About 50% of logistics cost is the cost of fuel. When fuel prices are hiked several times in a year only about 30% of fleet operators have long term contracts making fuel price hike a pass through for them but 70% of fleet operators take a hit on their profit margins. The Indian logistics sector is valued at Rs. 10 000 crores, contributing 14.4 % of country's GDP.
Out of this, 95% is accounted for by the unorganized sector (such as owners of less than 5 trucks, called SFOs (small fleet operators), affiliated to a broker or a transport company, small warehouse operators, customs brokers, freight forwarders, etc.), and slightly more than 5%, is contributed by the organized sector (LFOs - large fleet operators). However, the industry is growing at a fast pace and if India can bring down its logistics cost from 14% to 9% of the GDP (level in the US), huge savings will be realized at the current GDP level, making Indian goods more competitive in the global market. Moreover, growth in the logistics sector would imply improved service delivery and customer satisfaction leading to growth of export of Indian goods and potential for creation of job opportunities.
How To Reduce Logistics Cost on Transportation
Hydroxyl systems can help in reducing the fuel cost for the logistics and trucking industry by almost 75 to 80 percent. his drop in fuel price becomes disruptive for the whole country and the cost of transport and delivery of goods becomes very cheap suddenly.
We at Hydroxy Systems Pvt. Ltd have perfected a new way of producing automotive grade diesel. With plastic waste as our raw material, our process delivers 500 litres of HSD for every one tonne of shredded plastic waste. Large fleet operators can buy and install the hydroxyl system plastic to diesel converters directly. Small fleet operators can cooperatively install our system and share the diesel.
With our system, the production cost of one litre of diesel is around Rs. 10. If cost of plastic waste is added at Rs. 5/- a litre of diesel becomes available at just Rs. 15/- .
A dream come true in terms of fuel cost for the logistics industry.