'Indian Logistics Market Has Been Pegged At USD 215 Billion'- Vivek Juneja, Founder And MD Of Varuna Group
In an interview with BW Businessworld, talks about logistics, warehousing, challenges, learning, opportunities, growth and much more.
Brief us about your business model. How did you get the idea for this business? How was the journey so far?
Varuna Group offers services in two of its key lines of business – logistics, and warehousing. As the owners and operators of the country’s largest dry cargo container fleet with 1800+ vehicles coupled with robust digital infrastructure, Varuna Group focuses on operational excellence and providing customers with a seamless and reliable logistics management and warehousing experience. We also offer automated primary, secondary, and expedited transportation services alongside project cargo services under our logistics wing. We maintain a digital-first approach that involves customized ERP (Enterprise Resource Planning) for digitized indents, payments, loading point operations, POD, and enhanced visibility through real-time vehicle tracking.
With a PAN India network of 22 warehousing facilities totaling 1.2 million sq. ft. equipped with cutting-edge technology and 24x7 security surveillance, Varuna Group follows a customer-centric approach for consistent, reliable, and efficient inventory management. The company has its multi-user facilities spread across 5-lakh sq. ft. with the largest one at Shambhu Naka (Rajpura), Punjab, the rest are dedicated storage spaces and are also used for value-added services such as labeling, reverse logistics, quality checks, refurbishing, etc., for an efficient, all-encompassing experience. Frontrunners across verticals rely on our expertise, industry experience, and highly skilled workforce that uses a dedicated Warehouse Management System (WMS) and Transport Management System (TMS) to provide them with real-time data for efficient inventory management and cost optimization.
Our journey, since we established Varuna Group in 1996 in Bareilly with merely 2 trucks, 3 employees, and our founding doctrine of customer-centricity, operational excellence, and transparency, to scaling up the business, has been remarkable and filled with learning. During the initial phase, we were a contractor to an express service provider in New Delhi but by 2011, we had built an organization with a fleet of 500+ trucks with a PAN India network and we had even expanded into the warehousing space. Over the past 25 years, Varuna Group’s legacy has only grown with innovation, a digital-first approach, and operational excellence being at the heart of our strategy.
What challenges are you facing in running your business amid the second wave of COVID?
One of the major challenges we faced was the lack of manpower availability due to the mass reverse migration, where thousands of workers migrated back to their hometowns/states in the wake of prolonged lockdowns over the past year. Varuna Group has always remained committed to operational excellence and customer-centricity while also prioritizing safety for both customers and employees alike. To ensure all our employees are safe, we are encouraging employees to get vaccinated and help them with vaccination centres while also granting them vaccination leaves. One significant achievement in the industry overall has been the quick adoption of technology on a large scale which has made the sector enhance operational efficiency and cater better to customers alongside improving the safety quotient with the introduction of contactless deliveries, etc.
What has been the biggest learning so far?
Our 25-year journey has been filled with learning, opportunities, and growth despite some challenges but since we have always prioritized innovation and leveraging technology, we have been able to overcome the challenges efficiently and further augment our offerings. Some of the key learnings throughout the 25 years have been that of consistency of service quality, transparency with clients, and delivering on the commitment.
What is the market size and opportunities? How do you look at expansion?
The logistics sector is one of the fastest-growing and the pandemic has only further underscored the significance of streamlined logistics. According to research reports, the approximate size of the Indian logistics market has been pegged at USD 215 billion, and given that 14% of the country’s GDP cost is logistics, and Varuna Group alone is doing business of INR 700 Cr, it’s safe to say that the market is huge. Besides, there’s also the valuation of third-party logistics and shared logistics, separately so the market is no doubt growing exponentially.
As for the opportunities, considering the size of the industry, the growth prospects and opportunities are abundant. There is plenty of scope to digitize the entire end-to-end operations, especially in tactical and operational decision making, routing, fleet optimization, data analysis, strategic planning, and updating legacy systems. Overall, there is plenty of scope for leveraging technology to augment operations and reduce the dependability on manpower. Increased technology adoption will also ease the burden of monotonous tasks from human resources, allowing them to focus on more important tasks.
Varuna Group has grown tremendously over the years and we currently have over 12 lakh sq. ft. of warehousing space in 22 locations in the country. We are planning on expanding this further by building 30+ well-equipped, automation-driven Grade A+ warehousing facilities in the next 5 years.
Have you witnessed any major changes in the logistic sector in the second wave of COVID?
There is no doubt that the logistics industry has undergone a significant transformation in the last 18 months and this has majorly been driven by accelerated technology adoption and digitization due to the pandemic’s impact. For instance, physical copies of documents such as lorry receipts were crucial yet tedious to keep track of. However, today, these are done and stored digitally. Technology has been the key to overcoming the challenges posed by the global crisis, especially introducing contactless logistics which was one of the major milestones as it streamlined operations and helped in optimizing time, cost, and manpower.
While safety has always been a top priority, the pandemic brought it to the forefront. Varuna Group has always retained a sharp focus on safety and we are actively encouraging people to get vaccinated while ensuring employees adhere to the best practices of hygiene. In the long run, vaccinated staff and adhering to safety guidelines will be beneficial, and with cutting-edge technologies, the industry will be well-equipped to overcome any challenges in the future. Moreover, there is also more flexibility and scalability in the sector, thereby enhancing the end-to-end efficiency.
How has the Logistics sector evolved in the past 25 years from your lens?
The industry has undergone a massive transformation, going from zero visibility to 100% visibility, at least for players with an organized business model. Previously, there were also rampant malpractices of overloading, lack of stringent regulations, etc. However, with the introduction of GST and E-way bills, the industry’s functioning has become more structured.
Apart from this, technological penetration has been one of the most significant aspects to completely transform the logistics sector over the years. Previously, every function in the logistics spectrum was done manually and was not only time-consuming but tedious and required additional costs and manpower. However, with digitization and technology adoption, this has entirely changed. Right from order picking to warehouse management and route mapping, Automation, AI, ML, Data Analytics, and IoT have been instrumental in increasing efficiency, allowing operational excellence.
Finally, logistics has gone from being a largely neglected industry where its significance wasn’t understood to becoming the industry in focus thanks to the pandemic with organizations realizing the crucial nature of the supply chain in the business ecosystem. Today, logistics is witnessing increased importance being given even from the government with the introduction of the National Logistics Policy that will largely benefit the sector.
How are you different from the existing competitors?
At Varuna Group, we prioritize delivering a seamless experience coupled with operational excellence and complete transparency with customers. Additionally, given Varuna Group’s expertise in the sector and being the owners and operators of the country’s largest dry cargo container fleet, we have 100% visibility even in FTL. We also maintain consistency in operational KPIs with 100% SLA achievement, a minimal in-transit damage ratio of 0.01%, and up to 50% reduction in transit time. Moreover, since operational efficiency is at the core of our business, we have a 95% on-time delivery. Varuna Group also offers flexible warehousing that customers can utilize to ensure cost optimization. All of these combined, offer us an edge over our competitors in the market.
Top sectors and companies that Varuna Group provides services to?
Over the past 25 years, Varuna Group has been the preferred integrated logistics partner for 500+ businesses across multiple industries such as Electrical, Pharma, FMCG, Chemical, Auto and Tyre, F&B, and Retail. Varuna Group’s growth has been remarkable, having gone from delivering 16 million tonnes worth of consignments in 2007 to over 436 million tonnes in 2021. Even amidst the pandemic, we managed to align our operations, and adapt to the situation and delivered shipments containing essential goods seamlessly. With robust infrastructure, we are well-equipped to handle future crises as well, if any arises.
What are your future plans, On what projects Varuna Group is working on?
In the next 5 years, we plan on expanding our Grade A+ warehousing facilities by setting up multi-user warehouses across key metropolitan locations. We also envision emerging as the leading shared logistics network operator in the country.
How does the Future of the Logistic Sector in India look like?
Undeniably, the logistics sector is poised for robust, sustained growth in the upcoming months with the increasing adoption of technology and companies taking a digital-first approach. As customer expectations evolve constantly, companies must evolve alongside this to avoid becoming redundant. Currently, the marketplace in the sector follows a B2B approach but with more players venturing into the market, the logistics sphere will likely become more all-encompassing and evolve into an aggregation model in the next 5-10 years.
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