Logistics cos to beat meltdown with cost-effective range

To beat the heat of financial slowdown and credit crunch, logistics companies like DHL, UTi Worldwide and Blue Dart are trying to provide cheaper and cost-effective products to retain their clients and attract new customers.

These logistics companies have taken such measures in order to retain their clients who are asking for an extension in the credit period, which according to the companies, is not a viable option as it will impact the profitability of the companies.

DHL has come up with some cheaper and cost-effective products. The company has also increased the number of walk-in retails by 25% in the last one year. Moreover, as customers are also looking at increasing their reach in tier I & II cities. DHL has also increased its reach in the tier I & II cities.

?We are trying to introduce some cheaper and cost-effective products that will help our clients in such trying times. A mere extension in the credit period can?t be a solution in the longer term,? said Malcolm Monteiro, senior VP& area director-South Asia , DHL. ?We have also increased our presence in the domestic road front,? he added.

Similarly, Blue Dart has also reduced their delivery time in order to make their service much cost effective.

?At Blue Dart, we have a strict credit norms, hence we are not looking at increasing the credit period, rather we are trying to provide them other viable options, which will benefit both,? said Ketan Kulkarni, head-marketing, corporate communication & sustainability, Blue Dart Express Ltd.

However, as some are trying to provide the clients with something different from the regular vanilla product, some are actually looking at extending the credit period for customers, at least for some time.

?As we are getting requests from our clients, we are thinking about extending the credit period, at least for sometime. We are in a position to do that, and we would not be largely impacted by that,? said Rajeev A. Bhatnagar, regional VP-India Sub-continent, UTi Worldwide India.

However, according to industry experts, an extension of the credit period is not the best way to deal with the situation, as it will be harmful for the logistic companies in long term and as it will have an affect on their profitability, cash flow, cost of borrowing and other things.