A Project Report On LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR

LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR
EXECUTIVE SUMMARY
In the field of management practical work plays a vital role, it is this practical
knowledge which drives one to his or her ultimate desire. In the similar way company can
achieve its ultimate goal only if it has sufficient service which contents prospective workers.
Title of the project:
Logistics Management in VRL Logistics Limited at Varur.
This fruitful venture was accomplished by undertaking the study at VRL Logistics
Limited, which is well known for its quality and in time service. The pioneer provides service
in goods transportation, passenger transportation and courier service.
The Logistics chain starts from suppliers or consigner, the strength of the chain would
emerge from the relationship that are nurtured between the consignee (person to whom the
goods are delivered) and transporter of each line and the flexibility would be a result of the
transparency of communication, speed of reaction and the focus on core competence.
Need for the study:
To study the various aspects involved in the Logistics management.
Objectives of the study:
i. To study the various costs involved in the Logistics management.
ii. To the importance of warehousing in Logistics management.
iii. To know overview of freight movement.
Limitations of the study:
The necessary information about the project was given by the company. Some of the
study was depended on observation.
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Findings:
i. The effective pricing strategy of VRL Logistics Limited.
ii. The various kinds of services offered by them.
iii. The material handling in the Varur TPT.
iv. The capacity of the warehouse.
v. The strategies of the VRL logistics Limited.
vi. Factors affecting road transportation.
Suggestions:
i. It should emphasize on warehousing facilities provided.
ii. Transhipment labours should be given sufficient training to handle the

goods.
iii. The company should build relationship with industries for more
contracts.
iv. TPT labours may be divided into three shifts for the efficiency. At
present they are working in two shifts of 12 hours each.
INTRODUCTION TO LOGISTICS
Logistics is a broad, far-reaching function which has a major impact on a societys

standard of living. In a modern society, we have come to expect excellent logistics services,
and tend to notice logistics only when there is a problem.
The difficulty in shopping for food, clothing, and other items if logistics
systems do not conveniently bring all of those goods or items together in one
place, such as a single store or a mall.
The challenge in locating the proper size or style of an item if logistical

systems do not provide for a wide mix of products, colours, sizes, and styles
through the assortment process.
The frustration of going to store to purchase an advertised item, only to find

out the stores shipment is late arriving.
There are only few of the issues for granted which illustrate how logistics touches
many facets of daily lives. Because of the magnitude of the impact of logistics on society and
individuals, a macro approach is taken to understand the logistics management.
Logistics is called by the many names, including the following:
Business logistics
Distribution
Logistical management
Supply chain management
Supply management
What these terms have in common is that they deal with the management of the flow
of goods or materials from one point of origin to point of consumption, and in some cases
even to the point of disposal.
The Council of Logistics Management (CLM) describes logistics management as The

process of planning, implementing and controlling the efficient, effective flow and storage of
goods, services, and related information from point of origin to the point of consumption for
the purpose of conforming to customer requirements.
KEY LOGISTICS ACTIVITIES
Outlined below are the key activities required to facilitate the flow of a product from
point of origin to point of consumption. All of these activities, listed below, may be
considered part of the overall logistics process.
Customer service
Demand forecasting/planning
Inventory management
Logistics communication
Material handling
Order processing
Packaging
Plant and warehouse site selection
Procurement
Return goods handling
Traffic and transportation
Warehousing and storage
While all organization may not explicitly consider these activities to be part of
logistics activities, each activity affects the logistics process.
Figure shows how logistics activities drive total logistics costs.
Place/customer service levels
Customer service
Parts and service support
Return goods handling
Inventory carrying costs Transportation costs
Inventory management Traffic and Transportation

Packaging
Reverse logistics
Lot quantity costs Warehousing costs
Material handling Warehousing and storage

Procurement Plant and warehouse site
selection
Order processing and Information costs
Order processing
Logistics communication
Demand forecasting/planning
OBJECTIVES OF THE STUDY
1. To understand the logistics management.

2. To study the role of infrastructure in logistics management.
3. To study various documents maintained while transportation of
goods.
4. To study manpower used and material handling in loading and
unloading of trucks.
5. To study various costs involved in logistics and steps to reduce
those costs.
6. To study the booking and delivery process maintained in
organization.
7. To study the importance of warehousing in logistics.
8. To know the potential for logistics industry in fourth coming years.
METHODOLOGY
Its not only the data; it is the way in which we collect the data. So
methodology is the sequence in which the data are collected. The tools for
collection of data for the present project work are the primary data and
secondary data. The information furnished in this report has been collected
primary data as well as secondary data.
The primary data is collected through the interaction with the

managers, supervisors, drivers, and labours of the company. The secondary data
has been collected from annual reports and company website.
INDUSTRY PROFILE
INDUSTRY OVERVIEW
Healthy economic growth, rise in the production of key commodities, infrastructure

investments and growth in import-export have led to growth in freight movement in the past 5
years, with roadways dominating freight movement on account of higher flexibility, reach and
customer preference.
Domestic freight transportation service (DFTS) refers to transportation of goods

within India; Here the mode of transportation also mainly refers to roadways and railways, as
they carry nearly 90 per cent of the cargo in volume terms.
The domestic freight transport services may be characterized as a large growing sector.
The size of the DFTS sector in India, comprising mainly transport by roads, railways, coastal
shipping and pipelines is estimated at 1,590 billion tonne kilometres (btkm) in volume terms
and at Rs. 1,990-2,010 billion in value terms in 2006-07. In volume terms, as per CRISIL
Research it is estimated that the sector has grown at 10.5 per cent per annum during 2001-02
to 2006-07, whereas during 2006-07 to 2011-12, it is forecast to grow at 10.1 per cent per
annum, and reach a projected size of 2,569 btkm by 2011-12.Going forward, given the
buoyancy in the economy and expected completion of infrastructure projects, the overall
freight movement is expected to remain strong. As a result, roadways will further gain market
share, backed by its inherent advantages of flexibility and due to the growth in demand from
redistribution segment. On the other hand, railways share will decline on account of capacity
constraints, until the dedicated freight corridors are completed.
In 2006-07, road transport services comprised nearly 58 per cent of the total freight
share, followed by rail transport at around 32 per cent and coastal shipping and pipelines with
relatively smaller shares of around 5 percent each. As per CRISIL Research roadways expects
to continue to dominate freight movement, with its share expected to grow to a tidy 61 per
cent in 2011-12.
On the other hand, the share of railways is expected to decline to 29 per cent in 2011-
12, on account of capacity constraints during the same period, while the share of pipelines and
coastal movements will remain small. Thus, road transport will remain the growing segment,
owing to its plus points such as greater coverage, higher flexibility and door-to-door delivery.
The sector will enjoy the benefits out of its inherent advantages despite higher effective cost.
Other factors like lower risk of handling loss, lesser loading and unloading of goods,
investments made in the NHDP and relatively higher customer orientation as perceived by
users also give road freight transport an edge.
INTRODUCTION
Transportation is the process of moving goods and passengers from origin to

destination in the timely and cost efficient manner possible with the available modes of
transportation.
MODES OF TRANSPORTATION:
In order to transport material from one place to another transporters have to use Rail,
Road, Air, Water and Pipe Line as the modes of Transportation. A brier introduction to the
various mode of transportation is as follows
Rail: Used for delivery of a wide range of goods including coal, iron ore, cement, food
grains, fertilizers, steel, petroleum products and other heavy goods.
Road: Used by suppliers to deliver goods in a cost effective manner. Many transport
companies have expertise for fast delivery, packaging etc. for making scheduled delivery.
Air: Used mostly for delivery of high value and low volume goods from distant
suppliers, usually not connected by any other mode of Transportation. It is also suitable for
emergent item to be imported for some specific requirement.
Water: Used by firms for delivery of goods from distant suppliers, mostly conducted
in containers of varied size. This mode is ideal for transportation of heavy and bulky goods
and suitable for products with long lead times.
Pipe Line: Used by oil sector companies for mass movement of Petroleum products
including gases. Due to quite low operating cost it is one of the preferred modes of
transportation.
INDUSTRY CLASSIFICATION
FRAMEWORK FOR FREIGHT DEMAND DETERMINATION
DRIVERS THAT INFLUENCE FREIGHT MOVEMENT
The overall freight movement in the country depends significantly on the growth in
industrial, agricultural production and imports. This is also reflected in the high degree of
correlation (>0.99) between GDP (industrial plus agriculture) and imports (called adjusted
GDP) versus freight movement during 1971-72 to 2006-07.Besides economic growth, the
investments made in infrastructure of transport segments also are an important driver of
freight movement in a particular mode of transportation.
Even though economic growth is the most significant driver for freight movement in a
broad sense, the extent of influence specific demand drivers will have on a particular mode of
transport may vary. For instance, freight movement in coastal shipping mainly depends on the
extent of import-export in the country, while, rail and road freight movement has been
significantly influenced by the hub and spoke model of freight distribution.
REVIEW OF FREIGHT MOVEMENT
During 1991-92 to 2006-07, the total freight movement is estimated to have increased
at a CAGR of around 7.2 per cent, to 1,590 btkm in volume terms and at Rs 1,990-2,010
billion in value terms in 2006-07, in line with the CAGR of 5.9 per cent in adjusted GDP
during the same period. Further, when the adjusted GDP growth declined from 7.3 per cent in
1996-97 to 2.3 per cent in 1997-98, demand for freight movement also declined from 5.2 per
cent to 4.4 per cent. Similarly, over the past years, while adjusted GDP growth increased at a
CAGR of 7.3 per cent, freight movement during the same period has increased at a CAGR of
about 10.5 per cent.
DOMESTIC ROAD FREIGHT TRANSPORTATION SERVICE:
Overview
Going forward, given the buoyancy in the economy and expected completion of
infrastructure projects, the overall freight movement is expected to remain strong. As a result,
roadways will further gain market share, backed by its inherent advantages of flexibility and
due to the growth in demand from redistribution segment. On the other hand, railways share
will decline on account of capacity constraints, until the dedicated freight corridors are
completed. In 2006-07, road transport services comprised nearly 58 per cent of the total
freight share, followed by rail transport at around 32 per cent and coastal shipping and
pipelines with relatively smaller shares of around 5 percent each. As per CRISIL Research
roadways expects to continue to dominate freight movement, with its share expected to grow
to a tidy 61 per cent in 2011-12 (excluding demand from last mile). On the other hand, the
share of railways is expected to decline to 29 per cent in 2011-12, on account of capacity
constraints during the same period, while the share of pipelines and coastal movements will
remain small. Thus, road transport will remain the growing segment, owing to its plus points
such as greater coverage, higher flexibility and door-to-door delivery. The sector will enjoy
the benefits out of its inherent advantages despite higher effective cost. Other factors like
lower risk of handling loss, lesser loading and unloading of goods, investments made in the
NHDP and relatively higher customer orientation as perceived by users also give road freight
transport an edge.
FREIGHT MOVEMENT: BULK VERSUS NON-BULK
Freight movement can be divided into bulk and non-bulk freight. Bulk freight includes
commodities like cement, fertilizer, food grains, POL, iron ore etc and non-bulk freight
includes general cargo (increasingly containerized). In 2006-07, bulk commodities are
estimated to have constituted about 70 per cent of the total freight movement. While 90-95
per cent of the railways freight constitutes bulk commodities, roadways freight is evenly
balanced between bulk and non-bulk commodities, with the non-bulk commodities
contributing 45-50 per cent of its total freight movement. Coastal shipping and pipelines
largely move bulk commodities. Over the next 5 years, the share of non-bulk freight
movement is expected to increase to 40 per cent of the overall freight movement, largely
supported by road transport. While 60 per cent of the road freight transport is expected to be
constituted by non-bulk commodities, the railways freight mix will continue to be dominated
by bulk commodities at 90 per cent. (Estimations are on btkm terms.)
ROAD FREIGHT MOVEMENT: HAULAGE-WISE
The road transport sector can be broadly divided into two areas, primary transportation
that is, long haul (>800 km), medium haul (350-800 km) and short haul (50-350 km)] and
secondary transportation (referred to as last mile distribution with <50 km). In 2006-07, out of
the total primary road freight movement (estimated in btkm terms), long haul contributed
close to 20 per cent, medium haul contributed over 55 per cent and short haul around 25 per
cent. Railways have an upper hand over roadways in long haul movement of commodities
mainly on account of its favourable cost economics (lower freight rates) and tie up with
government undertakings for freight movement. On the other hand, road transport has been a
favoured mode of transport in the medium haul, due to competitive and effective freight cost,
fuel efficient vehicles, improved highway infrastructure etc.
INHERENT ADVANTAGES INFRASTRUCTURE SUPPORT GIVE AN EDGE TO

ROAD TRANSPORT
Historically, railways has remained a dominant mode of transport in India, over the
past few decades, roadways has gained a significant share in the overall traffic movement,
while railways has lost its market share.
The reasons that have helped roadways gain market share are as follows:
Greater coverage as compared to any other mode of transport
Higher flexibility in terms of door-to-door delivery, giving it an edge despite

higher effective cost
Lower risk of handling loss, due to lesser loading and unloading of goods.
Investments made by the government in the NHDP.
Given the above-mentioned advantages and growth in road infrastructure, the road
transport network has acquired a considerable advantage over a period of time. This is evident
from the fact that during 2001-02 to 2006-07, while freight demand in road transportation
sector is estimated to have grown by 12.3 per cent, the growth in the overall road freight
movement was about 10.5 percent, and the growth in rail freight movement was just about 8.5
per cent. Consequently, over the past few decades, the share of road transport in the total
freight movement has also been increasing; this share has been estimated to increase from
53.3 per cent in 2001-02 to around 57.8 percent in 2006-07, supported by strong economic
growth, inherent advantages of roadways and initiatives in infrastructure development. (It
may be noted that this share of road excludes last mile freight movement).
BUSINESS OVERVIEW OF THE VRL LOGISTICS LIMITED
VRL Logistics is into the business of transportation and logistics service of goods and
transportation of passengers by road. They have a long operating track record of more than
two decades in this business. The chairman Mr. Vijay Sankeshwar has over three decades of
experience in the transportation industry. They have also recently forayed into wind power
generation and air charter business.
VRL Logistics offer following services which are summarized below -
1. Goods Transportation
a. Full truck Load
b. Less than full truck Load (Parcel)
General Parcel
Express Cargo
c. Courier
d. Passenger Travels
2. Wind Power Generation
3. Air Charter Business
VRL OPERATION
VRL LOGISTICS LIMITED
Transport and logistics Wind Power Generation Air Charter

Operation
Passenger Travels Goods Transportation
Vijayanand Travels
Full Truck Load Less Than Full Truck Load Courier
(Parcel)
Express Cargo Maruti Parcel General Shiva Road lines

Carriers Parcel
Road Rail Air
Goods Transportation and distribution business is carried across 17 states and 7

Union Territories i.e. Pondicherry, Daman, Silvassa, Chandigarh, Karaikal, Yanam, Mahe
covering 649 cities through out India. They cover the states of Karnataka, Andhra Pradesh,
Tamilnadu, Kerala, Maharashtra, Goa, Gujarat, Rajasthan, Punjab, Haryana, Delhi, Himachal
Pradesh, Uttar Pradesh, Chhattisgarh, Madhya Pradesh, West Bengal (Kolkata) and
Uttarakhand under this business.
Passenger transport business is carried on under the name of Vijayanand Travels.

They carry on this business within the state of Karnataka, Maharashtra and Tamilnadu
covering 56 cities in all. They have 40 branches and 466 franchisees across the states of
Karnataka, Maharashtra and Tamilnadu for their passenger transport business.
The fleet strength as on February 29, 2008 comprises of 2,683 vehicles, all of which are
owned by the Company. The fleet comprises of 2,446 vehicles for goods transportation, 197
vehicles for passenger travels and 40 vehicles for internal use which includes fork lifts,
cranes, staff buses, water tankers, diesel tanker, tractors etc.
Wind power generation: In 2006 VRL Logistics commenced wind energy business in
southern India at Kappatgudda, Gadag district in the state of Karnataka. Company had issued
various purchase and work orders to various Suzlon entities for the supply, commissioning
and erection of 34 Wind Turbine Generators (WTGs). As on date all the 34 WTGs are
operational. These WTGs are presently under warranty period which expires on March 31,
2008. Operations and maintenance of windmills are been taken care of by Suzlon Energy
Limited by a team of experts at the site.
Company has installed 34 wind turbine generators (10 WTGs in the month of
September 2006 and 24 WTGs in the month of March 2007) with a capacity of 1250 KW
(1.25MW) and all are operational. The total capacity of the wind turbine generators amounts
to 42.5 MW. Between April 1, 2007 and February 29, 2008, 77818019(KW) units of power
have been generated with a PLF of 22.77%.
Air charter business: VRL Logistics have entered into the air charter business by
providing services to individuals and corporate passengers. Recently, the Company has
purchased premier 1A aircraft from Hawker Beech craft Incorporation, USA. Premier 1A is 2
pilots and 6 passenger seat aircraft (with 4 club configuration seats). They have also entered
into MOU dated November 1, 2007 with Indamer Company Private Limited for the
maintenance of the aircraft.
Company have also made an application to the Ministry of Civil Aviation, requesting
for a no objection certificate which grants a Non Scheduled Operator Permit. They have been
granted the initial NOC dated March 23, 2007 to operate Non Scheduled Operator Permit
from the Ministry of Civil Aviation. They will operate on an all India basis subject to
necessary government approvals. The air charter business is headed by Vice President- Air
Charter, who looks after all the activities of this business. They also started recruiting the
pilots, co pilots, security officers and other staff for the business. They will be on the payroll
of the VRL Logistics Limited.
COMPANY PROFILE
VRL LOGISTICS LTD VARUR, HUBLI
BRIEF HISTORY OF THE COMPANY
The Managing Director Mr. V, B, Sankeshwar started as an individual

transporter in January 1976. Without any background and experience, initially for the first two
years he suffered heavy losses, and then by end of 1977 he started as a local transporter
between Hubli and Gadag. In 1978 due to personal management and effective service he
purchased one old lorry and he observed activities of other well known transporter, and
started first parcel service from Bangalore to Hubli, Garage, and Belgaum. With only two
Lorries gradually business picked up.
Similarly Smt Lalita .V. Sankeshwar purchased one old lorry in the year 1979
and running individually and some times hiring out to Vijayanand Road Lines which was
proprietary concern then, company came in to existence effective from 31st march 1983. Due
to efficient management and co-operation from the staff the total turn over and business
picked up.
The above proprietorship firm was converted into a private limited company and sold
its lorries to the company and the company came in to existence effective from 31 st march
1983. Since then, the business has grown leaps and bounds and VRL LOGISTICS LTD is
presently engaged not only in the goods transportation business but in the passenger
transportation and courier business. VRL LOGISTICS LTD today is the leader in the parcel
transportation business in India in fact the only organized segment player with a clear focus
on the parcel segment- and has an extensive network of more than 800 branches throughout
the country.
VRL LOGISTICS LTDs revenue for the year ending March 2008 is 2750 million; the
company got 81% of its revenues from goods transportation, 18% from passenger
transportations 1% from other source.
COMPETITIVE STRENGTHS
An established brand having a good reputation:
They have built a brand over two decades, owing to their commitment to quality
service standards, reliability and timeliness of services offered and long-standing presence in
the industry. They have a long operating track record in the industry. They have expanded
their service offerings over the years; having commenced operations with parcel cargo
transportation, they presently offer other services such as express cargo, courier and passenger
transportation. They provide several luxury offerings in passenger transportation business.
They also share good relationships with their business associates such as truck manufacturers
and equipment manufacturers who are very critical to the business.
Large and established size and scale of operations:
There are a multi-service transport and logistics provider with their presence in 17
states and 7 Union Territories in India. They offer a wide range of services such as parcel
cargo, express cargo, full truck load and courier services in addition to passenger
transportation. Company has an extensive network of operations which enables us to provide
connectivity even to certain remote locations. As on February 29, 2008 they have a fleet
strength of 2683 owned vehicles for carrying on the goods transportation and passenger
transportation business. They have presented below a summary of the size of operations in the
goods transportation and passenger transportation business:
Details Goods Transportation Passenger Travels
No. of vehicles owned 2479 222
No. of States covered 17 3
No. of Union Territories 7 -
No. of cities covered 649 56
No. of transhipment hubs 43 -
No. of branches (owned) 799 40
No. of Franchisees 1387 466
The large fleet size provides them multiple benefits like ability to provide the services
in larger number of routes, better margins on consignments, less dependence on hired
vehicles, and reputation for reliable delivery of the consignment / passengers in a timely
manner. Also the variety of vehicles fleet enables them to service the diverse nature of
consignments of their customers and requirements of their passengers.
Long operating history in the transport and logistics business:
They have an operating track record of over 24 years in the transport and logistics
business. The chairman Mr. Vijay Sankeshwar, who has been actively involved in the
business and management of the Company enjoys over three decades of experience in the
transport industry. They have extensive experience in the transport and logistics industry
enables us to gauge and understand the changing trends and growth prospects in the industry.
They have always believed that there is a growth potential in the transport and logistics
industry. During 1991-92 to 2006-07, the total freight movement is estimated to have
increased at a CAGR of around 7.2 per cent, to 1,590 btkm in volume terms and at Rs 1,990-
2,010 billion in value terms in 2006-07, in line with the CAGR of 5.9 per cent in adjusted
GDP during the same period.
Strong In-house capabilities:
They have developed strong in-house capabilities over a period of time which enables
to improve the efficiency of the vehicles and improve their delivery model. Their in-house
body designing facility enables us to build the structures for the vehicles based on their
specifications, thereby maximizing utilisation of space and minimising the body weight by
using light metals like aluminium along with the steel, rather than steel alone. The in-house
competency also includes vehicle repair and maintenance facility at Varur where they focus
on carrying on preventive maintenance measures to minimize the events of breakdown or
damage to vehicles.
Long serving and experienced management team:
They believe that employing and retaining individuals with experienced backgrounds
has enabled us to capitalize on their collective expertise in understanding this business and
ensuring its growth. They are led by a management team with sound experience and expertise
in the transport and logistics industry. The promoters are actively involved in management of
the business operations. The Chairman and Managing Director, Mr. Vijay Sankeshwar, has
over 3 decades of experience in the industry and provides the strategic direction to the
operations.
Integrated Business model:
They offer a range of services that are complementary to each other and thus
constitute a unique business framework. They have adopted a hub and spoke distribution
model for delivery of their consignments, which entails establishment of several transhipment
hubs and re-distribution of consignments there from to the respective destinations. This
ensures significant cost savings, rationalization of routes covered by the vehicles and
optimum utilization of resources including vehicles, manpower etc. They have 43
transhipments hubs, 799 owned branches and 1387 franchisees, which enables the smooth
flow of goods and services. They are an integrated transport solution provider with the variety
of services that they offer. The service offerings enable us to access a diversified customer
base comprising both institutional and retail customers. This enhances brand visibility among
different customer segments.
CURRENT POSITION
The company currently is on a growth path having achieved a turnover exceeding Rs

2,750 million for the year ending March 2008. The company has the largest network of
branches among all transport companies in south India with over 1000 branches in Karnataka,
Tamil Nadu, Andhra Pradesh and Kerala. The company currently owns 2479 trucks and
LCVs, 222 buses and regularly hires additional trucks from the market to render its services.
This makes the company the largest individual owner of vehicles in India giving the company
additional flexibility in its operating margins higher than other players in the organized
transport industry. The company is known for its reliable quality service during its operation
for the last two plus decades. VRL is an established brand name and this enables the company
to charge premium rates to its customer.
Turnover of Logistics division increased to Rs.51258.80 lacs in the current year

registering on increase of 17.20% over turnover of FY 2006-07. Express Cargo which is part of
logistics has achieved considerable operational success to reach turnover of Rs.2663.69 lacs in
FY 2007-08.
The Turnover details are as below.
From the above figures we can say that there is steady increase in the growth of the turn
over of the company. Within 25 years company has focused towards its Goals.
VISION, MISSION AND OBJECTIVES
VISION
To become the primer company that cuts across various segments and remaining
as the torchbearer of each segment that the group venture in to.
MISSION
To provide the highest quality service to our customers by continuously

increasing cost efficiency and maintaining delivery deadlines. To encourage our
employees /workforce to strive for quality and excellence in everything they do.
To promote team work and create a work environment that takes care of talent
and brings out the best in our employees.
THE VALUES
PUNCTUALITY, INTEGRITY, HONESTY, LOYALTY AND

CREDIBILITY
THE QUALITY POLICY
We are committed to provide Quality Logistics services consistently at

reasonable price and to continually improve the same to achieve customers
delight on a sustainable basis.
OBJECTIVES OF THE COMPANY
The main objective of the company is to provide good service to customer with
the reasonable rate and provide quick prompt and safe service.
To develop the transportation business in states like Andhra Pradesh,

Tamilnadu and Kerala.
To have fixed-assets mainly own storehouse in big cities like Davanagere,

Gulbarga, Bangalore etc.
To have an independent own building with printing machines &computer for

each &every district.
Training for all the employees.
Quick and safe service.
Customer satisfaction.
Competitive price.
Attain market leadership.
ACHIEVEMENTS AND AWARDS
VRL LOGISTICS LTD well known as VRL has been a staunch believer of Symbol
of Service and has become a familiar name in the country and in the state of Karnataka with
more than 600 branches all over the country. The company has 1600 vehicles consisting of
cargo and passenger buses and claims to be the largest single fleet owner in the world.
The company has been making all the efforts to have its own infrastructure facilities
like trans shipment yards, etc, in all the key business places, by acquiring the immovable
properties, the company has already established its own business activity centres and has also
been acquiring land properties. Thus, the group has been acquiring valuable assets.
Managing director of VRL LOGISTICS LTD Sri V.B.Sankeshwar has been awarded
Udyog Ratna Award in 1994, Sarige Ratna Award in 1998 and Vishveshwarayya
Navaratna Award in 2003.
CENTRALIZED BUILDING / LAND IS UTILIZED FOR THIS PURPOSE
Head office Building.
Transhipment godown.
Work shop for existing vehicles.
Canteen facilities for employees.
Drivers rest room.
The company has own petrol bunks Indian Oil Corporation.
Effluent treatment plant with capacity of 1, 75,000.
Rain water harvesting plant surface rainwater harvesting.
Surface rain water harvesting.
Roof water harvesting.
OWNERSHIP PATTERN AND MANAGEMENT
This company has been converted into a full-fledged public ltd

company since 14-02-1997. The authorized, issued, subscribed and paid up share capital of
the company as on date is 2000crores (200000 equity share of Rs 1000 each). To augment
resources for its future infrastructure development, the company is envisaging a public deposit
scheme for since infrastructure development such as purchase of buildings, godowns, etc, at
various places where the company has established its activities.
SHIFT FROM UNORGANIZED SECTOR TO ORGANIZED SECTOR
Currently, it is estimated that the unorganized sector accounts for over 86% of
the goods transport in the country. With the introduction of VAT, significant shift of the
business is expected from the unorganized sector to the organized sector (given that sales tax
evasion is no longer an attraction under the VAT scheme) and VRL LOGISTICS LTD is well
poised to take advantage of this shift with its wide network and the image of being a reliable
service provider.
Leadership position with revenue in excess of Rs 51258.80 lacs from the Logistics
division for the year ending March 31, 2008, the company is a leader in this segment, in fact,
the only organized sector player with a distinct focus on the parcel segment.
The companies further hopes to consolidate the position in this segment by increasing
its thrust on marketing and establishing further stations across India to increase its reach.
With the largest reach in south India, the company has a well established network of
branches enabling, procuring and distribution of goods across south India. The company
currently has in excess of 350 branches in Karnataka, Tamil Nadu and Kerala making it the
transporter with the largest reach in south India. Needless to say the impressive reach of VRL
LOGISTICS LTD within south India combined with its reliability has made VRL
LOGISTICS LTD the preferred transport of many a corporate houses in the southern region.
BOARD OF DIRECTORS
Sri. VIJAY SANKESHWAR (Chairman and Managing Director)
Has ardent faith in transparency to the core. He is a cut throat business

entrepreneur and a technocrat, highly professional in finance and accounts, legal and
personnel, advertisements and in circulation or marketing.
Sri. ANAND SANKESHWAR (Managing Director of Vijayanand Logistic

Ltd)
Sri. L. RAMANAND BHAT (CTO VRL LOGISTICS LTD)
He is the brain behind the entire computer system, heads the entire activities of
the workshop and garage for maintaining the bodybuilding of vehicles.
Sri. K. N. UMESH (Chief Executive Officer)
Heads the entire cargo transport activities of the southern and northern parts of
the country with HQ in Bangalore.
Sri. D. N. KULKARNI (Vice President of finance department)
Director of board at VRL handles finance and accounts wing of the group.
ORGANIZATION CHART
Vijay Sankeshwar
Chairman and Managing Director
Anand Sankeshwar
Managing Director
R.P.Raichur K.N.Umesh L.R.Bhat V.V.Karmadi G.S.Ayyer

Director CEO CTO VP (Operation) VP (Finance)
(Finance)
Anjan Rao
VP (Aviation)
D.N.Kulkarni Sunil Nalavadi

VP (Finance) Chief Accounts
Officer
S.L.Nagaraj
Chief Accounts
Officer
S.R.Hatti Y.M.Hannalli C.M.Baluthi Prabhu Salageri

GM GM GM (MPC) GM (Travels)
(Administration (Infrastructure)
) S.G.Patil
GM (HRD)
DEPARTMANTS HELPING IN SMOOTH RUNNING OF ORGANIZATION
Legal department
Complaint department
Maintenance department.
H R Department (Personal Department)
Account and finance department
Garage Department
Commission department
Service department
Information Technology
Legal department
Legal department is one which plays most prominent part in the company. It focuses
on all the legal aspects concerned to the company. It functions positively towards the success
of the VRL LOGISTICS LTD group of companies.
Its functional activities are:

Settlement of industrial disputes
Industrial disputes include strikes; lockouts are settled under industrial
dispute act. Thus settlement of these disputes is one of the activities concerned with trade
unions.
Settlement of workmen compensation
This compensation, under workmen compensation act include accidents, matters

related to gratuity pension etc are settled provided accidents to employees on job.
Settlement of accidents claims:
In case of accidents are losses to the vehicles of VRL LOGISTICS LTD of

companies occurs then compensation can be claimed by this department.
To avoid illegal activities in the firm:
Illegal activities such as theft, robbery within premise are avoided thus this department
is created.
Advice the departments in firm
This legal department acts as an advisor for the different department of the
firm concerning with ethics, Social obligation towards the public.
Suit against debtors
Customers are given maximum period to clear the debt. If the positive response
is not given first notice is sent. That is within 30 days and second notice within 90 days and
third notice within 20 days and thereafter are not sent but personnel approach is given and
then legal action is imposed, these notices are issued in order to avoid legal litigation, enmity.
Suit against bounced Cheque:
Customers paying by the cheque if return by bank when there is no enough

money in an a/c for it to be paid then the company has right to the customers for such as act.
Settle legal charges.
It is the responsibility of this department to pay all legal charges charged by the
court/govt.
Complaint department
Here is department to handle and settle the customer complaints, this

department takes care of customers to keep up their interest in the companies service problem
of customers will be handled efficiently and settled properly of their satisfaction.
Complaints settled by this department are
Delays
Delay caused in delivering of materials to destination point. Delay due to delivers

negligence inconvenience etc.
Settlement
When the customer complaints about delay in delivery of goods with LR no enquiry
will be made from destination point about the undelivered goods. And the date of right
delivery date will be given. If any loss is caused to customer due to delay, such loss is
compensated based on value of goods.
Exchange of materials:
This is one complaint that customer may complain. Sometimes the goods may be
misplaced by the consignor unknowingly. So the customer is not in a position to receive the
goods. Therefore the above complaint is placed.
The company takes back the goods from wrongly delivered consignee and redelivers
to the right consignee.
Road robberies, fire theft etc
The goods are undelivered to the destination point due to robberies fire theft etc. If the
goods are lost during transit, short certificate will be issued to customer until the goods are
traced. If fail to trace, loss is compensated on the basis of value of goods on certain condition.
Demurrage Collection Points
It is a point at which goods consigned will be stored when consignee fails to take
responsibility of these goods that is when goods consigned reach the destination, point and
fails to take delivering consignor. When they fail to respond the notice, goods will be sent to
and stored in demurrage collection point.
The notice inform them to take delivering of the goods consigned and settled and
unclaimed charges if any generally. 3 notices will be sent first 30 days, second 90 days, and
third 120 days. And a notice will be sent from demurrage collection point. When goods are
about to sell through auction.
Booking place Destination (delivery point)
1st notice 30 days
2nd notice 90 days
3rd notice 120 days
Department
Sold through Final notice
Auction _ before setting
Maintenance department and House Keeping Department
It means maintenance of various vehicles which includes bus, lorry and other goods
carries. At present there are 2686 vehicles which include Volvo buses, luxury, buses, lorry,
mini bus etc.
Functions of Maintenance Department:
Centralized purchasing
Repairing the vehicles
Complete body building of vehicles
Changing of oil clutches as per the schedule for precautions.
Hiring the lorries on the buses of locality and demand
Maintenance of drivers accounts i.e. payment of salary to drivers,

looking after their performance, appointment of new drivers etc.
Maintenance department is playing an important role in the company because

The Company can save the cost with proper maintaining of available resources and proper
utilizing them.
Account and Finance department
Significant of Accounting Policies.
Bases of preparation of financial statement
The financial statement are prepared on the historical cost convention basis in
accordance with the generally accepted accounting principles and they accounting standards
referred to in section 211(3C) of the companies act 1956 except otherwise stated.
Revenue recognition:
The company generally follow mercantile system of accounting expect on claims

which is a counted on cash basis.
Fixed assets
Fixed assets are started at cost of acquisition construction except in certain

fixed assets. Which has been revaluing less depreciation? All cost relating to the acquisition
and installation of fixed assets are capitalized and include borrowing cost the assets is put to
use.
Depreciation
Depreciation on fixed assets has been provided on straight line method at rates
prescribed in schedule XIV to the companies Act 1956.
Borrowing cost
Borrowing cost directly attributable to the acquisition or construction of qualifying

fixed assets are capitalized as part of the cost of the assets up the date assets is put to use other
borrowing cost are charged to the profit and loss account in the year in which they are
incurred.
Taxation
Provision for current tax is made and retained in the accounts on the basis of
estimated tax liability as per the applicable provisions of income tax act 1961 and considering
assessment order and decision of appellate authorities in companys case.
Goods and passenger transport business are subject to various taxes, which may
significantly affect profits. VRL is exposed to various taxes imposed by the State and the
Central government which include Wheel Tax for seater and sleeper buses, Inter State
Transportation Tax for buses operating between two states and service tax which are levied
upon private operators. The rates of these taxes have steadily increased in the past three years.
For example, the Wheel Tax which is payable by a private transport operator has
increased from Rs. 3,300/- per quarter in fiscal 2005 to 43.03% Rs. 4,720/-, in fiscal 2007 (per
quarter), for sleeper busses, and, Rs. 750/- in fiscal 2005 to 200% Rs. 2,250/-, in fiscal 2007
(per quarter), for seater busses. As they plan to expand their services and enter different states,
they may be exposed to different tax regimes in different states, which may adversely affect
profitability.
In goods transportation they pay tax to the municipal corporation which is called as
octroi. They pay octroi in Maharashtra, Andaman and Nicobar, and Manipur. If the octroi is
paid by the company then the penalty will be received from the customer. The company also
pay State entrance tax which is 1% of the value of the goods.
H R Department
It is heart of VRL LOGISTICS LTD group. It is department where matters relating to

recruitment, settlement of grievances etc taken place. A well experienced person any manager
of personnel department looks it after. Its activities are spread out over large area, some are:
Employment
Well force of employees
Facilitating for provident fund gratuity
Facilities of ESI
Matters relating to leave, salary, bonus etc
Improving employer employee relation
Providing facility to relating employer or by termination
Training
Training can be defined as the process whereby people learn the knowledge,
behaviour, skills needed in order to perform the job more effectively. It is the systematic
process of matching employee characteristics and employer requirements. So, it is closely
linked to other human resources. It is designed for non-managers. It is for a short duration and
for specific job related purpose. It is essential for all the employees in the organization
because trained person/manpower is the biggest asset to an organization.
Objectives of HR Department
To increase productivity of the organization
To reduce cost
To prepare for future assignment
To reduce labour absenteeism
To minimize the operational errors
To establish a sound relationship between worker and his job
To increase employees moral and confidence.
Importance of Training
Better quality work; if the training (formal) is provided with the best methods
and standardized norms, then it will help to improve the quality of service. Trained employees
will do less operational mistakes and perform the work effectively.
Less learning period; a systematic training program helps to reduce the time
and cost involved in learning. Employees can easily reach the acceptable level of
performance. They need not waste their time and effort in learning through trail and error.
Higher productivity; as training improves the skill and knowledge of employees increases
which helps to increase output have quality and quantity.
Cost reduction
More economical use of machineries and resources can be done through

training, which will in turn reduce the cost of operation per unit.
Supervision
Well-trained employees tend to be self-reliant and motivated Therefore,

supervisory burden is reduced and the span of supervision can be enlarged.
STAFF SELECTION IS ON THE BASES OF CERTAIN COMPANY RULES AND

REGULATIONS
Employees who complete 5 years in the company get gratuity funds and
insurance facilities. VRL LOGISTICS LTD implemented these schemes for all employees
Pension schemes are based on salary + dearness allowance at the rate of 12% from
employees salary matching amount is also contributed by the company and deposited in the
account of employees...There has not been a single instance of labour unrest. This is due to
the strong employee-employer relationship and various.
Welfare ensures adopted by the company such as provident fund, educational

benefits, gratuity scheme, medical reimbursement, pension scheme, maternity benefits.
The company has introduced various novel schemes like payment to drivers
based mileage driven by them. Even the labour and drivers of the organization are given
benefits of ESI/PF etc.
Apart from direct employment, the company has introduced a self-employment

scheme for local entrepreneurs by appointing them as agents of the company. The company
has found that in small places, local people are in a better position to cater to the needs of
customers without adding overheads to the company. It is estimated that at least 15000 people
are benefited by way direct and indirect employment from this company.
ENTERPRISING MANAGEMENT TEAM
The top management of the team is a highly proven team in planning and
implementing new plans and consolidating leadership position in their business. The team has
over 20 years experience in running a leading transport business.
Management Responsibilities (ISO 9001- 2000)
Customer satisfaction.
Statutory or regulatory requirement needed to conduct business.
Management requirement
Employees satisfaction
GARAGE DEPARTMENT
The repairs and maintenance of all the vehicles including buses are undertaken at the
centralized garage located at Varur Hubli. Shirr. L. Ramananda Bhat, CTO of the company
heads the garage operation. They have been maintaining stock of all spares and tyres and oil
required for the up keep of the vehicles. The total stock of spares and tyres and others on any
given date is of the order of Rs. 3.50 cores.
The minimum reorder level depends upon the type of vehicles and availability of
spares. This is being monitored both at the garage as well as the head office. The entire
operation and the infrastructure control have been computerized and the efficiency is to the
extent of 95%.
BODY BUILDING OF VECHICLES AND OTHER ACTIVITES
In the beginning VRL LOGISTICS LTD was arranging the truck bodies built
the other bodybuilding located at Namakkal and Mettupalyam. The company has since taken
up with the body building activities of VRL LOGISTICS LTD vehicles with all modern
facilities. This part VRL LOGISTICS LTD activity has been self-sufficient. All the heavy
goods vehicles and LCVs purchased during 1996-97 are mounted with in-house bodybuilding.
With this view in mind VRL LOGISTICS LTD has been procuring all the inputs such as
aluminium sheets, iron and steel bars, etc, required for the body building activities. There is
considerable saving by way of excise duty and central tax by virtue of VRL LOGISTICS LTD
activities having taken up all acts its on own.
Information Technology
The information technology division is located in the workshop in Varur. This division
oversees the information technology requirements of Company including the computerizing
of their branches, hubs and offices. The computerization of hubs has facilitated mailing of
delivery reports and quick flow of information between different offices, delivery offices and
transhipment hubs of the Company. This enables effective coordination and tracking of the
consignment.
Information technology division prepares software which are hardware-related such

as office automation-related, courier tracking and accounting software. Global Positioning
System (GPS) they have developed their own GPS based tracking device which they have
installed in selected vehicles. In addition to helping us keep track of the movement of the
vehicles, the GPS system also tracks the time spent by the vehicle when not in motion, the
location it has stopped in addition to tracking pre assigned route to be followed by the vehicle.
This discourages the drivers from not complying with the instructions given to them regarding
the route and time sheets that they are required to comply with.
Most of the software requirements are met in-house and in the event that any activity
is outsourced by the company, the source code is retained by the Company to ensure that it
can be used at a later stage as per the requirements of the Company.
Some of the important developments of information technology division include:
Vehicle Maintenance Tracker: This application schedules the maintenance of the

entire fleet and generates reminders and alerts automatically when any
maintenance events become due. These reminders help in avoiding the premature
failure and the excess consumption of parts.
Vehicle Traffic Application: This application controls the entire movement of the
vehicles and keeps track of the drivers performances in terms of the fuel average
and the distance travelled. This also tracks the advance amount paid to the drivers
and the diesel vouchers issued for en route fuelling. This application is online and
ensures access to this data from any part of the world.
Consignment Delivery Application: This application is used in delivery branches

to raise online cash receipts and track the consignment. This application also
maintains a record of the stock in the Companys godowns and is used to answer
queries from the customers regarding the arrival of consignments. The records of
stock and the delivery particulars are updated every 24 hours.
Hub Application: This application receives the consignment from other hubs and
booking branches and dispatches them to the final destination and some times
reroute to other hubs.
On line bus ticket booking system: This application is hosted online on the web
server and all agents and passengers log on to this application for booking
passenger tickets.
Accounting package: This application consolidates all accounting programs and

helps in the preparation of periodical financial statements, MIS reports etc.
Remote access to networked computers: This application enables the Company to

take remote access of any computer system linked to the network. This facility is
used for monitoring the operations of the employees and also for conducting
training sessions for employees in remote locations.
SWOT ANALYSIS
STRENGHT
None regulated industry:
Since, it is a courier service industry it needs no license to enter this industry, it

is a non control industry.
High entry barriers:
The courier companies have to make a lot of investment in establishing a

national network and for it the requisite, infrastructure and technology has to be set up. This
discourages new entrants to a large extent, for instance Elbe has 124 branches.
1200+servicesable locations and 10 major hubs
WEAKNESS
Dependent on economy scenario:
In the mid-80 the Industry grew at a rapid rate. This growth rate was sustained in the
90s but with the revival of the economy and the greater reach of major players in the
segment, the industry is expected to ground at an increasing rate.
Have to face the bureaucracy:
Express companies like other multinationals have introduced new technology and
standards PF efficiency into India, The major courier companies, which have tie ups with
international giants are facing problems with bureaucratic setup in India
OPPORTUNITIES
Value added services:
The courier companies endeavour to add to the products of their customers to

differentiate themselves from their competitors.
Backward integration:
The companies cease to be dependent on others for the service they need and
have integrated backwards; this is explained by the huge distribution network and the number
of vehicle owned by these companies.
THREATS
Economy showdown:
Being driven by the general economic scenario there is always the threat of it
being affected by showdown in the economy.
New technology:
The company also needs to be constantly in touch with the latest technology to
help them provide the best service possible; today a thing like tracking are fairly common and
has become a norm.
TRANSPORT AND LOGISTICS BUSINESS
The Transport and logistics Business is divided into two segments:-

1. Goods Transportation
2. Passenger Transportation
GOODS TRANSPORTATION
VRL Logistics, goods and logistics services include Full Truck Load, Less than full
truck load (Parcel) and courier service. Less than full truck load is further divided into express
cargo and general parcel service.
They have a fleet strength of 2479 vehicles, which includes:
Light Commercial Vehicles (LCV) with a gross vehicle weight of up to 7500

Kg,
Medium Commercial Vehicles (MCV) with a gross vehicle weight between
7500 Kg and 12,000 Kg,
Heavy Commercial Vehicles (HCV) with a gross vehicle weight of more
than 12,000 Kg,
Trailers with carrying capacity up to 49 tonnes
Small vehicles for internal use like collection and delivery of goods in the
cities and towns.
All these 2479 vehicles are owned by the company. However, in peak seasons
company also take vehicles on hire for transporting goods. This ensures that customers are not
put to any inconvenience. Therefore, last minute bookings are usually not turned away.
OFFERING IN THE GOODS TRANSPORT BUSINESS ARE AS FOLLOWS:
FULL TRUCK LOAD

Under full truck load, they provide door to door service to the customer, wherein the
goods are loaded at the premises of the customer and are delivered to a certain delivery point
as specified by the customer. Here the customer hires full truck for transport of goods from
one location to another. This service is used by customers / manufactures who have large
quantities of goods to be transported. This service is offered to the customer at a pre
determined price.
In this the whole and sole responsibility will be on the driver only. He only has to react
to the negotiations of the customers.
In full truck load price will be determined on per tonne base. Now the price is 3020
Rs/tonne. Here the driver will be provided with three water proof covers to provide good
service to customer. Before rise in the fuel prices the full truck load service was available for
2900Rs/tonne.
Some of the organizations which take help of this service are
West coast paper mill Dandeli.

Kalyani steels Ltd.
Sri Renuka sugars Munavalli.
Bell ceramics for clay transportation
Omkar purified water Ltd
Vijay Karnataka Paper Industry
All pharmaceuticals situated in Hubli, Belgaum, Bijapur and Banglore
etc.
Organization itself.
The company provided this facility to transport mines from Hospet to Manglore which
was then exported. This service was dropped as it was not profitable.
To trace the misuse of full truck load organization takes help of certain weighbridges
situated in different places.
LESS THAN FULL TRUCKLOAD (PARCEL)

Less than Full Truckload service is categorised into two categories; parcel and express
cargo. Under Less than Full Truckload the customers do not hire the entire truck.
GENERAL PARCEL
VRL Logistics provides general parcel services in 17 states, 7 Union Territories
covering 649 cities in India. The parcel business is not a time bound service. However the
company aims at faster deliveries to enhance customer satisfaction. Booking of the parcel is
done at booking office, and then sent through one or more transhipment hubs. At each of the
transhipment hubs the goods are segregated and finally delivered to delivery office. The
customer then collects it from delivery office. However in case customers demand, they
provide door to door also on extra charges. If the parcel is not collected by the consignees
from their branches within the specified periods they collect demurrages charges and also
send reminders to the consignor and the consignee. In case such reminders are not responded
to within the specified period they intimate the customer that the consignment is sent back to
head office at Varur. If the parcel is still not collected within the time specified in the
intimation letter, a notice of auction is sent to the consignor and consignee, after which the
consignment is disposed off in accordance with the notice.
Freight charges for parcels in VRL Logistics

In this category the charges made on the bases of weight and space occupied by the
consignment which ever is higher.
On the basis of weight:

Min weight considered is 40 kg i.e. if the weight of the consignment is below 40 kg
then also it will be considered as 40 kg only. Freight also varies according to distance it has to
cover.
For example: to transport the parcel of 7 kg from Dharwad to Banglore the company
charges 60/- Rs
On the basis of space:

For determining the rate the parcel is weighted at the booking house on the
bases of CFT. The organization considers 1 CFT = 10kg.
CFT=Length*Breadth*Height/1728
Example: For the container of 18 ft length, 8 ft width and 7 ft height

CFT is calculated as
CFT=18*12*8*12*7*12/1728 kg
=1741824/1728 kg
=10.08 kg
=10 kg
If the goods are of light weight and bigger in size then the goods are measured. The
height, width and length are measured in terms of inches and multiplied.
If the CFT cannot be measured, rate is charged as per the weight and distance. After
determining the rate, the WAYBILL No. Is marked or labelled on the goods. The goods are
then forwarded.
Competitors:
In Karnataka
a. Ghatge Patil Transportation Ltd
b. Prakash Roadlines
c. DHL
d. Deluxe
In Andhra Pradesh
a. Kirti
b. Navatha
c. SMRT
MARUTI PARCEL CARRIERS
Maruti Parcel Carriers (MPC) is one of the goods carrier divisions which operate
independently under its own name Maruti Parcel Carriers. Under this they provide services
from booking office to delivery office without routing it through the transhipment hubs. MPC
offers its services in the state of Karnataka covering 17 cities in all. MPC has a total network
of 25 branches. Currently it has two booking centres one at Bangalore and other at Hubli. Rest
of the 23 branches act as delivery offices. Parcels are collected from the booking centres and
transported to various delivery offices.
SHIVA ROADLINES
Shiva Roadlines was started in the year 2003 as a separate division by the company.
Shiva Roadlines provides service only in the state of Karnataka covering 6 cities. Shiva
Roadlines has 6 owned branches. It provides door to door services without routing it through
transhipment hubs. It carries goods weighing more than two tonnes only.
VRL EXPRESS CARGO "Anywhere Anytime"
Delivery on time zero excuses. This mantra is driving force behind the success of VRL
Express Cargo.
Surface, Train & Air Cargo mode services.
Dedicated Company owned vehicles.
Door pick-up and door delivery.
On-time delivery.
Online track & trace facility.
24X7X365 days operations.
Dedicated & well-groomed customer care windows.
Extensive nation-wide network.
The express cargo business of company is done on a door to door basis and in a time
bound manner using road/rail/air as a mode of transport. The express cargo business was
initially started for booking and delivery of goods within Karnataka; however today express
cargo service is available in 17 states, 7 Union Territories covering 649 cities in India. Express
cargo mainly focuses on the requirements of their corporate customers who want time bound
deliveries of goods to their various locations. The company charges higher freight amount
towards the transportation of goods under this service. Company transport a substantial part of
their express cargo using roads as mode of transport. In certain instances they may transport
express cargo using roads and the services of railways or airlines.
Under this category the charges will be 4 times than the general parcel. In this service
the company uses two drivers to provide quick and safe service. There will be time bound for
the drivers. If drivers are late then penalty will be paid by them.
VRL COURIER SERVICE "On Time Every Time"
Capitalising on the synergy of their transport network that connects all over
Karnataka, they are into Courier Services focusing on delivering documents and small parcels
in a time bound manner.
Storing & dedicated Operating Team.

Time Bound Delivery with an Emphasis "On Time Every Time".
Delivery Schedules ranging From 24/48/72/96 hours.
Dedicated Route Vehicles.
VRL LOGISTICS LTD started courier services in the year 1992, which marks the
beginning of courier services in company. The turnover of courier service was Rs 4 corers per
annum in the year 2007-08. It has become famous at the national level. But on July 17, 2007 it
has reduced to only Karnataka.
Company now offers courier services in the state of Karnataka, covering 27 districts
and 164 cities. Under this service, they receive non-bulky parcels which include small
articles/documents from consignors to be delivered to the consignees in a time bound manner
and on a door-to-door basis. The price charged by the company for transporting parcel
through courier service is determined on the basis of the weight or volume of the goods and
the distance of the delivery at customers place.
Under this company has divided customers in to categories i.e. walking and regular
customers. Door pick-up facility is provided for the regular customers. Regular customers are
also awarded with some credits in the payments. They can pay monthly once.
Charges for courier service:

For one dock of 250 Grams: 10/-Rs
For 1 kg the charge will be: 20/-Rs
250 Grams is considered as the minimum weight. Above 250 Grams and below 1 kg is
considered as 1 kg only.
This dept is having its branches and agencies in various cities. The branches are
maintained by the organization only. The agents have to deposit certain amount in the favour
of the organization. The agents in Bangalore city deposit 20000/- Rs and in other cities
10000/-Rs are deposited.
LIST OF DAILY CUSTOMER OF COURIER SERVICES IN HUBLI
ICICI BANK
STATE BANK OF INDIA
WEST COAST PAPER MILLS
Other daily customers.
THE COMPETITORS OF VRL LOGISTICS LTD (COURIER SERVICE)
1) DTDC Courier service.
2) Professional couriers.
3) Teja courier.
4) First flight courier
5) Parkash courier.
6) Other couriers
TERMS USED IN LOGISTICS
Consignments
VRL will transport all types of goods like cloth, medicines electrical parts,
motors parts, stationary etc.
Consigner
A consigner is the party who books the consignment for transport through
VRL.
Consignee
A consignee is the party who takes delivery of goods booked on presentation

of his copy of waybill
Types of Risk Beard
Carriers Risk:
Explains that all risks are borne by the transporter while in transportation.
Owner Risk:
Makes the transporter unliable from all risk.
DRIVERS
Drivers are the life & blood of VRL Logistics Ltd. Wages & salary is given to
drivers is on per km basis1Km = 70 paise. The drivers have to cover 40 kms per hour.
Driver are also hired on fixed salary basis Rs. 1,950/- per month
For Long distance journey
Double Drivers - 400 Kms 40 paise per km
Single Driver - 400 Kms 70 paise per km
Facilities for drivers
1) House rent allowance is given to drivers. This allowance is given at

20% of the salary
2) Education allowance all the drivers are also provided with education
allowance. This facility is given only to that person who has completed one year of
service in the organization
3) Provident fund- all drivers are enjoying this facility. Employee have to
contribute 12% towards provident fund & the employer has to contribute the same
amount
4) Employee state insurance- employees are contributing 1.75% of their

basic salary & DA. Employer is contributed 4.75% of the total salary paid by them.
5) Gratuity- This is available to only those who has completed 5 year of

services.
Company also provide various types of incentive schemes to truck drivers besides the
fixed amount paid to them for their services.
These incentive schemes work on a monthly basis and are as follows:
Monthly incentive structure for light commercial vehicles (5 Toner)

(Above 7000 kms & 8000 Kms); this incentive is based on the
kilometres covered by the drivers.
Monthly incentive structure for 9 toners (Above 6000 kms to 8000

Kms); this incentive is also based on the kilometres covered by the
drivers.
Monthly incentive structure for long route multi axel vehicles; this
incentive is based on the kilometres covered by the drivers on specified
long route.
Quick incentive; this incentive is based on reaching the fixed

destination before scheduled time.
Diesel incentive: This incentive is based on the saving of the diesel in

one trip and accordingly the incentive is provided to them
Company has also started the Loss Recovery levied for late service if the vehicle
reached the fixed destination after schedule time. They charge their driver very minimum
amount depends on how much hour taken for delay.
Terms and conditions
The company does not take the responsibility of leakage, shortage damage to goods by
rain sunlight, other cause beyond its control
Crockery, glasses & other delicate items are booked at the absolute risk of consigner.
The company shall not be liable for wrong deliveries if the addresses not mentioned
exactly.
The court in Hubli along shall have the jurisdiction in respect of all claims & matters
arising under the consignment.
The company has the right to reweightment at the destination & collection before
delivery such amount that have be omitted or under charged.
DOCUMENTS MAINTAINED
BOOKING SECTION:
In booking section there are two persons who book the parcels while booking process,
staff use receipt book. That book involved five copies
Consignor copy.
Consignee copy.
Proof of delivery copy (POD).
Head office copy (HOP).
Delivery sheet.
a) CONSIGNOR COPY:
In Consigner copy booking staffs write in consigner copy who has booked the
documents and in another consignee section of the consignor copy write who will
receive the document or its destination and write amount, date signature, declarations in
consignor copy.
It contains consignors Name and address.
Phone number
Amount
Value of consignments
Charges
Weight of parcel or document
TERMS AND CONDITIONS OF CONSIGNER COPY:

The customers after entrustment of documents or cargo or goods to VRL LOGISTICS LTD
Courier division for carriage or transportation shall be deemed to have accepted and agreed to
the terms and conditions and specified as standards conditions of carriage.
1. All documents or covers or envelopes letters are accepted for transport by air, road, and
railways.
2. Nature, contest, conditions and values of consignment are unknown to the company and
carriers are packed by owners and are at OWNERS RISK.
3. Consignor or consignee shall be responsible for any delay, detection, loss or forfeiture
of goods by any government authorities due to wrong declaration to contest or improper
documents etc.
4. The company will not carry explosive or prohibited coin or industrial diamond,
currency (paper or coin) of any nationality, lottery ticket and contraband items.
5. The company is not liable for any loss or damage or leakage, or for late delivery due to
break-down, accident, fire, riots, strike, theft, flood, rain, sun and other natural
calamities which are its beyond its control.
6. The company shall not in any case be liable for consequential losses such as loss or
profit, interests, market and utility, VRL LOGISTICS LTD. Disclaims all warranties
expressed or implied with respect to this consignment for any loss, shortage, damage or
unfair seen delay, in the carriage.
7. No complaints or enquirer will be entertained after 15 days from the date of booking.
8. No agent, servant or representative of company has authority to after modify any
provisions of consignment note.
9. The court in Hubli City alone shall have jurisdiction in respect to all disputes arising
under this consignment note.
b) CONSIGNEE COPY (RECEIVER)

This copy gives to receiver of the parcel. That addresses mention in consignees
copy.
THE CONSIGNEE COPY (RECEIVER) CONTAINS

It contains consignors address.
Phone number.
Amount.
Value of consignments.
Charges.
Weight of parcel or document.
Receivers signature.
c) PROOF OF DELIVERY COPY (POD)

This copy gives to receiver and takes his signature and that come back to booking
office and will give to person or company who have booked the parcels (consignor)
It contains consignors address.
Phone number.
Amount.
Charges.
d) HEAD OFFICE COPY (HOC).

This copy is for head office reference
It contains consignor and consignee address.
Phone number.
Amount.
Charges.
TRIP SHEET
This copy is prepared in triplicate. It contains courier LR number, receipt

number, weight of consignment and content of consignment. Number of pieces, source of
origin & source of destination. It is prepared in order to know the places from where the cover
is sent & to which place it is to be sent.
DELIVERY SHEET
Delivery of articles is done by delivery post. Particulars of delivery of articles

are written in delivery sheet. It contains the details of branch office, consignee name, original
place, consignee note, time, date & signature. Also if the booking party is a company seal
should be taken from the company.
ACCOUNTS
Booking statement is prepared for accounts purpose single entry system is

maintained here. They have a book system as well as computerized system booking
statements contains C/N number, weight destination & amount of consignment, branch and
date.
DEBIT VOUCHER
It is a voucher where any expenditure made by the staff is maintained. It is

attached to cash statement & sent to the head office to claim the amount.
CREDIT VOUCHER
This is the voucher which is given to the sub branches or agencies while submitting
the accounts, the issue booking statements along with total amount to this branch
COMPLAINTS REGISTER
It is a book where entry of customer complaints such as late delivery,

misplacement, improper courier is noted.
NON DELIVERY BOOK
It is a book where non-deliveries are noted is case of door locks, shifts, transfers;
incomplete address or party refusal parcel is brought back. Entry is done in this book.
MODE OF PAYMENT OPTIONS FOR THE CUSTOMERS
The price charged by the Company for transporting parcels is determined on the basis
of the weight or volume of the goods and the distance of the delivery point. They have three
types of payment mechanisms in their parcel and courier business:
i. Paid:
Under this system, the consignor pays the charges to the Company at the time of
booking the consignment. This is the most common mechanism of payment and this enables
us to receive the revenues immediately.
ii. To Pay:
Under this system, the consignor does not pay the charges at the time of booking the
consignment but the consignee is required to pay the same upon collecting the consignment
from the office.
iii. Running Account:

Under this mechanism, the consignor does not pay the charges to company at the time
of booking the consignment, nor is the consignee is required to pay the same upon collecting
the consignment. Company provides its services on credit and keeps a running account of the
charges the consignor / consignee is liable to pay, and the consignor / consignee is required to
make payment against the running account on a weekly / monthly basis. This facility is only
extended to selected high-volume regular customers.
WORKING OF GOODS TRANSPORTATION
TRANSHIPMENT POINT
Transhipment point is important section of VRL group, where in all the materials
which are booked from the offices all around the country, whose destination is the area under
Hubli branches are bought in, sorted out, stored and then sent to their respective destinations
within two days, however the goods that are to be claimed by the consignee have a demurrage
period of thirty days. In simple words it is the Hub and Spokes arrangement, the
Transhipment point acts as the hub and all the destinations (places) coming under this
Transhipment point are act as the spokes.
There is 110 staff working at Hubli Transhipment point as well as 250 contracted
labourers working day and night around thirty- forty labourers working in each batch.
The Transhipment point has the following departments
Booking section
Vehicle and accounts maintenances section
Delivery section
Short excess section
Booking section
At the booking office the booking of the goods to be transhipped are made. There are
thirty plus people working in this section, these peoples are normally sent for collection,
making and continuing of the goods, and looking after the clerical work in this section. The
main function of the booking section is to take the goods from the consigner and weighting
them. Then the freight price is fixed for the goods are sent to the transhipment point for the
delivery. Freight rates are varied according to the distance covered, nature of the goods,
season, condition of the roads, type of goods to be transhipped and risk involved in it. There
for the freight of the goods is charged on the following basis.
Bulky goods
Goods with heavy weight
Weightless goods
Long distances
Short distances
Working of the Booking section
The goods to be transhipped are booked as per the instruction of the customers at the
booking office and according to the goods forwarding note is prepared.
The customer has to fill the goods in forwarding note. The transhipment company
verifies the goods according to forwarding note. After the goods forwarding note is filled by
the customer marking at goods is done. The marking of goods is done by the clerk in the
booking office on it can also be done privately by consigner. The invoice number, and
marking number, is included in goods forwarding note.
On the basis of forwarding note way bill is prepared. It is bill containing information
regarding the consigners name, consignee name, date of delivery, nature of material weight,
type of packing & freight.
It is prepared by booking clerk. For convince and documentations, four copies of way
billing prepared. They are
Consignee copy
Consignor copy
Head office copy
Drivers copy
Vehicle and accounts section
This section basically deals with load management as well as with some of the
miscellaneous accounts. Where the vehicle in charge has to perform the basic function of
tallying the total market load that is with them in accordance with the availability of trucks,
normally there is a deficit in the availability of trucks, which is fulfilled by hiring trucks from
outside.
He has five people working under him. Of these one person handles the cash and
accounts for advances given to the drivers which are in turn handed over to the drivers
account section. There are three persons looking after vehicle maintains. If the vehicles are in
need of some heavy repairs, they sent it to the work shop or else the minor repairs are handled
then and there. The last person is meant for the miscellaneous works like collection, booking
outside trucks and any other routine work.
Delivery Section
All the goods collected at different booking office are to be transported are all bought
to the transhipment point. These goods are then separated, sorted and according to destination
to which they are to be sent.
These goods are then sent to their respective destinations and the delivery offices in
that area unloads the goods and delivers to the consignees. For goods more than two tones or
hundred cartoons boxed, there is availability of free door delivery.
Working of Delivery Section
When the goods are received from the booking offices they are
classified in two ways.
Urgent delivery goods
Non-urgent delivery goods.
Urgent delivery goods are those goods which are to be dispatched immediately or at
the earliest possible time.
The Non-urgent delivery goods on the other hand are the ones which do not require
such urgency.
The delivery of the goods also depends on the nature of payment, if the payment is
already made then it is very easy to delivery the goods, as the delivery is made
immediately after collecting the consignees copy. But in case of goods in regard
of which the payment has not been received, the goods are delivered only after
cash is received from the consignee.
In this case a receipt is prepared acknowledging the payment. The consignees seal
and signature is taken behind the copy of the receipt as a proof. On delivery the
name of the person taking delivery, quality and L.R. no. is recorded for future
reference.
The delivery office stores the goods for free for a maximum period of thirty days
in case of regular customers and twenty days for others. After this period a notice
is sent to the consignee to collect his goods. If fails, another notice is sent after
sixty days. A last notice is sent after ninety days. If he fails to do so again the
goods are sold and the amount is adjusted. But in case if the goods are collected
after the first notice or the second demurrages are collected.
Some of the documents used by this section are
Cash receipt book
Daily delivery and stock report
Inward statement
Short/Excess book
Unloading report
Short/Excess Section
While loading the goods some times the goods are loaded in excess or may fall short
this will be at their destinations when verified.
In case the excess goods are not claimed, these goods are sent to the search and found
department at Gadag. If the goods are sent on to pay basis and nobody claims, the company
has a right to sell the goods and make good its loss.
Working of the Transhipment Point
The materials that come from the booking offices are verified according to the trip
sheet, which is sent by the booking office.
Then the materials are unloaded.
The next step is to prepare the unloading report.
Materials are sorted according to there destinations.
Materials are sorted according to their destination in proper section provided at a

Transhipment point.
Materials of one destination are loaded in a single vehicle.
All the required documents are maintained by the respective departmental heads.
HUB AND SPOKE MODEL OF FREIGHT DISTRIBUTION AT VRL

LOGISTICS.
Under the Hub and Spoke system, VRL transhipment yards act as hubs and the various
booking and delivery offices act as spokes. The hub acts as a connector between the booking
office and the delivery office. The hub receives the booking consignments from various
branches, which are segregated, based on the destination and then dispatched directly to the
delivery office or to the other hub, which connects to the delivery office.
Once consignments are booked at the spoke they are unloaded at the nearest hub based
on the destination of the consignment. Once the unloading of a certain number of trucks is
complete, all the consignments meant for a particular destination are aggregated and loaded
into a truck for further transportation. This ensures that every truck is filled to capacity and its
utility is improved. In case a hub does not have enough consignments for a particular
destination, the goods are unloaded onto the next nearest hub to be further aggregated at that
hub en-route to the destination.
The processes followed by the company are designed to meet the various business
objectives such as simplicity in understanding and implementation, effective information
capture of a particular transaction, traceability of goods, automatic internal controls, etc.
A brief overview of order fulfilment process is given below:
Customer walks in
BOOKING CENTRE
Determine the Accept goods Prepare trip Consolidate days

kind of cargo from client sheet and transactions
and type of and issue a goods provide to and forward to
customer consignment note driver HO
TPT
Unload goods, Load the Prepare trip Prepare consolidate

aggregate goods sheet and list of days
goods provide to transactions and
check against GCs driver forward to HO
DC
Deliver goods
Receive goods against a
cash receipt
note.
Update the database HD

Receive updates with the received
from various. information.
As soon as the customer agrees to the terms and conditions of the contract, the goods
are booked and the customer is issued a Goods Consignment Note (GCN). The GCN
contains all relevant details such as the\ type of consignment (i.e. express, full load, parcel,
etc), type of customer (to pay, paid, account paying), volume of goods, rate, and estimated
value of goods. At the time of loading the goods at the branches, a trip sheet is prepared and
handed over to the driver. If the customer pays at the time of booking, cash is received based
on a Cash Receipt Note which records the details about the cash received like amount of
cash, and corresponding GCN.
At the Transhipment yard (TPT) the goods are unloaded and an unloading report is
prepared which needs to tally with the trip sheet. The goods to a particular destination are
aggregated and are loaded onto a truck wherein a fresh trip sheet is prepared. At the delivery
point, the goods are unloaded (and an unloading report is prepared). The goods are released to
the receiver and acknowledgement obtained. If the goods to be delivered were of to pay
type, goods are released after cash is received and a Cash Receipt Note is generated. All
branches (booking or delivery) deposit the cash receipts of each day to pre-designated bank
accounts.
In case of computerized branches, where the database is prepared for all the bookings
made on these branches and sent to the Head Office. In case of non-computerized branches,
copies of documents are sent directly to the Head Office. Each branch and Transhipment yard
also sends Daily Reports on the activities to the Head Office.
As the location and the extent of these transhipment hubs are essential for the smooth
functioning and success of the business, we try to ensure that these hubs are strategically
located and the consignments that are booked to the various destinations are within a radius of
200-250 km of the destination.
The transhipments hubs are overseen by a Vice President Operations (TPT) and the
employees work on a shift basis to ensure that there is no stoppage in the activities. The
operation team personnel deployed at their hubs include managers/in charge, shift in charge,
supervisors, clerks, and traffic in charge, data entry clerks and skilled labourers. All the hubs
are interlinked to each other, which provide us with the opportunity to ensure effective
delivery of the goods and also track the consignment. This also enables the hubs to be aware
of the goods, which are being transported. The loading and unloading activities take place
with the help of cranes, forklifts and trolleys, which are equipped to handle heavy goods in a
safe and smooth manner.
Branches
Currently, they have 839 branches in 17 states and 7 Union Territories in India. In all
the branches they provide booking and delivery services.
Particulars No. of Branches No. Of Branches
Goods Transportation
General Parcel 342
Express cargo 342
Courier 79
Maruti Parcel Carriers 25
Shiva Roadlines 6
Total Branches for goods Transportation 799
Passenger Transportation 40
Total Branches 839
INDUSTRY STRUCTURE AND PARTICIPANTS
Freight consignors usually prefer roadways over railways due to its inherent advantage
of higher accessibility and reach, and customer orientation unlike other modes of transport.
Moreover, the customers get an edge in bargaining power, as the roadways is highly
fragmented and there is intense competition even among the large transporters. However, the
large organised players who provide value-added services such as warehousing, containerised
movement, supply chain management etc are also able to influence the terms and conditions
of the freight contract, as not many transport operators provide such services. Also, while the
bargaining power of suppliers seems strong, given that there were only a few equipment
suppliers catering to a large customer base of transporters, more players showing interest in
entering the equipment manufacturing space, bargaining power of suppliers is set to come
down in future.
Industry participants in road freight transportation sector
The structure of the road freight transport industry in India has always been and
continues to be highly fragmented. It comprises many players who provide transportation
services, intermediaries transport contractors / booking agents who can provide haulage
services, brokers who fetch equipment and drivers for a commission, and the consignors /
users who constitute the ultimate demand for the services.
TRANSPORT OPERATOR
Transport operator is the one who provides transportation in the entire transportation
services value chain. These operators can be broadly classified into single truck or small fleet
operators (those who own up to 1-5 trucks) and fleet operators (those who own more than 5
trucks). Fleet operators can be further segmented into medium fleet operators who have a fleet
of 6-20 trucks and large fleet operators who own more than 20 trucks.
ROLE OF TRANSPORT OPERATOR
Small truck operators
Single truck or small fleet operators are operators who own up to 5 trucks. While in
certain cases, the single truck operator is both the owner and the driver of the truck, the truck
may be operated by the operators family members, relatives etc.
Following are some of the typical characteristics of a small fleet operator:
Ownership: Ownership of up to 5 trucks

Broker dependence: Significant dependence on brokers for business
Haulage: Mainly ply on last mile and short haul routes not exceeding 150-200
km
Operations: Operate mostly in the full truck load business
Attachment of vehicles: Small operators are usually attached to the large fleet
operators.
Large fleet operator
Following are some of the typical characteristics of large fleet operators are:
Ownership: They own or control a relatively larger fleet size, typically over 20
trucks
Broker dependence: They directly bid for contracts with consignors / users
without the support of any intermediary
Haulage: They operate predominantly on long haul on a hub and spoke
distribution model
Operations: They operate in both the fully loaded and partly loaded truck
businesses
Attachment of vehicles: They use the services of smaller operators when they
need to have additional vehicles.
Large fleet operators dominate road transport
In terms of structure, the road transport services segment is highly fragmented, while
the Railways are owned by the government. Coastal ships are either captively owned by end
users or by several small fleet operators, while pipelines are owned by a few organizations
mainly in the public sector. While road freight transport is generally described as highly
fragmented, large fleet operators control a significant portion of both the stock of commercial
vehicles and freight. According to estimates the large fleet operators (defined as owning more
than 20 trucks each) cumulatively own about 50 per cent of the total stock of commercial
vehicles and control about 65 per cent of the total stock of commercial vehicles. Similarly,
freight carrying capacity of vehicles owned by large fleet operators is estimated to be over 70
per cent and the same for vehicles controlled by them is estimated to be close to 85 per cent of
the total road freight capacity. Apart from the vehicles that are owned, controlled vehicles also
include vehicles attached by small fleet operators.
Domination on stock and load carrying capacity
The organised large fleet operators of the industry are relatively small in number and
have varying payloads; but, these large fleet operators carry a significant portion of both the
stock of commercial vehicles and freight. CRISIL Research estimates large fleet operators to
own over 50 per cent of the total stock of commercial vehicles (commercial vehicles includes
light, medium and heavy commercial vehicles excluding three-wheelers goods) and control
about 65-70 per cent of the total stock of commercial vehicles.
Controlled vehicles are vehicles owned and net of vehicles attached with the fleet
operator. Net of vehicles attached means vehicles received on attachment less vehicles given
on attachment.
According to CRISIL Research estimates, large fleet operators load carrying capacity
with owned vehicles is over 70 per cent and with controlled vehicles is close to 85 percent for
the year 2006 -07. The fleet is primarily used for general goods transportation, with the
operators working on a hub and spoke distribution model. The industry interactions with
operators and users also revealed that apart from their broad-based transport stock, large fleet
operators are able to generate business on account of goodwill, assurance of timely delivery
and quality, distribution network and necessary infrastructure.
Transport operation and haulage
Large fleet operators operate on all haulage segments short, medium and long.
However, as they are dominant in the medium and long haul operations, they operate on a hub
and spoke system of distribution. As the large operators cover a wide geographical area,
ranging from 200-1,500 km or even more, they typically have a wide network of branches
throughout the country, apart from the necessary infrastructure to support their network. This
enables them to attract users and get business on a continuous basis.
Unlike small fleet operators / single truck owners, large fleet operators operate on both
the full truckload and parcel truck load operations. Parcel truck load refers to small packages
booked by consignors that occupy only a part of the entire truck space. Large fleet operators
are able to operate in both the segments due to their wide range of distribution network and
clientele, the consignors perception of higher reliability and quality assurance.
FREIGHT RATES
As per the research, demand-supply and cost factors emerge as the two key
determinants of freight rates; however, regulations and industry structure also have a role to
play in influencing freight rates. These factors explain why freight rates have risen
continuously over the past five years, despite significant fragmentation of the road transport
sector. Over the next 5 years, the cost of transport operations may reduce structurally and this
will reduce freight rates (adjusting for inflation); however, the rates may continue to remain
firm over the next 1 year, due to continuation of healthy economic growth as well as cost
pressures.
FREIGHT RATE DETERMINANTS
Demand-supply dynamics
Freight rates have a direct impact on the distribution costs of the manufacturing sector
and therefore have indirect implications for the economy as well. A recent World Bank study
states that, despite many impediments, mainly related to the existing infrastructure, India has
achieved a highly competitive, low-cost road freight transport for basic services, with its
highway freight rates being the lowest in the world.
However, it should be noted that the costs of delay and uncertainty in transportation do
push up the effective cost of the users significantly.
Fuel price and capital cost
Fuel costs typically constitute more than 50 per cent of the transport operators total
costs; accordingly, any increase in diesel prices may reduce the players operating margins.
However, empirically, it has been observed that while the transport operators have been able
to pass on the fuel cost increase through higher freight rates when freight availability was at
its peak, the same has not been the case during recessionary periods, when they had to absorb
the small changes in diesel prices, and take a toll on their profitability.
The following graph will show the trends in freight rates and diesel prices.
Capital costs (interest and depreciation): also constitute as a major cost for transport
operators; in fact these costs constitute 6-10 per cent of their freight income. Moreover,
considering the 95 per cent penetration of finance in new truck sales and over 85 per cent
penetration in second hand sales, interest cost have gained significant importance in the cost
structure of transport operators over the past few years.
Likewise, as the number of commercial vehicles that are 0-4 years old is as much as
40 per cent usually 0-4 years is the period during which the finance for new commercial
vehicles has to be repaid the influence of any change in interest cost may affect the freight
rates. Hence, hardening of interest rates may lead to postponement of truck purchases and in a
scenario of good freight availability this may lead to a further rise in freight rates.
Comparison with Railway as mode of transport
An analysis of the normal freight rates of roadways versus railways revealed that
while the railway freight has risen marginally during 2002-03 to 2006-07, the road freight has
continued to grow. Moreover, during the same period, while the market share of roadways
(excluding last mile) increased from 54.0 per cent in 2002-03 to 58.0 per cent in 2006-07, that
of railways declined from 34.0 per cent to 31.5 per cent.
However, if we consider the effective freight rate, which is the normal freight rate plus
freight cost for last mile transportation and loading and unloading cost, the rail and road
freight rates are relatively comparable. This shows that even though the effective freight rate
of railways is competitive, the share of roadways is higher in the total freight movement, due
to its inherent advantages such as door to door delivery, higher accessibility and customer
orientation.
Other Factors affecting Road Transportation
Road development
India has a road network of 3.3 million km, one of the largest in the world, of which
national highways and state highways together contribute only about 6 per cent. But they
carry about 80 per cent of the total road traffic. Given that roads occupy a crucial position in
the growth and development of the transportation industry in general and specifically the road
transportation segment, the government undertook several projects to expand the road
network nationwide to provide connectivity and mobility in both the rural and urban areas.
Vehicle utilization
Vehicle utilisation is measured in terms of the distance covered by the operator during
the year. Changes in vehicle utilisation significantly affect the cash flows of an operator. A 10
per cent improvement in equipment speed, leads to a 5-7 per cent increase in distance covered
during the year, thereby resulting in a 15 per cent improvement in cash flows. Consequently,
the efficiency of the transporters goes up, as the average turnaround time decreases, and the
business expands by 5-7 per cent (number of trips). Monetarily also the transporter is
benefited, as the fixed costs gets spread over a higher base, thus improving the cash flows.
Given the good freight availability, if another driver is added, the vehicle utilisation will go
up, as the vehicle halting time will come down when one driver rests the other will utilise the
vehicle. Additional revenues from increased vehicle usage may more than offset higher costs
like fuel and labour. Variables that affect vehicle utilisation include the type of commercial
vehicle, road infrastructure / traffic, time spent at check posts and rest time.
Fuel cost
Fuel cost constitutes a major part of the cost structure of a transport operator; it
constitutes between 55-60 per cent of the total costs. Moreover, fuel costs are variable in
nature; hence, a small movement in fuel price or fuel efficiency significantly affects the cash
flows of the transport operator. A 10 per cent increase in fuel costs, for instance, increases the
total cost by 4 per cent.
Vehicle-mix and fuel efficiency
Transport operators can maximise their profitability by maintaining a suitable vehicle

mix, given the existing freight availability, its range of operations, type of freight carried and
contracts with customers. Since the late nineties, the preference for higher gross vehicle
weight commercial vehicles has been increasing, as they are more profitable with their higher
payload capacity and relatively better fuel cost economics.
OUTLOOK OF ROAD FREIGHT TRANSPORTATION SECTOR
The overall freight movement to grow at a CAGR of 10.1 per cent over the next 5
years and reach a projected size of 2,569 btkm. Healthy economic growth, increase in
production of key commodities, likely completion of infrastructure projects and rise in
infrastructure investments are expected to bring about this growth. In terms of proportion,
CRISIL Research expects roadways to continue to dominate the freight movement with its
share expected to grow from 57.8 per cent in 2006-07 to 60.7 per cent in 2011-12 (excluding
demand from last mile). Share of railways, on the other hand, is expected to decline from 31.6
per cent in 2006-07 to 28.8 per cent in 2011-12, on account of capacity constraints during the
same period. While the share of air and coastal freight movement will continue to remain
small, the coastal freight movement will rise due to rise in export and import in the country,
albeit, on a small base.
Over the next 5 years, CRISIL Research expects roadways to continue to move
majority of its freight in the medium and short haul segments; however, as capacity
constraints will crop up at the railways end, the roads will gain in the long haul segment as
well (till dedicated freight corridors by railways is completed; expected to be completed post-
2011-12). Growth in the last mile segment will soar to double digits in value terms over the
next 5 years, as the redistribution movement from retail consumption will continue to
maintain buoyant.
PROJECTED FREIGHT MOVEMENT
PROJECTED SHARE OF TRANSPORT MODES
INFRASTRUCTURE FACILITIES AND UTILITIES
The network of Transhipments/branches/offices covers 17 states and 7 Union

Territories in India. They have their Head Office at Varur and Corporate office at Hubli, 5
Administrative Offices, 43 transhipments hubs, 839 branches (goods transportation &
passenger) and 1853 franchisees, (goods transportation & passenger) which enables the
smooth flow of goods and services. The booking and delivering is transacted through the
transhipment hubs which are connected to the respective branches.
They offer the services of express cargo, parcel and courier. This business has been set
up to work on a Hub and Spoke Model to improve vehicle utility and increase efficiency.
Depending on the quantum of material handled by each hub, the hubs are classified as major,
mid and small size hubs.
a. Major Hubs
There are nine major hubs and more than 500 MT materials per day are handled by
these hubs. These nine hubs are located at Hubli, Sidrawali (Delhi), Salem, Vijaywada,
Hyderabad, Pune and Bangalore (three hubs).
b. Midsize Hubs
There are nineteen midsize hubs, which handle from 100 MT to 500 MT materials per
day. These hubs are located at Mangalore, Gangavati, Mysore, Shimoga, Bijapur, Harihar,
Goa, Ernakulam, Coimbatore, Madurai, Chennai, Aurangabad, Shiroli (MH), Solapur,
Anantpur, Chittoor, Vishakhapattanam, Hyderabad Local and Ahmadabad.
c. Small Hubs
There are fifteen small hubs handling less than 100 MT materials per day. These hubs
are located at Vapi, Prodattor, Nellore, Kurnool, Rajahmundry, Kozhikode, Bagalkot, Gadag,
Gokak, Bellary, Gulbarga, Kolkatta, Nagpur, Trichy, and Indore.
WAREHOUSING FACILITY IN VRL LOGISTICS LIMITED
Warehousing is an integral part of every logistics system. Warehousing plays a vital

role in providing a desired level of customer service at the lowest possible total cost.
Warehousing activity is an important link between the producer and the customer. Over the
years, warehousing has developed from a relatively minor facet of a firms logistics system to
one of its most important functions.
We can define warehousing as that part of a firms logistics system that stores products
(raw materials, parts, goods-in-process, finished goods) at and between point of origin and
point of consumption, and provides information to management on the status, condition, and
disposition of items being stored.
Warehouses at VRL Logistics Limited
Transhipment hub act as a ware house.
In the transhipment hub the goods which are to be delivered to other destinations are
stored. The space of the warehouse in Hubli is 40,000 sq feet. The total space which is called
as carpet area is around 60,000 sq feet. The warehouses are not well organised. The goods
which are unloaded are brought and kept in the respective places. There is no separate
compartment or racks for the goods to store, which may lead to misplacing of the goods.
The total capacity of the transhipment is around 1500 tonne to 1800tonne. There are
43 transhipments through out India. As explained above they are divided in to major, mid, and
small size hubs.
Store-room for automobile parts.
They have entered into an agreement with Ashok Leyland for the supply of automobile
spare parts and units in the Vehicle Maintenance Department for the maintenance of the
vehicles. As per the agreement, they have provided the space to Ashok Leyland admeasuring
1000 sq. feet in their workshop for the storage of spare parts and units. These spares parts are
available to them at discounted rates. The spare parts are used as and when required by them
and payment done on a weekly base.
This eliminates the cost of maintaining the inventory, cost of transport incurred in
procuring the spare parts at the same time ensuring timely availability of spare parts. There
are 6 branches through out India and all of them are computerised. The fourth coming years
estimation for stores is 1.74 crores. They store adequate spare parts which will be sufficient
for fourth coming three months.
Store-room for tyre section.
The company uses mainly four types of tyres. They are J K tyre, Apollo tyre,
Bridgestone tyre, and China tyre. They prefer Apollo tyres. The minimum stock maintained is
100 tyres and maximum is 6000 tyres. They use their trucks only for the transportation of
tyres.
Store-room for stationery department.
The stationary items which are required for the office use are printed in their printing
presses only and stored in the store houses. There are four printing presses through out India.
They store 400 items these store rooms. These store rooms are located in Hubli, Bangalore,
Delhi, Kanpur, Vijayawada, and Ludhiana.
MATERIALS HANDLING IN VRL LOGISTICS LIMITED
Materials handling is one of the important aspect in the logistics industry. The
materials should be carefully handled without damaging. The organization can use several
equipments which help on safe handling. As labours are not skilled they should be given some
basic training. In loading and unloading of each truck 10-15 labours are assigned under one
supervisor. At a time 22 to 28 trucks can be loaded in the Hubli TPT.
The equipments used in VRL Logistics Limited are as follows.
Fore clip
This is used to lift the goods and move from one place to another place. This can lift 5
to 6 tonne weight.
Hydraulic trolley
Hydraulic trolley is used by the labours to transfer the goods from one place to another
place. Here, the goods are kept on the pallet and then with help of this trolley they can lift that
pallet to move the goods. This can lift the goods of 3 to 4 tonnes. They are 25 in number in
Varur TPT.
Handle vehicle
Handle vehicle can lift up to 2 tonne which will be pushed or pulled by labours to
move the goods. The number of handle vehicle in Varur TPT is 55.
Pallet
Pallet is used to keep the materials, which is then lifted to move more goods at time. It
can be lifted by both hydraulic trolley and fore clip.
Crane
Crane is used to load the goods of large quantity and huge weight. All the major hubs
are provided with cranes.
FINDINGS
MAJOR FINDINGS:
The model used to provide the better service to the customer is Hub and Spoke
model.
The process of goods transportation takes place in three steps i.e. booking,
transportation, and delivery.
The pricing strategy of VRL logistics limited
The pricing is done on the basis of weight and space occupied by the
consignment (whichever is higher).
The labours in the Varur TPT are not skilled and trained, so the material
handling is not efficient.
The area of the Varur TPT is around 40,000 Sq feet. The area is utilised
efficiently for the present demand. The ware house can store around 1400 to
1600 tonne of material.
The factors affecting the road transportation.
Difference between large truck operator and small truck operator.
Freight rate determinants.
Potential for the freight movement in the fourth coming years.
GENERAL FINDINGS:
During the course of the study it was found that VRL LOGISTICS LTD. is a
service sector.
The organization focuses on customer satisfaction and best and speed service.
The major advantage is that the company is a single largest service provider in
south India.
They discontinued out of state courier service.
SUGGESTIONS
The following are the suggestions for the company for future growth and prospects:
The company should focus more on safe handling and fast service.
It should emphasize on warehousing facilities provided.
They can construct racks to make use of space in the warehouse.
They have to purchase more material handling equipments as the business

is growing.
Transhipment labours should be given sufficient training to handle the

goods.
All vehicles used for transportation should be given container facility.
The company should build relationship with industries for more contracts.
The TPT labours can be divided into three shifts for the better efficiency.
Now they are working in two shifts of 12 hours each.
The courier service can be provided in Maharashtra to gain more

customers.
CONCLUSION
VRL LOGISTICS LTD is offering high quality service for customers.VRL

LOGISTICS LTDs experience in service market through which the company can offer the
best service to the customer. The company has made sincere efforts to achieve its goals and
objectives over the years. It has good service record and has good market potential and image.
VRL LOGISTICS LTD is building long lasting relationships with its customers. Every
member of VRL LOGISTICS LTD is motivated to perform and deliver to the fullest of their
ability by constantly upgrading the skill-set of employees to suit long-term goals. Through
this the company expects to come out with highly competitive and technologically advanced
service and solutions.
As the global scenario is changing and due to globalization and liberalization the
business environment also went into sea change, so the logistics plays an important role in
todays business environment. As it is the part of supply chain management it is crucial in
every business organization.
So the company should take the advantage of changing business environment as

logistics is called lifeline of any business.
BIBLIOGRAPHY
Books Referred:
FUNDAMENTALS OF LOGISTICS MANAGEMENT
By D.M. Lambert, J.R.Stock, Lisa M. Ellram
SUPPLY CHAIN MANAGENENT
By B.S.Sahay
LOGISTICS AND SUPPLY CHAIN MANAGEMENT
By G. Raghuram, N. Rangraj.
COMPANY REPORTS (ANNUAL REPORT)
Websites:
www.vrllogistics.com
www.google.co.in
www.logisticsfocus.com

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LOGISTICS MANAGEMENT IN VRL LOGISTICS LTD VARUR

Title of the project:

Logistics Management in VRL Logistics Limited at Varur.

Need for the study:

To study the various aspects involved in the Logistics management.

Objectives of the study:

i. To study the various costs involved in the Logistics management.

ii. To the importance of warehousing in Logistics management.

iii. To know overview of freight movement.

Limitations of the study:

i. The effective pricing strategy of VRL Logistics Limited.

ii. The various kinds of services offered by them.

iii. The material handling in the Varur TPT.

iv. The capacity of the warehouse.

v. The strategies of the VRL logistics Limited.

vi. Factors affecting road transportation.

i. It should emphasize on warehousing facilities provided.

ii. Transhipment labours should be given sufficient training to handle the

Logistics is a broad, far-reaching function which has a major impact on a societys

The challenge in locating the proper size or style of an item if logistical

The frustration of going to store to purchase an advertised item, only to find

Logistics is called by the many names, including the following:

Supply chain management

The Council of Logistics Management (CLM) describes logistics management as The

KEY LOGISTICS ACTIVITIES

Figure shows how logistics activities drive total logistics costs.

Place/customer service levels

Inventory carrying costs Transportation costs

Inventory management Traffic and Transportation

Lot quantity costs Warehousing costs

Material handling Warehousing and storage

Order processing and Information costs

OBJECTIVES OF THE STUDY

1. To understand the logistics management.

The primary data is collected through the interaction with the

Healthy economic growth, rise in the production of key commodities, infrastructure

Domestic freight transportation service (DFTS) refers to transportation of goods

Transportation is the process of moving goods and passengers from origin to

FRAMEWORK FOR FREIGHT DEMAND DETERMINATION

DRIVERS THAT INFLUENCE FREIGHT MOVEMENT

REVIEW OF FREIGHT MOVEMENT

DOMESTIC ROAD FREIGHT TRANSPORTATION SERVICE:

FREIGHT MOVEMENT: BULK VERSUS NON-BULK

ROAD FREIGHT MOVEMENT: HAULAGE-WISE

INHERENT ADVANTAGES INFRASTRUCTURE SUPPORT GIVE AN EDGE TO

Greater coverage as compared to any other mode of transport

Higher flexibility in terms of door-to-door delivery, giving it an edge despite

Investments made by the government in the NHDP.

BUSINESS OVERVIEW OF THE VRL LOGISTICS LIMITED

VRL Logistics offer following services which are summarized below -

a. Full truck Load

b. Less than full truck Load (Parcel)

2. Wind Power Generation

3. Air Charter Business

VRL LOGISTICS LIMITED

Transport and logistics Wind Power Generation Air Charter

Passenger Travels Goods Transportation

Full Truck Load Less Than Full Truck Load Courier

Express Cargo Maruti Parcel General Shiva Road lines