Ceva Logistics, Maersk Up the Ante in India

Logistics power players are expanding in India as the country looks to grow its manufacturing prowess.

The Indian government wants manufacturing to drive 25 percent of the national GDP by 2025, up from 16-17 percent before the pandemic, according to the U.S. Commerce Department. Ceva Logistics and Maersk want to help India improve intermodal connectivity, port operations and shipping capacity.

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Ceva Logistics acquired contract logistics firm Stellar Value Chain Solutions, more than tripling its physical presence in India.

The CMA CGM-owned logistics company will acquire the roughly 7.7 million square feet of space Stellar runs across more than 70 facilities in 21 Indian cities. This expands the 2.7 million square feet of warehouse space Ceva currently occupies in 75 locations and 35 cities.

Stellar gives Ceva a fellow contract logistics firm with omnichannel fulfillment services catering to fashion and retail, e-commerce, automotive, food products, consumer, healthcare and pharmaceuticals, in addition to cold chain expertise.

Stellar’s 8,000 full-time and temporary employees will join Ceva. The Stellar acquisition will help Ceva diversify its presence in India, boosting its local workforce, assets, customer roster and capabilities.

“Stellar has an important network of contract logistics facilities across India and a top roster of customers,” said Mathieu Friedberg, CEO, Ceva Logistics in a statement. “Bringing on their expertise and footprint in India is a major step forward for Ceva Logistics.”

In addition to India, the acquisition complements recent growth in Ceva’s contract logistics business elsewhere in the Asia Pacific region. The deal is also expected to benefit Ceva’s freight management and customs business in the region. With new manufacturing trends and supply chain routes developing, Ceva wants its global network to help APAC clients navigate changing market conditions.

As part of the deal, Ceva acquired 96 percent of the Mumbai-based business from an affiliate of private equity firm Warburg Pincus and other shareholders.

While Ceva expands, Maersk is strengthening its delivery capabilities and further committing to its 2040 net-zero targets in India with the deployment of more electric vehicles (EV).

Within a year of deploying the first EVs in India, Maersk said it will strengthen its EV fleet to more than 500 vehicles in 26 cities covering first-, middle- and last-mile distribution across the South Asian country. This is up from the 300 currently deployed.

In September 2022, Maersk unveiled its three-wheeler and four-wheeler EVs in Mumbai and soon rolled them out for its first customer in India’s National Capital Region (NCR). Since then, Maersk has reported “unprecedented demand” from several customers.

“With growing e-Commerce came the growing demand, especially for middle- and last-mile distribution,” said Vikash Agarwal, managing director, Maersk South Asia, in a statement. “But it is not limited to just any distribution means—our customers are keen on decarbonizing supply chains rapidly, and we are stepping in to support them with our fleet of EVs in India.”

The expansion comes after Maersk recently tied up with a “large” unnamed Indian e-commerce platform to support its distribution requirements with a dedicated EV fleet that can haul 1,200 to 1,500 pounds and drive roughly 75 miles on average.

So far, Maersk’s EV fleet has covered more than 83,000 miles. Maersk is also investing in creating an EV charging network, including the option to harness solar energy at its own facilities for warehouses across India.

Digital and infrastructure initiatives have elevated India’s status in logistics in the past five years. The country has risen six spots since 2018 in the World Bank’s Logistics Performance Index (LPI), to rank 38th out of 139 countries in 2023.

India’s focus on improving road and rail aims to cut logistics costs and incentivize more international players to invest in the market.

The Indian government expects national highway construction to reach 20.5 miles per day in 2024, almost double the 10.6 miles in 2016. The share of containers shipped by rail is also rising, from 16 percent in 2018 to a projected 23.5 percent in 2024 and a forecasted 33 percent in 2030, according to India’s Ministry of Railways.

India is also prioritizing port infrastructure. While its total port capacity was 2.3 billion metric tons in 2018, as per the Indian Ports Association, this is expected to expand to 3.1 billion by 2030. In this same time frame, container throughput is projected to double from 15.4 million 20-foot equivalent units (TEUs) to 31 million.

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