Allcargo Logistics is looking for acquisitions in the field of technology and contract logistics

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Allcargo Logistics is considering acquisitions in the technology and contract logistics sectors as it looks to grow its business in India, where opportunities are likely to grow at a faster pace following the introduction of GST.

“We have started focusing more on India,” CEO Shashi Kiran Shetty told the media in an interview. “There has been nothing much happening here for the last five years. While the economy has been growing at a rate of 6%-7%, there has not been much change on the ground. There was excess capacity in transport, manufacturing, hospitality,” he said. “The cycle seems to be changing. GST will also help companies reorganise their supply chain management.” The company has set aside Rs 200 crore for acquisitions. It has made 12 acquisitions so far. Currently, its India business accounts for just 20% of Allcargo’s consolidated revenue; its global business — consolidated last year under ECU Worldwide — contributes the rest. The implementation of GST on June 30, among other things, would prompt companies to move to bigger, more efficient warehouses and adopt higher levels of technology across all aspects of operations to increase efficiency.

One way in which there is consolidation in this industry is through technology. I think technology will displace the middlemen,” Shetty said. “Technology companies will take over that role. As technology comes into play, it will start building an organization for some standardization,” he said. According to him, the focus will be on enabling technologies in the transportation space.