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PURCHASE 74 Annual 2012

Blue Dart has

always been a

brand

customer

centric

With the Indian Logistic Industry rapidlyevolving, , a customer centric brand

has been identifying new opportunities

through constant research on customers,

industry verticals and macro economic trends.

In an e-interview with Purchase,

Managing Director

tells us that the company is focused on

innovations and have introduced several

customized products to meet specific

customer needs. Blue Dart today drives

market leadership through its dedicated

people force, state-of- the-art warehouses

and cutting-edge technology and a wide

range of innovative vertical specific products

and value-added services to deliver

unmatched standards of service. With a

mission to establish continuing excellence in

delivery capabilities, their vision is to remain

a dominant force in the industry and

consistently achieve higher growth.

Blue Dart

Mr. Anil Khanna, , Blue Dart

I N T E R F A C E

Mr Anil KhannaManaging Director

Blue Dart Express Ltd

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Give us a brief overview of the present scenario of the logistics industry in India?

Outline the services offered by your company and their service advantage?

The Indian logistics industry is evolving rapidly and the overall economic growth is also having asignificant impact on the supply chain operations. Rising consumer spending coupled with an increasing

Indian middle class is driving the demand for goods and services, which is not only coming from urban

cities but also from Tier II and Tier III towns.

The logistics industry is a key enabler in facilitating trade and commerce because of the time-sensitive

nature of most goods and increasing demand for reliability, efficiency and speed. The opportunities are a

plenty for the industry in India as the current logistics spend in India is 13% of the GDP compared to a

notably lesser percentage of the same in more developed economies. However, the need for the highest

levels of efficiencies still exists.

The demand for express services is surging with each passing year and customer expectations have also

risen tremendously. Today, the express industry provides integrated, value-added, t ime-bound, door-to-door

delivery of documents, parcels and merchandise. It supports industries such as e-commerce, electronics,

telecommunication, IT, banking, retail, auto-components, textiles and apparels, gems and jewellery and

pharmaceuticals. Moreover, with India recognized as an outsourcing destination, manufacturing sectors

such as textiles, automobiles and pharmaceuticals are likely to witness increased activities in the medium to

long term. Also, in order to maintain competitiveness, companies operating in these industries are expected

to outsource their logistics requirements to third-party logistics (3PL) service providers. The logistics service

providers have evolved in India and now there are large operators who offer complete supply chain

solutions across industries.

Besides, the opening up of banking, insurance, telecom, retail and e-commerce sectors would boost the

demand for value-added express services in India, as these are major user industries. Apart from the usual

logistical activities such as transportation and warehousing, these players also provide value added services

such as customs clearance, freight forwarding, import-export management, inventory management,

assembly / installation, packaging and labelling, distribution after sales support, reverse logistics etc.

The benefits of logistics outsourcing are being understood and appreciated and also the realization that

apart from cost, customer service and delivery performance are also important to remain competitive on a

global level where logistics are much more evolved and advanced.

Blue Dart has always been a customer centric brand. We keep identifying new opportunities in the market

place through constant research on customer, industry

verticals & macro economic trends. This regular monitoring

and analysis makes us an intelligent organisation, resulting

in new product initiatives & solutions that are customer-

oriented.

Some of the services offered by Blue Dart are:

Domestic Priority: The fastest, most reliable door-to-door

service. Domestic Priority is designed to cater to documents

and small packages less than 32 kgs with day definite door

deliveries.

Dart Apex: Blue Dart's efficient, door-to-door, on-time

delivery solutions for commercial shipments that require

regulatory clearances and specialized handling through the

distribution chain.

Dart Surfaceline: is an economical, door-to-door, ground

distribution service to for shipments weighing 10 kgs and

above. It offers a cost-effective logistics option for less time-

sensitive shipments

Dart Surfaceline Plus is an economical, multimodal,

door-to-door, distribution service within India. It offers a

cost-effective logistics option for less time-sensitive bulk

shipments. The product essentially bridges

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the gap of transit time between Dart

Suraceline and Dart Apex in the location it

offers its service.Airport-to-Airport: is an air freight service

available on the flights operated by Blue Dart

Aviation between the airports of Kolkata,

Delhi, Mumbai, Bangalore, Chennai,

Hyderabad and Ahmedabad.

Charter Services: offer palletized capacity

for carriage of urgent and large volumes to

eighteen airports in India and four

international airports in the region.

Interline Services: Blue Dart has customs-bonded warehouses and dedicated customs personnel to

facilitate speedy and efficient trans-shipment of international loads among the major metros.

Smart Box (Air and Ground Express): is a ready, convenient, economical packaging unit, priced to

include door-to-door delivery service within India. Smart Boxes are available in sizes of 10kgs and 25kgs to

accommodate a variety of products

Express Pallet: is a convenient, flexible yet economical way to send goods within India. It's a special

wood-free palletized packaging, which can be 'built' to accommodate shipment as small as 50kgs or as large

as over 100kgs.

Blue Dart, in line with its focus on innovation, has also introduced several customized products designed

to meet specific needs. These include:

Rakhi Express: that ensures delivery of a sister's 'Rakhi' to her brother through all weather conditions on

the day of Raksha Bandhan.

Student Express: offers a 50% discount on all documents sent to any University/ School / College etc.

Temperature Controlled Logistics (TCL): Designed specifically for the Pharmaceutical sector, TCL offers

packaging solutions ensuring safe and compliant transport in frozen, chilled and ambient conditions.

Using appropriate cooling mediums, the packaging performance delivers temperature for the range -

20C, 2 - 8C and 15 - 25C for varying distribution times.

GOGREEN Carbon Neutral Service: Blue Dart's GOGREEN Carbon Neutral Service allows customers to

neutralize their carbon footprint by paying a marginal offset charge over and above their shipping rates.

The offset charge is calculated on shipment / weight. Carbon emissions from customer shipments will beoffset by reinvesting in environmental protection projects.

Value Added Services

DOD (Demand Draft on Delivery): The invoice value of the (shipper) shipment will be collected from the

consignee in the form of a Demand Draft at the time of delivery. The Demand Draft collected from the

consignee will be promptly returned to you (shipper) to complete the transaction.

FOD (Freight on Demand): The freight of the (shipper) shipment will be collected from the consignee at

the time of delivery.

FOV (Freight on Value) - Insurance Arrangement: Blue Dart can facilitate arrangements to insure the

(shipper) goods through an insurance company. In an eventuality of the shipment being damaged or lost

while in Blue Dart's custody, Blue Dart would assist (shipper) in the claim process and ensure the claim is

settled in the minimum possible time after shipper/consignee handover the required documents to the

insurance company.

COD (Cash on Delivery): The invoice value of the (shipper) shipment will be collected from the consignee

in the form of cash at the time delivery (maximum value of Rs.10,000 per shipment). The Cash collected

from the consignee will be returned to the (shipper) to complete the transaction.

Blue Dart, South Asia's premier express air and integrated transportation & distribution company, offers

secure and reliable delivery of consignments to over 33,665 locations in India. As part of the DP DHL Group

(DHL Express, DHL Global Forwarding & DHL Supply Chain), Blue Dart accesses the largest and most

comprehensive express and logistics network worldwide, covering over 220 countries and territories and

offers an entire spectrum of distribution services including air express, freight forwarding supply chain

solutions and customs clearance.

We provide door-to-door solutions where air transportation is one component, the other being an

integrated air-ground infrastructure to enable last mile deliveries within a short time frame and at globally-

benchmarked quality levels.

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What is your business model and how has it evolved over the years?


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The Blue Dart team drives market leadership through its motivated people force, dedicated air and

ground capacity, state-of-the-art warehouses and service centres, strategically located retail stores, cutting-

edge technology, wide range of innovative, vertical specific products and value-added services, to deliverunmatched standards of service quality to its customers across the vast expanse of Blue Dart Country. In

2011, Blue Dart handled 99.66 mn shipments with a service quality of 99.96%.

With more than 28 years experience introducing innovations and setting standards for the domestic

delivery of time-sensitive shipments in the India and around the world, Blue Dart is the leading domestic

courier and express partner of choice for individuals and businesses providing trust and loyalty to their

customers and delivering consistent high quality services for several years.

Some of our 'firsts' include:

Domestic and International on-board couriers

Hub-and-spoke system

10.30 a.m. delivery service

Early adopter of technology

Introduction of Employee Satisfaction Survey (ESS), Customer Satisfaction Survey (CSS) in the domestic

market

First Choice and Net Promoter Approach

E-mail network

Time definite express door deliveries countrywide

Domestic Cargo Aviation Infrastructure

Certified to the ISO 9001 standards (and later to the ISO 9001-2000 and ISO 9001-2008 standards)

An e-commerce website

Smart Truck and GOGREEN Carbon Neutral Services

With inflation rising, there is no denying that cost pressures have been increasing. Though the express

industry is highly dependent on the economy, primarily manufacturing, our published financial results have

been good. Blue Dart performed reasonably well on all fronts and capitalized on its strong brand equity and

focussed growth plans, customer loyalty, service quality, strong workings with group companies. Though

the express industry is highly dependent on the economy, primarily manufacturing, our published financial

results have been good. Blue Dart posted Rs.12,224 lacs profit after tax for the year ended December 31,

2011, compared to Rs 9,437 lacs profit after tax for the year ended December 31, 2010. Income fromOperations for the year ended December 31, 2011 was Rs.148,960 lacs, compared to Rs. 114,741 lacs for the

year ended December 31, 2010.

One of the reasons for this is that we introduced a lot of innovative products, technology and had very

clear sector, geographic and SME focus:

Innovative Products: Blue Dart recently launched India's first end-to-end GOGREEN Carbon Neutral

Service that allows customers to neutralize their carbon footprint by paying a marginal offset charge over

and above their shipping rates. Carbon emissions from customer shipments will be offset by reinvesting in

environmental protection projects and a Blue Dart certificate will be issued to the customer annually that will

mention the total amount of CO2 offset for the customer. This new service, a GoGreen initiative is an

extension of DPDHL's global environment protection program launched in 2008 and will provide customers

in India with an environmentally responsible shipping option.

Innovative Technology: We launched Smart Truck an intelligent pick-up and delivery vehicle that

combines a number of innovative technologies including a route planner. Piloted by Blue Dart in Bengaluru,

the Smart Truck technology is designed to provide solutions to urban logistic challenges such as traffic

restrictions, density and clogging, while ensuring environmental protection and fulfilling customer needs for

on-time delivery. These vehicles compute delivery deadlines to calculate the ideal sequence for shipments,

and use real-time GPS to avoid jams and optimise routings, thereby enabling flexibility and last-minute pick-

ups. This allows the Smart Truck to provide better customer service and a more cost-effective operation as a

result of optimum use of vehicles with less wasted miles.

Sector Focus: There are certain sectors that do not get impacted by a

slowdown - sectors like health sciences and the spare parts segment of

the auto sector. Apart from this, we have identified high-growth verticals

like e-commerce, where we will look for a large market share.

SME Focus: We identified Small and Medium Enterprises (SMEs) as

another growth lever as they offered a good business opportunity.

Geographic Focus: In terms of expansion; we concentrated on

expanding our reach to tier II and III towns and cities where we currently

do not have presence.

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Are cost pressures affecting the overall performance of the company, and measures adopted to maximize your business?

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Opportunities and challenges facing the logistics industry in India and measures required to enhance efficiencies in service?

Growth drivers to the logistic industry in India?

How efficiently has the logistic industry harnessed the power of technology to its advantage?

The opportunities are aplenty for the express industry in India as the current logistics spend in India is13% of the GDP compared to a notably lesser percentage of the same in more developed economies. In an

increasingly competitive environment process optimization and cost management have assumed key

competitive advantages as companies have realized that scale is the key and a significant differentiator. The

key success drivers of the express service provider largely depend on the size and scale of operations,

nation-wide coverage, dedicated air and ground infrastructure like aircraft, vehicles, facilities and ground-

handling capability apart from superior transit times and a loyal base of customers.

The growth in the industry

is largely driven by the

increase in trade, government

policy reforms, increased

spending on infrastructure,

and the overall economic

growth driven by the

domestic consumption and

growing affluence. At present,

the express industry in India

is still unorganized and

fragmented. The industry

faces several issues like high

logistics costs, inadequate

infrastructure, capacity

constraints, low usage of

technology, complex tax laws,

over regulation, policy issues

and lack of skilled manpower.

Infrastructure plays an

important role in

development. Road

infrastructure is a bottleneck

though over 70 % of freight

transportation in India is viaroads. Advances in IT

solutions will make tracking and tracing of shipments much more seamless than it is today. The

implementation of the proposed uniform Goods & Service Tax (GST) regime may see a shift of trend in the

movement of goods. Also better understanding on Government's part about the role played by logistics in

order to give it an industry status and less cumbersome regulatory requirements of ST/Octroi/Customs will

lend an added impetus.

India's air express industry looks promising. To enjoy the full benefits of integrated air express services,

the government needs to address restrictive civil aviation agreements, cumbersome customs clearance

procedures, and restrictions on investment in ground transportation operations. A strong commitment from

private sector operators coupled with determined efforts by the government and regulators will see a

transformation for the sector and optimize cost.

Infrastructural improvements in terms of better support systems for transport via air, road, rail and even

ports will facilitate the express logistic industry's contribution to the Indian business. As cargo infrastructure

at airports is being developed, albeit at a slow pace, movements by air will account for a large share of the

inter-modal transport of express cargo. The use of technology will continue to be a critical success factor

and key differentiator. The need for single-window solution provider will gain in importance as customer

look to further streamline their logistics processes.

As large businesses look at outsourcing their logistics needs to focus on their core business, logistics

express players will gain more momentum and importance. This augurs well for the industry.

IT is and will remain to be an important factor and a key differentiator to any logistic service provider.

Innovations in the IT space has contributed largely to not only increasing profitability but also enhancing

customer satisfaction in an industry like ours. The applications from incorporating IT systems are not only


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limited to air cargo movement and invariably affect the entire logistics universe in a similar manner. IT

greatly improves the tracking and tracing of shipments and the various interactions have become seamless

due to automation. The customer satisfaction levels have also jumped big time from the traditional sense oflogistic service providers.

Blue Dart has been the only Indian air express company

that has invested extensively in Technology infrastructure to

create differentiated delivery capabilities, quality services and

customised solutions for the customer. We have one of the

largest private computer networks in India. We are the only

Indian express company to have indigenously developed

tools that include an advanced state-of-the-art track and trace

system for all our consignments. Consignments are scanned

from pick up to every transit point till delivery, using bar

coding and laser scanner technology, transmitting updates

automatically to our database. This enables our customers to

receive real-time, complete and accurate information about

their consignments.

IT has enabled us to incorporate efficient processes which not only helps in increasing the bottom line of

any organization; but also provides an environmentally conscious direction, giving the logistic service

providers with an option to reduce the CO2 emissions and thereby decreasing the carbon footprint eg. our

Smart Truck, the intelligent pick-up and delivery vehicle.

Going forward we will witness advances in IT solutions which will make tracking and tracing of

shipments much more seamless than it is today. Interactions will become much more automated; web-

based solutions will provide real time information and better customer relationship management across the

entire supply chain.

DHL Express (Singapore) Pte Ltd. owns 81.03% stake in Blue Dart and the coming together of the world's

No. 1 international air express service provider and South Asia's premier courier, and integrated express

package Distribution Company has created a force to reckon with in the Indian logistics space. Blue Dart in

association with its group companies DHL Express, DHL Supply Chain and DHL Global Forwarding reaches

33,665 locations in India and 220 countries worldwide through its integrated air support and ground

network, with over 1,911,263 sq. ft. of facilities which include 7 aviation hubs and bonded warehouses, 12express hubs, 69 domestic warehouses, dedicated air services with a fleet of two Boeing 737 freighters and

four Boeing 757 freighters, 7355 vehicles and last but not least over 7,898 passionate and dedicated Blue

Darters. All of this together results in secure, reliable, time-definite distribution thereby simplifying our

customers' lives.

There is a growing concern of Green factors in logistics industry globally. In itself the logistics industry

has one of the severest challenges in the role of Green sustainability. The important areas of Green Logistics

are being able to measure your footprint and create suitable strategies to reduce carbon or particulate

emissions. The improvements in CO2 efficiency for DHL Express India and Blue Dart's operations is

impressive as the business already registered significant increases in CO2 efficiencies in 2009 due to

abatement measures put in place. DHL Express India achieved a massive 29% improvement in 2009, and

Blue Dart achieved 10% improvement in the same year.

Blue Dart - DHL's GoGreen program commits us to continually address issues that affect the environment

Do you have any strategic alliances?

Any energy efficiency measures adopted in your operations?

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and seek innovative solutions to reduce our carbon footprint and provide better services to customers. In

fast-growing, emerging markets such as India, those needs are critical and will grow more so as the world

continues to urbanize and megacities proliferate. The Smart Truck, the intelligent pick-up and deliveryvehicle which computes delivery deadlines to calculate the ideal sequence for shipments, and also uses real-

time GPS to avoid jams is an ideal solution to address this as tour planning would ensure less duration of

the vehicle on the road as well less carbon emission,

We constantly endeavour to create awareness amongst our employees to protect environment by using

the available natural resources judiciously. Observing global days like Earth Hour, Earth Day and World

Environment Day with activities like 'No Printing', 'Carpooling' and 'Share Green Tips', etc. help drive the

message across all our offices. At our workplace we practise energy conservation with the Power Saver:

Lights Off initiative where all offices across Blue Dart Country switch off lights for 15 minutes daily and for an

hour on the last Saturday of every month.

Our vision is to be the best and set the pace in the express air and integrated transportation and

distribution industry, with a business and human conscience. We commit to develop, reward and recognise

our people who, through high quality and professional service, and use of sophisticated technology, will

meet and exceed customer and stakeholder expectations profitably.

We want to establish continuing excellence in delivery capabilities focused on the individual customer.

Blue Dart would like to bring immense value to internal and external stakeholders by incorporating high

benchmarks and quality standards in every aspect of business. This would ensure that Blue Dart advances

as a Brand with a clear focus on fundamentals and stands for Quality, Consistency, Reliability, Passion and

Commitment. With this holistic approach, Blue Dart will remain a dominant force in the industry and

consistently achieve higher growth in the years to come.

What is the vision and mission of your company in India for 2020?


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