Blue Dart goes to ground, shifting more to B2C retail delivery

MUMBAI's Blue Dart Express, package delivery company, which claims top spot in the air cargo sector with a 40 per cent market share, hopes to lead in India's ground cargo business by 2015.


The organised air cargo segment in the country has an estimated value of INR1,481 crore (US$334.6 million) in 2009. The ground cargo business in the same period was INR1,727 crore, of which Blue Dart only holds 8.5 per cent.


Organised air and ground cargo and air freight are estimated to have reached INR3,800 crore in 2010, reports the Hindu daily newspaper. Blue Dart closed the year-ended December 2010 with revenues of INR1,148 crore, with 95 per cent of its revenues coming from the B2B sector.


The company, which operated with seven hubs for cargo handling in 2007, had grown to have 16 hubs at the end of 2010. By end-2011, it will have 20 such hubs in place.


The hubs range between 30,000 square foot facilities and Bangalore's 2,500,000 square foot site. The company operates three Boeing 737s and four Boeing 757s from seven airports.


"We will add airports in tier-2 and tier-3 towns where we see growth. We are looking at some cities in the north and some down south," said Blue Dart ground cargo marketing vice president Ketan Kulkarni.


"There are certain industry verticals using a lot of ground cargo handling, such as consumer durables, auto, FMCG IT and pharma. Our 'Grow India' strategy will see us focusing on these," he said.


The company has 5,300 vehicles on the road, with 170 serving as "network vehicles", that travelling cross country. A network of 390 retail offices (Blue Dart-DHL stores) arrayed across India with the number to increase to 1,000 by 2015.


While banking, financial services and insurance (BFSI) segments have been Blue Dart areas of specialisation, growth has also been noted in pharma, automotive and consumer durables, and for value-added services.


Blue Dart also does the last mile cash-on-delivery work for retailers such as homeshop18, indiatimes, rediff and naaptol, a business segment that has grown three times the rate of overall company growth of 27 per cent over last year, Mr Kulkarni said.


Blue Dart is priced higher than the cheapest options available in the market, but the company says B2B rates are higher than consumer rates.


The minimum cost of sending a consignment from a Blue Dart retail outlet for an individual consumer is over INR250.


"Blue Dart has always operated at a premium price and our consumers have always accepted us at that price, because of the value we deliver. Growing the business will be done without compromising on the premium of delivery or revenue," Mr Kulkarni said.
(Source:http://www.schednet.com)