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‘India is an extremely important market for BDP’

—Mike Andaloro & Pavithran M. Kallada

 

BDP International (headquartered in Philadelphia, the US), one of the world’s leading logistics and transportation solutions providers, has been in India for nearly a decade during which it has seen steady and consistent growth. The company is known here as BDP UGL Global Logistics (India) Pvt. Ltd, following its partnership with and subsequent acquisition of Unique Global Logistics. Exim India caught up with Mr Mike Andaloro, President & COO of BDP International – a 32-year veteran of the company who rose from an entry level role to his present position – during a recent visit to India, for an exclusive interview. Joining in was Mr Pavithran M. Kallada, Managing Director of BDP

 

UGL, somebody with years of experience and success in the Indian logistics sector. Excerpts.

 

What brings you to India?

 

Firstly, we have a supply chain summit in Mumbai where we engage with clients and share relevant industry matters and best practices. This is something we hold in key locations throughout the world, among them being Houston, Shanghai, Dubai, etc. Prominent officials from Customs, consulting firms and others interact with our clients at these summits to expand their knowledge on important issues concerning trade. Secondly, I am here to meet the BDP team in India which has been growing the business quite rapidly over the years. I am also here to meet our clients and explore opportunities to capitalise on India’s growth.

 

How many years has BDP been in India? How important is this market to you?

 

BDP has been in India for 9 years and today has 13 own offices with 300 employees. Globally, we are a 52-year-old firm having presence in 40 countries as a wholly or majority owned entity.

 

India is an extremely important market for us; it is a high growth market with high GDP and a growing middle class – all the things that are right for the trade. In fact, India today has the highest growth rate in our network, whereas globally the growth rates in some of our established regions have matured. India, therefore, offers tremendous opportunities in today’s global economic environment and BDP looks forward to further supporting the logistics needs in this market. We believe that the Indian market has the potential to grow to one of the largest in BDP’s global enterprise.

 

Broadly, what are the services BDP offers to customers in India? What has been the company’s rate of growth here over the years?

 

As a leading transportation and logistics solutions provider, BDP takes great pride in our ability to solve complex logistical and supply chain challenges. India is, therefore, the perfect market for us. Our services encompass freight forwarding, Customs broking, air and ocean freight, 4PL, trucking/overland haulage, etc. We offer global services in a wide range of sectors, with special focus on chemicals and oil and gas.As I said, India is a key market for BDP, which is reflected in our double-digit growth rate here since the beginning.

 

What would you say differentiates BDP from its competitors?

 

The strength of BDP has historically been in value addition and providing customised solutions. We provide solutions as per customers’ needs. This is enabled by a strong market-facing technology platform, as we believe there is huge value in aggregating data and bringing visibility to the clients’ supply chain. In addition, we have BDPSmartVu an all-inclusive solution to vendor management and supplier logistics, which can instantly send critical information to importers, origin suppliers, as well as BDP representatives.We also extend our services beyond the traditional freight forwarding. For example, we often have BDP representatives on site with clients and also engage in clients’ ERP systems. So we offer a whole range of customised services, as opposed to a one size fits all approach.

 

Talking about technology, today we frequently hear buzzwords like digitisation, IoT, blockchain, etc. How is BDP leveraging such technological advances to enhance its services?

 

We have participated directly in blockchain initiatives, in four or five proof of concepts that have all been successful. But what we have found is that the challenge is not in the technology but in bringing multiple parties onto a single platform, a single way of working. Until that is solved, blockchain will continue to remain a series of proof of concepts. It is not a tech issue but an issue of adoption of a standard. We believe it will take a few more years till a true standard is established.

 

BDP has an internal innovation centre that looks at better use of technology and how much of it we can deploy. We are also working with third-party tech firms to help us in areas such as predictive ETAs (given the deteriorating on-time performance of carriers), better container tracking, and overall work process automation.

 

As a logistics solutions provider, does BDP own assets?

 

We are one of the pioneers in non-asset based logistics and consider it a strength. If asset-based, you would be offering customers your assets whether it suits their needs or not. We prefer to be flexible, relying on sub-contractors and strong supplier management techniques to bring the right assets to our clients.

 

We believe that our greatest asset is our personnel.

 

How do you view the current global shipping and trade scenario and the prospects for this year?

 

We are aware that some global GDP numbers are being scaled down for this year. However, for BDP we expect high single digit growth in 2019 given our customer-centric business model and services. And we believe that China and the US will reach an agreement on their trade disputes later this year, which will be good for BDP.

 

Also, the IMO 2020 fuel regulation to be implemented from next year will have a significant impact on shipping, especially on the freight rates. It will force carriers as well as shippers to take a re-look at their rate calculations and overall supply chain networks.

 

Is consolidation a reality in the LSP segment too? Is acquisition something that BDP is looking at, especially in India?

 

A lot of consolidation has happened and is happening in the liner segment. What we are now also seeing is vertical integration where players in a particular segment of logistics are acquiring firms in a different segment. A fragmented industry is ripe for such consolidation. At BDP we believe that our current footprint and existing service proposition is sufficient to grow in India. We will continue to remain a non-asset based company but will always look at new opportunities that will improve our service capabilities and shareholder returns.

 

How do you view some of the government initiatives like ease of doing business and other facilitative measures? Have they improved things in India? Anything specific you would like to see policy-wise?

 

The ease of doing business initiatives have helped with regard to trade compliance; they have made the processes pertaining to documentation and transactions easier, but more needs to done on the infrastructure front. Port congestion, cargo release protocols and bringing cargo into ports still remain constraints. Another constraint is in warehousing and distribution. There has to be a clear policy framework regarding warehousing/storage and transportation, particularly of chemicals/hazardous cargo.

 

We welcome GST. It has reduced manual intervention and brought in transparency, but has to be implemented better.

 

What is clearly required in India is a dedicated Logistics Ministry. Currently logistics players have to deal with multiple ministries for different issues. A beginning has been made with the appointment of a Special Secretary (Logistics) in the Commerce Ministry.

 

What would be your message to the Indian trade?

 

BDP, which was named one of the world’s most ethical companies last year, will continue to provide high-quality logistics solutions to its customers and focus on value addition while managing their entire logistics process.In short – we help our customers WIN!

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