Postal dept launches logistics service in for states in the South

16 Jun 2014


The Department of Posts today launched door-to-door logistics service in, Telangana, Andhra Pradesh, Tamil Nadu and Karnataka as part of an ongoing diversification programme.

In the first phase, the department will be operating the service on four routes - from Hyderabad to Chennai, Bangalore, Visakhapatnam and Adilabad.

This will make regular logistics services available on the following routes - Hyderabad to Chennai via Vijaywada, Hyderabad to Bangalore via Anantapur, Hyderabad to Adilabad and Visakhapatnam to Vijaywada.

The services will use dedicated vans and offer point-to-point pricing, free pickup, door delivery and credit facility, according to an official press release.

S V Rao, assistant postmaster general, said the department has deployed eight vehicles in all these routes. The rates vary from a minimum of Re1 per kg to a maximum of Rs6.80 per kg from Hyderabad to Chennai.

The department expects average monthly turnover of Rs10 crore on a daily volume of 15-20 kg per day in the first year of operation itself.

The diversification programme is part of the department's preparations to be divestment-ready after the finance ministry asked it to be prepared for a stake sale soon after the budget in order to make the most of the bullish sentiment in stock markets.

According to sources, the government in its new budget is expected to retain the divestment target at roughly the same level of Rs36,925 crore proposed in the interim budget for 2014-15.

It is also likely that India Post gets licence to operate as India's first payment bank with the RBI considering its application to operate as a bank, but on a differentiated basis.

For RBI, this is key to promoting financial inclusion and spreading banking services to unbanked areas of the country.

India Post, which was one of the 26 applicants for new banks, failed to secure a banking licence in the latest round (See: RBI to set up payment bank soon, India Post likely candidate). 

However, while issuing the licences in April, RBI had said that it would consider India Post's application separately in consultation with the government.

RBI governor Raghuram Rajan had last month said that India Post could begin as a payment bank.

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