Total Transport Systems Ltd Management Discussions

Logistics is a part of supply chain in which the process of transportation of goods, services, and related information is done from the point of origin to the point of consumption. Nowadays, the logistics industry is experiencing a significant shift toward digitization and automation. Logistic companies are increasingly adopting technologies such as internet of things (IoT), Artificial Intelligence (AI), Machine learning, and robotics to streamline operations, improving efficiency and reduce cost. This includes warehouse automation, autonomous vehicles, predictive analysis, and others.

Waterways transportation is also called as inland waterways transportation and it refers to movement of goods and passenger through rivers, canals, lakes, and coastal waters. Water transport is generally cost effective for transporting large volume of goods over a long distance and it has high carrying capacity. Hence, the demand for water transportation is increasing. Such a factors are driving the growth of global logistics market in the forecast period.

E-commerce belongs to the buying and selling of goods over the internet. Shipping goods to customers is handled by third-party service providers. Logistics services are also used in the e-commerce sector to manage and oversee e-commerce businesses supply chains, allowing these businesses to focus on marketing and other company operations. As a result of the numerous benefits that logistics provides the e-commerce business, the adoption of these services is increasing significantly, boosting market expansion.

Globalization is a new factor driving market growth, with many multinational corporations outsourcing logistics results. Furthermore, logistics enables organizations to separate different stages of a manufacturing process across multiple countries. It further reduces the total cost of manufacturing.

Dynamic market conditions and improvement in the global economy are the key factors driving globalization. Attributed to rise in globalization, various activities related to trade are witnessing increase. Therefore, it is becoming difficult for manufacturers or retailers to keep track of these activities in an efficient manner. This factor is expected to drive the logistics market share of logistics companies. Moreover, development of the overseas market is a significant factor that fuels the growth of the market.

Logistics services are becoming extremely vital for price-sensitive customers who require a wider choice of high-quality products with timely delivery. Thus, increase in trading activities due to globalization fuels the growth of the logistics market.

Healthcare, manufacturing and trade & transportation segments have witnessed large-scale adoption of global logistics market.

Increasing adoption of logistics in these end user industries are expected to rise with highest market share and are identified as one of the lucrative targets for investment. As compared to the other segments, these applications possess larger market size by value. The application of logistics has expanded its reach and it is more inclined towards the developing economies. The revenue generated is mostly coming out from the developing economies rather than the developed economies. The demand for various goods is expected to increase at an exponential rate, which would further increase the demand for logistics firms in the years to come.

Asia- holds the largest market share in the global logistics market in 2015. The growth of global logistics market in Asia-Pacific region is driven by burgeoning demand in China, and India. The second highest share is LAMEA followed by North

America and Europe. The global logistics market is highly fragmented with the presence of large number of local players that occupy around 50% market share in the overall global logistics market.

The logistics industry plays a vital role in the dynamic economic landscape of India by enabling the efficient movement of goods and services throughout the countrys large territory. As India strives to realise its ambitious economic goals, including achieving a GDP of US$ 5.5 trillion by 2027, the transformation of its logistics sector emerges as a pressing imperative. Given its pivotal role in supporting various industries, from manufacturing to agriculture and e-commerce, the logistics sector faces a myriad of challenges, and offers a number of opportunities. The Indian economy, which ranks fifth in the world with a GDP of approximately US$ 3.7 trillion in 2023, grew rapidly between 2015 and 2019, averaging more than 7% annually.

The Indian logistics sector is one of the largest in the world and presents a huge addressable opportunity. The sector is critical for the countrys economic growth as it connects various elements of the economy and consists of transportation, warehousing and other supply chain solutions ranging from suppliers to end customers.

The Department of Commerce set up a logistics division in July 2017 to oversee the integrated development of the sector. Led by the Special Secretary to the Government of India, the division aims to enhance the sector by devising action plans for policy reforms and process enhancements, addressing challenges, and embracing technology.

The industry is characterised by dynamism, undergoing rapid evolution to meet escalating demands. Technological advancements, infrastructure enhancements and governmental initiatives, including GST implementation and the National Logistics Policy (NLP), are precipitating substantial transformations within the sector. Digitalisation, augmented connectivity, and the adoption of cutting-edge innovations such as Radio Frequency Identification (RFID) and Global Positioning System (GPS) are bolstering operational efficiency while mitigating costs. Furthermore, the surge in e-commerce activities and international trade is propelling demand for streamlined logistics solutions. Despite persistent challenges such as infrastructural deficits and regulatory intricacies, the industry stands poised for significant expansion, presenting domestic and international entities with opportunities to flourish within Indias burgeoning market.

Source: https://www.ibef.org/research/case-study/transforming-india-s-logistics-sector-challenges-and-opportunities

Indias logistics and supply chain industry is experiencing a major transformation, led by several government initiatives aimed at boosting the sector. Notably, implementing GST and recognising logistics as infrastructure status are two critical moves that have been instrumental in driving this change. Initiatives that have been implemented to streamline goods movement and reduce turnaround times are listed below.

Dedicated freight corridors: To facilitate the seamless transportation of goods and commodities across India, high-speed, large-capacity railway corridors – known as dedicated freight corridors – have been established. These corridors integrate state-of-the-art technology and improved infrastructure, promising enhanced efficiency, and effectiveness in logistics operations. As of January 2023, 1,724 kilometres of dedicated freight corridors have been completed. These corridors connect Delhi, Mumbai, Chennai, and Howrah, which are already part of the Indian Railways Network.

Multi-modal logistics parks: The development of multi-modal logistics parks is a strategic step towards providing comprehensive freight-handling facilities. Spread across at least 100 acres, these parks offer access to various modes of transportation, including road, rail, and air. They also provide advanced storage solutions such as mechanised warehouses, cold storage facilities, and essential services like customs clearance and quarantine zones. These parks aim to optimise logistics operations and enhance overall supply chain efficiency by lowering freight costs, warehouse expenses and vehicle congestion. Multi-modal logistics parks have been established at 35 important strategic sites, with a total investment of Rs. 50,000 crores. These parks facilitate smooth transportation of goods using various modes of transport.

Parivahan portal: To standardise processes and promote seamless information sharing across locations, the government has introduced the Parivahan portal. This digital platform encompasses ‘SARATHI for driving license processes and ‘VAHAN for vehicle registrations. Both functionalities are consolidated within a user-friendly mobile application, ‘mParivahan. This initiative streamlines administrative procedures and provides easy access to information related to registration cards and drivers licenses, facilitating smoother logistics operations.

Introduction of e-way bill: Implementing the e-way bill system mandates using electronic documentation for truckloads valued above Rs. 50,000. This digital documentation eliminates the need for physical paperwork and state boundary check posts, simplifying inter-state vehicle movement. The e-way bill initiative enhances logistics efficiency and expedites overall supply chain movement by shortening turnaround time and bureaucratic hurdles.

GatiShakti: PM GatiShakti, launched by the Prime Minister in October 2021, aims to improve logistics efficiency, and reduce costs by coordinating planning among different agencies. This initiative emphasizes breaking down barriers between departments, and integrating infrastructure and logistics networks. PM GatiShakti seeks to minimise disruptions and enhance efficiency by focusing on multi-modal connectivity and timely project completion. Through a National Master Plan, it intends to create an integrated transportation and logistics network, fostering value addition and generating job opportunities. The Minister allocated a capital expenditure of Rs. 7.5 lakh crore (USD 90.26 billion) in 2022-23 by the central government.

National Logistics Policy: The Indian government released the National Logistics Policy 2022 (NLP). NLP aims to boost economic growth by making the logistics sector more seamless and integrated. It plans to create a single-window e-logistics market and make MSMEs more competitive. This would lower logistics costs as a percentage of GDP.

Logistics Efficiency Enhancement Programme (LEEP): LEEP is designed to improve freight transport efficiency. Associated cost, transportation time, and logistics practices like goods transferring and tracking through infrastructure technology and process interventions.

Trade facilitation: The logistics industry plays a pivotal role in facilitating domestic and international trade. Efficient logistics networks enable the smooth movement of goods across borders, fostering trade relationships and contributing to economic growth.

To enhance trade facilitation and improve trade for logistics, the following steps have been taken: An Export-Import (EXIM) Logistics Group has been created.

The Ministry of Ports, Shipping and Waterways has developed a comprehensive plan for port connectivity. It aims to address infrastructure gaps at the first and last mile, ensuring smooth goods movement. Additionally, 60 projects by the

Ministry of Road Transport and Highways (MORTH) and 47 by Indian Railways have been approved to strengthen port connectivity.

The Logistics Data Bank app monitors EXIM cargo, enhancing predictability, transparency, and reliability. This lowers logistics costs and reduces waste in the supply chain.

Source:https://www.ibef.org/research/case-study/transforming-india-s-logistics-sector-challenges-and-opportunities

In the rapidly changing world of health care, collaborating with premium IT logistics companies, Logistics can improve the overall quality of health care delivery. We will help health care organizations to access the technology required for automating and streamlining their supply chain. Healthcare organizations will need to allocate additional resources to meet growing regulatory requirements and remain compliant. Extensive experience in health care logistics is required to stay on top of critical regulatory changes that make it difficult to comply with regulatory requirements. Healthcare supply chain employees must be prepared for the new health care challenges.

The health care supply chain must be agile and adaptable enough to deal with constant changes in regulatory compliance, product complexity, points of care, warehousing, and transportation. Third-party logistics providers can help health care organizations consolidate their warehousing operations to reduce or eliminate unnecessary expenses. They can assist health care organizations in developing an efficient supply chain, allowing them to save both time and money in the process. As a result, health care providers frequently demand high fill rates from their patients.

Healthcare providers are requesting lower prices for medical devices, and 3PLs can assist healthcare organizations in meeting these demands. Examples include health care companies with temperature-sensitive shipping requirements that benefit from the logistics providers existing infrastructure, advanced technology, and streamlined processes, among other things.

In the health care industry, third-party logistics companies combine shipments from multiple shippers to transport freight at maximum capacity. A health care logistics provider is familiar with the industrys standard operating procedures and can help you improve the overall efficiency of your operations like:

To secure additional capacity; a healthcare organization can use a 3PL partners carrier network; the 3PL partner can also access a wide range of solutions and options.

Healthcare products are packaged to protect patients and health care professionals from harm.

In the long run, hiring a third-party logistics provider will help you improve your services, making the investment worthwhile. Healthcare inventory management is a critical component of the health care industry.

Reverse logistics is necessary for health care products to be restocked, repaired, or recycled.

The shipping industry has become saturated due to the increased demand for final customer delivery and the demand for raw materials required to manufacture pharmaceutical products. The health care industry requires a specialized approach to logistics to ensure on-time fulfillment of sensitive medical products and equipment. This, in turn, improves customer service, material handling, inventory management and increases cost savings for the shipping partner.

Source: https://www.mccmdclinic.org/role-of-logistics-in-a-healthcare-industry/

The India Container Market is expected to grow at a significant rate of around 2% during the forecast period. The Indian container market is growing at a substantial rate mainly owing to the several policy reforms in place bolstering the container trade against the global slowdown. Improvement in transhipment numbers at Indian ports, direct port delivery (DPD), direct port entry (DPE), increase in authorized economic operators (AEOs), port community systems (PCS), digitization and automation of cargo movement through port gates, etc. are some of the key areas of improvement notably aiding the market towards an upward trend. In addition, healthy competition among major and private ports is improving the container volume growth at each port year-over-year is creating opportunities in the Indian container market.

Based on the product, the container market is classified into 0 feet, 40 feet, and 45 feet. The 40 feet segment caters substantial share of the market. Factors such as increased durability and large space offered by 40 feet containers are contributing to their high adoption across various applications. In addition, India has emerged as the worlds fastest-growing economy for the past five years owing to the rising demand for consumer goods and services.

Based on end-use, the container market is segmented into food & beverage, consumer goods, industrial goods, healthcare, and others. The food & beverages segment caters considerable share of the market. Perishable food items and beverages deteriorate quickly if exposed to humidity or extreme temperature. Reefer containers play a vital role in the transportation of perishable food items as they offer exceptionally large storage space for cooling while easy to transport and can be placed in many locations. As a result, the increasing trade of agriculture and processed food is expected to boost the demand for containers in the food & beverage segment over the coming years.

Source:https://www.giiresearch.com/report/umi1186486-india-container-market-current-analysis-forecast.html

Established in 1994, Total Transport Systems Ltd (TTSL) is a well-established Company in Indias cargo market. Through a robust network of partners, the Company has made a strong foothold in the logistics industry in the country.

TTSL specializes in logistics business keeping a focus on our core business activities namely consolidation of Export cargoes, deconsolidation of import cargoes, full container loads and air freight from India to worldwide destinations. As a non-vessel Operating Common Carrier, the Companys consolidated shipping is rated among the top customers of almost all leading shipping lines operating in the region. This reputation has ensured the Companys competitive rates & space with major liners for consolidated shipments on a regular basis. The Company specializes in the business of Airfreight, LCL Forwarding for both exports and imports. TTSL has sizeable market share in Indias LCL segment and the Company is one of the market leaders in cargo consolidation. In addition to such services, Total continues to focus on timely delivery, diversification of its service portfolio, sustained long-term relationships with its clients, and extending value-added services over and above simple logistics.

The Company is equipped with a Multi-Modal Transport Operators License for servicing its customers requirements. It also has a Federal Maritime Commission (FMC) license. These licenses help the Company scale new businesses and geographies. These efforts have enabled the Company to win long running contracts as well as garner accolades in the Industry as amongst the best groupage traffic in India. Moreover, the Company is well-positioned to leverage the changing trends in the logistics industry. It represents worlds 5th largest consolidators network named "I Cargo Alliance" with 166 offices in 89 countries

The Company has two wholly owned subsidiaries- CP World Logistics India Pvt Ltd and One World Logistics Pvt Ltd. Incorporated in 2010, One World Logistics offers services of last mile, rural mile and rural B2B delivery. The Companys robust business model along with its latest ERP and SaaS for technology back up gives an added advantage. It operates under the brand "Abhilaya" with a focus on last mile delivery especially for Amazon, Flipkart and FedEx with a target to work with other ecommerce players at PAN India level. It is an on-demand last-mile delivery solution provider offering tech-enabled delivery solutions for E-commerce, Restaurants, FMCG, Pharma and online & offline retailers.

The Company has entered into a Joint Venture agreement with Seedeer (Hong Kong) E- Commerce Company Limited to form a Joint venture entity called a Seedeer (India) E-commerce Private Limited to gain access to the world-wide global supply chain activity of Seedeer locally in India. All these services provided by the Total group help the Company to scale new heights of success. This is enabled by specialized skill sets, local insights and experience of its devoted management team.

Additionally I am pleased to announce that Company acquire a 25% equity stake by investing USD 66,750. This acquisition will be made by purchasing shares from one of the founding shareholders once the new company is established, rather than entering into a Joint Venture (JV) Agreement to incorporate a new entity. This acquisition targets a significant expansion of business operations in Africa, in Ghana, focusing on Console and Full Container Load (FCL) shipments. The Proposed

Investee Company anticipates handling 12 Console shipments monthly and 20 FCL shipments in its inaugural year, leveraging TTSLs expertise in FCL shipments to bolster its position in the African market and deliver exceptional services.

The Companys wide reach and superior logistics capabilities helps it provide end-to-end services. Such expertise and superior quality of service has led to increased confidence of its marquee clients.

The financial performance of the Company for the year ended March 31^st, 2024, is as follows:

Total revenue from operations at Rs 488.10 crore for the year ended March 31, 2024, as against Rs. 590.27 crore for the corresponding previous period, decline of 17.31%. Decreased freight rates for the first half of the year was the main reason for dip in revenue.

The EBIDTA (earnings before interest, depreciation, and tax, excluding other income) was Rs. 7.15 crore for the year ended March 31, 2024, as against Rs. 14.62 crore for the corresponding previous period, a decline of 51.09% mainly due to lower revenue and high operating costs.

EBITDA margin decreased to 1.47% in FY24 from 2.48% in FY23. Net Profit was at Rs. 1.05 crore in FY24 as against Rs. 4.61 crore in FY23. Net Profit margin decreased to 0.21% in FY24 from 0.78% in FY23. EPS was Rs. 0.78 in FY24.

As on March 31, 2024, the consolidated net worth stood at Rs. 76.17 crore and the total debt was at Rs. 33.49 crore. The cash and cash equivalents at the end of March 31, 2024 were Rs. 4.15 crore.

The net debt to equity ratio of the Company stood at 0.39 as on March 31, 2024.

Startups working on innovative ideas for logistics will go a long way in driving productivity and efficiency in the sector. However, it is the new thought process and technology that can make a huge difference. Of late, several startups are coming up with interesting ideas around AI optimisation tools or using APIs which the government is providing to integrate the Unified Logistics

Interface Platform (ULIP) and bring ease of doing business in the sectors.