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TCI seeks alliances in China, Pakistan

Lola Nayar in New Delhi

A leading Indian cargo handling company with operations in Nepal is striking up alliances in China, Pakistan and Sri Lanka to expand overseas operations.

Transport Corporation of India, the 42-year-old integrated logistics solutions company, entered the international market earlier this year and set up an express cargo service in a tie up with Dubai-based ETA Escon and Bangladesh's Enem-Omni group.

"We are now looking for alliances around Asian countries, which would provide us with the experience to branch out in other countries in a couple of years," Vineet Aggarwal, executive director of TCI, told IANS.

While declining to identify the companies, the official said the alliances would be finalised in China, Pakistan and Sri Lanka within six months.

"In a phased manner we are planning to expand our operations overseas. Our next move is likely to be Singapore, followed by Europe and the US three to four years, we are targeting that at least 10 per cent of our business should come from our international division started early this year," said Aggarwal.

The public listed company handles the entire inbound movement of Toyota cars from Bangalore, including products of its original equipment manufacturers through Transystem Logistics International Pvt Ltd, a joint venture set up in 1999 with Mitsui & Co Ltd of Japan for providing automobile logistics.

"We are now planning to extend this service to other automobile makers, starting with Mahindra and Mahindra, Hindustan Motors and Mitsubishi."

Operating a fleet of 2,000 trucks daily, including 700 company-owned trucks, TCI has 800 offices in India and Nepal. It also has 300 million square feet of warehousing facility spread over the country. During 2000-01, the company handled 5.5 million tons of goods, and expects 10 per cent growth this year.

To add to its fleet strength and reduce operating costs, TCI is in the process of consolidating small transport operators and bringing them under its wings as vendors.

The Indian freight industry is very fragmented, say industry sources, with 80 per cent of the 2.3 million trucks operating in the country owned by small operators with four to five trucks or single driver owners. There are around 3,500 transport companies operating in the country, many of, which are very small.

The global freight industry trend is veering towards integrated services, said Aggarwal. This includes pick-up from doorstep, customs clearance at the destination country, providing warehouse facility if required and distribution throughout the country.

"Global companies are looking for single window service providers. Being strategically well-placed in India, we have the infrastructure to provide integrated service for both inbound and outbound goods. Typically we prefer to handle air cargo, which is of high value and requires speedy movement."

While the global freight industry typically works at half to three per cent net profit, TCI has been making 1.6 per cent net profit annually. Last year the group revenue was Rs 5.50 billion (close to $115 million) while the net profits were Rs 90 million.

Indo-Asian News Service

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