GST Has The Potential To Create Mega Warehousing Hubs In The Country: Adarsh Hegde, Joint MD, Allcargo Logistics Ltd.
Allcargo Logistics is one of the largest integrated logistics solutions provider, in the private sector. Adarsh Hegde, Joint Managing Director, Allcargo Logistics Ltd. talks about the implementation of GST, DPD program and work culture of the company:
How has GST transformed the Logistics Sector?
GST has certainly brought paradigm shifts in the functioning of the Indian logistics sector and ensured seamless movement of goods and services across the country. Removal of inter-state trucking points has resulted in lower transit durations for truckers and fast-paced freight movement across states. With companies opting for centralized warehousing locations on the basis of the hub and spoke model rather than tax compliance requirements, GST has the potential to create mega warehousing hubs in the country.
Consolidation of warehousing operations would lead to improved inventory management with an onus on deployment of technology tools like RFID-tracking and IT-enabled warehousing management systems. All this will require the support of a robust IT infrastructure to ensure seamless and hassle-free processing. Companies require upgrading their systems and evolving to new ways.
While companies are getting accustomed to the revised system now, we have lost out on some crucial months of project execution which were delayed or were put on hold due to lack of tax clarity. Some teething problems still exist, which should be ironed out by Q1 FY 18-19. The landmark tax reform has the potential to help position India as a global logistics destination.
What is the hiring intention of the company?
We believe that competent human resources are focal to ensuring the sustained growth and development of a company. We invest in creating a leadership bench strength that is ready for the future. We hire management trainees and graduate trainees from reputed colleges and groom them to achieve the company’s vision of competitive excellence. Young candidates conversant with latest technologies and an innovative bend of mind are suited for a company like ours that has a vision to be a tech enabled logistics solutions provider. The average employee age at Allcargo is 35 and we intend to bring it down to 32.
What has been the effect of the Direct port delivery (DPD) program?
Direct port delivery is altering the traditional Container freight stations (CFS) business model. Businesses across industries are dynamic and ever evolving. Container Freight Stations (CFSs) will continue to remain a crucial link in the import export chain. As Allcargo, we can offer more than just DPD. Customers are now in need of a portfolio of services – like customs clearance, sorting, packaging, last mile delivery than pure play vanilla offering. Allcargo has the capacity and bandwidth to offer customers a package of fully integrated inventory management services, through their CFS facilities thereby expanding their service portfolio through value added services.
Allcargo has fine tuned its business model as per the requirements of customers and have earmarked a special area for DPD containers. Customers can store their containers in our facility which enables them to take delivery as per their business requirements. So, even though the landscape is changing, we are customizing solutions for customers, which is the need of the hour.
What is the revenue that you are targeting for the current FY?
Logistics industry has gone through a transformational change in the current financial year. GST will go a long way in improving India’s ease of doing business and boosting the logistics competitiveness of the country. The future looks bright for Allcargo with our order book soaring and business moving northwards as the execution of projects has commenced.
From the government, steps are in the right direction to better infrastructure and connectivity through road, rail and sea, for instance Bharatmala and Sagarmala project. We need to watch out for its’ in time completion so businesses do not lose out on crucial time. Allcargo is in any case is an underleveraged company with a AA- Crisil rating and will have an added advantage. All of these are indicators of a robust outlook for the coming years.
Tell us some anecdotes about the work culture of the company? How do you encourage employees to utilise their full potential?
Our people are our strength, and we try and foster a learning and conducive environment to keep our employees happy and motivated. Trust is one of our core values. Tapping this sentiment of trusting our employees, we have introduced flexi hours/ no attendance tracking policy, which is largely uncommon in the logistics industry.
We have initiated several initiatives to ensure that employees are not stressed out and their morale is consistently high. A stress buster and build up to the weekend helps in inter-department bonding where employees get to know each other better. We have an annual reward & recognition program, where we motivate employees to display their hidden skills. Our people are our assets and we strive to ensure we provide them with an environment necessary for growth.
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