UPS Worldwide Logistics Asia Pte, Singapore, a 100 per cent subsidiary of $32 billion UPS Worldwide, is close to entering into a strategic alliance with local outfits -- Gati Corporation Ltd and Dynamic Logistics Pvt Ltd -- to float a joint venture in India to provide third party logistics.
The formal signing of the memorandum of understanding (MoU) to float the joint venture between the three firms will take place in Mumbai tomorrow. Sources revealed that the joint venture will be called UPS Worldwide Logistics (India) Pvt Ltd with the foreign firm holding 40 per cent equity in the venture, while both the Indian partners will hold 30 per cent equity each in the enterprise.
The Indian partners are expected to benefit tremendously in terms of growth as United Parcel Services will bring in its global clients into India and also provide systems software for the joint venture.
The Indian venture will provide all types of logistics services including warehouses, transportation and inventory management, and value-added services linked to the conveyance and shipment of all types of goods by air, land and sea. It will also provide value-added service incidental to logistics like documentation and order processing.
Besides, the joint venture will also provide add-on services like logistics consultancy, receivables management, real estate facilities planning, component sub-assembly, parts kiting, tele-servicing and billing.
In order to provide comprehensive logistics services, the joint venture firm will offer among other things to undertake the job of transporters, warehousemen, custom brokers, bonded carmen, common carmen, storekeepers, packers, forwarding agents, ship agents, carriage conductors and break bulk agents.
Although, the exact size of the share capital of the new joint venture is yet to be decided, sources point out that the capital will be around Rs 5 crore which will be hiked as and when the need arises for expansion.
Gati Corporation is a Secunderabad-based wholly owned subsidiary of Transport Corporation of India. Gati has a country-wide network spread over 701 locations and a large fleet of over 800 trucks at its disposal.
Dynamic Logistics is a Pune-based firm into logistics and warehousing with a built-up warehouse area of 15 lakh sq ft. It also has large tracts of land in Pune, Nashik, JNPT port and Chennai.
The new joint venture is likely to face intense competition from other global majors who are planning to come to India after a tie-up with local firms and also from domestic logistics firms including Senbawang Shriram Integrated Logistics, TVS Logistics, Safe Express and Air Freight.