Logistics vendors reap technology harvest

Logistics vendors operating in India are leveraging technology to improve customer service and streamline back-office work, leading to reduced costs of internal operations and increased growth, says Abhinav Singh.

The Internet has helped us shift operations such as shipment status, and expected delivery time to the front-end. This puts customers in control of the shipment process, says Malcolm Monteiro

It is 7 PM in Bangalore and Kamaljeet Singh, an apparel manufacturer and exporter, receives a phone call. It is from a customer in the US who wants to know the exact date of delivery of his consignment in order to programme his supply chain. Singh immediately logs in to his system and finds out that his consignment has landed in the US and is just a few hours away from delivery. He conveys this to his customer and the delivery happens on schedule. This is just one example of how technology is helping logistics vendors serve their customers better.

Logistics vendors have become technology-savvy and are ambitiously adopting advanced technology to outclass each other in customer service. In a service industry, customer service directly affects the bottomline and gross income. Federal Express Corporation (FedEx), for instance, spends $2 billion annually on technology and TNT so far has spent $500 million, resulting in a saving of $100 million. FedEx has around 5,000 people dedicated to technology development in centres across the globe. Blue Dart Express also has a dedicated technology development team in Mumbai and spends around three percent of its revenue on information technology.

Evolving Indian customers

Indian companies are now increasingly becoming part of the global supply chain with many small and medium businesses (SMB) exporting components or materials to OEMs (Original Equipment Manufacturers). These OEMs want to integrate their consignment information with their supply chain systems to plan their production cycles better.

Indian customers have also become more demanding. Jacques Creeten, managing director, Indian subcontinent, Federal Express, explains: “Even SMBs in India have started actively participating in global trade and are exporting to international markets. They approach us not only for consignment delivery but also for consultation on regulatory requirements in different countries with regard to taxation and customs duties. With technology we have been able to fulfil their requirements.”

Making full use of the Internet

SMBs approach us not only for consignment delivery but also for consultation on regulatory requirements in different countries with regard to taxation and customs duties, says Jacques Creeten

Logistics vendors are using the Internet to provide just-in-time information to their customers. Before the Internet era, many logistics vendors had to provide the requisite hardware for customers to connect to their systems. After the Internet revolution, vendors launched their own websites. It became possible for many customers to integrate their logistics information with supply chains, incorporating sophisticated information into their production cycles.

Malcolm Monteiro, senior vice president, Sales, Services and Systems, Blue Dart Express, says, “With the use of the Internet we shifted some operations such as shipment status, and expected delivery time to the front-end. The Internet puts customers in control of the shipment process.” Logistics vendors are bullish about the Indian market taking off due to the Internet revolution. Creeten says, “On an average, we conduct a million online transactions per month in India.”

Acquiring new customers

Customers are now at ease while dealing with logistics companies. Real-time availability of information is helping courier companies attract new customers. Sanjiv Kathuria, head, Sales, Marketing and Customer Service, TNT India, says, “Technology adoption has helped us meet service levels with our customers and it is one of our key strategies to acquire and retain customers.”

Technology has been a key revenue driver for many logistics vendors. Creeten says, “We are able to streamline our customers’ supply chain systems which helps them access new markets and adopt a ‘just-in-time’ delivery model.” Logistics companies are also using technology to make their package sorting more effective. Many of them run their own aircraft fleet to deliver packages or containers. For instance, FedEx has a fleet of 650 aircraft. Technology provides them with real-time information about weather conditions and airport closures helping them plan package delivery better.

In-house solutions to keep customers happy

Flexibility and ease of response seem to have driven logistics vendors to develop their solutions themselves rather than outsource them. They feel that their business requirements are complex and sophisticated, and that they need an in-house team to build custom solutions. Blue Dart for instance has a quick response team, which studies the business requirements of its customers and develops appropriate solutions. It also has technical people spread across the country, who work alongside customers to solve any problems. On similar lines, TNT has an in-house development team based out of Atherston in the UK to develop location-specific solutions for its own offices. Kathuria says, “We have to fill in a requisition form underlining our requirements and our development team at Atherston develops the solutions.”

Indian companies are expanding their businesses world wide to cater to global businesses. Their dependence on logistics vendors is bound to increase, creating immense potential in this sector. Technology will be a key enabler for logistics vendors to differentiate themselves from their competitors. They will have to maintain the momentum of their IT investment and innovation to stay ahead.

Logistics software solutions
Vendor	Solution	Features
Blue Dart	SENTOR (Status Entry Offline for Regional Service participants)	Application program offered to Blue Dart offices and its channel partners in remote areas via the Internet. Users receive detailed information on inbound packages for delivery. Upon delivery, proof of delivery details are entered offline and updated on Blue Dart's Web server within three hours. The earlier time lag was 24 to 48 hours.
TNT	ExpressShipper (to be launched)	A PC-based solution aimed specifically at SMBs. It improves the business efficiency of customers by helping them send more than fifteen consignments a day. Customers can track consignments and obtain price quotations directly from their PCs.
FedEx	Global Trade Manager	Online consultancy on customs-related paperwork for SMBs that helps determine which customs documents should accompany their (customer's) international shipments. Lets customers print and fill them up thereby helping them save time on potential border delays.
		Source: Logistics vendors

abhinav@expresscomputeronline.com