India’s logistics industry is one of the most rapidly evolving industries, with an increasing customer demand for integrated offerings. As demand continues to grow, the industry will continue to experience technological upgradation, and fast adoption of digital solutions. Tapping the growing industry demand, V-Trans (India) is upscaling its warehousing facilities. The company believes in transforming operations and driving reliability, efficiency, and cost-effectiveness through the deployment of digital technologies and is adopting a similar strategy at its warehouses. Rajesh Shah, the company’s Executive Director says that the warehousing sector in India is at the cusp of transformation. The significant requirement for Grade A warehousing and the infusion of technology will push the sector towards better growth. To aid the development of rapid infrastructure development, warehousing and logistics sector has to grow at an even faster rate, supported by efficiency in their management, modernisation and enhancing availability with service automation. In an interaction with Ritika Arora Bhola, he informed that V-Trans is continuously expanding its presence, either by opening up new spaces or expanding the existing ones.
How efficiently are you handling the pressure during these times of emergency? Conversely, what do you see as the biggest untapped opportunities in the warehousing sector?
A pandemic outbreak of this magnitude caught entire companies and industries off guard, with a ripple effect that ripped apart supply chains and businesses. From a consumer point of view, many companies still do not have a clear demand signal as the outbreak completely changed buying behaviour and patterns.
The COVID-19 pandemic once again highlighted that logistics is the lifeblood of the economy. Logistics operations, from transportation, warehousing, and distribution to delivery, kept domestic as well as cross-border flows of medical supplies, food, and other essential goods smooth when most of the world was locked up.
Logistics is a field full of opportunities and therefore promising for entrepreneurial initiatives. The set of operations that make up this segment is well-defined and so it is possible to identify it among the rest of operations, even isolate and extract it to manage independently.
The pandemic period went mixed way. Initial months of lockdown were extremely tough and then slowly things picked up. Warehousing played a crucial role during the pandemic crisis, with having the group resources; we worked as a complete solutions provider for many of our clients who were directly in the essentials segment. While keeping the safety of our people at top priority and abiding by the state and centre’s regulations, we managed to carry forward our operations quite well.
The untapped opportunities in warehousing are certainly to get the A grade status. Warehousing and creating niche offerings within the segment, like the one we have come up with for Chemical Industry for storage of key hazardous chemicals is certainly setting a benchmark for the sector.
The Indian warehousing sector is at an inflection point and is expected to grow at a CAGR of more than 20%. It means that the demand for institutional-grade warehousing is almost outstripping the supply at the moment. Could you brief us more in this regard?
The warehousing sector in India is at the cusp of transformation. The significant requirement for Grade A warehousing and the infusion of technology will push the sector towards better growth. This is further fuelled by government policy making and framework of initiatives like GST and Digital India. Launch of programmes like ‘Atmanirbhar Bharat’ considering the impact of COVID-19 on capital markets and support local manufacturing, are certainly going to favour the warehousing sector going forward.
According to latest predications, the sector is expected to grow above 20 per cent CAGR in the coming years, and is currently attracting good investments from Indian and global private equity (PE) majors and overseas investors. Since the launch of GST, the warehousing sector has seen investment flow of over US$3.6 billion. Q2 of 2021 has been the best second quarter in the last 4-5 years from an investment point of view.
In the fourth quarter of the year, Indian commercial real-estate sector saw investment worth US$1.36 billion (over Rs 10,000 cr) of which warehousing accounted for over 55 per cent.
However, a lot of potential gaps exist between storage infra and the level of technology within the sector. Grade A warehouses are still very less and the current warehousing stock per capita is less than .01 sq ft, which make the sector very attractive for large investors with long-term capital commitment.
Apart from conventional storing services, warehouses are now equipped to provide value-added services like consolidation and breaking up of cargo, packaging, labelling, barcoding, reverse logistics, kitting, etc. Don’t you see this as the perfect foundation for the sector to chart its growth trajectory?
The management of the store is part of the logistics process within which the warehouse operator is responsible for receiving, storing, and moving within the space materials and goods to the point of consumption. The operator is also in charge of the information and the treatment of all the data generated by the process.
The goal of warehouse management is to optimise a functional area for supply and distribution. At a general level, the objective is based on guaranteeing a timely and continuous supply of the means of production and materials that are needed, in order to ensure uninterrupted services. Managing stocks, processing orders, and distributing them is also part of warehouse management. The operator’s responsibility arises when the units are received at the facility and their continued maintenance during the period of stay within the facility until subsequent treatment. The process ends when the units become orders and responsibility shifts towards their distribution and management.
While infrastructure is the lever that would deliver economic growth, warehousing and logistics is the backbone that all infrastructural growth hinges on. To aid the development of rapid infrastructure development, warehousing and logistics sector has to grow at an even faster rate, supported by efficiency in their management, modernisation and enhancing availability with service automation.
How crucial is the role of technology for growth of warehousing and transportation segment in India?
Automation is essential for organisations that hope to remain competitive. Large companies have used software to obtain reports and complete orders with great efficiency. Through technology and remote access, they are able to follow in real-time the execution of operations in the warehouses. The availability of information has helped managers to make decisions. With access to internet and data bank, the latest generation systems help warehouses to reduce damage, avoid errors and optimise processes within the supply chain.
What’s interesting to see and understand is thatthe technology sector does not stop growing. Professionals have to be prepared and must have the support of logistics systems to help them in that transition. With the use of specific software and being connected to market news, managers can study strategies to increase productivity.
How do you foresee the future of warehousing in India? What are the key megatrends transforming the scenarios even as we talk?
Sustainability and Digitisation holds the future for warehousing in India. Automation and robotics will be more essential in the logistics industry. The digital transformation of warehouses depends on automation. The association between technology and people, empowered by wearables is an important aspect of a modern warehouse. There are immense benefits associated with imaging, cloud integration, voice/face recognition, and voice assistants. Advantage of such technologies is that they offer real-time information, regardless of the environment and location.
Could you inform us of your near-term plans or any projects in pipeline?
We are continuously expanding our presence, either by opening up new spaces or expanding the existing ones. Our focus for now is on Chem Store—our super special chemical warehouse at Bhiwandi, Mumbai.