India’s Mahindra Logistics Ltd. sets up first international base in Dubai, eyes growth in the Middle East region

Published: Monday, June 19, 2023

The firm is part of the Mahindra Group, founded in 1945 and is today one of the largest and most admired multinational federation of companies with 260,000 employees in over 100 countries.

By R. Chandrakanth

Mahindra Logistics Ltd. (MLL), one of India’s largest integrated logistics solutions providers, announced on May 11 the commencement of itscargo charter operations in the Middle East, headquartered in Dubai, its first international foray.

Though the company provides specialised cargo charter services around the world through its subsidiary V-Link Freight Services Pvt Ltd, this is the first time it has opened a dedicated cargo office to explore opportunities in the region.

MLL is part of India’s Mahindra Group and provides technology enabled integrated solutions for 3PL, Express and cross-border supply chain management. The company provides freight forwarding and related value-added services, serves over 55 lanes across the world.

With this launch, the company will augment freight forwarding with cargo charter operations partnering with customers in electronics, consumer durables, pharma and engineering.

The choice of Dubai, UAE as the hub for its global charter operations bears strategic importance. Over the past few decades, UAE has emerged as India’s third largest trading partner in the year 2021-22. Dubai has also emerged as a global and regional trading hub.

Mahindra Logistics will service the large Middle East region from its Dubai operations. As a neutral player entering the global air cargo charter business, the company will offer dedicated aircraft, enhanced transit time, and the expertise in end market solution development, integration with other logistics services and a strong technology interface.

Cross-border logistics business

Rampraveen Swaminathan, Managing Director & CEO, Mahindra Logistics, said, “In line with our vision of enhancing our services, we are pleased to launch our Cargo Charter operations, based in Dubai UAE. This also marks the first international foray for Mahindra Logistics. With increasing complexity in global supply chains, cross border supply chain services have become critical to supply chain resilience. The business expands our cross-border logistics business, in addition to our current freight forwarding business, providing our customers enhanced service options. The UAE, and Dubai, provide us a great launchpad to develop the business.”

Saurav Chakraborty, Head – Global Cross Border Solutions at Mahindra Logistics Limited, commented, “We have chosen Dubai as the location for our air charter brokering business due to the unparalleled access and connectivity it provides. The charter business will be an independent division serving customers and partners across multiple vertical and geographies. We estimate this will significantly enhance our integrated solutions portfolio in line with our long-term business objectives”.

Over 400 plus customers

As an integrated 3PL service provider, Mahindra serves 400 plus corporate customers across various industries like automobile, engineering, consumer goods and e-commerce. It pursues an “asset-light” business model, providing customized and technology enabled solutions that span across the supply chain and people mobility services.

MLL is part of the Mahindra Group, one of the largest and most admired multinational federation of companies with 260,000 employees in over 100 countries. It enjoys a leadership position in farm equipment, utility vehicles, information technology and financial services in India and is the world’s largest tractor company by volume. It has a strong presence in renewable energy, agriculture, logistics, hospitality, and real estate.

Continued consolidation and growth

MLL has been growing consistently and the FY23 revenues went up by 24%year on year (YoY) at Rs. 5,128 Cr (about US$ 608 million) EBITDA up 39% YoY. The company has over US$ 3 million as profit after tax during the period, up from US$ 1.8 million.The continued consolidation and growth aredriven by supply chain services in Q4 F23, which grew by 15% including acquisitions. The diversified revenue portfolio across segments offset muted growth in e-commerce and freight forwarding business revenues were impacted by downward correction in freight rates. Despite the impact of the pricing, underlying volume growth was positive in ocean exports and air imports.

Rivigo acquisition adds 19,000 pin-codes across India

MLL said the mobility business continues to see a strong uptick on airport-based services driven by higher travel and moderate pick up in employee transportation management.

During the last quarter MLL’s wholly owned subsidiary MLL Express Services Private Limited (MESPL) completed the acquisition of the Rivigo’s B2B express business, along with the associated brand and technology platforms. The acquisition expands its presence to over 19,000 pin-codes across India.

The integration is underway and is expected to start realizing cost reduction benefits from Q1 FY23-24. The integration of Rivigo’s network, technology and process capabilities, will strengthen MLL’s existing B2B express business and overall customer value proposition.

Gurgaon-based Rivigo comes in with the capabilities of a pan India B2B express network, a robust client base and a full-service technology suite. Their 250+ processing centres and branches, spanning an area more than 1.5 million sq. ft. is another strength.

MESPL also announced Sreeram Venkateswaranas its Chief Executive Officer (CEO), Sunil Singh as Chief Operating Officer (COO) and Swati Raneas Chief Financial Officer (CFO).

“We are excited about our long-term vision to grow our B2B express logistics business in India and the combined strengths of the businesses enhance our ability to create long term value for our customers. We have great confidence in the leadership team and believe they will provide the right impetus for growth,” said the MLL Managing Director, Swaminathan.

He assured the company’s continued investment in the industry, saying:”In C24 FY23, we continued to invest in our vision of becoming a customer-led provider of integrated logistics & mobility solutions. Despite slowdown in some end markets, our core 3PL business demonstrated positive traction on order intake and margin expansion, driven by our diversified market segments. Our freight forwarding business was impacted by freight price corrections but demonstrated volume growth across all offerings. The integration program of Rivigo’s B2B express business acquired last quarter remains on track to yield cost and operating synergies in the coming quarters. Continued investments in operational excellence and technology aided in operational efficiencies. During the quarter we were certified as ‘Great Place to Work’, reaffirming our commitment to building an equal opportunity, inclusive workplace. We remain optimistic of positive demand uptick in coming quarters and remain focused on consolidating and leveraging our portfolio.”

Major warehouse expansion

The warehouse space under management stood at 19 million Sq. ft. including all service lines and the company along with Ascendas-Firstspace, an industrial real estate developer, announced launch of one million sq. ft. warehouse park in Talegaon, Pune.

With comprehensive connectivity, the entire development will be spread over three phases with the first phase of 0.5 million sq. ft. to be operational by the end of 2023-24.

At the Ascendas-Firstspace Pune Talegaon-II Logistics Park, spread over 40-acres, this is the second project in the micro-market of Ascendas-Firstspace. Talegaon-II is part of the Chakan Talegaon Industrial Corridor (CTIC), which is one of the most important manufacturing clusters in India. The area has been a traditional manufacturing base for large auto, engineering, and electronics companies. The CTIC corridor is currently witnessing significant growth on account of the success of the ‘Make in India’ program.

Sanjay Bajaj, Managing Director, Logistics & Industrial, India in JLL said, “We are proud to be the transaction advisors for this unique project. This is a testimony of India logistics growth story. Outsourcing of logistics activities is a major trend with 43% of all transactions in the 3PL sector in 2022.”