If you have ever wondered how all those luscious kiwis, strawberries and black grapes have begun to land on your breakfast table without a mark on them, don?t conclude it?s an overdose of pesticides. Part of it is also the result of the modern-day cold chain management that has vastly improved the logistics back-up of organised retail.

The outcome: Red, ripe apples from Kinnaur (Himachal Pradesh) can now be bought in Mumbai on the 15th day in exactly the same condition and for roughly the same price, that is, Rs 35 a kg, as they did three-four years ago, when no one had heard of reefer vehicles. The only difference is that the cost that was earlier going to intermediaries is now being spent on modern-day pre-cooling and packaging facilities. Best of all, there is zero wastage with the use of reefer units. ?There is higher realisation from a bio-degradable product,? explains Jasjit Sethi, CEO, supply chain solution (TCISCS), Transport Corporation of India (TCI).

Founded as a one-man, one-truck outfit in 1958, five decades later, TCI has a turnover of over Rs 1,450 crore and runs an extensive transport network through every nook and crevice of the country. The supply chain solution was born in 2003, when the parent company saw an opportunity in providing third- party logistics support to retail majors such as Unilever, Proctor & Gamble, Gujarat Cooperative Milk Marketing Federation (GCMMF) and Cafe Coffee Day (CCD).

?Nearly 50% of the distribution in the case of these clients is through the cold chain,? informs Sethi. Other than simple transportation, TCISCS also does inventory management, labeling, packaging, sorting by date, vendor return, everything that makes the supply chain cost and time efficient and cut wastage at all access points.

?The shorter the shelf life of a product, more the layers in the supply chain?that is, higher the cost. But the investment does start to pay off within the first few years, especially in terms of higher value produce,? explains Sethi. This is especially true of exotic fruit varieties, dairy, meat, vegetable and confectionary products.

?Logistics needs are different for each client,? explains Sethi. For instance, in the case of GCMMF, the TCISCS staff picks up the basic ingredients for the ice cream from Anand (a town in Gujarat and famous for its milk cooperatives), which are then mixed and frozen at franchisees? manufacturing plants in other cities. For ensure quality, GCMMF tries to make the final product as close to the market as possible. Likewise, for Cadbury, TCISCS runs special reefer vehicles maintained at 15 degree Celsius.

?The customer does bear part of the cost for this modern technology,? admits Sethi, ?which can run 2%-5% in the case of confectionaries and as high as 7%-20% in the case of meat and exotic fruits. The advantage is it maintains the taste and look of a premium product.?

From the retailer?s perspective also, the cost is justified as without this storage support, the value of the produce virtually becomes zero when hauled over long distances. Unfortunately, unlike apparel, there is no scope in recycling decayed vegetable and fruits.

In some cities where rentals are high, third party logistic companies like TCISCS also provide warehousing facilities, at what are known as distribution centres. Here, trained staff works round-the-clock doing milk runs in the morning, followed by vegetable grading (by size, quality etc, putting bar codes/holograms and house labels on them) and meat processing in the afternoon, following by the second wave of fruit, vegetable and dairy products distribution in the evening.

?With meat products, we have to maintain very high house-keeping standards and meet government norms on waste disposal,? explains Sethi. Training is also required for grading commodities such as rice, pulses etc, before putting the appropriate hologram on sundry packets. ?All this saves a lot of time at the vendor point,? says Sethi. Interestingly, work goes on 24/7 at the warehouses. When the sun comes down, the night staff takes over, reconciling orders from various stores, scheduling the next day?s deliveries by waves/clusters/ location etc.

?About one man day is spent in loading one small truck,? explains Sethi. Work mounts on weekends in anticipation of which the warehouse managers also have to do inventory forecasting. Big retailers such as the Future Group and Reliance Retail have their own supply-chain divisions, but given the time-consuming and labour-intensive nature of the work, many have begun outsourcing the work to third-party logistics providers.

?In the consumption space that we operate in, we see more value in keeping this function in-house,? says a spokesperson for the Future Group that runs retail chains such as Big Bazaar, Home Town, Pantaloon etc. Reliance Fresh also keeps it in-house, while a few others such as ITC, Cadbury, CCD have outsourced it to third-party vendors.

?We decided to outsource the logistics of our product distribution from the manufacturing hubs in Kolkata, Bangalore, Tirupur, Agra, Ludhiana etc to the retail stores in smaller towns to a third-party vendor as it helps us concentrate on our core competencies. It also ensures that the products are available to the remotest locations in the smallest possible time. TCISCS met with our demands adequately,? remarks Seshu Kumar, head, rural retailing, ITC International Business Division.

?The festival season is an especially busy time for us, but we specialise in the use of technologies such as RFID (radio frequency identification that automatically detects what shelves need to be replenished), SKU (stock keeping unit) system and JIKODA (if there is a defect, it is identified and solved immediately) and FEFO (first expiry, first out) without which it would be impossible to streamline some of these back-end operations,? says Sethi.

Another potential market for growth that TCISCS is looking at is electronics retail, especially telecom equipment retail, where speed to market is crucial because what is hot today may become completely obsolete the next day.

?Typically, with these products, the supply chain is not very long. But we still have to move fast, as the price falls dramatically within a few weeks of the launch,? says Sethi, recalling his experience with the recent launch of Tata Teleservices? iPhone.

The transportation of pharmaceuticals, vaccines and temperature-sensitive drugs and injectibles etc is another potentially under-tapped market for third-party logistics providers. That the demand for these services remains high can be gauged from TCISCS?s first and second year (2004-6) revenue growth (50%; 161%), followed by 140% and 65% over the next couple of years (2006-08). This was the time when it also added substantially to its manpower, 114% in 2006-7, followed by 28% last year. ?Growth and recruitment has slowed down a bit during these two years for two reasons,? explains Sethi. ?One, we started from a lower base in 2006. Two, recently there has been some remarkable shift towards warehousing projects where the topline is less visible compared to freight.?

?In these two years, we?ve also made heavy investments in hardcore logistics such asdelivery challan management and last mile deliveries,? he adds. To celebrate this success, TCI went for a brand new corporate identity this year. ?The new buzzline is, ?moving together; growing together?,? says Vineet Agarwal, executive director, TCI.

The next phase of growth for TCI, according to both Agarwal and Sethi, will come from co-warehousing and construction of massive logistics parks. Till that happens, the next time you pick up a tunic from an apparel shelf at Big Bazaar and casually drop it at the food counter, think twice. A worker from Future Logistics would have to step in promptly to clear your mess.