India’s logistics sector is witnessing a definitively bullish trend, with a host of measures such as The Gati Shakti Masterplan and the United Logistics Interface Platform (ULIP) charting a promising future of consolidation, digitalisation and growth for the sector. For FY 2022-23, the ministry-wise budget allocation for the Roads, Transport and Highways ministry stands as the third highest, at 199.1K rupees. In this context, the upward movement of transport stocks and the rising number of tech-enabled logistics start-ups also demonstrate the role of robust public-private partnership in strengthening the industry. In an exclusive conversation with FinancialExpress.com, Anjani Mandal, CEO, Fortigo Logistics talked about India’s logistic sector, Budget 2022, Gati Shakti Plan and more. Excerpts:
What is your opinion on the Budget 22 announcements for the logistics sector? What were the hits and misses?
There were various positives that came out of the Budget 2022 announcements. The government’s overall plan to grow at 9.2 percent and focus on the road infrastructure will directly impact the productivity of the logistics sector. Another significant positive was ULIP as part of the Gati Shakti Yojana and its element of data interface which will increase the adoption of technology across all modes and hence facilitate operations.
The budget has in the past, had schemes for the trucking sector such as credit schemes or relief funds, which were missing this time. What is your opinion on this? Is this a step towards organizing the unorganized part of the sector?
Absence of incentives like credit extension to individuals that grow the mass of unorganized players is surely an incentive to Organized players to continue to expand. Indirectly, it supports the push toward global competitiveness across the value-stream of Manufacturing & Logistics and integration with the Global Supply Chain with the adoption of digitization & technology deployment.
The ULIP platform announced promises to integrate logistics stakeholders and enable better management and movement of data. How do you think this will help the industry? Is Fortigo in line with this?
A Unified Logistics Interface Platform will help in the seamless movement of goods as well as information exchange through the origin to destination. It will directly help to improve the efficiency for all the players in the ecosystem. The next stage of productivity improvement is expected to be delivered by the deployment of technologies to facilitate collaborative execution by integrating processes across the shipper & vendor organization to provide end-to-end visibility & get better control thru’ the transaction execution – a ULIP facilitates & helps this journey. Fortigo has been a pioneer in driving productivity through platform technology having features like real-time tracking and high-quality customer service are finding favor with more manufacturing companies. Organizations are increasingly favoring technology-enabled organized players to entrust their transportation with. Through the enablement of technology, organizations are able to have better visibility and control over their operations which in turn results in mitigation of logistics costs in the long term.
Tech-enablement was a consistent pattern in this budget, across sectors, and the transport and logistics sector too was no exception. How will digitalization drive the Gati Shakti scheme and enable multimodal connectivity? What will the benefits be, and how much cost reduction can we expect?
The Gati Shakti Yojana is focused on integrated planning and coordinated execution. The aim is to break the silos of departmentalism and synchronize to achieve a seamless multi-modal network. The ULIP eliminates barriers due to undefined standards and will ensure higher pace in adoption of technology and improve overall efficiency and visibility for any transaction on an end-to-end basis. The Govt focus on (a) infrastructure build-up for multi-modal logistics hubs (b) Railway’s Freight Corridors and Private freight Terminals (c) up-gradation and extension of highways across the country and (d) providing warehousing sector infrastructure status will all contribute in a significant fashion toward reducing the overall Logistics cost. A Unified Logistics Interface helps bind all these together into a seamless continuum and facilitate end-to-end digitization of the transaction cycle..All these put together has the potential to achieve global competitiveness.
How do you think the digitalization push for logistics will improve inter-city and inter-state transport?
Digitalization push for the sector would help towards introducing measures and integrating technology towards the elimination of “highway-terrorism” at the hands of relevant, and not so relevant, local regulatory bodies. The inter-city and inter-state transportation can be through Single window documentation. Pervasive Tech adoption for initiatives like validation of E Waybill thru’ FasTag Toll system integration across the stakeholders and remote recognition of FASTag to validate the documentation of truck’s cargo will help ensure that trucks do not get held-up unnecessarily.
What is Fortigo’s role in streamlining the trucking ecosystem?
Fortigo network is enabling resiliency, agility, and efficiency for enterprise supply chain logistics through its Digital Supply Chain platform. Fortigo is using platform technology in the trucking ecosystem in India to interact with all ecosystem players and improve efficiency and drive productivity. We bring all the players on the platform and achieve seamless visibility for all the stakeholders.
Fortigo, with the use of platform technology, has been able to connect all key players in the ecosystem in a manner that benefits all stakeholders – from Shipper to Service Providers / fleet owners and to Consignees. The deployment of Technology to reduce the waiting period between trips, enable load-matching, provide end-to-end supply chain visibility for end-customers and completely digitalise payments and documentation helps improve overall efficiency and reduce the overall cycle-time & cost.
How has Fortigo’s business fared in this volatile climate? Any strategic pivot that has helped sustain growth? What are your future plans?
Fortigo has managed to see through the volatility and add service-lines during the pandemic to be leveraged for growth post-pandemic. We have seen strong demand from our FMCG customers throughout the period while the industrials witnessed slowdown during the lockdowns and have since recovered beyond the pre-covid levels. Our strong technology driven processes and platform approach has helped us to adapt to the pandemic challenges. Supply chain visibility, and technology led tracking helped us to help our partners provide services with minimal interruption.
The offerings now include an enterprise-class SaaS platform for our end-customers, with the launch of TruckNet Digital. We have been able to offer new products and services through our platform to help in the digitization journey of transportation of our enterprise customers. We are now on a rapid growth curve and we believe the combination of the move of Shippers to (a) consolidate business with Organized & Tech-enabled service partners and the (b) greater technology adaptation across the industry will drive further growth for us as well as the sector
Overall, we are expecting a 30% Quarter-on-Quarter growth and are expecting to touch 1000 crores by 2025. We are also looking to raise funding in the near future, and expand our services into end-to-end Distribution for Brand-owners & Manufacturers.
What has the recovery trajectory for the sector been like and What is your outlook for the sector in 2022?
The pandemic has eliminated a large number of smaller players – voluntarily as well as forcibly. There is a strong move by Shippers to consolidate business with Organized players that are financially sound & Tech-enabled. Consequently, the logistics sector is undergoing a transformation and consolidation, organizing the highly fragmented industry. Companies are adopting digital technologies to be more resilient and agile in the face of disruptions. Late deliveries, lack of visibility and control, and manual errors have pushed organizations for faster technology adoption.
1. All indicators so far point toward growth across organized Manufacturing & Core-Sector organizations. Demand for Logistics & Transportation will also have a corresponding growth.
2. Large shippers will look at reducing risk in Supplies by increasing the control they exercise on Secondary Transportation (intra-state & intra-region) in order to ensure product availability at Consumption centers.
3. Further, the momentum for Technology adoption by Transportation & Warehousing will increase substantially. The Technology focus will be around cloud-based solutions for the Digitalization of the Transportation process.
4. All this growth in Transportation for Industry will be mostly distributed among Organized players within the Logistics Industry – preferably such Organized players that are Tech-enabled.
5. The focus on “Green initiatives” across large brands will translate to an overall increased population of CNG vehicles for Secondary Transportation & pilots of Electric vehicles in intra-city movement.