Introduction
The recently inaugurated Mumbai Trans Harbor Link, also known as Atal Setu, has become India’s longest sea bridge. With an estimated daily usage of over 70,000 vehicles, this bridge is set to significantly reduce travel time from 1.5 hours to just 20 minutes. Atal Setu aims to provide seamless connectivity between Mumbai Port, JNPT Port, and the Mumbai airport. It boasts a maximum speed limit of 100 km per hour and has been designed to withstand cyclones and earthquakes. This bridge serves as a symbol of India’s growing logistical prowess and its rapidly evolving economic landscape.
The Logistics Industry Landscape in India
In the past, long queues of trucks loaded with cargo at interstate borders and national highways were a common sight in India. This was primarily due to state-specific duties in the pre-Goods and Services Tax (GST) era. However, another significant factor contributing to clearance delays was the extensive documentation and cumbersome procedural bottlenecks. Moving goods from the source point to their destination in India has always been an expensive affair, with logistics costs accounting for around 13-14% of India’s GDP. In comparison, European countries have logistics costs standing at approximately 8-9% of GDP. The impact of the logistics network in India extends beyond just costs. It affects inflation, export potential, and the quality of transported goods. Recognizing the importance of this sector, there have been substantial investments and fiscal reforms in recent years. Initiatives such as multimodal connectivity, dedicated freight corridors, logistics parks, drone deliveries, and e-commerce policies are expected to provide long-term tailwinds to key logistics players in the country. Additionally, the upcoming national logistics policy is anticipated to be a game-changer.
Blue Dort Express: India’s Top Cargo Aviation Company
Amidst the changing logistics landscape, Blue Dort Express has emerged as India’s leading cargo aviation company. With a focus on time-sensitive shipments, Blue Dort Express operates through an integrated ground and air transportation network. The company commands over 50% of the market share in the organized air express segment and has been gaining market share in the ground express segment as well. Blue Dort Express has shown resilience to economic shocks, even amidst the challenging years of the pandemic. The company managed to grow revenues through improved volumes and realizations by leveraging its dedicated aircraft fleet service. Unlike pure road transporters, Blue Dort Express’s operations were not severely impacted by the pandemic, thanks to its digitization initiatives and new customer additions.
Expanding Fleet and Services
To meet growing demand, Blue Dot Express increased its fleet of Boeing aircraft from 6 to 8 by adding two Boeing 737 freighters. The company also operates scheduled Boeing 757-200 Freighter services, providing a larger capacity than any other domestic airline in the country. Blue Dort Express offers a range of value-added services, including cash on delivery and freight on delivery. Furthermore, Blue Dort Express is exploring the use of drones for deliveries and plans to deliver shipments weighing over 300 kg using this technology. The company’s focus on technological advancements showcases its commitment to staying at the forefront of the logistics industry.
The Role of Cargo Aviation Companies
While we often think of traditional logistics players, cargo aviation companies also play a crucial role in India’s logistics landscape. Blue Dort Express, India’s top cargo aviation company, caught our attention when it expanded its fleet of Boeing aircraft last year. With the addition of two Boeing 737 freighters, Blue Dort now operates a fleet of eight aircraft, including scheduled Boeing 757-200 freighter services. This gives it a larger capacity than any other domestic airline in the country. Blue Dort Express specializes in time-sensitive shipments through an integrated ground and air transportation network. The company holds more than 50% market share in the organized air express segment and has been gaining market share in the ground express segment as well. In the financial year 2023, the air and ground express segments contributed approximately 65% and 35% of revenues, respectively.
Blue Dort expects the ground express segment to grow at twice the rate of the air express segment and plans to increase its share of ground express in its overall mix to capitalize on this growth opportunity.
Resilience and Growth
Despite the challenges posed by the pandemic, Blue Dort Express has shown higher resilience compared to its competitors. It has managed to grow revenues through improved volumes and realizations with its dedicated aircraft fleet service. Unlike pure road transporters, Blue Dort’s operations were not severely impacted by the pandemic. The company’s digitization initiatives and customer additions ensure a healthy volume outlook. Furthermore, a robust demand environment in both the business-to-business (B2B) and business-to-customer (B2C) segments bodes well for the company’s future. Blue Dort Express aims to expand its air fleet capacity to meet growing demand requirements. The company targets achieving 2/3 of its revenue from air express cargo. With the strong contribution of logistics players to India’s economic maturity, Blue Dort Express is well-positioned to benefit from the tailwinds in the logistics sector over the long term.
Conclusion
The Mumbai Trans Harbor Link, Atal Setu, has emerged as India’s longest sea bridge, revolutionizing connectivity between key areas in Mumbai. This bridge is expected to have a significant impact on reducing travel time and improving logistical efficiency. India’s logistics landscape has undergone substantial transformations in recent years, with various initiatives aimed at enhancing connectivity and reducing costs. In this landscape, cargo aviation companies like Blue Dort Express play a vital role in ensuring time-sensitive shipments and contributing to the overall growth of the logistics sector. With its expanding fleet, focus on ground express services, and resilience in the face of challenges, Blue Dort Express is well-positioned to capitalize on the opportunities presented by India’s evolving logistics industry. With its expanding fleet, value-added services, and focus on resilience and innovation, Blue Dort Express is poised to benefit from the tailwinds that the logistics sector has to offer in the long term. For more information on India’s top logistics players, check the financial profile of Blue Dort Express on the Equity Master screen.
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