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Opinion

November, 2017

A SMALL RULE ON WISHES


I am sure all of you have sent and received several messages on Diwali.
A small rule on wishes. You can give only what you have. So when you wish health wealth happiness to someone, make sure you have enough of it yourself.

The world has reduced everything to a Happy something – which is the 1st level of experience of anything. There are deeper levels that exist. If you think of it:

LISTENING IS DEEPER THAN TALKING

THINKING IS DEEPER THAN LISTENING

FEELING IS DEEPER THAN THINKING

And so on… we don’t even know how many layers are there but all will agree that they exist because we have felt them. So here below I present a small story on the festival of Diwali. When you read, you will listen, which you will think of, which you will feel and experience it on many layers.

Once there was a king who had 7 beautiful daughters.

One day, he asked all,

King: Who is it that feeds you?

The first 6 daughters said in praise of the king: It is you father, the greatest king, who feeds us.

Only the 7th daughter said: It is god who feeds us all.

The king got very angry. He married his 6 daughters to handsome rich princes but got the 7th one married to a poor and leprosy inflicted person.

The 7th daughter was very happy in her life however. She told her husband never to come back empty handed when he came back home from work every day.

So each day he would bring some fruit, vegetables, wood etc. back home.

One day he went to the jungle but couldn’t find anything to take back home, but found a dead snake, so he took that with him. When he showed to his wife, she asked him to throw the dead snake on their hut’s rooftop.

Meanwhile, the king of the state where she was married had a wife, who went out bathing one day to the riverside. At the riverside, she kept her expensive diamond necklace on the banks while she bathed.

Suddenly an eagle snooped down and took the necklace with it. She was heartbroken.

The eagle meanwhile realised it is of no use to him and saw the dead snake on the poor 7th daughters huts rooftop , so it snooped down and kept the necklace and took the dead snake which it could eat.

The king meanwhile announced that whoever finds the queens necklace would get a reward he desires.

The 7th daughter asked her husband to take the necklace to the king and whispered in his ear what to ask.

The king was very happy and asked the man: “What do you want?” He said nothing. The king forced him. He again said he wants nothing. The king ordered him: Ask you must, what is that that I as king can do.

He then told the king that his wife has a wish that on Diwali, no one light any diya in the whole town except for their hut. The king thought about it but for his word, said yes to it.

So on Diwali, the whole town was dark (being Amavasya, a no moon night) except for the poor man’s hut where the diya was lit.

So when Goddess Laxmi arrived, she saw that its dark everywhere and so went to the poor man’s hut and knocked on the door.

The 7th daughter, the poor man’s wife, asked: “Who is it ?”

“It’s me, Goddess Laxmi”

Wife: “Why do you need to knock, please come inside”

Goddess Laxmi walks in and is very happy and asked them: “What can I do for you, you are the only ones who lit a diya for me”

The wife said: “Now that you have come, never leave, stay with us”. And with that, she shut the door.

And Laxmi stayed there forever.

And so friends, with this small longish story, I wish you all a very happy Diwali. It is the feeling you invest into mythology that connects us from the material world to our souls. It tells us that with internal grit and determination and planning, even the gods can be captured by overcoming all our obstacles. It is not mere sweet eating and cracker bursting and bhajan singing, it is basically invoking the powers that lie within all of us. To invoke the powers, one needs concentration and for that one needs seclusion from external gimmicks.


September, 2017

What’s Your Business Type?


Rahat Talreja
Vice President – CSS Central India


As I write this article, the news of the moment is the resignation of the Infosys CEO. A lot of analysts (which is surprisingly a big job these days, in grounded part of India we call it “Bol Vachan”) are giving their views that the per employee revenue is up, the new technology verticals under innovation& automation are shaping well etc.

But the real issue (which basically means ‘my point of view’, people add the word real to assert their own point) was that the standard of governance in the board was down and investors (including the marquee promoters) had lost trust in the working of the board.

Now I don’t want to talk much on it except the point I am making through the headline of my article, what is your business type?

Let us see what the levels on which these evaluations are done are:

a) Value based analysis
b) Financial analysis
c) Hybrid model of the a + b

Value Based analysis

Hello Old school: I think you already know this word and its meaning “Values”

Hello New school: Don’t know this word? No problem carry on..

In this, the prime importance is laid on the values on which the business is run and the clear, defined & written policies which form the benchmark for any evaluation.

Financial Analysis

This is the most important criteria in our times. But most have different understanding of financials and therefore the analysis may not be absolute, it is always relative. Let me illustrate.

We have all seen the recent emerging market rallies wherein even India and its benchmark indices are all lifetime highs. Most common reasons coming out are that it is a liquidity rally since other asset classes have lost relevance and printed money of the central banks didn’t trickle into real economies, so liquidity in the system went into equities the most besides other financial assets and instruments like bonds and debt market. The main point to note is that earnings growth has been flat to negative over the last 4 years.

In this bargain, even a lot of non performing companies have seen their valuations run up. And this is exactly what happens when businesses are liquidity driven and not profit driven.

See in our industry for example – the consolidation, forwarding and logistics industry. Even if you lose a million rupees a month, you need at least 5 years to blow up a meagre investment of example 5 crores. And the best part is you never have to pay those 5 crores. You only need to pay 5 lakhs interest on it each month.

So many in our business run it on liquidity. The moment the liquidity dies, they either raise new funds or run helter skelter looking for newer options.

This is a business where if you run it on profits, you don’t need any investment from day 1. And let me assure you that a lot of people hide behind this liquidity survival for many many years in the industry and get away with it.

Hybrid model

This is obviously the model that most are trying to follow today. At least trying.

The crux of the above segmentation is that we need to see what our real business type is. Are we emphasising focus on volume, value, profit, liquidity or nothing. You may think you are focusing on profit but your actions maybe not in line with achieving it.

Illustratively, one should always focus on rich clients. And what is the definition of rich? Not that the client has a lot of wealth, his cars, his phones, his properties etc. This is the start of wrong analysis. Rich for us is the client who has rich thinking. A thinking where he is rich to think that after he has made all that money , his long term vendors also deserve their pie under the sun. And you will see majority of them are more miserly for others once they have achieved their financial goals.

Their vendors keep visiting them in the same train, same bus, from the same house etc. but the clients keep getting richer, getting into bigger cars, bigger homes etc. These are absolutely poor clients let us first understand that. In fact most shun their own business and start focusing on what you do. So they will call for quotes from 10 different forwarders, squeeze all, delay payment and have all the fun.

Shift gears to rich clients. The ones who value you, your time, your effort, they are certainly not big themselves. They are rich for us. They are loyal, let you earn, pay you on time, give you respect when you visit them, value your relationship.

So friends, I used a few analogies so that we all realise that our analysis should be real, in line with our goals and only then our actions will help achieve those goals. This is the best way to move forward in my view and lets answer the first question in that direction today – what’s your business type?


July, 2017

Why All Cars Below 25 Lakhs Need To Be Banned In India


First, this is an impossible task. Let’s say a member of parliament (MP) proposes this in a meeting, his own colleagues will shut him up. Let’s say for some reason, his colleagues (Other MP’s agree), then the parliament may not pass the bill in both the houses. Several back door reasons will play. Who will consume commodities, metals, labour, capital – auto industry in India is one of the highest consumers of these inputs. Indian manufacturing will lose its sheen. All companies will lobby against the same. Most of all, the public will oppose it strongly. India being a strong functional democracy will find it impossible to pass this.

So let’s say this is a fictional article because it can’t be converted to reality.

Now, I am not the “banning” types. I just say it for getting the basics of life back like clean air, space, safety etc., and more so for aesthetics back in urban areas. This is also not classist because most of us including myself will have to weight options if cars cost above 25 lakhs.

Let me give some facts:

1. In 1995 , there were mainly 2 categories of cars – 1 sedan – Maruti esteem and 1 hatch – Maruti 800

Esteem was priced at 6 lakhs and 800 was priced at 2 lakhs

In these 22 years since 1995 – everything in India is up 20 times at least. The inflation index says that the median rise in price is 16 times

So by this simple reverse math, the 6 lakhs esteem cost 1.2 crores today and the 2 lakhs Maruthi 800 cost 40 lakhs today. So it’s not that cars were available at 5000 etc in 1995. The point is that a car is a car. It should be priced at a premium and only those who can afford it should buy it.

2.  Now if you disregard the economics above, let me show you around. Look at the road around you and see. Maximum cars are below 25 lakhs and look at them. It’s a shame on the aesthetics if they matter. We have 39 hatch back cars now named funnily but just look at them. It’s a box of metal masquerading as a car. Vomit. Think of that favourite hatchback or sedan. Think rationally. India is a country of immense beauty. So you have a sense of beauty. Now think with this sense. Vomit.

3. Most of these cars are sold with jingles and advertisements where it’s shown screeching, twisting, turning etc., and that is exactly how the owners of these cars drive them. Whatever happened to safety? These cars have very basic safety features but who cares for the drivers safety because the drivers themselves (due to their unprofessional driving) are the real threat on the road. The safety needed is not for passengers but others on the road. Airbags should be placed outside the car and not in it.

Now think of a scenario where all cars below 25 lakhs are banned and imagine the road. You will remember your city as it looked in the 90’s. Clean, expansive and beautiful. Open space, few cars, people walking, what fun!

But we need a solution as well, correct? Taxi network, and again all expensive long sedan taxis. All costing more than 25 lakhs. Not the lame duck ones with a touch screen mobile on its windscreen. Driving like nincompoops.

Now any person who can buy a car worth 5-25 lac can surely afford a taxi anywhere and pay 1000 bucks so what ? Also all drive ring licenses should be with strict tests like in Dubai. And voila, long, swanky, sexy looking sedans on the road dropping people. And I firmly believe that most people just wander around just because they have a car. Once they don’t, unnecessary wandering will stop for sure. What’s the need? Sit where you are duffer.

I think it’s not increasing hospital beds, its reducing patients, if there are no hospitals, i think lesser people will fall ill. If there are lesser restaurants, lesser the people will eat out. It’s the supply that is creating the demand. Not that we want it. But someone thinks you need it. I strongly feel that if there is no jail, crime will be lesser. Because it is there, some people go for it. This is all in the subconscious world of human beings. You act out of presence of supply.

Side effects of the 25 lac & below car ban will be:

  1. Unemployment
  2. Lack of demand for metals and plastics
  3. Stock prices of many companies will crash
  4. It may look unpopular
  5. It may look like favouritism to the wealthy
  6. Cribbing by the masses


But in 6 months, everything will settle down. Solutions will come up. Just imagine that clean, wide road. Also the municipality will not be blamed for bad roads because most won’t be driving on them. Less clutter on Facebook, whatsapp etc. No sarcasm. I won’t honestly do it if I could. Imagine a life without names like Dragon R ( why not Dragon S), Bravio, Shitwft, Lasoon Go, Hi ten, Hi twenty, kitna Hi karega, Polio etc wink – I think you know what I am saying.

Signing off and rushing back in my Gonda Cheaty


March, 2017

Seeking What We Can Never Receive and Receiving When We Stop Seeking


Rahat Talreja
Vice President – CSS India


This article is not about business or economics in its conventional way. But the world is run by people and so whatever is going on within people affects commerce and trade as well. So this is my license to write this article in a business journal.

What is it that you always seek?
Peace or Stress ?
Sorrow or Happiness ?
Poverty or Wealth ?
Love or Hatred ?
And so on ….
Ask yourself.

The conventional and obvious answer is the “ better “ looking feeling wether Peace, Happiness, Wealth, Love etc Don’t you remember the several messages you receive and forward on occasions like Diwali, Eid, Christmas seeking the above for you?

But now ask : Which is more powerful and Think. ( this is keeping your mind silent and tongue silent and letting your mind and energy go on a deeper plain ) the definition was important because we are talking more and thinking less these days

The more powerful thing is the one which is omnipresent and the one we are seeking is eluding us always or not visible.

So Stress is present always, peace is to be found
Sorrow is a larger reality, happiness is a wish
Let me give you an example.

All religions, leaders of peace, humanity etc always talked and worked for “ Equality “

Many centuries have passed. Is the world equal ? Need I answer this no brainer? Can I actually say that inequality was always there and is there and will always be there. What happens is that we make the omnipresent reality a bad word and then seek the opposite of it always

But lets be humble to accept that “If the maker of the universe thought that inequality was not required, it would not be there. Simple. Period.”

So if equality is not there – it had to be like this. The issue is our doubt and distrust and non acceptance of the realities around us.

People may argue that what ought to be there, wouldn’t always be.

But just do simple observation. No intelligence required.

The maker didn’t want a cat giving birth to a human, does it ? it doesn’t

The maker didn’t want the ocean to cross its line at the beach, does it ? it doesn’t

But unequal – it wanted . And it did. We cant decipher why so we keep seeking the other end of it. And fail. Till date.

No eye image, no thumb impression, no toe print in the world is equal. So what else should be?

So i come back to the main point of this article. By illustrating the example on equality, I want to simply say that what is present is actually the powerful reality and not the opposite of it. The issue is we make a bad word out of it and keep trying to rotate it. We are actually masters at making bad words out of situations. The two eyed approach. The dual aspect approach.

Without realising that:

Only after stress, deep stress, the peace is recognised – the absence of stress.

Only after sorrow, deep sorrow, happiness is recognised, the absence of sorrow.

The stress is the womb on which peace grows

The sorrow is the womb on which happiness grows

So now I request you all to stop making bad words out of realities.

And accept reality.

And then see what happens.

Once you are ok with stress, the value of seeking peace will go away.

Once you are ok with inequality, the value of seeking equality will go away.

And as every aspect of reality is accepted in its own form, the effort, pain and journey to make the opposite happen will end. Because your starting and ending point will be the same. You will be the 1st and last in the race because the race will never happen. Because now, you have stopped judging everything in dual aspect.

I remember a hilarious situation. Just before a company’s results are out, there are analyst expectations and then if the results are lower than that, people react negatively to it.

But the result is the reality, the expectation is above it. Funny isn’t it.

Another example is in eating. Rich food and Poor food. You eat as you can afford. But what does it result into? If you eat the food of the poor you never get the diseases of the rich. But one strives to get from poverty to richness and misses the mirage.

The article needs to end like this. Understand carefully.

In continuation to my own point that the actual reality is omnipresent and we make a bad word of it and seek the other opposite end. ( Inequality the reality and equality the opposite)

But the reality is also that we do it. This making a bad word if it and seeking the other end. So if it is like this, so be it. My article and its points stand validated only if they stand cancelled. I hope the confusion has bought you clarity on a deeper point.

If not, turn the page and ignore this article, its as simple.

Cheers


January, 2017

Caste System in the World


rahat-talrejaOh no? What did I just say? isn’t this supposed to be a corporate journal and I need to write all the neutral and nice sounding things which appear modern and liberated from the past clichés of society like caste , class etc.

Shouldn’t i have written words and phrases like “go green” or “value addition” or “digital revolution?”

How could I use THAT word in the 21st Century?

But me being me, I can’t remain on the surface for long. So let’s get to the real thing. Which is our internal world which is not seen by all but runs us constitutionally in every way.

Caste! So what is it? It is nothing but a race or a set of similar people who follow similar customs and traditions and mind set and thinking. Not wholly but mostly.

My current insecurity makes me identify my current caste.

If sitting with a Delhi person, I am from Mumbai

If with a Chinese, both Delhi and I are Indian

If with a European, all, Chinese, Delhi and me are Asian

If with an alien, all, European, Chinese, Delhi and I are from the Earth

If in a car, the guy on the bike is another caste

If with a female, I am the guy, the other caste

If with an old person, I am young, the other caste

If I am fat, the thin guy is another caste

Besides if i am my caste, all others are from the other caste.

So basically, my dual nature of viewing things, with two eyes, and not the third eye: the eye of perception, everything is Another Caste

I am basically “casting” myself in one slot, viewing with 2 eyes and automatically the other becomes “other caste”

If you see, this caste system emerges from human insecurity and nothing else

He is just trying to get comfortable in his own casted space.

If insecurity is a fear and the human overcomes it be “casting” himself, how can it be wrong since it comes from a totally helpless and hapless position

Now a lot of countries like India are especially infamous for the caste system. North Indian, South Indian, East Indian, West Indian. Dig further and you get many such bifurcations.

So as we have observed, human beings first need “security” It is the most fundamental need and survival instinct of a human being. You cannot move forward one bit unless you feel secure. This is why now I come to the point that it is not the bad word it is made out to be. In fact the whole world follows it. I have seen in India. Japanese forwarders work with Japanese exporters/importers. Germans work with Germans. And so on. It is the feeling of security, of being like them, of having same thinking. And this is across the world. A very big role is played by the caste everywhere in the world. I have heard how Jews are comfortable with the Jews. How Whites avoid marrying the other colours.

Nothing wrong. It’s the comfort, the security; the same values the same thinking, the ability to address issues together.

The problem is we made it a bad word and then started avoiding using it on the surface although internally, our fundamental need of security and comfort drives us to think with that mentality. Many people suggested that the world citizens have globalised and everything is common now. But look around on the socio-geo-political front, globalisation has failed miserably. Protectionist policies are coming back on the economic front, on the leadership front, protectionist leaders are getting elected with recent examples of this being Mr Trump in the USA and The Brexit vote. How you find the disparity in retirement ages bring grudges to the hard working European countries vis-a-vis the earlier retiring populations of other European countries. In fact the prime agenda is now to save the EU. How the migrants from Syria and the other GCC countries being met with resistance from taking refuge. How Russia is consolidating its CIS position. How India is protecting its local farming industry for years now with protectionist duties.

As they say, you can only make others happy if you are yourself happy. Same applies to races, castes, countries etc. Human populations became adventurous in the name of globalisation and now are coming to terms, that first is security, then comes the rest.


Don’t you see that pickle jar being off loaded by the customs for an Indian traveller? It’s the pickle that gives him security. That taste. Makes him connect to himself, before he connects to others. The goal of every person should be to make a relation with himself first and then others. Every act you do should take you closer to yourself.

And for that, I think the most important is to see things in three dimensions and not duality. Beyond good and bad, beyond right and wrong, beyond day and night, beyond fire and ice, beyond high and low. The fact that every aspect is useful to understand the other aspect. That good cannot be understood without knowing bad. That richness can never be achieved without knowing poverty. That tall cannot be understood without seeing short. This is the third dimension. Which takes you beyond presentation, performance and any other external activity. It gives you a “cast” where you slot yourself and see things as they are. Without judgement. Because that my friends, is the actual caste that we belong to.

The inner world of blood, bone, mind, soul, perception. All the same.

Cheers and Merry Christmas to all


November, 2016

Macros VS Micros


rahat-talrejaThe year 2014 looked tired. There was a feeling that things have reached a top rapidly and therefore we were entering a long phase of consolidation for economies and businesses across the world after the golden decade of 2004-2014.

It quickly dawned upon all that 2015 is even slower than 2014. The year saw fresh addition of equity and debt to balance sheets across the spectrum of economies and businesses. Existing capital was not performing in line.

And as the year 2015 eventually sunk in, people soon realised that 2016 was even slower. Actually threatening world economies and you have seen that the most active participants in the year were central banks, on whom a lot depended to let liquidity bail us all out of the slowdown.

2016 mellowed ambition and let pragmatism set into economies. All capital in the world realised that beggars cannot be choosers. Preservation of capital became central over Return on capital. Emerging markets offered short term returns on world capital but corresponding currency depreciation over the last 30 months eroded that significantly.

Let me turn the focus now on India specifically. The Indian economy was responding to this new phase of consolidation and distribution. Why not? 52 % of the sales of the top 100 Nifty (Indian stock index) companies came from exports. Also domestic consumption was muted and savings also took a hit since sustenance expenditure elevated due to real estate inflation. By the way the inflation which we calculate is based on farm and factory output data which is obsolete in today’s times to calculate urban inflation. When you sit and have a 300 Rupee coffee, you pay for the real estate on which you sit and not the coffee itself. So to take farm output cost of coffee will never reveal the real picture.

But if you ask me, how does all of the above matter at all. It is only good academic data and can be used to talk at social events where everybody has something to say on how economy and country should be running. Then eat food, gulp your drink and go home. Macros matter but Micros are the real test of your mettle.

And this brings me to individual businesses. We saw all of them realign to the newer market realities. Over stretched companies collapsed. Rightly allocated ones survived. But there are a whole lot of companies who actually became more efficient and profitable in this macro environment.

The non-performers always hide using the macro slowdown and emerge taking credit during the macro boom. But the real fighters are those businesses who use all events to their efficient realignment.

In my view, any company turning less than USD 20 million remains largely unaffected due to any macro events on the global or domestic economy level. Their industry macro decides their micro. Let me give an example: There were two boys in the same college. One dull, the other very bright. After 20 years, they met. The dull boy went on to become a senior executive of a construction company and the bright boy was the top executive of an airline. Needless to say, the dull boy was doing far better for himself because his industry macro supported him more.

What is basically required in dull times are:

Honesty: This is a building block to be courageous. We have to accept realities as they are and in their right context rather than masquerading them without own bias and inhibitions.

Courage: To take bold decisions. Brash is not bold. In fact it’s the opposite. Bold is to do what is required and not do what shouldn’t be done. Sounds clichéd but it needs real courage to do it.

Sharp analytical skills: To take the right decisions. Many pound foolish and penny wise decisions are purely due to lack of any meaningful analysis.

Change: Randomness is not change. In fact keeping business fundamentals constant are a good measure of change. Also change should meaningfully and tangibly yield a result and not just alter emotional situations.

Perform: From top to bottom, everybody has a role to play and needs to perform to his best ability. Ability to recognise ability and be secure about it is the hallmark of all successful business leaders. In fact, it is by standing on their shoulders of giants that one sees the world.

Be Strong: Strong is not speech power, it is will power. Strong is not talking, it is silence. Strong is not intimidation, it is accommodation. Strong is not indulgence, it is restraint. Strong is not rhetoric, it is reality. Strong is not intelligence, it is wisdom.

2017 approaches.

I wish everyone realigns and hope that India Inc reaches its full potential. To all my fellow business brethren, this is a small poem. I hope it gives hope to all.

He Fell.
He Faltered,
But didn’t Fail.
He waited.
Waited for Long.
Almost Forever.
And then it came,
His time.
Under the Sun.


September, 2016

Why GRI is More Important Than GST For The Logistics Industry


There is a unique relation between all organs in the human body. They always go through the central leadership of the brain who directs them to act in a certain way and react in a certain way to an external stimulus. This is the standard procedure and in existence since mankind itself.

But two organs have turned out to be breaching this protocol for the last few years. Some outsiders (Social media avenues like Facebook, Twitter, Whatsapp etc.) have motivated them. These controversial organs in cahoots with each other are:

Ears

Tongue

What they have done is, they have become hand in glove with each other and skipped the intermediate link of involving the brain. So ears listen and tongue reacts instantly. Read a tweet, react. Read a post, react. Read a message, react. And react FAST. This is the new chaos called social media.

I remember, earlier days, if some people were fighting outside the railway station, suddenly a crowd would appear and in 7-8 minutes, all were giving “solutions” and in 11-12 minutes all were fighting with each other.

Same thing is happening, but not necessarily outside the rail station.

Now the point i want to make is: This rhetoric, which is aggravated by the noise around it, is about GST legislation in India. Suddenly, everyone and his uncle think that this will be very good for the logistics sector.

I will speak for our sector only in context of GST. The buzz is:

• Due to a “One Nation, One Tax “theory, all indirect taxes will be subsumed and therefore there will be ease of operations and flow of goods and services.

Remember – one nation one tax is a good theory but look within and see the difference of opinion and chaos within your own house, office, society, club, village, town. Accounts department doesn’t agree with marketing teams so how will centre and state agree and work without chaos is to be seen to be believed.

• Since goods and services will flow freely, a unified National Logistics policy will come in leading to organisation of the industry.

All i have seen in my observation of industry is that whenever a “policy “or “ organised “sector is tried to be created, the small, middle, tertiary level players get exhausted and only the large fish remain. If this is good or bad, you decide but I think it is necessary to have industry at every level of operation, especially in a country like India, where entrepreneurs are at each level.

• Then due to this policy, 100% FDI in warehousing will be possible, 3PL and 4 PL will get a boost with the entry of multinationals etc. Look, the listed players who are ready for it will benefit. But the industry as a whole will be further cornered and narrowed.

Also, never forget that FDI is just a policy. It doesn’t guarantee FDI. Look at the real estate prices on which warehouses are built which are higher than London, New York, Tokyo and I doubt if anyone will want to pay a price for it, knowing very well that the final pricing power of warehouses to customers is nil.

That brings me to a larger point:

GST is only a tax situation. Tax alone is not the Business. If the Business is there, tax comes in the picture. There are four constant players in any business:

•     Shareholders – Real owner
•     Managements and Employees – executors
•     Tax – government
•     Customers – consumers

This doesn’t change. What changes is that according to the macro and micro dynamics of that industry, the share of revenue is distributed. Let me illustrate with an example:

Let’s say in Logistics: The denominant is INR 100. The year is 2016. The Base year is 2001.

Customers benefit the most because of no pricing power. So they have almost 45 bucks of this 100 – which in 2001 would be 15 since there was no competition and logistics companies had pricing power.

Management & Employee costs have escalated over the decade so as of today; they corner 35 bucks which was 5 bucks in 2001.

Tax: new taxes like service tax have come in and direct taxes have also gone up so this corners 15 of that 100 today which was 10 in 2001.

What remains is Shareholders or Owners who have the balance 5 out of the 100 today. I am not just saying. The Net Profit After tax component of the large listed players in India and around the world is in low single digits like 5%. This in 2001 was 70 if you do the reverse math.

These 70 out of 100 enabled them to buy offices, land, warehouses, equipment etc. and the asset prices appreciated over the years. Ask a promoter today to invest 150 crores for a warehouse and then hunt for business without pricing power on the back of discounts and he will rather do nothing than hit himself on his own toe.

So what is needed?

A business situation in logistics needs to change. Pricing power needs to come in which i don’t see coming anytime soon, maybe never. It looks like the best is behind us. On immediate basis, that business situation is GRI (General Rate Increase)

That happens when demand picks up and supply can’t catch up and the business situation changes for the better. Everyone makes better profits when prices are higher. You may argue that LCL rates never go up but see your own P&L statements over the years and realise that when the prices were higher, the going was the best.

So to my mind, a business situation needs to better, not a tax situation like GST.

GRI as of now is much anticipated than GST.

But you won’t listen to me because print, digital, broadcast and social media are all shouting: GST best for Logistics. All stocks have run up in anticipation. Companies in the business of Market Cap, congratulations. You can do one thing for me at least: You don’t breach the brain in this sinful partnership of the ears and tongue.

Like!


July, 2016

Zero Is The Superhero


Have you ever wondered: People are so busy giving the Right answer forgetting that the question itself may be wrong?

Well, the conditioning that our environment does to us is such that we start playing to the rhetoric without actually thinking why?

So examples are:

We may call FPS as FPS Shipping and CSS as CSS Shipping, in-spite of the S already taking care of the word shipping.

            Or

We may all ensure that we have medical insurance but never ensure that we have a healthy life by eating and living well

            Or

We may constantly be seeing our emails or phones or Whatsapp without actually any urgency on anything

Or

We all want to become market leaders or come 1st in whatever we do.

Ahh, the last example is interesting. Coming 1st or the obsession with the 1st position or being on top at number 1.

Isn’t that what we all are trying to do sub consciously and isn’t that why we have most of the stress and emotional problems in life. The society is sub consciously celebrating anything and anybody who is at number 1 and therefore we all think by pursuing the number 1 position, we will get the self-esteem and self-worth we all are looking for.

But today we will sit back and check if the effort is worth the pain.

The quest to get to the top or number 1 brings out several poisons and i can enumerate as follows:

a)  It gives birth to “Competition” – when you want to run a race, since positions are all relative numbers and nothing in absolute terms, you have to become competitive. What this does to you is it makes you a person who becomes relative to his environment and not in harmony with it. So with each other thing or person, you will try to find your relative standing and stop seeking to know how you stand in harmony with it.

b) Next poison that comes out is “Insecurity” – when you start viewing everything in relative terms , you will get insecure about yourself. In absolute terms you are secure because nature has given you a harmonious position and not a relative position. But your eyes with which you view have become relative so you think you are insecure even though you are secure. Got it?

c)  Now armed with high “competitiveness” and “insecurity” and a vision “to be 1st “, you are totally out of context with the ways of existence and have created a parallel world in your mind. And now, whatever, whoever and whatsoever comes in the way of you gaining your relative position in the world, you view it as “enemy”, “obstacle” or “challenge.”

d) Then come some so called leaders (who are nothing but victims of the same thought process and have accumulated some wealth or what they think is “intelligence” but lack basic premise clarity) and they tell the young: overcome all competition, obstacles and challenges in LIFE.

By the way, keeping money small in life is a part of thinking big. And here you have some profiteers giving lessons on LIFE. Laughable isn’t it?

e)  Then the pursuit starts and it never ends, till you end or die or give up. Because it is a race no one wins. At every pedestal, you realise, i am so tired and yet there is so much to go. Because the flaw is the way you view things and not how things really are.

Ok, let’s say, a lucky few reach the TOP, at number 1 Or 1st position. Now what? Now, as all movies, enters the real villain. And that is the number Zero.

You have never thought about it but read now:

a.  Even if you come 1st, you are still behind Zero.

b.  Zero is so humble that it is never visible to any.

c.   Zero is so powerful, that if it stands behind anyone, it can add tremendous multiples of value to it.

d.  Zero in itself is free of all the poisons mentioned like competition, insecurity etc. I mean how much incrementally insecure can one get when one is already a Zero.

Now look and compare the person who has after all the effort come 1st. He is still behind Zero. He is only 1st and has nowhere to go now. He needs to preserve his 1st position all his life now and live in high insecurity. Not Zero. 1st position is actually a jail. From where you just can’t fail. But Zero is free, independent and can stand where it wants to. It stands before you and stands after you. You are actually nothing. It is Zero who decides what you are.

So my dear friends, next time you “PRAY” and ask god for something, pray that he makes you a Zero. Because as you have rightly realised by now, Zero is the ultimate superhero!

Practical tip: As easy as it sounds, it is most difficult to become a Zero. So my suggestion is for now, you aim for number 3 or beyond. Because number 2 is always HURT that he lost to number 1 by a fraction. And number 1, all of you know, is in a jail, insecure and highly protective of his relative position. Number 3 or 4 are relatively more comfortable. Relaxed, Living, Breathing.

Breathe. Hope you are?

Rahat Talreja
Vice President – CSS India
rahat@cssindiagroup.com


May, 2016

Why Rocket Science is So Simple But Logistics is Not


We all keep saying : This is not rocket science!

Its more to describe something as simpler compared to a more complex rocket science which looks very intriguing from the outside.

Rahat Talreja
Vice President – CSS India

Today, I wish to decipher it and make it as simple as it is for you. Today you will realise that it is safe to tell a rocket scientist that it is not logistics (to make his own subject seem simpler to him)

First of all, the word Rocket Science itself is a misnomer. It is more appropriately Rocket Engineering or Rocket Technology.

Why?

Science is basically the study of the origins, nature and behaviour of the universe. science is therefore “study” of what is already there.Whereas Engineering is more about using scientific concepts and engineering principles to solve problems and develop new technology. Engineering is therefore “problem solving through solution development”

Now what exactly is Rocket Engineering?

Aerospace Engineering – which has 2 parts: aeronautical and astronautical

Aeronautical is used to describe all engineering which relates to flying within the stratosphere (lets say our local aircraft etc)

Any flying outside it is referred to Astronautical (rocket, spacecraft etc)

So all study & development related to Astronautical is Rocket Science as we know it.

So why do we think its complex?

Since all the flying is outside the stratosphere, complex weather conditions, temperatures, pressures, objects, gravity etc are involved. This is the main reason we think its tough. Because we never look up, we are mostly looking in our computers or the road or the nice building or the good looking people and things which are on ground near us, that’s it. In fact Rocket science is so simple that you will see many producers made movies on science fiction like:

Alien, PK, Krissh, Interstellar, Star Wars, Star Trek, Gravity, Independence Day, Apollo 13, Spaceballs, Avatar, Extra Teresstial, Jaithra Yathra, Bharathan Effect , Indru Netru Naalai etc.

But, have you ever seen a single movie on Logistics, about packing a console box, about warehousing , about a trailer looking for parking at an Indian port ?? never, because no producer understands it to attempt it.

Rocket science is so simple that only 1 company in the world is needed to run it : NASA

But logistics is so complex that many individuals, in every country around the world have gone their way and accumulated a team of people and we have thousands of logistics companies yet no one is able to say that we don’t need any more. So the research continues at every level.

Rocket science is so simple that they dont have any convention or meeting or get together or associations or maybe once a year if they do.

Logistics is so complex that we have 8-10 associations like CAI, AMTOI, FFAI, IATA, WCA, PCN etc, we have at least 10 meetings per month in every nook of the world, we have agent meetings with one to ones at least once every quarter, internal meetings every day, and sales meetings twice a day at least.

Rocket science also never produces any heroes . By the way, which aerospace hero do you know and are chasing to hire ? But logistics is such a complex subject that heroes are made in every corner and are chased for their 100, 200 , 500 , 750 cbms with pots of cash by all.

Before a space mission, every Tom Dick and Harry or in Indian context, every Sonu, Monu and Tonu know that a “rocket” will be used and there are 5 astronauts going in it.

But in logistics, till the Friday cut off, even the head of the company doesn’t know if it will be a 20’ or 40’ or 40 HQ that has to be placed and how many cbm if at all a 40 HQ – 45, 55, 65 or 70 cbm will be stuffed in it.

When you look in the sky, even a child knows : Hey thats the moon, thats the sun and it will rise for sure everyday.

But on looking at a well dressed salesman in logistics, no one can say for sure if he will stuff your cargo, release your BL on time, pick your phone when cargo is shut out or not fleece the city if there is a case of cross stuffing.

A rocket or spacecraft does most of the work through computers which are fully automated, like an auto pilot in commercial aircraft.

But in logistics, carting, stuffing, stowing, lashing, choking, sealing, shipping, destuffing, unloading, storing, delivery order, outstanding payment collection, etc everything is done by breakfast eating, coffee sipping human beings.

When a spacecraft takes off, it leaves so much of gas behind it.

A logistics salesman’s sales pitch is THAT gas.

Rocket science is heavily funded by the government due to its non commercial and expensive expenditious nature.

Logistics companies have the same nature of being non commercial (since everyone wants minus freight and free other things like stuffing plan, sailing schedule, hand delivery of BL, make the certificate of origin for free, less DO fee, less storage, discount on THC etc) and also expensive due to rocket high rents, salaries, travel costs, high interest rates etc but no one will fund it.

Never heard of IT scrutiny notice, service tax notice, DRI notice, ED notice, Customs notice, CBI notice or Income tax raid on NASA.

The most important, there is no service tax on flying to space

But wef 1 June 2016, everything is subject to service tax in logistics

When you die and meet Neil Armstrong in heaven, tell him about it.

By the way, just like people who live have the fear of dying, people in heaven always have the fear of being born (their worst dream being to be born and make a living out of collecting cargo)


May, 2016

World of Knowledge Opened for the Little Ones


CSR @ CSS – New Library and Smart class for Govt. LP School from CSS Group Chairman

As part of the CSR initiative, CSS Group Chairman T S Kaladharan, sponsored a new library and smart class with a stock of books to the Lower Primary School at Thrikkunnappuzha. The library consists of a cross section of books from Children’s section to the reference section which is required for the teaching staff.

A smart class was also constructed and inaugurated which will facilitate the teaching lab activities in the future. The library and smart class was inaugurated in a grand function which was organised within the school premises on the 10th March 2016. The library was inaugurated by renowned journalist and cultural activist Chunakkara Janardhanan Nair.

The function was inaugurated by poet Inchakkadu Balachandran whose poems had greatly influenced the malayalee minds. At the function, as per the request from the audience, he recited his own poem. CSS Group was represented by the Head of Marketing and Corporate communications, Unnikrishnan G.

P Ramachandran from the PTA and the School Headmistress M. M Sreedevi who were on the dais thanked T S Kaladharan for his donation. The entire function was well attended by the students and their parents.


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