 Freight forwarding companies are diversifying into the fast-growing logistics business as fears of slowdown have forced them to tap alternative streams of revenue instead of
focusing on their traditional activities such as cargo forwarding and customs clearance.
Companies including, Clearship, Om freight forwarders and Hi-speed movers, are setting up warehousing and distribution facilities across the country, seeking to cash in on the demand for high-end logistics solutions triggered mainly by the growth in sectors like automobiles, pharma and organised retail.
Clearship has set up its warehousing facility in Pune, while Om freight forwarders and Hi-speed movers will look at setting up warehousing facilities across India. These small and medium sized players plan to set up offices abroad, looking to tap rising global demand for logistics providers.
"We are only one of the companies looking to set up offices in Europe and in south east Asia. Smaller companies want to go global in the next few years and we will see more investments by freight forwarders as they look for expansion and consolidation," said R Radhakrishnan, MD of Clearship and former chairman of Federation of Freight forwarders association in India.
Logistics sector in India is poised to cross the $200 billion figure by 2020 making it a lucrative opportunity for small scale freight forwarders, looking to tap a small percentage of the fragmented market.
"Indian freight forwarders need to move from the traditional business if they are to be part of the India growth story. Post the global slow down, companies are looking to provide value added services to customers and there is a clear move to venture out into high end logistics solutions," said Ompra ash Agrawal, vice-chairman of FFAAI and MD of Nagarkot Forwarders.
Freight forwarding agents, who until a few years ago had only been concentrating on cargo forwarding and custom clearance-related work, had lost out on business when many global shipping companies cut down on their operating routes and agents lost their client base. Also, the increasing number of ship hijacking by pirates has also contributed to the diversifying of business.
Source: EconomicTimes |
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