I have just returned from a two week trip to India. It was great to be in a place with such vibrancy and excitement about their automotive industry. The market has shown positive signs in recent months, and India is now entering its biggest sales period during the religious festivals. The country’s recovery can be best judged in January after they end.

Rail and collaboration
I started in Delhi at the SIAM (Society of Indian Auto Makers) conference. Logistics is not a regular topic here but I was pleased to see the outgoing SIAM President, Mr Ravi Kant, who is retiring as President of Tata Motors, highlight the development of finished vehicle deliveries by rail in his opening speech. This is a big step forward and I am pleased at the part that we have played at our Automotive Logistics India conferences in bringing the necessary players together to begin collaborating and discussing the possibilities of rail. The discussions that took place between carmakers as well as the Indian Railways helped to turn the talk into action (and you can read more here about how serious India is about overcoming the obstacles and embracing rail for automotive movements as discussed at the Automotive Logistics India conference in January. You can also read more here about Tata's use of it for domestic movements of the Nano).

On the subject of collaboration, SIAM is now working together to reduce the empty legs during road hauling vehicles. The next meeting is on Friday, September 11th. For both the rail and collaboration issues Mr MM Singh and the SIAM Logistics Council should be noted for their progressive work.

LSPs in India
Indian carmakers are aware of their challenges, and are eager to work more closely with logistics companies.
The Indian logistics companies are also developing, especially those who are not hiding behind the "Indian Way" of doing business, which all too often includes low standards and even corruption, albeit all at cheap prices. But the improvements in logistics need to come now, and need to be more than knowing who to bribe. A compromise on quality today will cost the industry much more in the long run.

Multi-national providers and suppliers need to enter the market more forcefully. The carmakers have said they would prefer to work with joint ventures between global and local partners.

However, global LSPs have not been so willing to commit to India. I asked some of these companies why they have been slow to do so, and several have already told me they don’t expect infrastructure to improve in their lifetimes (and they are not that old, I might add).
An executive at Schneider, a US-based LSP that has had success in China recently, told Automotive Logistics that while the company has spent the past three years exploring expansion in India, Schneider does not believe it can be successful until there is a more developed infrastructure beyond ports and port cities, as it focuses mainly on overland logistics.

“Certainly, a great many organisations are engaged in attempting to get the projects going, but they tend to be more local rather than nationwide, and we see no long term plan to integrate the various projects,” he said, adding that Schneider will hold back entering the market more fully until there is a sustainable governing body that can implement a national plan involving both rail and roads.

A source from another global LSP agreed that India’s poor infrastructure means his company operates in a localised environment with little, if any, ability to improve upon the internal costs of moving goods within country. He believes that most global players will focus on port-to-port movements, “and leave the intra-country logistics alone.”

He also added his distaste over the “Indian way” of logistics, describing corruption as “rampant”. I would be very keen to hear the responses from other LSPs and carmakers.

A close shave for LSPs in India

But in case it would appear that there is only one “Indian way” for logistics, I’d just like to share a story about one company that, to encourage better standards, reduce damage and improve reliability amongst his drivers, has gone so far as to provide barber shop facilities at his depots for his drivers.

Mr Bafna, President of Bafna Motors and Kishor Transport, believes that if you treat drivers with more respect, they will reciprocate it.
Drivers can be away from home up to ten days at a time, so he provides the barber shops so they can get hair cuts and shaves. He also provides them with mobile phones to stay in touch with their family. But he is equally realistic: truck drivers in India have a notoriously high rate of HIV, so he distributes condoms with their pay packets.

Bafna told Automotive Logistics that these measures have kept turnover low, but more importantly have led to better service for his customers. It’s an example the industry should learn from.

These are my personal views on some of the many things I picked up from my most recent trip. If you have comments you would like to add, if you agree, disagree or just have different viewpoint, I would be very pleased to hear from you.
I also hope to continue these discussions at our Automotive Logistics India conference in Pune later this year.

Louis Yiakoumi

Automotive Logistics
+44 7984 421621