Promising to remain asset light, Mahindra Logistics Limited is looking to add new verticals and enhance differentiated services to ensure beefy margins in the Goods and Services Tax (GST) equipped logistics industry. In an interview with Aditi Divekar, Pirojshaw Sarkari, chief executive officer at Mahindra Logistics Limited talks about acquiring and their wait for the development of inland waterways. Edited excerpts:
Currently, Mahindra Logistics is present in rail, road and air transportation but has no presence in transportation via waterways. Why are you not looking at this cheapest mode of transport?
So far, we have moved only one automotive finished goods consignment through waterways and it was quite challenging. We would like to use waterways for transportation but we are waiting for concrete development in this segment. The first and last mile infrastructure needed in this mode of transport is not up to the mark and poses threat for cargo damage. Till the time the infrastructure does not develop in full, we will continue to have only trail runs on this mode of transport. However, we are watching developments happening in inland waterways and believe that a lot of improvement will come about in this segment.
There is a huge scope for growth in temperature-controlled logistics. What is your plan for this segment?
Today we do not do cold chain logistics. We are present in pharma logistics but only handle dry pharma cargo. However, we have recognised the need for cold chain in pharmaceuticals and hence by end of this financial year, we will be crystalising our foray into temperature-controlled logistics for pharmaceuticals.
Mahindra Logistics has no expertise in temperature controlled/cold chain logistics at present. What is going to be your investment for this segment?
We being an asset-light company will not be making any on ground acquisitions for cold chain business. But we certainly need to acquire expertise in this region and hence will be acquiring talent for this vertical instead of acquiring an asset. Asset on ground will remain with the business partner.
For a logistics company, its margin growth is dependent mainly on services it provides and not volumes. How is Mahindra Logistics placed in the market in terms of its differentiated services and how do you have an edge over your peers?
The industry today believes that they do not need to outsource services to third-party logistics companies and that they themselves can take care of services. We, however, are uniquely placed in the market. We were a division of M&M (Mahindra & Mahindra) for eight years and took care of their entire logistics requirement, including critical activities. We are in a position to attract big customers as businesses are beginning to realise that we can provide services better than what they themselves can do for their own business. The more intricate the service a logistics company provides, the better margin it can draw. This is precisely what we are doing. We provide critical and customised services which draw higher margin compared to vanilla-service provided from point A to point B. Starting from supply chain consulting to freight forwarding to warehousing to distribution, we are present across the entire chain.