Partnership Model Can Improve the Logistics Standards
- Vivek Arya, Managing Director, Rhenus Logistics India Pvt Ltd

According to the government, the Indian chemical industry will witness 15 percent growth over the next few years. The industry is currently contributing 2.51 percent in India’s overall GDP and 15.95 percent of its manufacturing. The growth of the chemical industry is certainly a good piece of news for the logistic service providers; however, it will not only bring new opportunities but also present several challenges to the logistics companies. Harshal Y Desai seeks views of Vivek Arya, Managing Director, Rhenus Logistics India Pvt Ltd on how the company is planning to move ahead with its plans and offer impeccable services to its customers.

People, IT (Information Technology) and HSSEQ (Health, Safety, Security, Environment and Quality) are the three things that differentiate Rhenus from its competitors, claims Arya. "We boast of well-trained personnel - who understand the chemicals, IT tools - that enable us to operate with efficacy and utmost emphasis on following global practices of safety and sustainability - which have been imbibed in our culture," he adds.

Rhenus, presently, operates at 50 locations in India with the help of a workforce of 1000 people. What started as a domestic freight business has today expanded into a combination of services that includes International freight, custom clearance, distribution and warehousing and other host of value added services. The company has successfully created each business unit as a separate profit centre. In recent few years, the overall business in India has seen a remarkable growth, with the warehousing and domestic freight businesses increasing dramatically. Overall, the company has witnessed a remarkable growth in the last 10-15 years, both in India and globally. Being a niche player in the industry has helped the company maintain profits even in a bad economic period.

Integrated Approach
An integrated approach has helped the company earn accolades among its customers. "Typically, a number of chemical manufacturers and other process industry players do business with more than two and sometimes, three vendors in the entire supply chain, which not only has an impact on the cost, but also on optimum resource utilisation. Rhenus with its vision to be an integrated logistics service provider offers a one stop logistics solution for all the customer requirements. Our services cover the entire process chain; from procurement of raw materials to the last mile delivery of finished products. We also provide in-plant services by helping our customers outsource some of their internal processes. This allows us to optimise cost for our clients and also facilitates them to concentrate on their core competence." Arya states. According to him, this model proved to be highly beneficial for the company.

Can this approach help the entire logistics industry as well? "Yes, of course," Arya agrees. "Having an integrated logistics approach which allows chemical manufacturers and logistics service providers to work as partners and a long-term relationship between them can certainly improve the industry standards within the country," he notes. Arya believes that there are thousands of logistics service providers who are happy to invest heavily to serve the customers, provided they are engaged with them on long-term basis. Today, not many customers are happy to make long term commitment. Arya says that the partnership model is missing in the country. The onus is not only on the chemical companies, but also on the service providers who need to make the commitments.

Logistics business in India is highly fragmented. 93 per cent of the trucking businesses in India are owned by people who have just one or two trucks, Arya reveals.

HSE in Logistics
Rhenus Logistics place a lot of emphasises and importance on HSSEQ. "Rhenus is committed to provide compliant logistics to their customers. Rhenus has spent a lot of time in understanding the needs and requirements of their customers on HSSEQ and has created infrastructure and services to meet the highest standards. The company also boasts of its warehouses which are completely equipped to store hazardous chemicals in bulk quantity. We have dedicated Safety Officers in the organisation and we ensure 100 per cent compliance on all HSSEQ norms," Arya comments. "I believe, more and more chemical manufacturers and logistics service providers are paying attention to HSE and they will continue to do so to ensure a sustainable business environment around them. Customers are happy to shell out more than what they have been paying so far, for value added services and world class facilities. The trend is moving towards qualitative services," he further elucidates.

Arya also reveals that there is a big difference in logistics practices followed in India and across the European region. The standards that are missing in India are the minimum requirement in European countries. The regulations are much stricter there. India will still need some years to reach to the level of European countries. "Value of the life is unfortunately lowest in our country. Safety standards are compromised and are poor. Concern for environment is also low. I believe it is a matter of culture. It is in the culture of European or western world to give utmost importance to safety. I have seen employees being reluctant to wear safety shoes or boiler suits in India just because they are not comfortable wearing them. It may sound strange but it is true, "he continues.

Arya also comments on the infrastructure and sounds positive. He says that infrastructure is continuously being developed by the government. We have moved miles ahead in the last three to four decades. However, the development could have been better organised.

Plans for Future
"As far as our existing business is concerned, we would like to increase our clientele in the country and work towards increasing the overall revenue from our business. We have recently launched the Hi Tech Division in India. The services include an integrated offering to manage transportation of sophisticated Hi Tech machines like ATM’s, computer servers, medical diagnostic machines such as CT Scanners, MR Scanners, X Ray Machines, etc. We will continue to introduce some new verticals in the time to come,” reveals Arya. He also states that the company is planning to incorporate advanced automation technologies within its facilities to increase the efficiency of its services. "We believe, advances in IT and automation solutions will allow us to optimise the cost and we will be able to pass the benefits to our customers as well," he concludes.