Although electrification is gaining momentum in the automotive industry, electric M&HCVs in their current form are expensive and require dedicated charging infrastructure. In addition, it still lacks product practicality in terms of usage patterns compared to their ICE counterparts. FM Logistic, one of the leading providers of 3PL solutions and now expanding as a 4PL provider, anticipates that as part of its India plans, electric three- and four-wheelers will take first place in its fleet, rather than electric trucks.
These vehicles are mainly used for city deliveries and trips where a long range is not a must. On the other hand, electric vehicles can also help meet mobility needs in cities where petrol/diesel-powered commercial vehicles are being phased out.
What is 4PL?
Compared to the 3PL solution provider, FM Logistic wants to use the technology to lead in the 4PL field. But how is that different? Compared to a 3PL, a 4PL manages the entire supply chain for its customers, starting with the integration, curation, assessment, and management of the resources and procedures, to the technologies needed to manage the entire supply chain. This brings greater transparency and optimizes the movement of goods for companies.
For this, the control tower of the company offers:
- A range of transportation services ranging from order management, network design, transportation simulation and vehicle management to track and trace services.
- Full process automation to reduce duplication and use optimized resources.
- The CT Integrated Logistics Platform enables EDI/API integration with the customer’s ERP and Track & Trace systems to ensure seamless data transfer and 100% transparency.
- Real-time performance reports via business intelligence dashboards.
- In case of an emergency, predictive analysis is a key feature of the CT solution that helps in decision making.
The French company, which operates over 100 warehouses covering an area of 7 million square meters and works with more than 70 customers in 20 states of India, sees great potential for the country. In fact, on June 20, the company inaugurated what it says is a state-of-the-art Control Tower facility in Pune, which will further streamline supply chain operations in India. The control tower is part of FM’s strategy to enhance its 4PL and LLP offering.
The event was attended by Jean-Christophe Machet, CEO, FM Logistic; Stephane Descarpentry, MD, Asia and Strategic Projects; Alexandre Amine Soufiani, MD, FM Logistic Singapore and Ajit Jangle, MD, FM Logistic India. Descarpentries said the company has already invested around US$100 million (Rs.824 billion) in India and plans to invest another US$20 million (Rs.165 million) over the next 12-18 months to expand its operations to be further strengthened in the country. India is currently among the top 3 business markets globally, but has the potential to overtake Poland and become the second largest market in the coming years.
Automotive segment is a key area
FM Logistic currently serves four main sectors: Industrial (40-45%), FMCG (25%), Electronics (20%) and Automotive & Auto Parts (15%). The automotive industry is expected to play a significant role in the growth of the FM logistics business in the coming years. The company believes that optimizing its supply chain will play a critical role in its productivity given the complexity and vast ecosystem that automakers require. This is where an integrated 4PL player like FM Logistic can help.
On the other hand, the reduction in CO2 emissions is not lost on the company and it wants to encourage its fleet partners to invest in newer and cleaner technologies. This means that a large part of its fleet partners would have to phase out their existing polluting vehicles and introduce more environmentally friendly vehicles. In the coming years, the company estimates that with the help of 4PL solutions, it can reduce its carbon footprint by 15 to 20 percent in Europe and by around 8 to 10 percent in India. In the future, FM Logistic could also prioritize fleet partners that use green vehicles over old, polluting vehicles to deliver to customers.