WAREHOUSE SPECIAL
16
Rapid Advancements
Prof. Samir Srivastava
IIM-Lucknow
LOGISTICS TIMES May 2011
In India, no other area has got as much attention in logistics and supply chain as warehousing in the last two three years. The sector is on unprecedented growth path and is advancing rapidly. The warehouses are transforming fast from dilapidated, simple and non-descript buildings in the viscinity of octroi posts to state-of-the-art plush facilities. This is a much awaited welcome change for Indian logistics and supply chains. Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses, customs, etc. Receiving, storage, order picking, and shipping are their basic functions. Traditional warehousing has declined since the last few decades with the gradual Current introduction of Just-In-Time (JIT) techniques. Warehouses today carry out a host of other additional activities such as selective racking and block storage, cross docking, temperature control, kitting/light assembly, repacking, labelling, palletising and other value added services such as specialised transport, duty and tax determination, complete documentation preparation, expedited customs clearance, tax exception and license application. Due to growing economy and increasing business volumes, many firms like the Arshiya International, DHL Global Forwarding, Future Group, Gati, Hitech Frozen Facilities Pvt Ltd., NBHC, NCMSL, Samridhi Bio-Energy Pvt Ltd., Shreyas Shipping and Suri Agrofresh Pvt Ltd. are largely into warehousing capacity expansion. Logistics service providers (LSP) like TNT, Transport Corporation of India (TCI), Blue Dart, Gati and Safexpress, are looking at creating more than 25 million sq ft of warehousing space. Arshiya International will invest Rs 7,468 crore over three years on developing warehouses and railway infrastructure across India. This includes five distriParks and a 75-train pan-India rail charter. It has scaled up its rail infrastructure operations to 12 rakes in just about a year of operations, making it the first truly integrated logistics company of India. Shreyas Shipping and Logistics Ltd. is diversifying from its existing core shipping business to become an end-to-end containerised cargo logistics operator. It plans to invest Rs 100 crore to expand its shipping, warehousing and inland transportation capacities. Shreyas will set up warehousing facilities at 8-10 locations across India including Mundra, Cochin, Kandla, Tuticorin and Delhi and will also increase its trailer strength which currently stands at 8 to 100 in
phases to enhance its inland transportation capacity. Future Supply Chain Solutions Ltd. has decided to invest up to Rs 400 crore as a part of its expansion plans for the next four years. The company intends to set up a cluster of large distribution network in which the hubs will get products from vendors and feed the other smaller warehouses. It also plans to set up logistics parks across India with an investment of Rs 30 crore in 2011-2012 to serve as backend systems for its e-commerce business. The parks will be developed as clusters with container depots for a large distribution network. In cold storage arena, Gati has decided to set up 10 facilities over the next two-three years. The first two facilities, with a capacity Scenario of 25,000 square feet each, will come up at Delhi and Bengaluru. National Collateral Management Services Ltd (NCMSL) is investing Rs 420 crore to establish warehouses having capacity of 1.4 million tonnes in Madhya Pradesh, Rajasthan, Chhattisgarh, Uttar Pradesh, Bihar and Tamil Nadu. It intends to set up 55 warehouses, six cold storage units and three multipurpose logistics centres. National Bulk Handling Corporation (NBHC) plans to increase its existing two million tonnes commodity management capacity by about 400 percent in the next five to six years. The company at present manages 473 warehouses and offers storage, testing-grading, fumigation & pest management, warehouse audit and commodity valuation services. Others to join in the fray are DB Scheneker, Om Logistics, AFL Logistics, Robinsons Global Logistics Ltd., Allcargo Global Logistics, CCL Logistics, etc. Jayem Logistics has set up three state-of-the-art warehouses in Bangalore, Chennai and Delhi. They offer congestion-free facilities with three-docking stations that allow storage of odd-sized cargo. They are equipped with uninterrupted power supply, flooring with high load bearing capacity, security, closed-circuit television cameras, fire safety alarms and smoke detectors. Similarly, MJ Logistics Services Ltd (MJLSL) has opened its first hub warehouse at Palwal on the Delhi-Agra highway in October 2009. The facility comprises two lakh sq ft with computercontrolled racked shelving and 20,000 pallet positions of ambient storage and temperature-controlled chambers all under one roof. MJLSL has signed a three-year contract with HCL Technologies Ltd for providing integrated services to this new facility. The Palwal facility as the main hub, is linked to two