business plan - sukam india
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BUSINESS PLAN ON PROPOSED JOINT VENTURE BETWEEN EXPRESS LOGISTICS PTE.
SINGAPORE &
SUKAM INDIA LTD.
Submitted toPROF. O. P. WALI
CONTRIBUTED BY:
SAMIR SURI – ROLL NO.12
URVASHI SHAH – ROLL NO.49
KAUSHIK DEY – ROLL NO.53
AJIT MANCHANDA– ROLL NO.24
MANU CHOPRA – ROLL NO.40
Indian Institute of Foreign TradeNew Delhi
USAGE
This document is designed to serve as an introduction and briefing guide for top
management and may therefore be treated only as a guideline. It contains a broad
illustration of the business intentions of the Joint Venture, provides a concise insight
into the basis upon which this project has been judged to be viable and concludes
with an overview of the implementation and business plans.
By virtue of the simplified nature of this documents, detailed financial data is beyond
the scope of this synopsis and has thus, been made available separately in another
section.
EXECUTIVE SUMMARY –
SUKAM INDIA LTD.
The idea for SUKAM India Ltd. blossomed out of the fortuitous meeting of
Samir Suri, a Senior Manager with a Freight Forwarding firm and
Manu Chopra, Director-Owner of a Courier Service, in a Seminar on
"Outlook of International Trade". This seminar had highlighted the
business opportunities arising out of removal of Quantitative
Restrictions. The second reason? Market opportunity." The exports from
India had increased by 20.4% in 2000-01 over the previous year. Growth
of world trade volume in goods and services recovered from 4.3% in
1998 to 5.1% in 1999 and it is estimated to have almost doubled to 10%
in 2000. World merchandise exports ,in value terms, increased by 3% in
1999 as against a decline of 1.6% in 1998. The recovery from
developing countries was even stronger with exports rising by 5.7% as
compared to a decline of 6.2% in 1998. This showed and confirmed that
there would be a lot of movement required for goods , both from India
and out of India. With the Government's intention to set up Special
Economic Zones and product specific Agri Export Zones, the production
of goods for exports would increase substantially. Moreover, India's
export to its major destinations like OECD, Asia & OPEC regions
showed significant increase. Exports in $ value grew by 12.8% to
OECD,20.1% to Asia & 12.3% to OEPC. Both felt that removal of
barriers amongst the WTO members would result in boom in trading in
goods. Foreign Direct Investment of US$ 1916 million in the previous
year April - December period showed an increase of US$ 427 million
over the same period. With the recent announcement of further
liberalisation in the FDI , it became clear that the opportunity had arrived
to spread their wings and enhance their area of business which would
expand very fast. FDIs would require the movement of goods and raw
materials into the country for setting up of either the wholly owned
subsidiaries or joint ventures which would result in production of goods
for the export market or domestic consumption. Both the markets would
require the services of specialised freight forwarding and delivery of
goods to various destinations at the designated time at a competitive
price.
In the context of the above envisaged developments, consequential
expected increase in volume of movement of goods and documents
and the common business activity, they agreed to meet in the next few
days. In their next meeting they analysed the future of international
trade. Four meetings later, they agreed to set up a common business in
the field of Couriering, Freight forwarding and Consolidation.
SETTING UP OF NEW BUSINESS
Manu believed that the window of opportunity had arrived with the
domestic market getting smaller. It was becoming clear that only the big
and the most competitive would survive. There was a need to become
global and to achieve this they should bring some strength in their
business process by improving upon the existing value chain. Everything
is changing so fast that there would never be the perfect strategy with
the perfect technology with the perfect marketing opportunity with the
perfect product. So you need to back a team that's facile enough, and
experienced enough, to make the inevitable adjustments in strategy.
Samir felt that their venture project required a professional management
team. They realised that to be competitive they must use IT savvy
business processes which would bring them at par with the other major
players in the market. This process required the assistance in
synergising the Enterprise Marketing Automation (EMA).
In came the technology-savvy Kaushik Dey who had substantial e-
commerce experience and Ajit Manchanda with years of experience with
an International chain of hotels and Airlines. For more than 22 years, Ajit
Manchanda had been immersed in the world of business development
and customer loyalty programmes. The most important aspect which
needed to be covered was to arrange funds and the person to manage
it. Urvashi Shah an outstanding financial controller in a Multinational
Company agreed to join them and offered to share her expertise in
sourcing of funds for the new firm..
The salient points in the setting up of SUKAM INDIA LIMITED is given below:
1. The new company SUKAM INDIA LIMITED, has been formed by five partners
namely Mr Samir Suri, Ms. Urvashi Shah, Mr. Kaushik Dey, Mr. Ajit
Manchanda and Mr. Manu Chopra.
2. Mr. Manu Chopra, owner of the courier firm is the major share holder. He is
providing his offices, staff and assets in Delhi. His domestic and international
business in couriering works on the basis of tie-ups with major players in the
market. The arrangement amongst partners is internal. The share in the profit
and losses will be on the basis of agreement drawn amongst them.
3. Sukam India Limited is strengthening its value chain by providing the services of
freight forwarding, warehousing and consolidating.
4. On the basis of the in-depth analysis done by the partners on the impact of
dismantling of QRs, opening of sectors for 100% Foreign Direct Investments
and increase in world trade due to the impact of the positive WTO
measures, the trade within and outside India will grow. This would result in
major in-flow of goods, intermodal transportation of goods and export of
goods. To add on to the USP of SUKAM INDIA LIMITED, a tie-up has been
arranged with M/s. XPRESS LOGISTICS PTE., SINGAPORE. This foreign
company has made a name in the last ten years of operation in the field of
couriering, freight-forwarding, warehousing and consolidating. It has tie-up
arrangements with Express companies (couriering, freight-forwarding,
warehousing and consolidating) in the United States, European Union, United
Kingdom, Japan, China, Korea, Russia, South Africa and Brazil.
5. The advantage of their networking will benefit the new joint venture company
which has been named as SUKAM XPRESS INDIA LIMITED. EXPRESS
SINGAPORE will bring in technology to the new company as well as provide 50%
equity. The total Investment including the assets of Mr. Chopra's office set up in
Delhi would be Rs.3,57,30,000/-. The financial equity of 50% coming from Xpress
Logostics would be Rs. 1,78,65,000/-. Balance 50% equity has to be provided by
SUKAM India. Investment of Rs. 1,19,10,000/- has already been made in terms
of Mr. Chopra's office in Delhi. The loan requirement for investment in Chennai
and Mumbai of Rs.59,55,000/- has been arranged and being sourced from a
Bank at a rate of 17% to be repaid in 3 years. This arrangement allows the
repayment of principal of one third at the end of each year. The total repayment
at the end of the first year works out to be Rs. 29,97,350/- ( Principal-
Rs.19,85,000/- + Interest - Rs.10,12,350/-).The rest of the repayment schedule
has been shown in the Forecast and Investment Analysis.
6. XPRESS SINGAPORE will set up a website in the name of the joint venture
company SUKAM EXPRESS. They will maintain this site. This site will provide
on-line tracking and tracing system for all documents and freight. Access to this
site would provide the on-line status of the document of freight sent by the
customer. This site would also provide eCRM concepts, list of branches of the
company, and names of the Express companies with which it has a tie-up. It will
also give information of the type of warehouse facilities available with the
company. This site would also provide facility to Retailers for online selling and
delivery of the goods. It has immense potential and the site can grow from here.
7. The joint venture company would set up its own offices in Delhi, Mumbai and
Chennai and work through franchisee based offices in Bangalore, Hyderabad,
Cochin, Kolkata and Ahmedabad. The Sales Offices would function through
broker agents.
In short, Sukam Express, the logistics sevice provider will have to cater to
complete supply chain management underlining the demand for a ONE
STOP SHOP facility to the customer.
CONTENTS
EXECUTIVE SUMMARY PAGE
1. PRESENT EXPRESS INDUSTRY SCENARIO ……………. PAGE 3
CATEGORY OF COURIER COMPANIES
UNIQUE SELLING PROPOSITION OF COMPETITIORS
2. PLAN/INTENTIONS ……………………………………………. PAGE 5
DEVELOPMENT OF SERVICE INFRASTRUCTURE
i. ESTABLISH 24 HRS HUB AT BOM, MAA, DEL
ii. SALES OFFICE AND FRANCHISE OFFICE
DEVELOPMENT OF MANAGEMENT
INTRODUCE NEW SERVICES & PRODUCTS
MARKET POSITION & BRANDING PROJECTION
3. REQUIREMENTS ……………………………………………. PAGE 6
SETTING UP 24 HRS HUB & SALES OFFICES
QUANTUM OF DOMESTIC & INTERNATIONAL BUSINESS
NATURE OF SHIPMENTS
NATURE OF CLIENTS
LOCAL CONDITION FOR HIRING STAFF
IMPORTS FROM XPRESS LOGITICS, SINGAPORE NETWORK
HIGH COST OF ESTABLISHING OWN SALES OFFICE
4. PROPOSED STATIONS TO BE ADDED TO SUKAM XPRESS
NETWORK …………………………………………… PAGE 10
TOWNS & CITIES WE INTEND TO SET UP OUR SALES OFFICES
CATEGORY OF CITIES ON THE BASIS OF THEIR SALES POTENTIAL
5. MANAGEMENT STRUCTURE & STYLE ………………… PAGE 11
STRUCTURE OF NEW ORGANISATION
6. COST ANALYSIS AND INITIAL INVESTMENT …………. PAGE 14
PRESENT INVESTMENT AT SUKAM DEL
INVESTMENT FORECAST AT SUKAM MAA &DEL
COST OF COMPUTERISATION
MONTHLY RUNNING COST BOM/MAA/DEL
COMPUTED INCOME FOR THE 1ST YEAR
SUMMARY
VENTURE CAPITAL
WORKING CAPITAL
NOTES
7. INTRODUCTION OF NEW SERVICES AND PRODUCTS/MARKET
POSITIONING & IMAGE PROJECTION –
IMPROVEMENT IN SERVICE LEVELS IN THE SUKAM XPRESS
NETWORK ……………………………………………………… PAGE 36
8. CONCLUSION …………………………………………………. PAGE 38
1. PRESENT EXPRESS INDUSTRY SCENARIO IN INDIA:
If SUKAM XPRESS plans out its entry wisely and our expectations from the joint
venture are pragmatic and logical we are convinced that over a period of few years
SUKAM XPRESS can capture a major share of the Indian Express Industry Market.
But of course for this to happen the changes are not only likely in India but overall
globally in the SUKAM XPRESS Network. India’s courier market, presently, is
serviced by approximately more than 5,000 courier companies, most of these are
broker agents who feed into the networks of other large Express companies. Such
brokers select particular networks for particular destinations depending upon price,
speed and reliability. The total courier market in India can be divided into 3 type of
categories:
(i) TYPE A: The franchise networks who work entirely on a free to free basis and
each station is owned by a separate individual or company and are entirely
financially responsible for themselves. Such networks are basically existing in
the domestic sector of the market.
(ii) TYPE B: Broker agents who market their services independently and
source/route their shipments though a number of countrywide networks
depending upon the prices and services levels offered to them. However,
their main earnings from specialised regional routes which they operate
themselves e.g. specialising in service between India-U.K., India-U.S.A.,
India-U.A.E., India-SIN, India-HKG and the rest of the world routing through
other larger networks. The unique selling point or in other words why
customers would like to use such companies is because they are able to
provide custom tailored packages in terms of prices and deliveries e.g. offer
next day delivery in LON, NYC, etc., deliveries by 9.00 a.m. in DEL, BOM,
MAA etc. which the larger networks would not be able to do because of the
larger volumes handled and keeping a strict schedule of cut-offs for
deliveries.
(iii) TYPE C: Countrywide networks owned by a single company. Such networks
are very few probably only 1 or 2 who have been able to achieve their
financial goals and have been able to sustain the high levels of investments
and can totally rely on revenue from international or domestic sales.
The revenue levels per package which the various companies are generating and
the market categories in which these companies can be categorized are as follows:
i) The Higher End: These are the companies which have their own networks
and their investment levels in terms of computers, vehicles, office
infrastructure are very high and therefore they are charging the highest
amount. The companies which can be placed in this category are Blue Dar
(Fed Ex), DHL, Elbee (UPS). The philosophy that guides these companies is
that their sustained income is generated from Imports and Exports and all the
Domestic sales merely compliment their income.
ii) The Middle Group: Most of the visible courier companies like Overnite, First
Flight, DTDC, Prakash Air Freight, Corporate Couriers, Airborne Express,
Aramax, Skynet etc. come under this category. Such companies are basically
either International or Domestic Courier Companies and they charge anything
from Rs.35.00 to Rs.75.00 for Domestic shipments, and Rs.300.00 to
Rs.400.00 for international shipments, depending upon the existing market
condition. They basically depend upon each other to provide the service
which they cannot handle.
iii) The Lower End Group: These are the various local companies operating
within particular state/states and are majority Domestic Courier Companies.
They operate by forming alliances between themselves. Whatever
International shipments they generate are routed through any of the category I
& II Companies. In return these companies provide the I & II Companies
access to small and remote stations within particular states. They deliver the
shipments on the CWB of the larger courier companies. Such companies
account for less then 40% of the total market.
UNIQUE SELLING PROPOSITION (U.S.P.)
OF VARIOUS COURIER COMPANIES
S.
NO.
NAME OF COMPANY FEATURES
1. Blue Dart (FEDEX)
EXPRESS IND.
Reliability
Step by step tracking information
Services by air and surface
High value logistic services
Cargo services, Small & Large
Both Domestic & International
service through their own network.
2. DHL
EXPRESS INDUSTRY
Very low prices for International
shipments
Small cargo service
Custom designed solutions
Both Domestic & International
service through their own network
3. Elbee (UPS)
EXPRESS INDUSTRY
Services by air & surface
High value logistic services
Courier & cargo services
Both Domestic & International
service through their own network
4 Overnite, First Flight Both Domestic courier and cargo
DOMESTIC COURIER
AND CARGO
service
Service by air & surface to large
number of Domestic destinations
Specialist services to neighboring
countries like Bhutan, Nepal,
Andaman & Nicobar Islands etc.
Very low prices.
5 OCS, TNT
COURIER & FREIGHT ON
CUSTOMER REQUEST
International service through their
own network
Customer designed solutions for
small cargo
Low prices for specialised area
Custom designed solutions to certain
large clients
The above information clearly indicates the enormous competition and thus implies
that it is absolutely necessary that we enter the market to expand our business
with a new product and not enter as just another courier company.
2. PLANS/INTENTIONS:
The long terms plan for expansion of SUKAM XPRESS Network/services in India
would be to become a leading logistics service and support organization in Asia
Pacific Region. In order to achieve this goal it would require us to undertake the
following activities in a phased manner:
i) Development of service infrastructure:
Setting up of 24 hrs Hub facilities
Setting up of Sales Offices (self-owned offices/franchise offices)
ii) Development of management (induct professionals and placement at strategic
locations)
iii) Introduce new services and products: freight forwarding, warehousing and
consolidation, food service, newspaper distribution, subscription, door to door
cargo handling (Domestic & International), domestic courier (tracking facility
with India).
On par with service standard of existing competition
On par with competitiveness (pricing) of existing competition.
iv) Market positioning and branding projection: i.e. not just as another express
company to and from Far East, but as a worldwide network providing
customised solutions at competitive price. Service levels outside India.
v) Forecast
3. REQUIREMENTS:
Development of Service Infrastructure:
Regional Hubs:
Any future increase in outbound business (India to other countries) is directly
dependent on our ability to provide a reliable, competitive service within India. In
order to achieve a level to satisfy the requirements of the Worldwide Network the first
step should be to elevate the level of regional hubs at DEL, BOM, MAA, to
functioning 24 hrs a day with all custom clearance and related facilities.
Regional hubs would have a dual function as follows:
(i) Regional level international import/export hubs at DEL, BOM, MAA. (Self-
owned by JVC)
(ii) Upgrade tie-ups for outsourcing from express companies only at BLR, CCU,
COK, HYD AND AMD having 24 hrs hub facilities.
In order to facilitate on a 24 hour basis at both Domestic and International Regional
hubs, the existing infrastructure at self-owned/operated hubs would have to be
enhanced substantially. In order for the hub to operate round the clock the following
would be required:
(i) Vans/Mini trucks: The function of these vans would be to provide shuttle
services between airport & hub, OBC companies & Hub, etc. The vehicles for
the hub operations should not be confused with the vehicles for delivery
requirements and shuttle between Hub to city offices.
(ii) Two way communication: As most of the areas at the airports and customs
are not readily accessible to telephones, the exports operations staff/vans
must be equipped with some sort of two way communication i.e. mobile
telephones, two way radio communications etc.
(iii) Computer Hardware: The hub must be equipped with the necessary computer
hardware in order to record all transactions like imports/sorting, exports
(reshipping), scanners etc.
(iv) Office automation: Xerox machine, Fax, telephones, generator, weighing
scales strapping machines etc.
The up-gradation of facilities to the level to operate as a 24 hour hub (refer to
Investment Forecast & Cost Analysis).
Minimum cost Rs.30,00,000.00 – Rs.50,00,000.00 per office
Sales Office:
In addition to the 24 hr hubs the immediate requirement to satisfy the needs of the
SUKAM XPRESS Network would be to set up our branches at various locations
across the country. However, in order to do this we have two options:
(i) Set up our own branch offices
(ii) Set up Franchisee based operations
We are not setting up self-owned branch offices in BLR, CCU, COK AND HYD
since it would not be cost effective for the following reasons:
The cost of establishing a sales office in any part of India today is in the region of
Rs.5,00,000.00. if the premises are rented and Rs.10,00,000.00 if the premises are
purchased. All offices will be required to function at a certain basic level of
technology and system. The main equipment cost for a single sales office would be
in the region of Rs.2,00,000.00 – Rs.3,00,000.00. This would include procure of
basic facilities e.g. telephone, fax, telex, companies etc.
It is not advisable to open sales offices purely on the assumption that there is
untapped market waiting for SUKAM XPRESS to capture. Even on the countrywide
Networks Blue Dart (FEDEX), Elbee (UPS) have suffered big financial losses due to
ill advised expansion planning. In order to avoid the failure and huge financial losses
of other networks, these objectives cannot be acquired in the traditional method of
expansion/market capture i.e. setup of countrywide offices, investment thereof sales
campaigns etc. The sales office whether self-owned or Franchise would exclusively
work as SUKAM XPRESS and have primary responsibility to generate domestic
sales.
The decision to set up our own offices and franchisee based offices would depend
upon the following factors:
(i) Quantum of business (International) available.
(ii) Quantum of business (Domestic) available.
(iii) Nature of shipments {heavy volume, SPX (non document) , DOX (document)}
(iv) Nature of clients as paymasters
(v) Local condition of hiring staff
Strong union (of labour)
Efficiency of labour
(vi) Import into such location
(vii) High cost of establishing sales office.
A. Establishing of sales office if self owned
Minimum cost Rs.05,00,000.00
B. Establishment of Franchisee sales office
Minimum cost Rs.15,00,000.00 – Rs.20,000.00 per month as subsidy.
(i) QUANTUM & QUALITY OF BUSINESS (DOMESTIC & INTERNATIONAL)
Depending upon the strategic location of certain cities, the quantum of
business available from such centers could be very high in terms of volume
(number of pieces). However, due to the enormous number of lower end
courier companies operating out of these stations, the revenue per piece
would be very low. For example, PNQ-BOM, CHG-DEL, CJB-MAA, TVM-
COK, LUD-DEL etc. There are courier companies operating between such
locations @ Rs.05.00/ pc. Which we, with our costs and investments
(overheads), will never be able to match.
The quantum and quality of business available for freight forwarding/
consolidation/warehousing would also be very high in terms of volumes
particularly for cities like Moradabad, Panipat, Aurangabad, Tirupathi,
Ludhiana etc. A franchise based option at these places would work positively
in the long term interests of SUKAM EXPRESS as customers at these places
are dependent upon local companies an exhorbitant amount in order to
provide facilities like consolidation, warehousing. SUKAM EXPRESS with
self-owned regional hubs and strong financial backing will be in a very strong
position to provide customised packages at competitive prices to clients in
cities like Moradabad, Pune, Panipat etc..
(ii) NATURE OF SHIPMENTS:
Another important factor to decide whether to have self owned or franchise
office is the nature of the customers’ business or nature of courier shipments
business available.
(i) SPX or DOX
(ii) Heavy SPS or Light SPS or Both
(iii) Heavy DOX or Bank DOX (light) or Both
(iv) Most frequent destinations e.g. USA, Europe etc. where shipments are
sent.
This criteria is of great significance as SUKAM INDIA presently is not in a
position to offer competitive service in Heavy SPS/Light SPS/Heavy DOX/
category.
There are certain locations such as Moradabad, Ludhiana, Panipat, Varanasi,
Tirupur, Coimbatore, Jallandar, etc. where the market demands very
competitive tariff for heavy weight shipments. Such locations have, basically
export manufacturing units. The market in such locations also demands
service to selected destinations. Such demand is fulfilled by the “lower end”
courier companies, which demand rock bottom prices (well below the market
rates), which the main line courier companies like DHL, FEDEX, UPS OCS,
TNT, SUKAM cannot offer. These lower end courier companies have
successfully designed special products/services e.g. next day service to LON,
NYC, SIN for specific market segments and are also able to sustain
themselves despite the extraordinarily low charge (approx. 5% on line haul).
Such companies are offering services ex India to major locations e.g.
NYC/U.S.A., LON/U.K., SIN, DXB/U.A.E., HKG, CMB/Sri Lanka, KTM,
FRA/Germany.
(iii) NATURE OF CUSTOMERS:
One of the major viruses the Express Industry is plagued by is the bad nature
of the customers as paymasters. Such behaviour is generally found in
customers such as individual companies, family companies etc. The volume
of business of such companies is very large and is very attractive for the
Express companies. As a result the companies are offering rock bottom
prices to these clients, however collections from such customers generally run
bad or run into 4-6 month credit. Such a situation arises because of the
industry being disorganized. These customers are able to shift from one
Express company to another and are able to avail the services they need,
without being disturbed even if the company they utilise stops to provide
services to them. Due to such reason, many of the express companies have
opted out of certain locations and appointed franchisees. Such franchisees
are local people, well aware of the local environment & stability of the
customers. This way the large Express company Networks are able to pass
the risk onto the franchisee.
(iv) LOCAL CONDITIONS OF HIRING STAFF:
Certain locations within the country are very strong in regards to labour
unrest, strike, lockout etc. e.g. West Bengal, Uttar Pradesh etc. At such
locations due to strong labour unions, the efficiency of staff is low & cost of
running high.
(v) IMPORTS OF VARIOUS STATIONS INTO INDIA:
The current number of packages per day received for delivery from each
primary XPRESS LOGISTICS, SINGAPORE station in the region as follows:
STATION NR. OF DELIVERIES AT NR. OF DELIVERED AT
XPRESS LOGISTICS
STATIONS
NEW STATIONS
TYO 200 30
LON 20 05
FRA 05 02
NYC 05 02
EUB 05 02
DXB 20 10
SIN 20 10
CMB 05 02
As is evident from the above table, the figures show that exports to India by
XPRESS LOGISTICS worldwide Network other than TYO, DXB, SIN, LON is
negligible in terms of revenue which may have helped to offset the high cost
of operating new sales offices (improvement of service infrastructure). The
volumes are so low that they will lead to higher rate per CWB at BOM, MAA,
BLR, HYD, CCU is too small to enable an office to break even on its fixed
costs, merely from decreased revenue on account of deliveries. As a result,
our opening of new stations will not necessarily lead to reduction in cost of
transfer. Considering the lack of any financial support from the network, in
respect of this project, we may not be able to pass on any benefits of lower
transfer charges to the members of the XPRESS LOGISTICS Network for
several years. Once the volume of import deliveries from the network
increases the cost of handling per CWB would be lower as well. Providing
some subsidies to the franchisee which will lead to certain fixed cost for the
initial period.
4. PROPOSED STATIONS TO BE ADDED TO THE NETWORK AND
ESTIMATED SALES FIGURES FROM THE STATIONS:
The towns and cities, where we intend to set up franchise based offices have
been divided into the following categories:
CATEGORY A: Cities where the sales are expected to be above Rs.5
lakhs per month, with a 50-50 share between the
international and domestic market.
CATEGORY B: Cities where the sales are expected to be more than Rs.3
lakhs per month, with the share of the domestic being
60% and for international sector 40%.
CATEGORY C: Cities where the sales are expected to be more than Rs.2
lakhs per month, with the share of the domestic sector
being 80% and that of international being 20%.
CATEGORY D: Cities where the sales are expected to be up to Rs.1 lakh
per month with the share of the domestic sector being
90% and that of international being 10%.
CATEGORY E: Cities where the sales are expected to be up to Rs.50
thousand per month with the share of the domestic sector
being 98% and that of international being 02%.
CATEGORIES OF CITIES ON THE BASIS OF THEIR SALES POTENTIAL:
CATEGORY A:
Ludhiana, Ahmedabad, Pune, Delhi, Bombay, Hyderabad, Calcutta, Madras,
Bangalore.
CATEGORY B:
Lucknow, Kanpur, Moradabad, Agra, Baroda, Indore, Tirupur, Salem, Coimbatore,
Trivandrum, Calicut, Jallandhar, Surat, Faridabad, Panipat, Jaipur, Allahabad,
Chandigarh, Guwahati, Ghaziabad.
CATEGORY C:
Gurgaon, Noida, Goa, Bhopal, Varanasi, Madurai, Amritsar, Nagpur, Nasik,
Aurangabad, Visakhapatnam, Jamshedpur, Rajkot, Erode, Mysore.
CATEGORY D:
Ahmednagar, Aligarh, Ambala, Bareilly, Bhillai, Bhubaneshwar, Cuttack,
Gandhinagar, Gorakhpur, Gwalior, Jammu, Jodhpur, Karnal, Karur, Mangalore,
Mathura, Meerut, Palghat, Patna, Trichur, Trichy, Udaipur.
CATEGORY E:
Ajmer, Bhatinda, Kolhapur, Kota, Ooty, Pathankot, Patiala, Rohtak, Roorkee,
Sholapur, Shimla, Sonipat, Haridwar, Shillong, Ranchi, Porbandar, Raichur, Raipur,
Guntur, Nainital, Hissar, Coonoor, Dehradun.
5. MANAGEMENT STRUCTURE & STYLE:
It is much too early to identify a single person who will be solely accountable
for this task. In view of the size of the project and the long term implication we
feel that it would be necessary that our present country management team at
SUKAM DEL will be actively involved with the project. Whether it be in the
capacity of accountability or assisting the project manager. At the very
beginning, national level executives will be induced one each in the primary
disciplines – marketing, operations and finance. Their main task will be to
define the objectives, detailed planning and scheduling, execution and
monitoring of Stage I i.e. setting up of the joint venture company at BOM,
MAA, DEL. They would be directly reporting to the country manager.
I) MANAGEMENT STRUCTURE & STYLE:
While we concur that in order to manage a large organization a drastic
change in style and attitudes would be required, we still feel that the transition
to such a structure should be gradual and dependent on the success of the
new organisation. We propose that SUKAM EXPRESS India headquarters
concentrate its efforts on strategic management and planning, while leaving
the tactical and front-line management involvement entirely at Regional and
Branch Office level. This would naturally be aided and guided by pre-set
operating parameters. Management Decontrol to this level may be achieved
after a period of 1-3 years.
II) Management Structure:
The following is a broad description of the intended management structure
and may please be treated as a guideline only.
i) The country will be divided into 4 to 5 zones for ease of management and
control. These are geographically demarcated (Southern, Northern, Central,
Western & Eastern Zones) and each would be headed by a regional head
who would run his region as a profit center, with complete responsibility within
his region for marketing and sales, operations, administration, finance and
accounts and personnel. We would naturally require to induct professionals
with experience in this line of work in order to see the above goals fulfilled.
ii) We are strongly of the opinion that, there has to be a combination of our own
(SUKAM India) and agents offices in India. It is assumed that whether it is an
agent or a branch office, it will fulfill all requirements of a full-fledged SUKAM
XPRESS Station. In similar locations, it is a branch office for reasons that
have been outlined in the preceding paragraphs.
iii) All branches/agents will have a branch manager appointed, responsible for
the overall smooth functioning of his branch. These branch managers would
then report to their Regional Heads who in turn will report to the Country
Manager. In case the concentration of branches in any one region is high, the
regional Head may group together a number of branches under the charge of
an Area Manager.
Such a structure we believe, would leave the Head Office free to concentrate
its efforts on policy, planning and strategy.
STRUCTURE OF NEW ORGANIZATION
DIRECTOR FINANCE
DIRECTOR OPERATIONSDIRECTOR MARKETING
COUNTRY HEAD
REGIONAL HEAD
AREA MANAGER
BRANCH MANAGER
FRANCHISE AREA SALES MANAGER
AREA OPERATIONS
MANAGER
AREA OPERATIONS
MANAGER
SALES MANAGER
CUSTOMER SERVICE
MANAGER
OPERATION MANAGER
SALES EXECUTIVECUSTOMER
SERVICE EXECUTIVES
OPERATION EXECUTIVES
A
INITIAL INVESTMENT FORECAST & COST
ANALYSIS:
Breakdown of cost estimate for purchase/rental of offices at Mumbai and Chennai to
Regional Hubs operational 24 hours.
This figure has been arrived at by a simple calculation of Rs.40,00,000.00 –
Rs.45,00,000.00 per office (2 offices need to be purchased/rented out) therefore, 2 X
Rs.45,00,000.00 = Rs.90,00,000.00.
The above estimate is based on the assumption that the office space is on rental.
(I) Present Investments at SUKAM DEL office:
SR.
NO.
ITEMS A
WITH REAL ESTATE
PRICE (INR)
B
WITHOUT REAL
ESTATE PRICE (INR)
1. Estimated cost at market value of
present SUKAM DEL Airport
Operations Hub approx. 2500 sq.
ft. and city office approx. 600 sp.ft.
4,00,00,000.00
2. Furniture/Air Conditioning/Interiors 27,00,000.00 27,00,000.00
etc.
3. 8 Telephone lines (@ Rs.30,000
per line)
2,40,000.00 2,40,000.00
4. Telephone exchange/EPABX (3
lines & 6 extensions)
25,000.00 25,000.00
5. 2 Fax machine 60,000.00 60,000.00
6. 1 Telex machine 15,000.00 15,000.00
7. 2 Photocopier machine 1,40,000.00 1,40,000.00
8. Delivery vans (4, 2 for Hub
operations, 2 for delivery/pickup
operations)
11,00,000.00 11,00,000.00
9. Communications system (pagers,
mobile phones, 2 way radios)
20,000.00 20,000.00
10. Computer system (as per details
enclosed)
8,00,000.00 8,00,000.00
TOTAL 4,51,00,000.00 51,00,000.00
(II) Cost for Minimum configuration of Computer System
S.
No.
ITEMS QTY. PRICE EACH
(INR)
TOTAL PRICE
(INR)
1. Server Pentium 1 1,25,000.00 1,25,000.00
2. Nodes 4 30,000.00 1,20,000.00
3. Nodes with 16 MB Hard Disk 2 75,000.00 1,50,000.00
4. External Tape Drive 1 15,000.00 15,000.00
5 Dot Matrix Printers 4 20,000.00 80,000.00
6. Laser Printer 1 30,000.00 30,000.00
7. 625 VA UPS for Server 1 10,000.00 10,000.00
8. 1 KVA UPS for Nodes 3 10,000.00 30,000.00
9. Bar Code Readers 3 25,000.00 75,000.00
10. Hand held POD Retriever 2 45,000.00 90,000.00
11. Electronic Weighing Scales 2 15,000.00 30,000.00
12. Data Communication Modem 1 15,000.00 15,0000.00
13. Dedicated Telephone Line 1 30,000.00 30,000.00
TOTAL 8,00,000.00
Breakdown of minimum cost of up-gradation of SUKAM India’s existing infrastructure
to cater to increased work load. In terms of additional staff, equipment, office space,
etc. at MAA and BOM.
** The above estimate is for one station only.
III) Forecast investment for SUKAM XPRESS MAA & BOM Hub Office:
SR.
NO.
ITEMS PURCHASE
PRICE (INR)
RENT PRICE
(INR)
1. Estimated cost of purchasing suitable premises
to locate Regional Operations Hub approx.
1000 sq. ft. @ Rs.6,000-7,500 (depending on
location), with furniture/ fixtures/ Airconditioning
etc.
MAA – 1,00,00,000
BOM – 1,00,00,000
2,00,00,000.00
2. Estimated Security deposit payable for 1000
sq.ft. premises on ground floor, for suitable
premises to locate Regional Operations Hub.
(Rent per month Rs.1,00,000 X 12) depends
upon land owner to demand 1 yr, 2 yr, or 3 yr
deposit
MAA – 24,00,000
BOM – 24,00,000
48,00,000.00
3. 4 Telephone lines (@ Rs.30,000 per line) 3
lines for day to day function, 1 line for fax.
MAA – 1,20,000
BOM – 1,20,000
2,40,000.00 2,40,000.00
4. Telephone Exchange/ EPABX (3 lines & 6 2,00,000.00 2,00,000.00
extensions)
5. 1 Fax machine
MAA – 25,000
DEL – 25,000
50,000.00 50,000.00
6. 1 Telex Machine (optional)
MAA – 15,000
BOM – 15,000
30,000.00 30,000.00
7. Photocopier machine
MAA – 1,00,000
BOM – 1,00,000
2,00,000.00 2,00,000.00
8. Delivery vans (4,2 for Hub operations, 2 for
delivery/pickup operations) @ Rs.2,00,000
MAA – 8,00,000
BOM – 8,00,000
16,00,000.00 16,00,000.00
9. Communications System
(pagers, mobile phones, 2 way radios)
MAA – 6,00,000
BOM – 6,00,000
2,00,000.00 2,00,000.00
10. Computer system (as per details enclosed)
MAA – 6,00,000
BOM – 6,00,000
12,00,000.00 12,00,000.00
11. Staff Uniforms
MAA – 50,000
BOM – 50,000
1,00,000.00 1,00,000.00
TOTAL 2,38,20,000.00 86,20,000.00
SUKAM DELHI
CURRENT DELHI MONTHLY RUNNING COST/PROFIT & LOSS
COURIER SERVICE
S.
No.
ITEMS INCOME EXPENSES PROFIT &
LOSS
1. Courier Sales (Domestic &
International)
10,00,000.00
2. Imports – Inward Commission
(NET) (After deduction of Inter
Agent Delivery and 50%
commission to XPRESS
LOGISTICS, SIN)
4,00,000.00
3. Imports ex LHR/SIN/DXB/TYO 2,40,000.00
4. Franchise Sales 6,00,000.00
5. Salaries including Bonus / P.F./
Medical Insurance/ Overtime
etc.
2,35,000.00
6. Communication charges
(Telephone/ Fax /Telex)
80,000.00
7. Electricity/ Water/ Municipal
Taxes
35,000.00
8. Legal Expenses (professional
services obtained from
10,000.00
Chartered Accountant, legal
advisors etc.)
9. Computer Hardware
Maintenance
10,000.00
10. Vehicle maintenance (includes
Petrol & Repairs etc.)
30,000.00
11. Freight
Domestic
International (70% for MAA,
DEL, BOM)
(EUB,FRA,SIN,DXB,LON,TYO)
1,50,000.00
3,00,000.00
12. Customs/ dispatch clerks/
miscellaneous charges (without
receipts)
75,000.00
13. Stationary/ Packing Materials
(CWB’s, Packing Lists,
Envelopes, Plastic covers,
Mother Bags, Computer
Stationary etc.)
75,000.00
TOTAL 22,40,000.00 10,00,000.00 12,40,000.00
C
SUKAM XPRESS
FORECAST MONTHLY PROFIT & LOSS SUMMARY
FOR THE FIRST YEAR
LOGISTICS (COURIER, FREIGHT FORWARDING, WAREHOUSING AND
CONSOLIDATION)
S.
No.
ITEMS INCOME EXPENSES PROFIT &
LOSS
1. SALES
DEL – 25,00,000
BOM - 12,50,000
MAA- 10,00,000
Franchisee – 15,00,000
62,50,000.00
2. Inward remittances (NET)
After deduction of Inter Agent
Delivery and 50% Commission
to XPRESS LOGISTICS, SIN
12,60,000.00
3. Average Monthly Expenditure
(includes Domestic & Intl Freight
& Running Cost of offices &
reflects the total expenditure
60,23,500.00
incurred for the whole of India)
DEL – 42,25,000
BOM – 1 7,70,500
MAA- 20,28,000
TOTAL 75,10,000.00 60,23,500.00 14,86,500.00
SUMMARY FOR THE FIRST YEAR:
Income per month : Rs. 75,10,000X 12 = Rs. 9,01,20,000.00
Less Expenses : Rs. 60,23,500 X 12 = Rs. 7,22,82,000.00
Gross Profit : Rs. 14,86,500 X 12 = Rs. 1,78,38,000.00
Less Repayment of
Loan :PRINCIPAL Rs.19,85,000.00 Rs. 29,97,350.00
Interest Rs. 10,12,350.00 Rs. 1,48,40,650.00
D
SUKAM XPRESS
FORECAST MONTHLY PROFIT & LOSS SUMMARY
FOR THE SECOND YEAR
LOGISTICS (COURIER, FREIGHT FORWARDING, WAREHOUSING AND
CONSOLIDATION)
S.
No.
ITEMS INCOME EXPENSES PROFIT &
LOSS
1. SALES
BOM – 20,00,000
MAA - 15,00,000
DEL - 30,00,000
Franchisee – 20,00,000
85,00,000.00
2. Inward remittances (NET)
After deduction of Inter Agent
Delivery and 50% Commission
to XPRESS LOGISTICS, SIN
16,00,000.00
3. Average Monthly Expenditure
(includes Domestic & Intl Freight
& Running Cost of offices &
75,00,000.00
reflects the total expenditure
BOM – 27,00,000
MAA – 18,00,000
DEL - 30,00,000
TOTAL 1,01,00,000 97,00,000.00 26,00,000.00
SUMMARY FOR THE SECOND YEAR:
Gross Profit : Rs. 26,00,000 X 12 = Rs. 3,12,00,000.00
Less Loan: Principal-Rs.19,85,000/-
Interest - Rs. 6,74,900/- =Rs. 26,59,900.00
Rs. 2,85,40,100.00
E
SUKAM XPRESS
FORECAST MONTHLY PROFIT & LOSS SUMMARY
FOR THE THIRD YEAR
LOGISTICS (COURIER, FREIGHT FORWARDING, WAREHOUSING AND
CONSOLIDATION)
S.
No.
ITEMS INCOME EXPENSES PROFIT &
LOSS
1. SALES
(For BOM, MAA, DEL,
Franchisee)
1,00,50,000
2. Inward remittances (NET)
After deduction of Inter Agent
Delivery and 50% Commission
to XPRESS LOGISTICS, SIN
20,02,400
3. Average Monthly Expenditure 86,00,000
(includes Domestic & Intl Freight
& Running Cost of offices &
reflects the total expenditure
BOM – MAA –
DEL - 86,00,000/-
TOTAL 1,20,52,400 86,00,000 34,52,400
SUMMARY FOR THE THIRD YEAR:
Gross Profit : Rs. 34,52,400 X 12 = Rs. 4,14,28,800.00
Less Loan: Principal-Rs.19,85,000/-
Interest - Rs. 3,37,450/- Rs. 23,22,450.00
Rs. 3,91,06,350.00
SUMMARY
It is evident from the attached Profit & Loss Summary that SUKAM XPRESS is
healthy and contributes an annual Gross Profit of approx. Rs.2,74,95,700.00 PER
ANNUM.
With the formation of the joint venture, it can be expected that the expenses will rise
to about Rs.60,23,500.00 per month, in the first year. The major increase being due
to Renting of offices at MAA and BOM and recruitment of professionals in freight
forwarding and Consolidation Industries.
During the first year of the joint ventures’ operations, we can expect a increase of
almost 100% in sales at Delhi and franchisees and a modest increase at Chennai
and Mumbai. The reason being the provision of customised logistics packages to
clients at a competitive price.
The expected sales from this region per month during the first year would thus be –
Mumbai Rs.12,50,000 + Franchisees, Rs.15,00,000; Chennai, Rs.10,00,000; Delhi,
Rs.25,00,000 – bringing the total sales to Rs.62,50,000 per month. In addition to
this, we expect the Net Inward Remittance from XPRESS LOGISTICS, SIN for India
to increase substantially from the current level of Rs.4,00,000 per month to
Rs.12,60,000 per month reason being the opening up of QRs and increase in the
FDIs.
Using the above forecast Income & Expenditure figures for the first year, we arrive
at:
INCOME (ANNUAL)
Sales (Rs.62,50,000 X 12) = Rs.7,50,00,000
Net Inward Remittance (Rs.12,60,000 X 12) = Rs.1,51,20,000
Total = Rs.9,01,20,000.
EXPENSES (ANNUAL)
For the entire region (Rs.60,23,500 X 12) = Rs.7,22,82,000
We can thus, safely expect the Joint Venture to expect a Gross Profit of
Rs.1,78,38,000 at the end of the first year of operations.
In the short term, it is essential to employ a strategy of having the Joint venture
Management only at Mumbai, Chennai and Delhi. Other stations must be managed
entirely by Franchisee (as is the policy currently). This strategy offers two major
advantages to the Joint Venture. Firstly, it drastically reduces the investment capital
and the running expenses. Secondly, it enables us to concentrate our efforts in
increasing and consolidating our market positions in the three major metro areas
(Mumbai, Chennai, Delhi). Once this is achieved, the place regarding Franchisee
locations e.g. Cochin, Mangalore, Tirupur etc., can be safely reviewed and where
necessary a decision to open our office can be taken.
In the second and subsequent years, we expect an annual increase in Sales by
25%, Net Inward Remittances by 20% and a 20 increase in expenses across the
region.
6. INTRODUCTION OF NEW SERVICES AND PRODUCTS – MARKET
POSITIONING AND IMAGE PROJECTION – IMPROVEMENTS IN SERVICE
LEVELS IN THE XPRESS LOGISTICS NETWORK:
In order to sustain the competition the joint venture company would have to
look at new avenues to generate revenue so that the company maintains its
probability and is able to provide the services to both its customers, clients
and the network at the required level. The new services which the company
could look into to generate additional sales would be like delivery service of
food items, collection of newspaper subscription, door to door cargo handling
(Domestic and International), freight forwarding and consolidation and at
the same time look into expansion of its core business which is providing
Domestic and International courier and logistics service. Though new services
may be added the capital required to invest in new products and service
would have to come from the profits generated from the core business which
is the courier business. For the courier business to expand in India, we must
realize that such expansion and improvement in such services can not only be
achieved by investments in improvements in our infrastructure and service
within India but also is directly dependent on the fact that the XPRESS
LOGISTICS, SIN network outside India to provide similar services and
facilities to SUKAM XPRESS India.
The freight forwarder arranges for the shipment of goods as an agent for an
exporter. The forwarder is an indispensable agent for an export firm that
cannot afford an in-house specialist to handle paper work and other export
trade mechanics. Even in large companies, with active export departments
capable of handling documentation, a forwarder is useful as the shipment co-
ordinator at the port of export or at the destination point. Besides arranging
for complete shipping documentation, the full service freight forwarder
provides information and advice on routing and scheduling, rates and related
charges, consular and licensing requirements, labouring requirements and
export restrictions. The agent also offers shipping insurance, ware-housing,
packing and containerisation and ocean cargo or air freight space.
Consolidators: are people who consolidate shippings into larger, more
economical quantities. Shipping and air-freight costs are an important factors
in a product price in export market and the transportation mode must be
selected in terms of the total impact on cost. One estimate is that logistics
account for between 19 and 23% of the total cost of the finished product
sold internationally. One of the most important innovation in ocean shipping
and air-freight in reducing and controlling high costs of transportation is the
use of containerization. Containerized shipments in place of traditional bulk
handling of full loads have resulted in intermodal transport between in-land
points, reduced costs, reduction in losses from pilferage and damage and
simplified handling of international shipments. This is one of the major way of
saving freight charges and the customer is the ultimate beneficiary.
The process of developing COSMAT began in 2000. To start with, the
information technology consultant Kaushik on this project, along with SUKAM
XPRESS in house technology professional created an empty shell
encompassing all the locations that SUKAM serviced. It was shown to each of
the teams. They in turn brainstormed and sent suggestion back. The
management looked at the suggestions, explored the options and created a
solution. Slowly the shell began to fill out and a system began to take shape.
The background was that SUKAM's regional offices were having independent
LAN and none of the other offices were computerised. The PC's were limited
in number and inter-LAN connectivity was not available. COSMAT, the
international track and trace system, was operating out of one office, Delhi-
head-office and data transfers were on STD and local dial-ups. The objectives
drawn were to inter-connect LAN and EDP and subsequently all remote
offices; to extend international COSMAT connectivity to all locations for faster
and reliable data transfer; to inter-connect all locations on e-mail and to
support SUKAM's vision to utilising to servicing its business needs.
The Consultants analysed and studied the requirements and integrated
solutions that would fit the needs, thereby, giving the customer a complete
solution. The implementation of the technology was analysed, post-
implementation and course corrections and tuning was done to ensure that
technology installed was giving the desired outputs. The users feedback was
sought and the solution was tuned to the needs of the user to ensure all user
requirements were met.
The result was that Sukam Xpress got the solution to its needs in terms of
wide area network technology coupled with the requirement of local area
network technology. The network was analysed on a periodical basis to
determine whether the needs of SUKAM EPRESS were being met by
installed technology and steps were initiated to revise the needs as when as
the opportunity arose. This led to a process of determining future needs and a
plan was worked out to resize and demand of applications and user. This plan
was supported by both the consultant and SUKAM's system personnel which
involved hi speed lines (ISDN) VSATs, voice date multiplexers, and
associated communication equipment to ensure SUKAM's future needs to
resources were met.
Before COSMAT could be put in place the company first developed
standardised routes for consignments covering its 242 locations all over the
country. Seven large cities, Mumbai, Delhi, Calcutta, Madras, Bangalore,
Hyderabad & Erode which had the largest number of flight connections were
chosen as Hubs, where packages were sorted and reloaded for their
destinations. Cosmat allows Custom formalities to be completed even as the
consignment is on its way. Its also makes the arrangement to the next
destination even before it reaches the intermediate destinations.
Apart from Cosmat another factor has been excellent in house
communication. Most of the employees in the Co are connected by electronic
mail allowing for communication along cities but more importantly across
layers ,keeping top management in touch with the employees in the field.
Such heavy investment in Technology actually paid off . According to the top
management it has enabled them to introduce new products As a step
towards this, SUKAM forged alliances with e-commerce company. For
instance, SUKAM tied up with Rediff on the Net, one of the first e-commerce
companies in India.
For instance, the company recently introduced Power Xpress, where
customers are put on line to SUKAM offices and have instance access to
flight and shipment schedules, price , etc. , allowing the customers to in turn
plan their consignments. City Bank's credit card division is one such client.
Billing is also computerised there by saving, both SUKAM as well as the
client's valuable time. The company has also introduced the SUKAM Collect
which allows the consignee to pay for the consignment. But apart from the
ability to introduce new products, the biggest pay off will come in when the
customer starts seeing couriers as more than just against to deliver his goods.
The two major points which the Overseas XPRESS LOGISTICS stations must
look into are:
a) Services on par with the service standard of existing competition
b) Pricing structures on par with the competitors.
Currently the market in India with the exception of Far-East based
multinationals consider the worldwide XPRESS LOGISTICS network to
represent a small to medium sized courier company specializing in services to
and from SIN, HKG & TYO. This image needs to be altered to one befitting a
market leader represented by a worldwide network.
To become a market leader represented by a worldwide network, there are a
number of points/service related issues which the new company, SUKUM XPRESS
would have to concentrate upon:
SUKAM XPRESS would have to push the Overseas stations of Express
Logistics to improve upon the service levels, invest in infrastructure, prepare global
corporate policies in regard to inter agent custom clearance, delivery and local
courier charges. We would like to highlight a few of these issues which if not taken
care of could jeopardise not only the future of the new company, SUKAM XPRESS,
but, also have a direct financial impact on the image of EXPRESS LOGISTICS.
(i) SUKAM XPRESS would have to ensure on a consistent basis a 24-48
hours delivery ex-Delhi and Bombay to London, Dubai, New York, Singapore,
Hong Kong, Tokyo. This will enable SUKAM XPRESS to capture a major
share of the courier market in India.
(ii) SUKAM XPRESS in coordination and with the support of the Overseas
stations of EXPRESS LOGISTICS will have to work upon the operations
systems of the network. These operating systems would mean better, faster,
cost-effective, trouble-free, custom clearances, correct and safe dellvery of
small and big consignments, proper storage/warehousing facilities and final
prompt, timely delivery to the doorstep of the customer.
(iii) SUKAM XPRESS will stress upon the need to have better and more
cost-effective transfer charges within the network. Infact, in the long-run it
would be advisable for the network to function and operate on a free-to-free
basis and thereby simplifying the accounting procedures.
(iv) SUKAM XPRESS in arrangement with EXPRESS LOGISTICS,
Singapore will work upon providing an insurance package to the customers
for their valuable shipments. To prevent, loss/pilferage/damage/theft to the
shipments, it is important that proper security systems are devised and
evolved.
7. CONCLUSION:
From the above Points – for – consideration we may safely conclude that:
(i) As is evident, SUKAM XPRESS India initially will have to rely heavily, if
not entirely on domestic sales as far as the courier market is
concerned, for revenues to pay for the operating costs and incomes.
As a new entrant in the freight forwarding/warehousing/consolidating
market, it will take time to gain the confidence of the customers.
However, once the logistics specialisation of SUKAM XPRESS has
been established and recognised by the industry and the customer,
there will be no dearth of business coming in.
(ii) For freight forwarding and logistics business, it is important the SUKAM
XPRESS taps the untapped market potential of cities like Panipat,
Moradabad, Pune, Aurangabad, Jaipur, Surat, Tirupur, Coimbatore,
Cochin, Agra, Firozabad.
(iii) We would have to introduce value added service, in the form of a USP
which no one else is currently offering i.e., in terms of a ' ONE-STOP
SHOP FACILITY'.
(iv) Service levels will have to be upgraded to match, if not exceed the
completion vis-à-vis delivery time, feed back (status information). This
will require the investments in the form of Regional hubs, a national
computer network, dedicated hub vehicles and other infrastructure.
(v) Until substantial progress is made in terms of the EXPRESS
LOGISTICS worldwide policies governing matters, as diverse as
operational responsibilities, a rationalisation of transfer and local
courier charges, and a minimum mandatory level of exports from all
agents, we do not feel it feasible to expand our international business.
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