Six new warehouses to come up by 2018
Crystal Logistic Cool Chain Ltd. is beefing up its network, both in terms of storage space and transportation. Having raised its first private equity funding of $10 million (Rs. 66 crores) from Neev Fund earlier this year, the company is poised not only to double the existing capacity at its Kolkata warehouse from approximately 6,000 pallet capacities to 12,000 pallet capacities, but also build six more warehouses in the north and north-eastern part of the country.
In an exclusive interview to MOTORINDIA, Mr. Abdul Gafoor, Head – Strategy and Business Support, stated: “With Neev funding, the USP that we wanted to create as a strong east and north-eastern player in the country will get accelerated. By 2018 we are going to build six more warehouses, one each at Bhubaneshwar, Indore, Ghaziabad, Siliguri, Ranchi and Raipur. The first three will have 6,000 pallet capacities each and the last three will have 3,000 pallet capacities each.”
Neev Fund, backed by the State Bank of India, was launched in November 2015 by the Prime Minister, Mr. Narendra Modi, to help low-income States with equity partnerships for small infrastructure development. The fund had earlier invested in another cold chain logistics service provider, Milk Mantra, in January 2017.
The structure of a cold chain transportation is such that it requires cold chain storages as well as supply chain management. Undoubtedly, to manage and then transport perishable goods in a temperature-controlled environment will require adequate storage space and vehicles to move those goods. The ramp-up is thus imperative if the company aims to be a strong east and north-eastern player.
“It is obvious that the current occupancy at the Kolkata warehouse is quite encouraging and that the transportation will grow much higher than the storage, as we ramp up. No customer will want to have stock lying for a long time. We anticipate that the volume of growth, when it comes to the number of vehicles, is going to be much higher, moving forward. From 100 vehicles at present, it will grow up to 500 vehicles in the next three years,” said Mr. Gafoor.
The current fleet comprises predominately of pick-ups, LCVs and HCV rigids. The new additions are expected to be on the same lines.
If the company realizes its ambitions of expansion by 2018, by 2020 it aims to have pallet capacities of approximately 1 lakh across India. “The strategic expansion will happen across the western and southern India. We are looking at 6,000 pallet capacities each at Bhiwandi, JNPT and Vishakapatnam and 12,000 pallet capacities each in Chennai and Hyderabad by 2019. Come 2020, and we would want to make it wider to Pune, Goa, Cochin and Ahmedabad with 6,000 pallet capacities each, and Nagpur, Chandigarh and Guwahati for 3,000 pallet capacities,” he added.
End-to-end solution
Crystal Logistic began cold chain operations in early 2000 with refrigerated transportation for a Quick Service Restaurant (QSR) chain. Prior to that, the company, started by Murari Lal Agarwal (the current Chairman), was known as Haryana Transport Company, providing dry cargo services.
Today Crystal Logistics’ business solutions include end-to-end, multi-temperature, multi-user logistics solutions. The end-to-end solutions include refrigerated and dry – primary and secondary – transportation, refrigerated warehousing, third-party logistics (3PL), portable cold storage and value-added services. The company continues to provide Full Truck Load (FTL) and Less-Than-Truck Load (LTL) called Crystal Express.
“We have a QSR customer with us for more than 4 years with whom we started as a pure storage contract and a separate transport contract. However, over a period it evolved to become one single contract where we provide end-to-end solutions to this customer. This means picking up from the customer supplier’s factory and taking it to our storage facility, process it wherever required and provide them secondary distribution all the way till their retail outlets. In a nutshell, we take care of the entire process chain, from procurement of raw materials to distribution of finished products. Hence, we are not looking at mere transportation. We aim to provide single-window logistics services to customers who have had enough of India’s underdeveloped and fragmented transport network as well as multiple unreliable service providers,” Mr. Abdul revealed.
The company also offers portable cold store in partnership with a Denmark-based company known as TITAN Containers A/S under the name of Crystal TITAN Containers. “This service enables manufacturers, distributors and others to store temperature sensitive cargo in their premises. A restaurant hosting a birthday party or wedding can utilize the portable cold storage solutions and avoid huge investments in the creation of cold storage space. This enables them to focus on their core business,” he said.
Owing to its diligent and proactive end-to-end solutions, the company clientele boasts of popular milk & dairy brand, a couple of renowned international QSRs, pharma, fruits & vegetable networks as well as paints and chemical companies.
Customised value delivery
Unlike any other company in the industry, the Crystal Logistics’ Account Management (customer handling) team is picked to suit the client’s requirement. “If we have a pharma client, the Account Manager and the customer facing team that handles the client are predominantly B.Pharm pass out with MBA in Supply Chain, Operations or Logistics and having worked in the industry for a minimum 2 years. It is easier for them to then understand the customers’ terminology and nuances of the industry. The ground level operation is a shared team. The Account Management team filters out the customers’ requirements and translates them into logistics terminology to pass it out to the operations team,” Mr. Abdul disclosed.
The company is building multi-user and multi-temperature facilities, with an OPEX model for customers. As they pay and use, they don’t have to bear a fixed cost. Multi temperature also means dry or room temperature storage available, so that, the customer doesn’t have to deal with multiple service providers.
Value-added service doesn’t end here. There could be customers who want Crystal Logistics to do invoicing on their behalf, on their systems using their ERPs. “In such a case, customer’s ERPs are installed at our facility and our people are trained and given SOPs. Customers pass on the orders to us and we process it, do the invoicing, do the documentation and execute it. For big companies who have a big wholesaler for one State or one super stockiest for one big district, they are going to enter the transaction once a month or once in a fortnight. Customer’s consider this as a clerical job and don’t want to invest in human resource that accrues fixed cost”.
Packaging and labelling the consignment is an add-on that goes without saying. What is innovative is Crystal Logistics’ prudent transit service for containers meant to be picked up from JNPT for north or north east. Usually any other transporter will pick up and go all the way to the north or north-east, get the container destuffed (empty it) and bring back the empty container to JNPT, which may take 14-18 days. On the other hand, Crystal Logistic picks up the container from JNPT, destuff it in their facility (their cross-docking facility), load the stuff into a truck container and give back the container to JNPT within a day or two. “This adds a lot of value to the customer. We are helping the customer by lowering their costs which leads to a more strategic bonding which is beyond a single transaction,” beamed Mr. Abdul.
Interminable improvement
In the end, what matters to Crystal Logistic is if they were able to reduce the lead time for their customers. “It cannot always be measured against payment made per km or per kg basis, but how much did the client pay for the entire logistics operation. Did it grow sales for them?”, averred Mr. Abdul.
Going forward the company would also want to add multi-temperature containers on trucks or vans. Currently, if one container is set up with a temperature it will remain the same throughout the container. “We might start looking at two temperature compartments within a container to be able to save fuel and enable transportation of 5 degrees as well as 15 degrees or – 20 degrees products in the same truck for a single customer. This will lead to bigger trucks replacing smaller and the midsized trucks,” envisioned Mr. Abdul.
There is also a lot of detailing done in overseeing the material that is used to build the containers. If a brand is assumed to be good then the company invests in it and the containers are designed and built with the user reliability, performance and running costs in focus. “If we use a lighter container or a bigger container we may get a more payload space. Even at the warehouse, all the material that we use like the insulation is taken care. Better the insulation, the lesser the energy consumption, and a warehouse with 12,000 pallet capacities can have huge electricity bills if not designed properly,” revealed Mr. Abdul.
The company is looking at 100 per cent solar power panels for the warehouse to make energy consumption free and transfer the solar power back to the grid (source of power). “If we use ‘X’ watts of unit through electricity, we will be able to generate the same amount and give it back to the grid, even if we do not store for our own consumption,” concluded Mr. Abdul.
The logistics industry and the cold chain sector are expected to grow at a CAGR of over 15 per cent by 2020. With its evolved and accelerated single window approach, there is scope for Crystal Logistic Cool Chain to take a leadership position.