Dear Shareholders,
FY 2023-24 has been a year marked by sustainable innovation and
progress. As leaders in ground express, and as a responsible corporate citizen, we believe
it is our responsibility to not only deliver excellent logistics services that moves India
forward but also to contribute positively to the environment and the communities we serve.
This year, sustainability has been at the heart of our strategy, as we
have continued with our green strides. We have implemented eco-conscious initiatives
across our operations, from optimizing delivery routes to reducing our carbon footprint,
we are taking concerted efforts to provide businesses with solutions in alignment with
their carbon emission goals. Our commitment to sustainable practices is driven by our
belief that a thriving business and a healthy planet go hand in hand.
Powering Future-Ready Green Logistics
Climate change being an issue that impacts all irrespective of
geography, there is an increasing focus on reducing carbon emissions, the world over.
Various countries have announced their target year by which to achieve carbon neutrality,
and numerous governments have passed stringent environmental policies, such as the
Scandinavian countries – companies from such nations are looking for sustainable
solutions even in the country of operation. Consequently, there is an increasing
requirement for a more responsible supply chain, with anticipated global demand for green
logistics being approximately $50 billion in 2025 and with an expectation to rise to
roughly $350 billion in 2030. In India, the government has set a target of 2070 to achieve
the goal of net zero carbon emissions, and has also committed to cutting the ratio of
greenhouse emissions to gross domestic product to 45% of its 2005 level by 2030. At
AllcargoGATI we are geared to support the country's carbon emission goals, and
contribute to the health of our environment. This shift towards green logistics aligns
perfectly with our ESG commitments, aiming for carbon neutrality by 2040 and converting
our fleet to alternative fuel vehicles by 2026.
As global supply chains diversify, India's bold logistics ambitions and
our focused efforts to reduce environmental impact through digitalization and
infrastructure development will create a significant competitive advantage. In fact,
AllcargoGATI has partnered global brands such as IKEA and Schneider Electric with
alternative fuel vehicles for their deliveries.
Maximizing the Potential of India's Growth Story
India is poised for significant socio-economic growth, supported by
stable policies and development initiatives, aimed at achieving a Viksit Bharat. The
logistics sector, which is one of the key development levers for India is set to reach USD
591 billion by FY27, supporting the nation's expanding economic activity. India,
today, is the largest market in terms of end user industry, and the expanding middle-class
with an increased spending capacity is driving retail consumption. The Indian retail
market witnessed a significant 34% growth between 2019-2023. Further, the internet
revolution – wherein 54% of the population actively uses the internet – has
transformed the spending habits of Indians. The Indian e-commerce market is expected to
become the second-largest worldwide, by 2034. At a time when the digital economy is
opening up new consumption frontiers, global companies are establishing manufacturing
bases in India and the nation is staking its claim in the global value chain.
Moreover, it is a matter of great pride that India has officially
emerged as the world's third-largest startup ecosystem, boasting over 1.25 lakh startups
and 110 unicorns. MSMEs are considered the backbone of the economy, contributing around
38% of the country's manufacturing output and strengthening India's trade by
contributing nearly half of the total exports.
Further, with the Make in India initiative, aimed at turning India into
a global manufacturing hub, and Budget 2024's focus on encouraging MSMEs through the
credit guarantee scheme, we are taking various strides towards becoming an atmanirbhar
bharat. These foresighted development polices need to be complemented with robust ground
logistics services, that can penetrate difficult terrains and remote locations. The
multimodal connectivity initiatives like the visionary PM Gati Shakti National Master Plan
and National Logistics Policy are already laying the foundation for this development, but
the success of these initiatives will depend upon active participation from private
players as well.
This is where AllcargoGATI is perfectly geared to partner India's
growth with unparalleled reach into the hinterlands and excellent metro connectivity. The
customised solutions for large enterprises, e-commerce businesses, as well as SMEs are
helping them reach new frontiers of growth.
Excellence in Ground Express and Contract Logistics
AllcargoGATI has emerged as a trusted partner for businesses, with an
integrated network comprising 18 surface express centres, 21 surface transshipment hubs,
and 86 distribution hubs. Our coverage spans the whole of India, ensuring safe and timely
deliveries.
We have accelerated capacity creation, implemented hub modernization,
and enhanced automation to provide industry-leading turnaround times. Our multimodal
solutions for ground and air express, combined with enhanced delivery services, have
enabled businesses across India to move even time-sensitive parcels and special cargo with
ease.
Creating synergies with Allcargo's contract logistics wing,
Allcargo Supply Chain, we cater to specific needs of marquee customers in various sectors,
delivering high standards of customer service and identifying new markets for expansion.
Optimizing Operations with Digital Technology
Streamlining operations and optimizing costs through transformation and
digital infrastructure is a key focus area. Our state-of-the-art hubs offer economies of
scale, cross-docking for improved turnarounds, and automation for smoother operations.
Our digital-first approach creates a competitive advantage for
customers, with tools like Salesforce-based CRM, digital payment modes, WhatsApp chatbot
Gati Genie, and data-driven route optimization enabling high service quality at the best
possible costs. GEMS, the legacy operating system is being upgraded to a cloud native
system. The core operational software will be designed to have a modern interface that
offers improved customer experience. AI and machine learning will automate several tasks
in GEMS 2.0, and the application will prioritise security and robust performance across
different geographical operations.
Progress Driven by Our People
Our people are our greatest strength. We continue to strengthen our
management and leadership team, realign sales structures, and create growth opportunities
within the organization. Our focus on Diversity, Equity, and Inclusion (DEI), helps us
attract and retain top talent. It is commendable that the first shift of 9 our facilities
is operated entirely by women, and certain job openings are exclusively offered to women
logistics professionals in an effort to increase the gender diversity of a rather
male-dominated sector.
Social and Governance In addition to our efforts to conserve the
environment by offering green logistics, we also uphold stringent social and governance
parameters.
Through our CSR arm, Avashya Foundation we work collaboratively with a
network of well curated partner NGOS to reach out the wider community with carefully
crafted initiatives in the six intervention areas of Education, Environment, Health, Women
Empowerment, Disaster Relief and Sports. I'm happy to share that during the year,
Maitree – one of our key projects planted a landmark one million trees.
Further, on the governance front, AllcargoGATI exemplifies a
forward-thinking approach aligned with the principles and guidelines of ISO 31000 Risk
Management. Through a comprehensive framework encompassing emergency response, cyber
security, and crisis management, seamless operations and exceptional service delivery are
ensured. The ISO 27001 certification underscores our unwavering commitment to cyber
security, guaranteeing the safety and security of our customers' data.
Looking Ahead
Delivering on India's progress and global ambitions every day is
our driving force. We are aligned with national initiatives and look forward to
collaborating with customers, partners, and associates to enhance the global
competitiveness of the logistics sector through skill-building, infrastructure
development, cost reduction, and streamlined supply chains.
Sincerely,
Shashi Kiran Shetty
Chairman AllcargoGATI