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Project on Logistics

Global Sourcing and


Business
Development Project
report on

BLUEDART

Project on Logistics

Submitted by:
Akshay Chugh (21/004)

Project on Logistics

INTRODUCTION
What is LOGISTICS?

Logistics is about moving materials, information and funds from one business to
another or from a business to the consumer. It is a vital part of the business economic
system and is a major global economic activity. In fact 10-15 per cent of product costs are
logistics related. Worldwide, logistics constitutes about $2 trillion a year. For any country,
the logistics cost is estimated between 9 and 20 per cent of its GDP.
Every company dreams of achieving the seven R's - delivering the right product in
the right quantity and the right condition, at the right place, at the right time, for the right
customer at the right cost. Effective logistics management alone can make this possible.
Logistics is one of the oldest and also the newest activities of business management. It
involves combining diverse functions and service providers who may be culturally and
objectively different.
In the past, quality of products and services was the key differentiating factor for
companies operating in the same market. In due course, quality and low cost became the
winning combination.
Today, responsiveness to the customers' needs is the determining factor. An
enterprise that caters instantly to the needs of the customer is the winner. Integrated
logistics can serve as a potent tool for success in today's competitive business
environment.
Logistics is an organized process of managing the flow of merchandise from the
source of supply - the vendor, wholesaler or distributor - through internal processing
functions like warehousing and transportation, until the merchandise is sold and delivered
to the end customer.

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Logistics management aims to reduce inventory-holding costs and improve
profits, while enhancing customer satisfaction.
Anything can be ordered online, but receiving a tangible product is impossible.
The difference between e-business success and failure lies in a company's ability to
manage the logistics.

History of Logistics

The Greeks defined logistics as "the science of correct reasoning by means of


mathematics". The first modern use of the term was in the military to identify the process
of planning and coordinating the movement of army and weapon support systems. Good
logistics brings out the ability to move faster and accurately to the battlefront. If one
applies the same to the business organisation, it is one's ability to reach the product to the
consumer at the right time, right place, right quantity and at the lowest cost. On similar
lines, supply chain management will mean the network of organisations involved in the
process by which goods are moved from producer to consumer and the counter flow of
information, to manage the supply chain as a single entity.
A prominent application of logistics was in World War II where weapon
movements were coordinated to ensure success. A recent instance of massive logistics
initiatives is in the Gulf war. With increasing competition in the market place,
managements started focusing on customer services in the early 1950s in developed
markets such as Europe and the U.S. In late 1960s some of the logistics concepts were
tested. Following the oil crisis of the 1970s and the concept of just in time in
manufacturing customer-servicing standards were given more importance and new
integrated logistics models and solutions were born. The emergence of organized
distribution system by department stores and super fast courier service organisations gave
a boost to logistics concepts and strategies. Today all businesses are looking for seamless
transaction systems to co-ordinate their information and material requirements along the
value chain.

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At the micro level any manufacturing and marketing company spends 5 - 35 per
cent of sales on logistics. The major cost components are transportation, warehousing and
inventory carrying cost. Improvements in logistics get reflected in a reduction in
inventory levels, shorter delivery schedules, and improved servicing standards with
significant savings in total costs.

Logistics Management Process


Michael Porter in his famous book "Competitive Advantage'' has spoken of the

value chain approach and emphasized logistics as one of the most important tools for
competitive advantage.
The various processes and elements that are part of logistics as a discipline are:
Inbound logistics: Purchasing, Inbound transportation, Inventory Management.
Manufacturing: Production planning systems, Machine scheduling system.
Outbound logistics: Order booking process, Distribution management, outbound
transportation, and Warehouse management systems.
As customers started demanding improved servicing standards, fast cycle time has
become the key factor for business success, whether it is custom made tailoring service in
Hong Kong or development of a new car in Detroit.
Before delving deep into logistics, a look at the current business scene will be great help.

Scenario of Logistics in India


At present, companies specialising in logistics operations in India use traditional

technologies and cater to stand alone services like transportation, warehousing, clearing
and forwarding. There is tremendous scope to upgrade the technology, integrate the entire
supply chain, improve productivity levels and bring down operating costs. Any

Project on Logistics
technology that can improve productivity in transportation operations will be a great
boom to the economy both directly and indirectly with opportunities for 10-12 per cent
reduction in costs. Besides the savings on downstream users of transport will be much
higher and the cost multiplier effect on the economy will be reduced to that extent.
Given the emerging business and technological trends there are possibilities for
adoption of innovative logistics solutions specifically designed for India. In addition,
there is a requirement for an integrated strategy towards developing logistics and its
related IT infrastructure and also enhancing its industry base.
In recognition of the growing need for technology-enabled solutions in logistics in
India and abroad, many companies such as eLogistics are taking shape. In fact, there are a
dozen multinational logistics companies such as Exel, Bax Global and Menlo which have
started operations in India during the last few years.
Today logistics management in India has become complex with about ten million
related outlets to cater to the needs of 1000 million people.
The logistics market in India is estimated to be Rs. 260,000 crores and constitutes
13 per cent of the GDP. It is much higher than for the U.S. but lower when compared to
countries like China and Korea.
A reduction in logistics costs by one percentage point will mean a saving of $4.8
billion or Rs. 21,600 crores annually.
Besides significant benefits can be reaped through the multiplier effect of better
logistics on all economic sectors.

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Corporate Profile
About BLUE DART

BLUE DART is South Asia's leading integrated air express carrier and premium
logistics-services provider. It has the most extensive domestic network covering over
13,880 locations, and service more than 220 countries and territories worldwide through
its Sales alliance with DHL, the premier global brand name in express distribution
services.
BLUEDARTS vision is to establish continuing excellence in delivery capabilities
focused on the individual customer. In pursuit of sustainable leadership in quality
services, they have evolved an infrastructure unique in the country today.
State-of-the-art Technology, indigenously developed, for Track and Trace, MIS,
ERP, Customer Service, Space Control and Reservations.
Blue Dart Aviation, dedicated capacity to support their time-definite morning
deliveries through night freighter flight operations.
Warehouses at 14 locations across the country as well as bonded warehouses at
the 6 major metros of Bangalore, Chennai, Delhi, Mumbai, Kolkata and Hyderabad.
ISO 9001 - 2000 countrywide certification by Lloyd's Register Quality Assurance
for their entire operations, products and services.

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Its Competitive Advantage lies in:
Blue darts vast and unparalleled Domestic Network
Linked by some of the most advanced communications systems and positioned to
offer a consistent, premium, standardized quality of service.

A spectrum of services to provide customized solutions.


Blue dart is the only express carrier in the country today which offers an entire
range of services that extend from a document to a charter-load of shipments. Its services
are relentlessly monitored to deliver a net service level of 99.96% (as on February, 2005).

Its Customs and Regulatory expertise


Company had a dedicated team of specialists who provide the expertise for
customs as well as regulatory clearances at all States within the country, to support
seamless service to the customer.

Its Technology
Designed to enhance the reliability of our operations and process efficiency, and
add value to the customer through time and cost savings.

Its Air Network


The only one of its kind in the country today, that is focused on carriage of
packages as its prime business, rather than as a by-product of a passenger airline. A
dedicated aviation system to support Blue Dart's services is self-sustaining, with its own
bonded warehouses, ground handling and maintenance capability.

Its financial credibility


Fitch Ratings India Pvt. Ltd. has assigned the highest "F1+ (Ind)"

[F one plus

(Ind)] rating for their short term debt programme of Rs. 30 crores. Further, ICRA Ltd. has

Project on Logistics
also assigned the highest "A1+" (pronounced A one plus) Rating for their Commercial
Paper Programme of Rs. 25 crores.

Its People force


Committed, diverse and over 4,000 strong are companys most valued asset. All
companys achievements have been possible because they have a team who believes in
themselves and their company, a team with a winning attitude. Blue dart is a learning
organization, valuing self-development, and most of companys managers are
homegrown.

MILESTONES

1983:
Khushroo Dubash, Clyde Cooper, and Tushar Jani establish Blue Dart Courier Services
with a capital base of Rs: 30,000. They forge ties with Gelco Express International U.K.,
and introduce India's first international air package express service.

1984:
Blue Dart Courier Services becomes a Global Service Participant of FedEx with the
acquisition of Gelco Express International by FedEx. Blue Dart Courier Services is the
first carrier in India to provide domestic and international on-board couriers, a hub-andspoke system and a 10.30 a.m. delivery service.

1988:
Blue Dart Courier Services establishes real-time, on-line tracking for all international
shipments through COSMOS, the FedEx track and trace system.

1991:
Blue Dart Express is registered as a private limited company, and introduces its

Project on Logistics
economical logistics service option, Dart Surfaceline. It indigenously develops its
domestic tracking system, COSMAT-ITM.

1992:
Blue Dart Express Pvt. Ltd. connects its in-house domestic E-mail network, and sets up
its employee satisfaction programme - Survey Feedback Action (SFA).

1994:
Blue Dart Express Ltd. goes public with an equity offer of 2.55 million shares, at a
premium of 14 times, worth Rs: 382.5 million. Blue Dart Express Ltd. launches Dart
Apex (Domestic Air Package Express), a multi-modal, premium package delivery
service, and COSMAT-IITM, an advanced system which includes track and trace. Blue
Dart Aviation is registered as a public limited company and becomes the first private
company to receive government permission for operation of cargo aircraft in India.

1995:
Blue Dart Aviation acquires 2 Boeing 737-200 freighters and receives ATO permission.
Blue Dart Express Ltd. develops its SMART (Space Management Allocation
Reservations and Tracking) system for its aircraft, the first cargo management system in
the country. Blue Dart Express Ltd. is awarded the "Global Service Participant Sales
Award" by FedEx for outstanding sales performance.

Blue Dart, Calcutta is proud to have the office inaugurated by Mother Theresa of the
Missionaries of Charity, and Nobel Peace Prize Laureate.

1996:
Blue Dart Aviation launches India's first jet express airline. Blue Dart Express Ltd's
turnover crosses the Rs: 1 billion mark, as it expands its domestic network by entering
into strategic alliances in North, South and West India. Blue Dart Express Ltd. is the first
express company in India to receive an ISO 9001 certification, and post its website on the

Project on Logistics
internet. Blue Dart Express Ltd., FedEx and the Heart-to-Heart Foundation, U.S.A., cooperate in bringing the world's largest airlift of charity to Kolkata.

1997:
Blue Dart Express Ltd. signs agreements with leading international airlines for
distribution of bonded cargo within its network. Blue Dart Aviation launches its domestic
charter operations.

1998:
Blue Dart Aviation develops India's first Load and Trim software for its B737F flights.
Blue Dart Express Ltd. launches SMARTBOX, its economical, packaged door-to-door
product, and extends its delivery to over 1000 locations.

1999:
Blue Dart Express Ltd. moves to its state-of-the-art Administrative, Technology and
Operations Super hub, the Blue Dart Centre, at Mumbai. At close proximity to both the
international and domestic airports, encircled by four five-star hotels, and equipped with
the latest technology, the Super hub has improved efficiency and increased load-handling
capacity multifold. Blue Dart Express Ltd. Launches Power Dart 2000+, a software that
provides customers free connectivity to its database, enabling customers to track and
retrieve all information related to their shipments.

2000:
Blue Dart Aviation acquires its 3rd aircraft on lease. The aircraft is scheduled for
operations on the Bangalore-Delhi-Bangalore sector. Blue Dart Express Ltd. also
revamps its website replacing it with an interactive website to support e-trade and
commerce and facilitate customer interface on the net.

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2001:
Blue Dart launches its 3rd aircraft operations on the Bangalore-Delhi-Bangalore sector.
The Civil Aviation Ministry requisitions Blue Dart aircrafts for relief operations into
earthquake-battered Bhuj in Gujarat. Technology tools and customer software MobileDart, On-Line Pick Up and ShipDart - are developed in-house and launched. Blue
Dart declares 1:1 bonus shares. Blue Dart, Kolkata moves into heritage building, Kanak,
its new premises inaugurated by Sr. Nirmala of the Missionaries of Charity.

2002:
Blue Dart is re-certified as one of a handful of Indian companies to the new global ISO
9001 - 2000 standards for "Design, management and operations of countrywide express
transportation and distribution service within the Indian Subcontinent and to international
destinations serviced through multinational express companies". Blue Dart ends its
contract with Federal Express and signs a path-breaking Sales Alliance with the World's
No. 1 international air express company, DHL Worldwide Express. Blue Dart crosses
100,000 shipments per day.

2003:
2003 - Blue Dart acquires its fourth Boeing 737 freighter. With a thrust on strengthening
infrastructure, Blue Dart establishes twelve of its own offices in the South, delivering to
an additional 198 locations, expands its hub at Bhiwandi and sets up a bonded warehouse
in Mumbai. The company is selected a Super brand from over 700 brands across 98
categories by a jury of eminent marketing and advertising professionals. The company
celebrates its 20 years of service to the nation on 19th November 2003

2004:
Blue Dart inducts its 4th aircraft into operation on 17th May 2004, connecting Hyderabad
as its 6th Aviation Hub. Blue Dart also extends its brand into Sri Lanka through a
Regional Service Alliance with Foster Agencies Pvt. Ltd., Member of the Hayleys Group,
one of Sri Lanka's largest diversified multinationals. The Alliance will enable customers

Project on Logistics
to use Blue Dart services between 400 locations in Sri Lanka and over 13,700 locations in
India. Blue Dart acquires its fifth Boeing 737 freighter.

2005:
DHL Express (Singapore) Pte. Ltd. completes the acquisition of 81.03% of the equity
capital of Blue Dart Express Limited. Blue Dart continues to operate as an independent
brand and provides a complete spectrum of domestic and international express services
through synergies with DHL.

Companys future plans:


Focus on our core domestic products to expand our market share and consolidate

our unique and premium position in the Indian market, and expansion into the near MidEast and Far East markets and the SAARC (South Asian Association of Regional Cooperation) countries. Blue Dart would also leverage its vast customer base for global
distribution through its alliance with DHL. We plan to leverage our established
infrastructure to continue adding value and customised solutions to the changing and
evolving demands of the customer. We would also provide global logistics customers
with access to our quality domestic and regional distribution. Our domestic network will
continue to differentiate itself in all areas of our core competencies - supply chain
management, logistics and Ecommerce.

Position ourselves as the preferred, seamless link to a country projected to be an


economic superpower of the 21st Century. Through our technology development,
premium services, quality network and strategic alliances, we plan to carve for ourselves
a leadership position in the industry as India's and the region's link to the world.
Continue to deliver value to our stakeholders through our People Philosophy and
Corporate Governance based on distinctive Customer Service, Business Ethics and
Accountability, and Profitability.

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LOGISTICS IN BLUE DART

The Information Technology industry is, perhaps, typical of the changing and
escalating logistic demands of various industries today, irrespective of their category as
'old' or 'new' economy. In the IT industry, the difference between success and failure is
closely linked to the supply/value chain integration, of which there are two distinct
processes:
1. The delivery of goods to the customer in the most reliable transit period (and
preferably the shortest) possible. 'Reliable' alludes to a certain guaranteed transit time for
packages to reach customers or the response that organisations need in the event of any
exceptions.

2. The reverse flow of acknowledged signed delivery records without which, in many
cases, recovery of bills are virtually impossible. Especially so in the case of companies
placing multi-location orders that could cover hundreds of cities. The task for the supplier
is staggering - plan logistics for deliveries to all these locations, and hope for 100% of the
delivery records to be returned before bills can be submitted to the customer. In most IT
companies, the role of 'logistics' or 'fulfillment' is key.
With organisations moving towards close to perfect standards like Six Sigma,
interaction with logistics suppliers has taken on a critical role moving up sometimes to
the level of the CEO of the organization.
Blue Dart Express Limited applied and found solutions to these critical demands
much before other players could even recognize their need. Through its exceptional
people processes, superior technology, and stress on quality systems over the last, almost
two decades now, Blue Dart was quick to fulfill these needs:

Project on Logistics
The country's most reliable air and surface network offer a pre-determined
delivery schedule with close to 100% accuracy. The IT industry could plan its production
with precision and avoid expensive inventory build-up.
Blue Dart offers the country's most comprehensive communications technology.
Much before the internet was prevalent; Blue Dart customers could dial into the network
through Power Dart 2000 and track their packages. As an added option, Fax dart could
fax a copy of the delivery record the minute the Blue Dart system was updated.
The country's only express airline with a fleet of three Boeing 737s ensured that
packages were flown to their destinations overnight. Another tremendous advantage was
that the individual size of packages that could be carried multiplied manifold.
Retrieval of signed delivery records posed the industry's most intriguing problem.
Blue Dart was quick to understand this requirement and put in place a 100% retrieval
system.
Blue Dart not only handles large volumes and oversize packages overnight - it
also provides the industry with status of their shipments and retrieves such records as are
necessary for billing. The entire cycle has been considerably shortened, enabling the
industry to achieve healthy bottom-line.

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SERVICES OF BLUE DART


REGIONAL SERVICES IN SAARC AREA
Between India, Bangladesh, Bhutan and Nepal.
Blue Dart offers the fastest, most reliable, door-to-door express
deliveries for your documents and packages to countries in the SAARC
region through Regional Priority. The service offers access to over
13,700 locations in India, and over 800 locations in Bangladesh,

Bhutan and Nepal, providing the widest coverage in the region through a quality network,
an integrated air and ground infrastructure dedicated to express transportation and
innovative technology support.

Regional Priority: Documents (RPDX)


The most dependable and secure delivery for non-dutiable, critical and important
shipments such as legal documents and tenders. The Blue Dart Envelope provides secure
and attractive packaging for your documents, brochures and reports up to 500gms.

Regional Priority: Non-Documents (RPDT)


Fast reliable and safe door deliveries for samples and non-commerical shipments.
Currently available between India and Nepal only.

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Let see different type of regional services: DOMESTIC PRIORITY

The fastest, most reliable, door-to-door


delivery service within India and to Bangladesh,
Nepal and Bhutan for documents and small
shipments under 32kgs per package. The special benefits of this service are:

Delivery to over 13,700 locations in India

Free pick-up from your location

Real-time Tracking

Regulatory Clearances

Free Computerized Proof of Delivery

DART APEX
Dart Apex is a door-to-door delivery service within India
for shipments weighing 10kgs. And above. It is the fastest, most
efficient delivery solution for commercial shipments that are
time-bound and are required to undergo regulatory clearances,
or require special handling.
Dart Apex offers you an economical option of an Airport-to-Door service from the
major airports of Chennai, Bangalore, Mumbai, Delhi, Kolkata and Hyderabad to all the

Project on Logistics
Dart Apex locations serviced. A customer may book space for their shipments through
companys Customer Service and deliver customer shipments to Blue Dart Aviation
Office at the related airport.
Dart Apex also offers a further economical option of a Door-to-Airport service. A
customer may book their shipments at any of companys locations serviced for this
product to any of the major airports. Consignee would be required to collect the shipment
from the Blue Dart Aviation office at the concerned airport.

Dart Apex offers the following benefits:

Wide Market Reach

Single-window Clearance

Real-time Information

Time-Definite Delivery

Free Proof of Delivery on Demand

Speed

Flexibility

Economical

DART SURFACELINE

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


distribution service within India for shipments weighing
10 kgs and above. It offers a cost-effective logistics option
for your less time-sensitive shipments, with the following value-added benefits:

Time-bound Delivery

Track your Shipment

Regulatory Clearances

Pick-up Convenience

Secure Shipments

Economical Tariff

SMART BOX

Smart Box is a convenient, economic, packaging unit


priced to include a door-to-door delivery service within
India. The units come in 2 sizes, 10kgs and 25 kgs, and are
designed to accommodate a variety of products. The special benefits of using Smart Box
are:

A wide market reach

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Speedy Delivery

Free pick-up

Real-time Tracking

Regulatory Clearances

Proof of Delivery

Trouble Free Service

INTERNATIONAL SERVICE

International services of Blue dart are taken over DHL EXPRESS in 2002.

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Blue Dart Express Limited, through its International Sales alliance with DHL, the
premier global brand name in express distribution services, offers DHL Document
Express (DOX), DHL Worldwide Package Express (WPX) and the Jumbo Box (Jumbo
Box - 25 kgs. and Jumbo Junior - 10 kgs.), a one-stop shipping process for reliable, timedefinite, door to door delivery of international documents and packages. The service
offers access to 220 countries and territories worldwide and the extensive, quality
network of Blue Dart and DHL.
The special benefits of the International Services are:
1) A Convenient Solution for Urgent, International Documents & Shipments.
2) Documents and packages will be picked-up from location, cleared through
customs and delivered to consignee.
3) Customs Clearance Expertise Specialists conversant with customs formalities in
India as well as in 228 countries worldwide, and pre-clearance for shipments in
transit available for most destinations, ensure efficient delivery.
4) Real-time Tracking
5) A Cost-effective Option.
6) Packaging.

Different types of international services: AIRPORT TO AIRPORT


The airport-to-airport service is an air freight
service available on the flights operated by Blue
Dart Aviation between the airports of Kolkata,
Delhi,

Mumbai,

Bangalore,

Hyderabad. The advantages of an airport-to-airport service are:

Chennai

and

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Cooling-Period
All the Blue Dart Aviation warehouses are equipped with X-ray

machines, which eliminate the necessity of the mandatory 24 hour cooling-period


required for security reasons for all air freight transported within India.

Late Night Cut-off & Early Morning Deliveries


With

Blue

Dart

Aviation's

night

operations,

shipments

manufactured during the day can connect the night flights and be delivered at destination
the next morning.

Capacity
Blue Dart Aviation is the only cargo operator with scheduled

B737-200 freighter services within India and can offer a larger capacity than other
domestic airline.

CHARTERS
Blue Dart Aviation operates the only Boeing 737
freighters in India. The freighters have an 8-pallet
configuration, and operations are supported by an in-house
ground-handling and maintenance capability, as well as
bonded warehouses at all the on-line stations, and companyowned cargo handling assets. With qualified, professionally-trained personnel, Blue Dart
Aviation is positioned to offer the most superior quality of service in the country today.

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Charters are operated on an ad-hoc basis. Normally, charters have been used
where timely delivery of sensitive equipment or large loads is required. In the past, Blue
Dart Aviation has operated charters for carriage of TV Equipment for the Miss World
Contest, high-value TV and Broadcasting equipment for Cricket Matches around the
country, perishable Aquaculture, Computer peripherals and Electronics, Emergency
Equipment and large inventory for JIT plants.

INTERLINE
Blue Dart Aviation operates the only Boeing 737
freighters in India. The freighters have an 8-pallet
configuration, and operations are supported by an in-house
ground-handling and maintenance capability, as well as bonded warehouses at all the online stations, and company-owned cargo handling assets. With qualified, professionallytrained personnel, Blue Dart Aviation is positioned to offer the most superior quality of
service in the country today.
The bonded warehouses with customs personnel facilitate efficient transhipment
of cargo within India. This facility has enabled distribution of imports within the country
and has provided exports access to and from the gateways of international airlines. This
provides international airlines with a cost-effective option to restrict their on-line stations
within India, and enhance their marketing possibilities at off-line locations by utilizing
the distribution capabilities of Blue Dart Aviation.
Currently, Blue Dart has interline agreements signed with 23 international airlines
- Air Canada, Air France, Air India, Air Mauritius, Alitalia, Asiana, British Airways,
Cargolux, Cathay Pacific, China Airlines, Cross Air, Das Air, El Al Israel Airlines,
Emirates Sky Cargo, KLM Royal Dutch Airlines, Kuwait Airways, Polar Air, Saudi

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Arabian Airlines, Singapore Airlines, Sri Lankan Airlines, Swiss Air, South African
Airways, and Qatar Airways.

VALUE ADDED SERVICES


Value added services on the rise. Blue Dart has started providing value-added
services like logistics management, supply chain management and warehousing
facilities to its clients. Going forward demand for such services from corporates is likely
to grow at a fast clip. This is because by outsourcing such services to third party service
providers they would be able to cut down on costs and improve their efficiency levels.
For the courier companies such services would be part of the overall value proposition
they would be offering their clients apart from the normal pick up and delivery. Such
services have the potential for enhancing the margins of courier companies like Blue
Dart. We believe that Blue Dart is best equipped to capitalize on the growing
opportunities in the emerging areas of warehousing and supply chain management.