Industry Outlook

Till the past decade the Transport Industry on the whole had been on the back seat. The reasons were:
  • Ill-literacy
  • Lack of professionalism
  • Lack of networking
  • Poor infrastructure
  • Focus on Margins rather than volumes
  • Lack of importance for Logistics in India
  • Limited Variants availability in vehicle type

But in the past decade, with the new generation coming into the industry, things have drastically changed. The industry has understood the importance of:
  • Education
  • Professionalism
  • Focus on volumes rather than margins
  • Emphasis on service levels
  • Importance of Information Technology(IT)
  • Requirement of a nationwide network
  • Numerous Vehicle types available

Today the logistics industry has got a status. The whole world has understood the importance of logistics in our day to day life. Suddenly we are treated as BUSINESS PARTNERS rather than just a VENDOR. Companiesí demands have increased, expectation levels have gone high. In short they are focused on to get the best with the cheapest cost.

Earlier the contracts used to be for 2-3 years and were extended. But today the contracts are being done on a yearly basis or even bi- yearly. Few companies have even started doing it on a quarterly or even on monthly basis.

The question is WHY?

Our industry runs on DEMAND & SUPPLY. In such a scenario the cost is never stable. In the past 3-4 years it has been observed that the DEMAND has always overtaken the SUPPLY. With more multinationals coming in and Indian companies becoming multinationals, the INDIA INC. is selling faster than expected. Because of this the cost of everything has shot up drastically and this effect has hit our Industry too. Attached are some data which will show you the cost we used to pay in 2008 for an owning a fleet & running and the cost we have to pay today.

There is a surge of 26% in the capital cost and 35% increase in the running cost.

AND

If we talk about the market conditions than it is very surprising to note that in the past 3-4 months itself the markets have arisen by 25-30%. Normally the rainy season is expected to be very low but this year is exceptional and has broken all records. The industry experts believe that in the coming two years the gap between the demand & supply will further increase and the freight rate will shoot up to 40-50% as compared to today.

Now the decision lies with the company, whether they want to reduce on the market dependability by asking their BUSINESS PARTNERS to own more and more fleets or to continue with the attached/market fleets.

We at TRIMURTI CARGO are concerned with this change in the demand & supply gap and have switched our focus from attached/market to owned fleets. In the last 6 months, we have put in 55 multi-axle containers and have plans to go up to 100 by the year end.

Till last year our turnover of INR5000 lacs was dependent 100% on the attached/market fleets but this year we expect a turnover of INR6500 lacs and the dependability on market will reduce to 70%. Next year it will come down to INR 8000 lacs and 50%.

The attached data will show you how we plan to be a step ahead when compared to our competitors in terms of costing and managing the owned fleet operations.

The future ahead for the Logistics industry is very bright and we estimate a YoY growth of 25-30%. Transportation cost cannot be reduced with the increasing volumes but the increase can be controlled.