In an engaging conversation with N. Balasubramanian, Southern Cargo Carriers (India) Directors Sital K. Mittal and Mohit Mittal elaborated on their company’s impressive journey since its inception in 1985. Central to their success has been a strategic partnership with Eicher trucks, which has played a pivotal role in shaping their fleet management and operational efficiency. The interview explored how this collaboration not only ensures reliability and sustainability in their logistics operations but also aligns with their commitment to advancing technology in the transportation sector.
Founded in 1985, Southern Cargo Carriers (India) has established itself as a premier logistics service provider, leveraging strategic partnerships and innovative practices to thrive in a rapidly evolving industry. With a commitment to excellence, the company has transformed its operations and embraced new technologies, all while maintaining a strong focus on customer satisfaction and sustainability.
Sital K. Mittal, Director – Operations, reflects on the company’s journey, highlighting the challenges faced during its inception. “The company started in 1985 when the economy of India was growing. At that time, our turnover was around 30 lakh rupees per annum. As we aligned ourselves with multinational companies entering the Indian market, such as PepsiCo and ITC Foods, our growth accelerated significantly,” he explains. Today, Southern Cargo boasts a turnover of over Rs. 400 crore, marking nearly four decades of evolution in the logistics sector.
Sital recalls the early days of the logistics business, characterized by a lack of technology. “Although we didn’t have any technology, we never had computers; we used to work with pagers. However, our passion for growth and the inflow of multinational companies into India set the stage for our success. Our main clients in those early days included firms like Brook Bond, Lipton, and PepsiCo.”
As PepsiCo entered the Indian market, Sital highlights how it catalyzed growth for Southern Cargo. “Pepsi launched its products in 1992, and at that time, they grew by 200% year on year. They established factories across the country, and we were the first in the South to enter into business with them. Our business significantly transformed when Pepsi came in.”
Navigating Challenges and Opportunities
Sital reflects on the evolution of the logistics sector and how perceptions have changed over the decades. “It’s a fantastic experience. I am an engineer by training and initially did not intend to join the transport industry. In the 1980s and 90s, transporters were often regarded as unprofessional. But today, logistics plays a vital role in the economy. Without logistics, nothing moves. Companies like Amazon and Flipkart rely on logistics to function effectively.”
Mohit Mittal, Director, joined the company in 2009. He shared, “I joined unofficially after graduating as a telecom engineer. Initially, I had no plans to join the family business. But observing the passion and hardwork of my family ignited a desire within me to contribute. I started managing one of the toughest operations the company was handling at that time.”
Reflecting on the growth during the early years of his tenure, Mohit explains how the company adapted to the market’s demands. “Between 2013 and 2017, our business scaled up significantly. Initially, we had a minimal fleet, but we expanded quickly by introducing about 60 to 80 Eicher trucks. Eicher was the market leader in the ICV segment, so they were a perfect fit for our requirements.”
As the company grew, it faced challenges during periods of economic turbulence. “We did experience stagnation during demonetization and GST implementation, where startups began replicating our model in a more technologically driven way. However, our model gained recognition as clients began to trust us more during these tough times,” Mohit states.
Sital notes the significant impact of technological advancement on the logistics industry. “Logistics is the only industry that is growing leaps and bounds. Companies today are advanced forms of logistics. They may not own their products, but they excel in technology and transportation. For instance, Zepto provides 10-minute deliveries through logistics companies, highlighting the importance of efficiency.”
In recent years, Southern Cargo has also made a strategic shift in its client portfolio. “While we primarily served the FMCG sector until 2017, we have diversified significantly since then, entering industries like consumer goods, solar, automotive, etc. Our current clientele includes companies like Saint Gobain and Asian Paints, contributing to a growing percentage of our revenue,” Mohit elaborates.
Sital emphasizes that the future of logistics is bright, with substantial growth opportunities. “We are looking at expanding into new market segments. The government is also making strides in improving infrastructure, which will enhance logistics efficiency. If we capitalize on these opportunities and continue to adapt, our growth trajectory is promising.”
The Eicher Partnership: A Cornerstone of Success
A significant part of Southern Cargo’s success can be attributed to its long-standing partnership with Eicher, a truck brand renowned for its reliability and efficiency. Mohit Mittal emphasizes the importance of this collaboration, stating, “We have relied on Eicher trucks since our inception. My first purchase was Eicher trucks, and within two years, our fleet expanded from 10 to 80 trucks, all of which were Eicher. This growth was driven by our commitment to quality and driver satisfaction.”
Southern Cargo’s preference for Eicher trucks is not just a matter of fleet management; it is rooted in the feedback from the drivers themselves. “Eicher is the preferred truck type for drivers, especially in the southern and western parts of the country. It’s crucial for us to ensure that our drivers are comfortable with the vehicles they operate, and Eicher has consistently proven to meet those needs,” Mohit explains. The comfort level, ease of handling, and overall driving experience play a vital role in driver retention and satisfaction, which in turn impacts the operational efficiency of Southern Cargo.
Sital Mittal highlights the operational benefits of partnering with Eicher: “One of the most critical factors in our decision-making is the reliability of the trucks. Even though we have trucks from other manufacturers, Eicher stands out for having the least number of breakdowns. Their aftersales support is unmatched; it’s among the best in the country. They provide us with essential data about truck performance, allowing us to make informed decisions about maintenance and operational improvements.”
The partnership has also been instrumental in Southern Cargo’s transition toward sustainability. Mohit notes, “As we’ve moved to incorporate more alternative fuels into our fleet, Eicher has played a significant role. We have introduced CNG trucks into our operations, and the transition has been smooth, thanks in part to Eicher’s readiness to support us with the necessary vehicles and technology. All new purchases are now CNG trucks, reflecting our commitment to sustainability.”
With 280 of Southern Cargo’s 400 trucks being Eicher, Mohit explains how this choice aligns with the company’s long-term goals. “The operational costs associated with Eicher trucks are considerably lower than their competitors. Initially, while the cost of CNG trucks might be around 10% higher, the operating savings range between 10-15%, making it an economical choice over time.”
Sital adds another critical point regarding the financial aspects of the partnership: “The resale value of Eicher vehicles is significantly better than other brands. After 3 to 4 years, we can sell our Eicher trucks for a fair amount, which facilitates reinvestment into our fleet. This financial advantage enhances our overall business model, as it allows us to maintain a robust and modern fleet while also availing GST inputs of 28% during the sale.”
The collaboration has also fostered a close working relationship with Eicher’s dealer partners. Mohit explains, “We have developed a deep relationship with our dealer partners over the years. This connection allows us to drive all our purchases, even when operating across multiple states, through our main dealer partners. Their support ensures that we receive prompt service and that our operational needs are met efficiently.”
As Southern Cargo looks to the future, the partnership with Eicher remains a cornerstone of its strategy. “As we expand into higher tonnage and larger vehicles, Eicher will continue to lead in our fleet composition,” Mohit assures. “Their ongoing development of new truck models aligns perfectly with our needs. We’re currently looking forward to introducing Eicher’s new CNG and EV models, which have been tailored to our specifications based on our feedback during the development phase.”
The collaboration extends beyond mere transactions; it embodies a shared vision for innovation and growth. “Eicher has been proactive in engaging with us for trials of electric vehicles,” Mohit states. “We are among the first to test their new models and have procured 10 units of their Pro 2055 EV vehicle. Our input is considered during the product development phase, ensuring that the vehicles meet our operational demands while also addressing broader sustainability goals.”
Future Targets
Looking ahead, both directors are optimistic about the company’s growth trajectory. “We aim to cross Rs. 500 crores in turnover by FY25-26, with an annual growth target of at least 20%,” they jointly assert. “We are also planning to expand our fleet to 1,000 trucks and potentially go public in the next five years.”
Sital concludes, “The opportunities in the logistics sector are immense. As long as we continue to adapt, innovate, and respect our partnerships, Southern Cargo Carriers will thrive. Our commitment to sustainability and technological advancement positions us well for the future.”