Effibracing a new visual representation
We have always believed in being ahead of the curve and reiterating our leadership as
industry frontrunners by being innovative, change managers, courageous in decision making,
and agile in execution, in India and across the globe.
With a striking new visual identity, we are reinforcing leadership as well as the
values and ideals we associate with.
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Symbolizing a partner who is strong, reliable, and dynamic, this bold, new presence
showcases prominently, and with
clarity and confidence, our pride in being a homegrown Indian multinational, ranked as
the 65th largest company and the
foremost logistics company in India (as listed in BS 1000 Index, published in the
Business Standard in March 2023).
Anchored by our purpose and core values
At the very core of everything we do, is our purpose of Helping global supply
chains, while caring for sustainability.
While our vision, mission, and values guide us on how to operate and conduct
business, our purpose defines why we do what we have chosen to do. Across borders,
geographies, departments, functions, and business verticals, our purpose unites us all.
As we chart our course towards sustainable growth and progress, we endeavour to build a
strong institution that is resilient in the face of challenges, and yet adaptable to keep
moving in a constantly evolving business environment.
Providing a powerful roadmap are our core values, namely, Entrepreneurship with a
Purpose, Customer Centricity, Innovation and Execution, Collaboration, and Care for
Environment and Society.
Global growth stable, but fragile
In the recent OECD Economic Outlook, global GDP growth is projected to be 2.7% for
2023, with a modest improvement to 2.9% expected in 2024. Among major economies, India
seems to have the brightest prospects with GDP growth projected at 6% for 2023 and 7% in
2024.
Growth is set to gradually pick-up through 2024 as inflation moderates and real income
strengthens.
In terms of the directives to governments, the focus is on maintaining a restrictive
foreign policy to combat inflation,
target fiscal support to include inadequately covered vulnerable households, and
prioritizing pro-growth public spending.
Shipping and logistics sector to reffiain key contributor to growth
According to a recent study, the global logistics market is projected to touch USD
570.9 billion by 2030, growing at a CAGR of 11.8% from 2023 to 2030.
This growth is likely to be driven by thriving e-commerce and
reverse logistics operations, increase in trade agreements, and integration of new
technologies in automation and data
analytics across the shipping and logistics ecosystem. Demand for multimodal global
cargo movements and single-window
solutions from a reliable logistics partner, for time and cost efficiencies, will
create new expansion avenues.
Exploring the use of autonomous and unmanned vehicles for delivery, real-time inventory
tracking, use of Artificial Intelligence to streamline network and routing, robotics and
automation for more flexible storage and fulfilment in warehousing, Big Data
analytics to plan and optimize logistics at every stage, are just few of the many
factors that will impact the digitalization of global and domestic business supply chains.
Powering India's bold, global logistics affibitions
India's recent six-rank jump in the World Bank's Logistics Performance Index
2023 to be ranked 38th is testament to the success of the government's growth agenda
and support to the logistics sector through a number of initiatives like the PM
Gati Shakti National Master Plan, National Logistics Policy, etc., which aim to
streamline nationwide infrastructure development by using technology to integrate them on
a common platform with real-time visibility and information availability.
With the new Foreign Trade Policy 2023, the target of USD 2 trillion exports by 2030,
and the endeavours to make the Indian Rupee a global currency, the situations are
favourable for us to make a mark, globally.
As India's first homegrown global logistics player with operations in 180
countries, Allcargo Logistics Limited, along with its
wholly-owned subsidiary ECU Worldwide, and Gati Limited, in which we own controlling
stake, is well-positioned to contribute to this growth story.
Leadership in International Supply Chain solutions
In the past year, we have consolidated our position as the global LCL consolidation
leader with 15% market share in
operating markets. With 2500 direct trade lanes and door-to- door deliveries in more
than 50 markets, we have provided customized solutions for not just large corporates and
global accounts, but also small and mid-sized freight forwarders and shippers.
We continue to leverage our scale, breadth of connectivity, and associations with key
carriers to build resilience and ensure
business continuity for customers, especially in the face of challenges that are a
result of the global macroeconomic situation.
As a result of high volumes, we are able to ensure better
container utilization, which increases profitability and allows us to offer cost
advantage and exceptional service. Consequently, we have remained a preferred partner for
our customers.
Building on our leadership in LCL, we have also made significant breakthroughs in FCL
and air freight services. In several key global markets, we have carried out restructuring
of our teams
and brought in talent from within and outside the industry, to have a laser-sharp focus
on rapid expansion in these domains.
We continue to enhance reach and connectivity through inorganic expansion as well, and
ECU Worldwide recently
entered into a Joint Venture with Fair Trade GmbH, which is one
of Germany's leading ocean freight service providers. Together, we are
well-equipped to offer increased services, new port pairs, as well as road haulage across
Europe and a stronger presence in the Europe-Asia, Europe-Latin America, and Europe-North
America trade lanes.
In keeping with the current business situation, establishing cost leadership will be
critical, and we are ably supporting this with smart sales and business development
initiatives to grow revenue, volumes, and market share, as well as tap into new markets.
Bolstering doffiestic presence with express distribution and contract logistics
Our collaboration with Gati, India's premier express distribution company, helps
us offer truly integrated logistics. Complementing our International Supply Chain
solutions are Gati's express distribution, contract logistics, domestic air freight,
and special services.
We have recently bought out KWE's shares from Gati-KWE, which was the operating
entity of Gati Limited. With the
completion of this transaction, Allcargo, along with Gati, holds 100% stake in the
operating entity, Gati Express and Supply Chain Private Limited (formerly Gati-KWE).
Further, we have also acquired the entire contract logistics
business (we already owned 61.13% and have now bought out the remaining 38.87%) of our
Joint Venture partner CCI Logistics. As Allcargo Supply Chain, our contract logistics
division has close synergies with Gati, they have been brought under
common leadership.
With this, we now have more strategic decision-making and offer enhanced services to
Indian manufacturers and traders, with better inventory planning, management, and superior
delivery
capabilities to drive growth. We have diversified into several industry segments and
partnered with marquee customers to offer express distribution with better reach and
connectivity in more than 19,800 PIN Codes, as well as manage their inventories and
provide third party supply chain solutions.
Together, with Gati and Allcargo Supply Chain, we offer a unique combination of express
and contract logistics, backed by more than 150 warehouse and distribution centres, over
5000 vendor network trucks, and close to 10 million square feet of distribution and
warehousing space. Additionally, Gati also aims to contribute to the government's
goal of cutting the net carbon
emissions to zero by 2070, by targeting to convert its entire pick- up and delivery
fleet to alternative fuel by 2025.
More than 100 Electric Vehicles (EVs) have been deployed for first and last mile
deliveries, and Gati has also singed an MoU with Gentari, a clean energy solutions
provider, to add another 500 electric cargo vehicles to its fleet. For a global furniture
retail giant Gati enables 61% of all deliveries from their Hyderabad
store, as well as 40% e-commerce business and 38% of their local
customer deliveries in Bengaluru to be carried out using EVs. Further, Gati has also
entered into a special collaboration with a global leader in energy management and
automation to design greener logistics solutions for them.
Delivering excellence, digitally
In keeping with the global trends in the shipping and logistics sector, we have made
technology and digitalization the cornerstone of our business and organization-wide
transformation in the fiscal gone by. While Project Voyager has
been critical to sales acceleration and digital sales and service enablement, with
Project Drone, we are streamlining our IT and finance functions across the globe. Use of
new-age tools and technology is key to these projects.
We already have a robust network operating in 180 countries, and with our cutting-edge
digital logistics platform ECU360, it is now strengthened with a digital infrastructure
akin to some of leading technology-based logistics startups. What this
essentially creates is a competitive advantage that creates vital synergies with
offices at origin and destination ends, as well
as the ease and convenience of online, on-demand logistics transactions –
something which few others, if any, can match.
With ECU360, we have revolutionized the industry by offering an online ecosystem which
provides access to instant quotes and quick bookings, value-added services like trucking
and insurance, as well as increased customer satisfaction, revenue, and profitability,
owing to its automated back-end processes.
More than 60% of ECU Worldwide's bookings are done through ECU360 and more than
20,000 freight forwarders use it every month.
A number of globally scaled AI projects across 90 countries, some of which were
initially considered impossible or wasteful by industry experts and consultants, have been
implemented
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successfully.
We have brought in new technologies that are allowing us to capture and measure new
metrics, thus creating opportunities to identify gaps, new opportunities, and enhance
operational
efficiencies across the organization. AI and automation are being implemented to
improve service reliability and visibility.
As a result, we are today, seen as a standard, globally, for our digital efforts. With
our digital-first approach, we are cascading the benefits of technology, by inspiring our
vendors, partners, associates, and other stakeholders to digitalize and enhance
efficiencies.
The noteworthy acceleration in our digital transformation and contribution to
digitalizing the logistics ecosystem at a global
and domestic level has been made possible by a well-structured digital framework which
helps us carry out digital interventions to deliver a smart, digital business model, offer
faster turnaround times with real-time information and assistance, as well as make our
support functions like HR, finance, and IT more efficient.
Coffiffiitted to custoffier delight
In order to get a better understanding of how our customers perceive us and rate our
performance, we conducted a Customer Satisfaction (C-Sat) and Net Promoter Score (NPS)
survey.
I am so proud to share that in 2022, our Customer Satisfaction (C-Sat) score moved up
to 9.01 from the earlier score of 8.92.
We also retained our excellent NPS score of +49.
With a positive sentiment of 90%, customers' top positive associations with
Allcargo were 1) Quality of service 2) Overall excellence and 3) Our infrastructure and
scope with end-to-end services.
Our aim, now, is to enhance our capabilities and service offerings to maintain the
upward trend and increase these scores even further.
Strategic deffierger paving the way for enhanced collaboration
Our strategic decision to demerge Allcargo Logistics Limited
and create two new entities namely Allcargo Terminals Limited, which will include our
CFS-ICD business and Transindia Real Estate Limited which will comprise of our logistics
parks and leasing services, has come to fruition.
As a result, business verticals now have the operational and financial flexibility to
pursue organic and inorganic expansion in a manner that truly maximizes their potential.
With sharper management focus, opportunities to explore independent
business undertakings and value creation avenues can be leveraged more effectively.
With Allcargo now being a completely asset-light and digitally- enabled business, we
are in a position to be extremely flexible, in line with what the industry needs and
demands. Our vast global presence, combined with this agility, allows us to compete
effectively with multiple tech platforms and logistics service
aggregators, while offering the added advantage of integrated logistics solutions as
and when needed.
We divested our project cargo transport division in line with
our strategic vision to focus on core businesses. We also exited the customs clearance
business. This has been a group level strategic initiative and even in other group
companies, non-
core business of crane rental has been divested. Also, there has been significant
success in sale of already leased logistics parks, demonstrating end-to-end capabilities
in our real estate business under Transindia Real Estate, the company created as a result
of our demerger.
This also makes way for more relevant evaluation and
competitive benchmarking, when it comes to investor analysis and recommendations.
ESG efforts to contribute to a better world
We have always believed in contributing to the welfare of societies and communities,
while simultaneously building a culture of care within the organization which has a
cascading impact on all things we do. This innately held value that has guided all our
business decisions and activities, will only be fortified more with our ESG commitment.
We are streamlining our efforts across the globe, and have partnered with leading
global consultants to take structured, result-oriented action.
By 2040, we look ahead to going carbon neutral and also
transition to 100% renewable sources for electricity consumption of all owned
facilities.
As part of our Maitree initiative, we have planted more than
860,000 trees and by 2023, will achieve our aim of planting a million. Taking this
commitment further, we have set a target to plant 3 million trees by 2027 and 5 million by
2030.
Leading ocean freight player in the Nordic region, Nordicon, which is an ECU Worldwide
company, is among the first to launch the use of electric trucks for container movements
to and from Gothenburg port. Its digital platform My Nordicon also has a feature where the
carbon emissions of cargo movements are displayed, thus creating awareness and enabling
shippers to
make informed, sustainable decisions.
Through inclusive initiatives of our CSR arm Avashya Foundation, we have made a
difference to over 400,000 lives, and intend
to continue this effort across core areas of Health, Education, Environment,
Women's Empowerment, Sports, and Disaster Relief.
In addition to a focus on green logistics, our ESG targets and efforts have been
designed to align with the United Nations Sustainable Development Goals, and span multiple
areas like diversity, inclusion and equity, occupational health and safety, community
development, corporate governance, and more.
We look ahead to continue taking consistent efforts to optimize our network and
services, as well as closely evaluate our
businesses and operations to integrate sustainable measures at every step.
Looking ahead
What will hold us in good stead is the institutionalization of our vision, mission, and
values and professionalization to bring in expertise from within and outside the industry.
Our Global Startup Innovation Program to collaborate with niche logistics startups,
partnerships with leading supply chain venture capital firms, and renowned academic
institutions, will help us explore new avenues of innovation.
Our journey to new milestones will be a result of strategic
collaboration with peers and associates, encouraging gender diversity, partnerships
with niche start-ups, people-centric policies to foster enabling workplaces, and an
atmosphere conducive to nurturing new ideas of young minds.
Backed by your support, confidence and trust, FY22-23 has been an important step in our
journey to sustainable growth and progress, and in the coming months and year, we will do
everything it takes to take our success to the next level.
Together, let's keep moving forward, as we simplify the
complexities of logistics with ingenuity, and bolster global business supply chains.
Best Regards,
Shashi Kiran Shetty
Chairman – Allcargo Logistics