Infrastructure is one of the biggest challenges faced by the Indian trucking industry points out Dr. Sharmila H. Amin, Managing Director of Bertling, South Asia – India.
The logistics industry in India has grown enormously in the last few decades.As a consequence the entities within the $ 92 billion transportation and logistics fraternity, have witnessed overwhelming response from the market. Despite sound revenue growth, only a few transportation and logistics companies have managed to enjoy higher profits. Of course Bertling is one of them. The German-origin unternehmen has not only changed the landscape of logistics operations but also brought about a disruption in the transportation marketplace. With a nerve center in Mumbai, this firm has been providing skilled services in the fields of shipping, logistics and project freight management.
The foundation of this150-year-old company dates back to 1865 when twenty three-year-old Friedrich H. Bertlingthought of providing transportation links throughout Scandinavia and the Baltic States. Leveraging his connections with decision-makers and local authorities, Friedrich H. Bertling – by that time Senator of Luebeck and Consul of the Kingdom of Norway – stressed the need for linking German industrial centers with Scandinavia and the Baltic states.
Since its inception in the nineteenth century, Bertling has carved its own path to glorious successes year after year. The firm has emerged as a global entity with more than 60 offices in 30 countries, spread across 8 global regions. Bertling has an established reputation for excellence in the fields of ship owning, chartering, transport logistics and project freight management. The company has made them a trusted partner of their clients.
Bertling initially began its operation in India through Hansefracht around 1990. They executed many interesting and challenging projects through Hansefracht, the most important of that being the Uri Hydro Electric Power Project, in J&K. The firm has successfully executed landmark projects like Adani – Mundra, Mohindergarh, Siemens – Ballia, Bihwadi HVDC Project, RKM Power generation in Chhattisgarh, KEC International in Leh and Nuclear Power Corporation in Kudankulam.
As an exclusive turnkey logistics service provider, Bertling is way ahead of competition in the space they govern. Bertling has also diversified business interest. BESITEC, the IT arm of the Bertling, provides robust and reliable IT infrastructure and innovative software solutions. The company also owns a fleet of 14 modern ocean-going vessels that operate to and from worldwide locations.
As the government is investing in Sagarmala, Freight corridors and Inland Waterways, Bertling is getting equipped to explore those tremendous opportunities. The CEO Magazine catches up with Sharmila Amin, Managing Director of Bertling South Asia India to know in detail, an excerpt from the interview:
Tell us about your organization Bertling.
Bertling has global class assets in fields of shipping, transport logistics and IT. We have integrated all of these to provide our customers world-class services. We are always looking to further consolidate our position in the market and be leader differentiated by better quality at the lowest cost.
As a 3PL provider, we own the process and take full responsibility for the entire chain. Not only have we planned for everyday activities but for exception as well like alternative transport arrangements. We have a full-fledged audit team as well as analytics team which by use of business intelligence and data keep generating useful solutions.
Our proactive and innovative approach has helped to deliver tailored logistics and shipping solutions to major clients in the oil & gas, energy and mining sectors in the most distant and challenging regions worldwide.
What are some of biggest on-ground problems faced by India’s trucking industry?
Infrastructure is one of the biggest challenges faced by the Indian trucking industry and this has been a major deterrent to its growth. Infrastructural problems like bad road conditions, poor connectivity, inadequate air and sea port capacities and lack of development of modes of transports like railways and alternates like inland water transport and domestic aviation have been constant irritants.
Lower economy of scale due to high fragmentation of the industry, lack of skilled labor and manpower are also one of the major challenges for this industry. The Indian subcontinent faces different challenges vis-a-vis developed nations. Internationally the problem is demand, in India; demand management has been a great challenge. India still has a long way to go in terms of best practices.
Apart from the above-mentioned points, the key challenge is the lack of human resources followed by infrastructure in terms of logistics, power, and water. The other challenge which exists in a vast country like India is that the customer base is diverse and widely distributed. The point I am making is that the real growth which will occur in India is from rural areas and remote locations.
Another key challenge is volatile demand, needs and preferences consumers, and customers are changing rapidly, hence creating uncertainty in the demand patterns.
The transportation market in India is expected to continue offering significant opportunities to all concerned stakeholders. However, for the sector to reach its full potential, the timing and economics would depend on how the various drivers and inhibitors evolve in future. While the quality of road infrastructure is certainly likely to improve, the pace of infrastructure development is certainly likely to improve the pace of infrastructure development is critical to minimize losses, both economic and environmental.
The government continues to be the focal point and key to many of the challenges. The litany of complaints is simply too long and we will need a separate issue of poor Infrastructure.
Does your supply chain minimize the amount of touches and the touch time in supply chain transactions, so as to reduce the number of potential failure points?
It pays to be proactive in making sure your supply chain is designed for success, and that means asking some key questions about it. We have a built-in change management process that constantly reviews the elements of our supply chain and looks for opportunities to improve quality and operational efficiency.
Minimizing supply chain disruptions to maintain a high level of quality control requires a best-in-class approach to addressing the complexities inherent in the system. It shouldn’t take a high-profile quality control failure for CEOs to take a fresh look at what’s happening in their own organization since a supply chain failure of any kind could devastate or destroy profitability.
What are some of the obstacles in end to end logistics?
The ports and the allied infrastructure are surely not well equipped to handle the cargo at this point of time in this country. The infrastructure has not expanded as has the demand and the increasing dimensions of Project Cargo.
In addition we have the regulatory hurdles which significantly impede the free flow of project cargo. The unorganized sector hampers our competitiveness, since most of the services they provide lack quality. They can afford to cut corners since they have no policies and norms governing them. This translates into a lower price and hence customers looking for cost cutting find them attractive from a price perspective.
The customers themselves need to be educated about the shortcomings of such an approach. The key to look at is Total Cost of Logistics Operations (TCLO) – and this means looking at damaged goods, delayed deliveries and lost sales due to poor logistics solutions delivered by these unorganized players.
Where do you see your major growth coming from in the next few years?
The scenario for capital expenditure in this country looks robust, particularly in the next 5 years. With a stable government which is bullish on growth, especially infrastructure, we may witness a move ahead in terms of the stalled projects. Once these take off, the flow of capital goods for these projects will follow with a lag of 6 to 9 months. Thus overall I’m pretty hopeful about the potential of growth in the next 5 years.