'Local Courier Sector Abreast Of International Trends'

"With the centre's simplification of the courier import regulation Act and its forward looking attitude, the courier industry is abreast of global trends," feels Tushar Jani, chairman of Blue Dart Express, the local associate of the US-based Federal Express. Excerpts from an interview with Devendra Vyas.

What is the status of the courier industry at present?

The express industry has emerged from its earlier confines of door to door transportation of commercial goods and offering third party distribution services. It now services various sectors of the trade.

The courier industry can be divided into two segments - the international and the domestic. Regarding the international segment, the entry of multi-nationals such as Federal Express and TNT has perked things up. Further the government's simplification of courier import regulation Act has also aided the industry a great deal.

 

As far as the domestic segment is concerned, the industry has gained a foothold by providing cost effective distribution solutions.

It has registered a growth rate of 25 per cent this year and is valued at over 800 crore. The total number of employment generated by the courier services is pegged at around 20,000 people. It has now gained access to the interior as well.

As the economy moves ahead, what role does the industry see for itself?

The courier industry's superior distribution services have helped the local trade reduce their inventory. This has definitely helped in reducing the financial cost of keeping a large inventory.

It has also aided the movement of documents and other time-sensitive parcels, in minimum time, to foreign countries and vice-versa.

This has helped exporters obtain a greater number of orders. The realisation of proceeds from exports has come much faster.

The industry will also steadily start providing dedicated third party logistical services to the local manufacturer, enhancing better and swifter distribution.

As the industry gets well-entrenched, manufacturing units would be benefited, as they would be able to deliver goods in time.

Moreover multinational courier firms have, with their superior networks, initiated major changes in the functioning.

With liberalisation, flights of multinational firms transport more express products abroad.

How is the industry changing with the times?

The centre is committed to be a part of the global electronic revolution. This will have more local exporters and importers being drawn towards electronic commerce. E-commerce involves faster transportation and quicker clearance of consignments, which will result in faster delivery.

A customer can order a product through the Internet from the manufacturing company , which will handover the goods to an express company. This would render stockists' chain, distributors and C&F agents redundant. The product will also be more competitive in terms of price.

Is the conventional distribution set-up set for an upheaval?

With greater use of express services, distribution will shed layers. For e.g. an office equipment firm will manufacture products and hand it over to a courier company, which will store products in its warehouse. The warehouse will be linked by computers to the manufacturer.

Orders received by the firm would be passed on to the courier company's distribution centre. It will then process the order and generate the invoice and delivery challan from the computer system.

The goods will delivered after the completion of the necessary formalities and octroi.

We will also obtain the necessary acknowledgement on the manufacturer's invoice and delivery challan and hand over same back to the manufacturer.

Large express companies would create a dedicated distribution centre representing the manufacturer.

The courier firm's distribution centre will also accept defective items at various locations. The defective items will be, after repair or replacement, delivered back to the customer.

Could you elaborate on inventory management and third party logistical services vis-_-vis your industry?

The manufacturing company will provide inventory management to the courier firms' third party logistics. The courier will receive raw materials and finished products, which will be distributed to multi locational manufacturing facilities. This will help avoid duplication of inventory as the source of the inventory will be from single location of the courier firm.

Distribution will also be from a single point, providing greater flexibility to manufacturers to move finished products to highly demanding market segments.

The same express company would provide logistical services to multi-locational firms. It would take over the responsibility of finished products, transportation and distribution.

How do you visualise the industry in the post - GATT scenario?

With the removal of value and quantity restrictions by countries with reduced and generalised import customs duty tariff, local consumers will have the opportunity to order products from anywhere in the world. Global manufacturers will also start to focus more on the local market.

The importer will import his products from anywhere in the world to one gateway in the country.

The products will then have to be distributed within the country at various locations. Thus the courier industry will have ample opportunities for expansion after 2005.