Tag: India

Indian, Chinese express firms plan cooperation

Two of the leading locally-owned express transport groups in India and China plan to cooperate to profit from soaring trade between the two fast-growing Asian economies. Bilateral trade between China and India grew 83% to USD18 billion in 2006 and is expected to reach USD40 billion by 2010.

Gati, one of the largest road express operators in India, and China Railway Express International Logistics (CREIL) have signed a memorandum of understanding covering cooperation in courier services, freight forwarding, ocean freight and logistics.

Under the agreement, CREIL and Gati will be responsible for all infrastructure arrangements and transportation of shipments in China and India, respectively. The two firms are reportedly looking into creating a direct road landbridge between India and China through the Himalayas to transport shipments as well as using air and sea connections.

“This arrangement will enable the two companies to complement each other’s strength and service the large base of customers in India and China,” said Mahendra Agarwal, CEO and MD, Gati. The Indian company covers 594 of India’s 602 districts while CREIL, a unit of China Railways, covers 500 cities in the 31 Chinese provinces.

Hyderabad-based Gati has embarked on a major international growth strategy over the last year which is designed to transform it from a domestically-focused company into an international player. CREIL mostly uses the China Railway network for rail-based freight transport but also has a fleet of over 3,500 delivery trucks for nationwide distribution.

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India Post gears up to revive parcel biz

It will no longer be just passengers who’ll enjoy the comfort of travelling in air-conditioned trains. Now even your parcels – small, medium and large – booked with the Department of Posts (DoP) will be delivered across the country via the network of AC trains running in India.

In an effort to revive its parcel business, India Post has inked a deal – the Joint Parcel Product initiative – with Indian Railways. As per the MoU, to be signed soon, while the Railways will reserve a space in all Shatabdis and Rajdhanis for these parcels, India Post will ensure the pick up and delivery part of it.

Over the last five years DoP has seen a decline of over 77% in the unregistered parcel business with revenues coming down to a mere Rs 7.45 crore in 2004-05, as against Rs 32.70 crore in 2000-01.

Explaining that the tie-up would be on a revenue sharing basis, Khan said: “India Post is losing a huge chunk of its revenues from the parcel business to private players in the industry and the initiative will help us cope up with our deficit of Rs 1,100 crore by 2011.”

According to the last industry survey done in 2003, logistics and parcel business in India is to the tune of Rs 75,000 crore and DoP contributes a minuscule 0.5% or just Rs 400 crore to it. No wonder, the department is gearing up to establish a strong foothold in the parcel and logistics business.

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Indian express industry set for sizzling growth

India’s express industry is expected to register a growth of at least 20 per cent per annum during the next five years and more than double its size by 2012, according to a study by rating agency Credit Analysis & Research (CARE). Opening of banking, insurance, retail, aviation and telecom sectors and their penetration to smaller cities would be the major growth driver.

According to CARE, the size of India’s courier industry currently stands at around Rs 7,100 crore and is estimated to have grown at a CAGR of around 33 per cent over the past decade. At its current estimated size, the courier industry is larger than the tea industry and close to the size of paper and shipping industries in India.
The industry is highly fragmented with more than 2500 express players and a few large sized players account more than half of the industry revenues.

The industry contributes more than Rs 1000 crore to the government revenues by way of service tax, income tax and other levies and it offers employment opportunity to about a million people.

Amongst domestic players Blue Dart, DTDC, First Flight and Overnite Express are leading express services companies in India while UPS, FedEx, DHL and TNT are leading international players presence in the country. According to the CARE survey, the industry players earn about 52 per cent of its revenues from document parcels.

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Air Cargo imports in Mumbai airport rise 32%

Air cargo imports into Mumbai airport rose 32% to 13,336 tons in November ’06, compared to November ’05, as per the latest available airports authority of India data. Exports from Mumbai dropped 1.9% in the same month, over last year, to 12,405 tons.

On the imports side, Air India maintained its lead, with 1,925 tons imported in November ’06, a rise of 24% over November ’05, followed closely by Cathay Pacific, with 1,407 tons, showing a 164% year on year growth.

Singapore airlines came in third, with 1,376 tons, up 19% and Lufthansa was fourth with 1,020 tons, up 20%.

In all cases, high industrial activity and demand for materials is showing up in rising imports cargo tonnage and origin. With China-India opening up to trade with each other, imports of machines, tools, garments, raw material, samples is rising exponentially, which benefits Cathay Pacific as the largest Hong Kong/ China based carrier.
Air India was the top carrier in exports out of Mumbai, with 2,424 tons in November ’06, up 1%. In the year 2005-06, it held 18% market share of air exports from Mumbai, which has already moved up to 19.5% in November ’06. Taking second slot is Emirates, with 1,176 tons, up 4% over November ’05.

It held 9.5% share in November ’06. Garments, textiles, gems, food items form major chunks of the cargo for both Air India and Emirates. The logistics majors FedEx and UPS turned in a 43% and 25% increase in cargo exported in November ’06 over November ’05.

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India Post to emerge as a key player

The multi-crore courier services sector, dominated by the multi-nationals and indigenous private players, will soon see India Post emerging as a key player in the arena.

Come Wednesday and the India Post’s fresh initiative ‘ Mail Business Centre’ on this front will unfold. Delhi will be the first among the major cities to have three such stops catering to the bulk mailing requirements of the corporate and government organisations.

To begin with, first of the three such centres will become functional at Foreign Post Office near ITO. The other two MBCs will be located at Rail Mail Service Bhawan and Army Mail Postal Service Centre, Vasant Vihar.

In what could be perceived as image make-over for the India Post, its General Manager, Business Development, John Samuel, described the MBCs as “one stop mailing centres” primarily eyeing the corporate clients. Soon all major cities of the country will have this facility, he said adding : “Basically, we are adopting a businesslike approach to woo the customers by providing an efficient service.”

Believe it or not, trained Marketing Executives and Key Accounts Managers will be available at these centres to interact with the clients and study their needs. They will hold business negotiations and offer financial packages to suit their requirements.

Not only will it be faster and more accountable, it will also replace the prevalent system of sending the bulk mail and parcels through ordinary post, Samuel said.

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