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Mahindra Partners is the internal incubator of new businesses for the Mahindra Group,
supporting a portfolio of diversified ventures in Logistics, Retail, Luxury Boats, Steel
Trading, Clean Energy and Media, while constantly exploring newer avenues for growth,
helping the group build optionality into its system. Over the last 10 years, Mahindra
Partners has provided over USD. 1 Billion in seed and growth capital, to pursue
opportunities in new and emerging areas, while also adapting Mahindras unique
strengths in brand, governance, innovation and creative business modeling. This
internal VC arm has been a pioneer venture to accelerate the "transferability" of the
Mahindra DNA into these emerging businesses. One such venture is Mahindra Logistics
Limited (MLL), established in 2008 with a focus on Rural transportation system.
BUSINESS BACKGROUND
Mahindra Logistics is one of Indias largest 3PL solutions providers in the Indian
logistics industry which was estimated at INR 6.40 trillion in Fiscal 2017, according to
the CRISIL Report. Our technology enabled, asset-light business model allows for
scalability of services as well as the flexibility to develop and offer customized logistics
solutions across a diverse set of industries.
Mahindra Logistics is uniquely positioned as one of the few national players providing
Corporate Mobility Solutions to over 100 domestic and multinational companies
operating in the IT, ITeS, business process outsourcing, financial services, consulting
and manufacturing industries. It provides technology-enabled people transportation
solutions and services across India through a fleet of vehicles provided by a large
network of over 500 business partners. As at May 31, 2017, we operated our PTS
business in 12 cities and over 120 client and operating locations across India.
Among other awards, Mahindra Logistics has also been awarded the Best 3PL
Company of the year for 2016 by Logistics Asia.
According to a World Bank report the logistics cost in India is one of the highest in the
world (around 6%-8% of the total value of the goods in most developing countries) but
in India the total cost is about 12-13% of the total value of goods in comparison to
9-10% in other BRIC nations. Secondly, the logistics sector is also constrained by the
lack of proper infrastructure. In a report by Standard & Poor the losses due to poor
infrastructure account for about 4.3% of the total GDP and this cost may rise up to 5%
of the GDP by 2020. Further the constraints in the logistics sector are also due to the
misuse of the modes used to transport different types of commodities and the limitations
posed by certain modes of transportation.
Some other benefits which 3PL companies as well as its users stand to gain are -With
optimal utilization of transport modes, 3PL companies like MLL as well as users of our
services stand to gain on the following fronts:
Given this background should Mahindra Logistics enter into the multi modal
transportation? What are the advantages Mahindra Logistics have over its
competitors which make this move a logical next step towards its growth. What
can Mahindra Logistics do to integrate its various logistic capabilities to smartly
gain the Multi modal advantage.
Evolve a road map for Mahindra Logistics to enter the multi modal logistics and
become the biggest player in this space by 2020.