What is logistics company Gati upto? A Quick Update!

Logistics firm Gati is planning a rapid expansion of its network as it aims to achieve a target of delivering 10 lakh packages per day by 2022 from about 300,000 packages daily at present.

For this, the company plans to add 100 more delivery locations in the next six-eight months, taking its total to 700 locations. Gati would also lease about 1 million square feet of space, taking its total leased area to 4.5 million square feet.


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Bala Aghoramurthy, Deputy Managing Director, Gati, said the company will need to incur incremental capital expenditure of Rs 100 crore (it already expends Rs 30 crore each year) over the next five years till 2022 to achieve its target. In sum, this will amount to an investment of Rs 250 crore over the next five years. He said, "This would be funded through internal accruals. The large portion of the space we need will be for warehousing and for our hubs, which, in turn, are connected to the spokes, or our delivery centres."

Aghoramurthy added the company is aiming to increase its e-commerce deliveries from 40,000-45,000 packages per day at present, to 500,000 packages daily. He said the business-to-business (B2B) deliveries would also increase to a similar number from 2.6 lakh packages daily at present.

For its cold storage business, Gati Kausar, the company is looking to purchase up to 50 trucks. It will also take more space on lease. Gati Kausar has an owned cold storage facility in Dharuhera in Haryana which can store up to 5,500 pallets. Including the leased space in other locations, Gati Kausar has a capacity of 7,000 pallet spaces Aghoramurthy said the company is planning to increase the lease component up to 6,000 pallet spaces, taking the total capacity to 13,000 pallet spaces.

Aghoramurthy said the cold storage business has gradually improved after the ban on meat. He said, "This business is better placed now than a year ago. Our cold store utilisation has ramped up to a range between 70-80% from about 30% a year ago."

Gati Kausar contributes about Rs 45 crore to Gati's total revenue of about Rs 1,700 crore.

The total express business in India is estimated at about Rs 17,000 crore, including both domestic and international cargo.

- TradeBriefs Bureau -