us being the nation’s most preferred express logistics provider.
Blue Dart has been an industry leader in the time-definite space since 1984 and our premium service quality, which is only propelled further, year on year, continues to provide reliability, resilience, and responsiveness. Our supply chain network has always prioritised a seamless first, middle and last-mile logistics experience for our customers and this will only catapult further as we move forward. As a customer-centric organisation, we are consistently revisiting our product portfolio and updating it based on market demand. Keeping this in mind, we will continue to introduce new and more efficient ways of operating to ensure better customer experiences.
What are your top strategic priorities?
Digitisation and automation, leveraging the power of technology to strengthen our sustainable supply chain, risk assessment and management across verticals and building on resources provided to us by the Government of India are on the list of our current strategic priorities. Technology has been our backbone, and its significance was further reinforced during the pandemic. As part of the DPDHL Group, we firmly adhere to the group’s ‘Strategy 2025 – Delivering Excellence in a Digital World’. The pandemic propelled innovation at Blue Dart further to ensure supply chain continuity as the nation’s trade facilitator.
Our customised initiatives ensured lean operations that helped us ramp up and achieve high service levels at short notice. Adapting to the need of the hour, we pioneered the contactless delivery service and activated payment through 16 digital wallets, net banking, credit and debit card, UPI, BHIM and QR code. To accelerate this seamless experience, we also launched the ‘My Blue Dart’ mobile application that helps customers track their package, find out the most cost-effective prices to send their shipments across horizons as well as access important contact information, etc. in a user-friendly and ‘on-the-go’ manner.
To turn this ‘crisis’ into an opportunity, we launched the Blue Dart Med-Express Consortium to operate experimental drones for delivery of vaccines and emergency medical supplies safely and reliably to the remotest parts of the country. We successfully concluded the Visual Line of Sight (VLOS) and Beyond Visual Line of Sight (BVLOS) drone trials in September 2021. Going forward, through the Blue Dart Med Express Consortium we plan to deploy drone flights through an immersive delivery model to optimise the current healthcare logistics within Telangana.
We aim to be a brand that provides long-term sustainability and shows corporate responsibility through our environmental and societal initiatives. Following the sustainability roadmap that we, as a part of the DPDHL Group, align ourselves to, we work towards clean operations for climate protection (environment), being a great company to work for all (social) as well as being a highly trusted company (governance). We continue to innovate in this area as well to reach our goal of being a sustainable logistics provider of choice. One of the other lessons from the pandemic was the importance of risk management. One cannot eliminate risk but timely intervention can help minimise its effects on business.
Risk management will continue to be a key priority to ensure our stakeholders’ interests are safeguarded. Lastly, policies like the National Logistics Policy, the National Air Cargo Policy, the planned dedicated freight corridors, the new initiatives announced in the Union Budget for FY 2022, and now the Draft Drone Rules 2021 point towards bridging the gap, bringing down cost and increasing efficiency for the logistics industry. Further, the prime minister has announced around Rs 100 lakh crore for the ‘Gati Shakti’ master plan to accelerate the development of transportation and logistics infrastructure in the country. With all these policies in place, this sector is set to become a lot more streamlined and a lot less fragmented.