'Not under pressure': Why logistics firm Allcargo is taking it easy with last-mile services

Business-to-consumer (B2C) or ecommerce last-mile logistics services will be an important component to creating sustainable customer stickiness in the long term, Shashi Kiran Shetty, Founder and Chairman of Allcargo Group, said.

“At some stage, we will have to look at it (ecommerce last mile) because from a sustainable customer stickiness point of view, last mile will be important, but today we are not under pressure to do that,” Shetty said in an interaction with Business Today on the sidelines of an event at the company’s logistics park in the outskirts of Bangalore. 

“If we want to start (B2C last mile) today, I do not think it is a big issue because there are so many start-ups that can stitch it together for us as vendors. We are thinking about all that, but we have other priorities now. We would look at more profit-making businesses than do something for the sake of doing it,” he said. 

Shetty said the company is not keen on venturing into quick commerce logistics. “Quick commerce or 10-minutes delivery, we are not really excited about it. Let somebody else do it and we will figure out,” he added.

Shetty said Allcargo has set up a separate digital arm that is trying to get the company to be digitally first and digitally ready globally. “We have built a tech platform for customer acquisition and management of supply chain business digitally. We are trying to become a digitally first organisation. As a result, today 60 per cent of our business globally comes online already,” he added. 

He said ecommerce will eventually constitute about 40 per cent of the company’s warehousing business. 

“It is just a beginning. Ecommerce business will continue to thrive. Not only Amazon and Flipkart, there is a long tail of companies looking to leasing facilities. They don’t want to build it on their own. As we speak, we are at least looking at five locations including two properties in Bangalore, in Nelamangala we bought 100 acres and in Hoskote we already bought 35 acres, it will go to 75,” Shetty said. 

The company has already developed 100 acres in Farrukhnagar for the NCR region and a 35-acre facility in Hyderabad. It is currently building parks in Kolkata and Ahmedabad, and is in land acquisition discussions in Patna and Kanpur. The Mumbai-based company aims to build about 20 million square feet of warehouses in the next five years in India.  

He was speaking to BT from the company’s logistics and warehousing facility -- Malur Logistics Park – which is now fully occupied. The two million square feet park, spread over in a 100-acre facility, houses sports retailer Decathlon and ecommerce players Flipkart and Amazon. Decathlon has taken up 900,000 square feet of space, Flipkart occupies over 500,000 square feet and Amazon operates from 300,000 square feet in the logistics and warehousing park to manage their supply chain requirements.  
 

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