As the Indian automotive industry braces for the real impact of the global slowdown and the downturn in the domestic market, service providers to the industry are also expected to experience a slowdown. Logistics providers, which had mushroomed with the boom in the industry and just-in-time deliveries, are now strategising how to handle tough times.
DHL Express and Blue Dart, along with Blue Dart Aviation, recently inaugurated the integrated terminal at the Bangalore International Airport (BIAL). The new set-up will help synergise operations of both international and domestic operations in South India.
This $25 million 220,757 square foot facility is expected to provide faster clearance and seamless handling of in-bound and out-bound international and domestic shipments.
The facility, which handles both domestic and international express operations at BIAL, will bring substantial operational synergies such as reducing throughput handling time, streamlining processes and optimising the utilisation of space and common resources. The facility augments the dedicated aviation network which is one-of its-kind in the country with its own maintenance, ground handling and airside cum citywide operations capabilities.
Dan McHugh, CEO, DHL Express – Asia-Pacific, said: “With increasing trade opportunities in India and continued growth in intra-Asia trade, our integrated facility at the Bangalore airport will offer greater customer convenience by providing end-to-end solutions for domestic and international express services. This first-of-its-kind facility in Asia is benchmarked against world-class facilities and successful global hubs that have self-controlled operations.”
Malcolm Monteiro, Senior VP and Area Director-South Asia, DHL Express Asia-Pacific, said, “DHL continues to invest in India to support its growing customer base. Along with our domestic partner, Blue Dart, we are now jointly leveraging on our strengths in joint facilities, customer service, retail express outlets and back end support. We consider this to be a tremendous competitive advantage to combine DHL’s international access in over 220 countries along with Blue Dart’s strong domestic network of 21,044 locations across India.”
The auto business
The automotive business comprises close to 11 percent of DHL Express India’s business and for Blue Dart too. According to Craig Grossgart, Country Manager - DHL Express India, there is an increasing demand for reliability and security in the automotive industry. He says, “Both DHL and Blue Dart partner with automotive suppliers in offering them supply chain solutions ranging from VOR solutions, direct to dealer models, new product development supply chain. Since we provide time-critical solutions, some foreign automotive companies prefer using our services for the imported component supply chain and keep their inventories nimble. There are also domestic distribution solutions that Blue Dart offers on the back of its superior air/road express models."
Most of the major players in the Indian auto industry are their clientele and include Maruti Suzuki, Toyota, Honda, Ford, Hyundai, Mahindra & Mahindra and Tata Motors. And demand is set to grow. Crossgart says, “The automotive sector heavily depends on inventories to support their operations. These inventories are kept as close to the customers, as customer service and economic sense allow.
DHL/BD provide reliable and nimble supply chains to offset the inventory and thus the associated costs. Suppliers can either choose to work with DHL on our advanced SPL (Service Parts Logistics) model, wherein the inventories and supply chain optimisations help them to benefit from the arbitrage available, which normally is not visible unless viewed seamlessly.”
The integrated facility in Bangalore will now provide a seamless express handling experience that ensures better utilisation of airport assets. With the reduction of load shipments and vehicular movement, customers will now
benefit with a throughput time advantage of 60 minutes.
As Anil Khanna, managing director, Blue Dart Express stated, “Blue Dart was the first express player to operate freighters in India. Our dedicated ground and air express services, combined with our superior aviation infrastructure continues to be our key differentiator. This shared facility increases our competitive advantage.”
Grossgart, while explaining the rationale behind integrating the South Indian domestic and international operations of both businesses, told Autocar Professional, “This integrated air side facility, which will provide all express handling services under one roof close to the airport, will reduce cost and time involved in domestic transfers from other locations. It will result in faster clearances and efficient handling of in-bound and out-bound international and domestic shipments.
All this will lead to substantial synergies in operations and savings in operating costs by reducing throughput handling time by 60 minutes, eliminating redundant processes and optimising utilisation of space and common resources.”
While talking about Bangalore and setting up similar facilities at other locations in India, Grossgart said, “Bangalore is one of India’s largest and most economically vibrant cities. As a key location for IT and automotive companies and heavy industries, it is a major industrial and transportation hub in South India. With increasing trade opportunities in India and with intra-Asia trade growing at 8.6 percent, we believe this joint facility will act as a gateway for express shipments in South India and will drastically reduce transit time.”
Referring to the impact of the economic slowdown, he stated, “The Indian economy is well supported by strong macro-economic factors and is looking at a GDP of 7-8 percent in the 2008-09. In the medium to long term, we expect much of the crisis to settle down.”