Presented By:Himani

ChoudharyParas Bhat

IntroductionGati ltd. was a leader in the Express Cargo

and Distribution and Supply Chain Management solutions in India.

Gati ltd. was incorporated on April 25, 1995 with its registered office at Scunderabad.

It provided services ranging from traditional point-to-point transportation, to complex end to end integrated logistics and supply chain management solutions.

HISTORY1996- Gati entered into strategic alliance with Indian

Airlines on 1Jan 19961997- Introduced an innovative concept of 3 party

Logistics solutions. Customer could outsource readymade distribution channel.

1999- Developed the infrastructure to enter the International Cargo segment.-PD Aggarwal Development Centre in Pune was set upfor employees training and dev.

2003- Initiated internal communication process with the latest oracles based software

2004- Introduced Mechanized racking system in its automated warehouse near Mumbai in July 2004.

BUSINESS SEGMENTSCompany Deals in 3 Different Business

Segments: Logistics ShippingFuel Stations

Logistics: The division offered multi-modal transport services through a vast

network, own and outsourced fleet of trucks, and through an alliance with Indian Airline.

Express distribution & supply chain was core business of GATI. International business wing provided courier/freight services to over

200 countries. Trucking solutions wing offered customised container services, with online cargo tracking.

Turnover for this segment is 259.14 cr. with a growth rate of 22.47%.

Shipping:Shipping division “GATI coast to coast” engaged in coastal shipping as well as covered Yangon( Myanmar) & Andaman & Nicobar islands. Segment was growing by 11%.

Fuel Stations:• Operated in 5 fuel stations: Bangalore, Belgaum, Indore, Shadnagar

and Chhatra. • In fuel station segment: traded in petroleum and lubricants.

Products & Services…

Products & Services… contd.

GATI’s Total Turnover:...• Logistics division – 70% (98% from

cargo, 2% from courier)• Shipping division – 7%• Petrol station – 23%

It had 5 Zonal offices, 61 express centres, 109 depots, 160 franchisees, 54 customer convenience centres, 20 surface transit centres, 19 air transit centres, 5 rail transit centres, 3827 extra service station and 27 modern ware houses.

It had a strategic alliance with Indian Airlines.

Handling more than 24000 dockets daily, its 2000 strong surface vehicles fleet covered over 3.20 lac kms everyday.

It owned a fleet strength of over 1350 aerodynamic LCVs and 30 containerised HCVs, refrigerated vehicles and tractor-tow-heads.

Shipping division “GATI coast-to-coast” operated through 2 ships: GATI-1 and GATI-Suvidha.

INFRASTRUCTURE...

In 2002, GATI website was inaugurated through which customers could track multiple docket number and download information, lodge complains online and track its status which leads to high level of customer satisfaction.

In 2004, GATI@web, comprising GEMS (GATI enterprise management system) – a custom developed application. It was totally centralised.

More than 120 locations were networked through Lease-lines and VSAT.

TECHNOLOGY

It employed 2364 employees supported by 512 trainees from GATI learning school.

They brought high level of critical appreciation of its performance management system (PMS) and linked with the business performance.

They start giving Performance linked awards (PLA) to the higher performer employee.

A proper training schedule is made which helped individual in their career growth.

For training its personnel in soft-skills they co-opted consultants and resource persons from reputed institution like IIMs, NIIT, ICFAI, XLRI, etc.

GATI was planning to provide benefit of life/ medical/ accident cover to its business partners.

HUMAN RESOURCES...

It is certified by ISO 9001:2000 for the purpose of design, marketing and cargo management.

It is equipped with stackers, forklifts, cage lifts and CCTV.In September 2004, it entered into a tie-up with Indian Airlines and

launched GATI gold and GATI silver services for the speedy air services.

Services were to be extended to other domestic airports as well as a few overseas destinations.

GATI was certified by International Air Transport Association (IATA) to promote service market and handle International cargo movement.

OPERATIONS:

The clientele of GATI included HITACHI, PANTALOON, FORD and RANBAXY.

Their priority is to work towards personalised and innovative services, for this they took several internal and external initiatives including changes in people and processes.

They transformed its existing warehouses into modern express distribution centres.

They revolutionised the cargo sector with its on time intact, else money back offer through its fleet of custom designed, product-specific containers, flexible pick-up delivery option.

First Indian company provide a toll free number facility along with customer complaint monitoring system.

GATI was also the first company to offer unique track-n-trace facility for customers to monitor their consignments.

MARKETING:...

The Alphonso Mango Scheme from GATI, under which customers had the fruit delivered at their door step by placing order telephonically or through company website.

GATI was the unanimous choice for the Best Domestic Logistics Company awarded from Frost and Sullivan in 2004.

In November 2004, they launched GATI Saver in the small package segment.

In February 2005, GATI coast-to-coast achieved new milestone by launching direct services between Chennai and Myanmar and in March 2005, they set-up a new office at Port Blair.

GATI built the brand over a period of years with active participation in the media, exhibitions, trade fair and other promotional activities on the warehousing front.

Industry scenarioExpress industry comprised couriers companies

providing express, door to door pickup and delivery services for documents and non documents shipments other than freight to various domestic and international destinations. Domestic services included express and door to door pickup and delivery services to the various destinations in India through air and surface mode. International services include pickup and delivery of inbound and out bound shipments to India mainly through air.

The consignment handled by the express companies broadly classified into two type documents and non documents. Documents accounted for about 60% of the total organized sector revenue and non documents constituted 40%.

The express industry witnessed progressive growth during the last decade of the 20th century. The growth drivers were trade and services changing economic scenario led removal of trade barriers and globalization of markets led to increase in international trade. The express market was characterized by existence of over 2000 express companies operating in India, with about 20 companies in organized sector and 25 in semi organized. The market was estimated at Rs. 2493 crores. The domestic market constituted of 59% valued at Rs. 1468 crores while the international market constituted of 415 of the total industry valued at Rs. 1025 crores.

Organized sector...This sector comprise national and international express service

with fully equipped infrastructure and other value added services.

The last service provider were technology driven companies with major emphasis on customer service and speed.

With the development of Just in time and E-commerce there was a sizeable business opportunity for web-enable services Convenience, Reliability and Speed were the growth drivers.

Tracking services were offered by most of the organized sector player.

The organized sector was mostly into the package segment of the cargo management business

Other major players Blue dart

It was south Asia’s leading integrated air express carrier having a domestic network covering 14,000 locations and services in more than 220 countries through alliance with DHL. The competitive advantage was that it had an air service, the only one to have this which was focused on carriage of packages as its prime business rather than as a by product of a passenger air line.

DTDC courier and Cargo ltd. It had four zonal offices and had presence in over 80 locations with over 3700 franchises, delivering 321000 consignments across the nation every day. DTDC worldwide Express ltd., a unit of DTDC group catered to the overseas market with over 240 worldwide destinations.

CONCOR(Container corp. of India ltd.)It operated container terminals across the country and had undisputed position as sole provider of rail hauls for containers.

EMS Speed PostIt was the Express arm of Post and telegraph department in India which operated in association with the member countries of universal postal union. Speed post domestic carried about 634 lac articles every year and generated revenue of Rs. 2.43 crores while the speed post international carried 5.76 lac articles.

Semi-Organized sector..The semi-organized sector comprised players operating within

a limited geographical area.

Such companies generally had their own network of branches and franchises in the region in which they operated.

However, Such companies did not have their own distribution network, and relied on the network of other similar companiesin various location or acted as a wholesaler to organizesector companies.

The semi-organized and unorganized players were mainly characterized by high volume business and were operated on price advantages

Unorganized Sector…Un-organised sector comprised companies, which had

restricted operation within the boundaries of a particular city( intra-city couriers).Such companies were found in metropolitan and urban cities and had one or more branches in those cities.The delivery schedules were based on the urgency of the consignments.Operated on economies of scale where large companies

catered to the higher business volume. This sector thrived on price and was unable to keep pace with the market in terms of reliability and

timeliness

SWOT Analysis

Dominant player in the surface cargo segment in India, which accounts for more than 55% of the total volume of cargo moved.

Gati established state of art warehouses in different regions of country with multi level stacking facilities for effective space utilization

Entry into the coveted cold-chain logistics business through the acquisition of Kausar India, which has a fleet of 99 refrigerated vehicles..

Agreement with Indian Airlines to develop a joint product called IC – Zipp to leverage the growth in the retail courier market. This product will cover the high-value courier segment and the company expects it to contribute towards business growth both nationally and internationally

Strategic alliance with Indian Airline s for assured cargo space in 34 air sectors of the airline

Strengths

WeaknessesFreight expenses

account for a majority of Gati's

operating expenses. Afurther increase in Gati'sfreight expenses, with anincrease in fuel costs, could potentially lead to further contraction in margins.

Threats

A rise in fuel charges could have an adverse impact on margins,

An economic slowdown could impact the

logistics industry as a whole.Significant investments involved in the setting

up warehouses and building of vessels - capital-intensive industry.

Strong macroeconomic growth, robust growth in trade driving the growth of the Indian express industry. The industry has grown in the range of 25%-30% over the past 3-4 years. We expect the industry to register a similar growth rate over the next few years.

Exemption of interstate sourcing from VAT will make having centralized large warehouses more viable for companies than having local sourcing and distribution. We expect most Indian companies to outsource the warehousing function, creating a potentially attractive market for3PL providers.

Entry of a large number of global retailers would require efficient and cost-effective supply chain solutions and 3PL and 4PL logistics solutions within the country. With the retail sector in India spending approximately Rs30 bn on JIT, companies like Gati stand to benefit.

Improvement in the logistics infrastructure in the country - the dedicated rail freight corridor, modernization of ports, and improvement in road infrastructure are set to give a boost to intra- state and interstate freight movement.

Opportunities

StrategiesStrengthening the market standing, Brand

Positioning, Build on Core Competencies and continue to enjoy the loyalty of customer results in steady growth and value creation.

To position the company to focus on IT, Process Improvement, Cost management and establishment of state of art warehouse.

It proactively re-engineered its warehousing , infrastructure and made its operation more mechanized, thereby reducing operational cost

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