Indian private couriers not to lower rates

Even after a major tariff revision by the department of posts (DoP) in the below 500gm segment of courier, private players are in no mood to lower rates.

Eyeing a larger share of the Rs 50,000 million business in the below 500gm segment, DoP reduced tariff in the sub-50gm segment of the local speed post by 40 pct last month from Rs 20 to Rs 12. The new rate is inclusive of service tax and education cess.

While courier majors like XPS charge Rs 30 for the below 250gm segment and Rs 50 for the sub-500gm segment in the same region, department of post charges vary from Rs 12 and Rs 20.

XPS charges Rs 50 for sub 250 gm and Rs 75 for below 500 gm for the rest of the country. Speed Post charges for courier, other than local; vary from Rs 25 to Rs 80.

Mr.K Prabhakar, president & CEO of XPS, a multimodal express logistics company, said, “We serve a niche customer segment which is driven by serviceb quality rather than price. We don’t see any impact of the decision taken by the DoP.”

According to experts, while majors like Gati and XPS have their niche market, the decision would adversely effect local, unorganized players, who operate on factors such as price rather than service delivery.

Size of the organized sector in the Rs 100,000-million courier industry is about Rs 7,100 crore. Almost 65- 70 pct of the business for the courier industry comes rom the below 300 gm segment. A mere less than 30 pct business comes from the above 500gm segment.

AK Agarwal, director of DRS Group, said, “Consumers today want factors like speed of response, customer service, established delivery record, transit time and accessibility.”

Patram Choudhary, head of business & operation, east, of Gati, said the decision of the department is unlikely to have any impact on their courier business.

Gati recently launched value-added services like Café d’eliver and IC -Zip to provide multi-modal solutions to customers.

1 GBP = 81.4266 INR