Concor to provide third party logistics

The Container Corporation of India Ltd (Concor), plans to become a third party logistics service provider by expanding the core business into area such as warehousing, refrigerated cargo storage and movement, and a provision of a large number of other value added services.

As a part of overall strategy to increase market share, Concor plans to provide multi-modal, transportation and logistics consultancy services to shippers or intermediate agencies such a shipping lines, forwarding agents, terminal operators, amongst others.

"As part of the plan to expand the business and move towards providing a complete logistics services, the company is considering the option of moving into operating large railway goods-shed hubs, which would mean managing integrated freight terminals amongst others," P G Thyagarajan, director, international marketing and operations, CONCOR told Business Standard on Friday.

To manage integrated freight terminals, CONCOR plans to set up distriparks, freight centres, and trade development centres at some of its terminals. The focus of providing such services will be on the backward and forward integration of various value added services with the core business of value logistics, in which the company already has established a foothold.

According to a recent study commissioned by Concor, there are about 15 logistics service providers in India. Out of this only five to six players have a turnover exceeding Rs 50 crore.

In spite of having over 1,500 transportation companies in India, only 25 offer third party logistics services. Others offering similar services include courier companies, freight forwarders, brokers and booking agents.

About 75 per cent of the revenue generated by this segment is from transportation. Only the rest comes services. The study further showed that in-house logistics service arrangement is still predominant. The major users of third party logistics spend about 0.5 per cent to 8 per cent of their turnover in getting these services.

Within the realm of logistics, transportation, customs brokerage, freight consolidation and freight forwarding as services are almost outsourced, whereas inventory management is the only key element of logistics chain that is seldom outsourced.

The advantages offered by Concor as logistics service provider includes efficient rail transportation of containers, massive warehousing capacity, country-wide network, large fleet of containers, relationship with top end customers and relationship with various intermediaries in logistics amongst others.