HomeBUSINESSDB Schenker eyes acquisitions to expand logistics ops in India

DB Schenker eyes acquisitions to expand logistics ops in India


NEW DELHI : Germany’s DB Schenker plans to acquire companies in India to expand operations with a focus on building end-to-end contract logistics operations and picking up a larger share of delivery contracts from e-commerce players.

The company, owned by the Deutsche Bahn Group, operates e-commerce deliveries internationally but proposes to launch a pilot in India soon to gain a foothold in the growing business, Kinjal Pande, chief executive for India and the Indian sub-continent at DB Schenker, said in an interview.

Pande said that the pilot would be an inbound delivery service for a global e-commerce company.

“We are looking at piloting our first in-bound delivery on air freight to see how we can do the end-to-end movement. Once that starts in full flow, we can look for potential partnerships in this space. But, currently, we are doing it internally, with tie-ups with a local technology company,” Pande said.

On acquisitions, Aditi Rasquinha, executive vice-president, head of ocean freight, Asia-Pacific region, said that acquisitions had been a big part of general growth for the company across markets, and that the strategy will be no different for India, where the company sees big potential to grow its warehousing capabilities by taking over domestic entities and operations.

The company has nearly doubled its warehousing space in the country in the past five to six years, and Pande said that DB Schenker would continue to go on that trajectory for the next couple of years as well.

“Inorganic growth for the company in India will come from the domestic logistics space. So, it could be acquisitions in contract logistics, clearances, technology and trucking. Most of these acquisitions will be made keeping the plan of the company to expand to tier-II and tier-II cities for provision of end-to-end logistics solutions,” Pande said.

Besides, the company is also planning to expand its air freight operations in India through the use of charters.

Right now, there are two services a week from south India and one from Mumbai.

Pande said that air charters of the German logistics operator will soon start flying from China to an identified destination in India, while the plan is also to bring a charter to New Delhi.

Talking about the impact of ocean and air freight operations due to the Russia-Ukraine crisis and the possibility of a recession setting in internationally. Rasquinha said that the conflict raised freight rates, but it is now on a steady and slow decline.

“I don‘t see businesses return to pre-coronavirus levels for the next two years, primarily because after the covid pandemic and the conflict situation, the International Maritime Organization (IMO) 2023 will set in that will mandate strict greener practises for vessels. This could create some disruptions as the industry is still preparing to follow stringent green norms,” Rasquinha said.

Rasquinha added that freight rates would also remain moderately firm for some more time due to International Maritime Organization regulations, but it would be nothing like the first quarter of 2022 when rates shot up due to disruptions created in movement on account of the Russia-Ukraine crisis.

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