Logistics support for precious cargo has proved a good niche business for the company, which has a client list of 6,000
Indians love to buy jewellery, but not many would know of the logistics chain that works at the back end, running a series of operations, that starts with transporting gold bars stored in a bank vault abroad, and culminates with transferring the glittering jewels from local workshops to jewellery shops in the customers’ cities.
That’s what the Bengaluru-based Sequel Logistics specialises in. It provides secure logistics for precious metals, right from the source to delivering the finished jewellery to stores.
Starting with just one client – Titan – in 2004, Sequel has expanded and today handles jewellery for around 6,000 customers, including top jewellers, banks, bullion importers, traders and refiners.
It has been steady progress in the past 14 years, says S. Rajkumar, founder-director and CEO, Sequel Logistics Pvt Ltd. Sequel sources raw material from the banks and delivers it to Titan’s in-house or outsourced production centres. Once the finished goods are ready, Sequel delivers the pieces to the designated stores.
A year into working with Titan, the company realised that there was a huge gap in the logistics services provided by regular courier companies for the valuable cargo. That is when it looked at this critical, high-yielding logistics service, for which customers were willing to pay a premium.
Sequel started by offering jewellery logistics to Titan’s Tanishq on the Hosur-Bengaluru and Hosur-Chennai routes. In two-three years, it established a pan-India network for the company, covering 250 retail stores and 70 vendors. The experience gained by working with Tanishq, helped Sequel offer its logistics services to other jewellers. The demand has been overwhelming, and its client list has zoomed to over 6,000 in a decade, he says.
India does not produce gold; the metal is imported by 20-25 nominated agencies, including major banks. Globally, the gold-selling banks include JP Morgan, HSBC and Standard Chartered.
“We are one of the two companies that handle India’s imports. Of the annual import of 500-600 tonnes of gold, we do about 35 per cent” he said. There is an overlap in customers between us, as clients would like to have options on pricing and operational reasons,” he added.
Sequel has a tie-up with G4S, a London-based company, and also with Loomis International, a Swedish company, to route imports.
The journey starts with gold bars picked up by G4S from vaults in places such as Zurich, Dubai, London and Singapore and sent to India by air. After Customs clearance, the gold is taken to vaults in different locations. The network of vaults is very important, so that we are close to the customer, he said.
“When we entered the market, we realised that companies provided vaults in six-eight locations only. A jeweller from Rajahmundry would need to come to Chennai or Mumbai to pick up bullion gold and carry it back. It was a very risky operation. There have been instances of owners being attacked. “We expanded the network of vaults and got closer to the market. We also do door delivery,” he said.
Sequel has 20 vaults across India. The vaults first need to be approved to receive the material by the selling bank, with audit done twice a year by the security director, he said.
Sequel moves anywhere from 1 gm to 1 tonne of gold. The average would be between ₹2-5 crore per shipment or transit. In a month, it does about 60,000 to 80,000 packages, he said.
India is a big cutting and polishing hub for diamonds, especially the city of Surat. Sequel brings diamonds from Brussels, the US, Hong Kong and Israel. After cutting and polishing, the diamonds are exported to different countries and some go to the domestic market as well.
Sequel has modified vehicles for the transport of its valuable cargo, which it does not see or even handle. It receives the product packed in a sealed container from the customer. The value of the content is based on a declaration in the GST documents.
Compliance is very important. “We only work with customers who provide us tax paid documentation accompanying the shipment. Without the document, it is illegal to move. We do an extensive KYC to on-board a client, who cannot just walk into our office and hand over a parcel for shipment. All our clients are B2B. However, a B2B client may have B2C business, he said.
When a jeweller wants to send a package with Sequel, a request for a pick-up at a specified time is made. This information is then allocated to the right branch for pick-up, after which the delivery team operates completely on a mobile app. Customers are kept informed on the status of the package.
Sequel can view vehicles and even track people from a control centre in Bengaluru, which monitors all its vehicles (200-plus) in real time, he said.
The vehicles are well protected with a multiple set of levers, a separate cargo section with a special lock that can be opened through a Bluetooth mobile phone, and also GPS locks that can be opened only from a remote centre. Nearly 15 per cent of the vehicles are bullet resistant, he added.
Clients have a choice of two insurance options – first, they can opt for a package that includes transport, retail outlet and inventor. The second, is to leave it to transporters, wherein if the consignment does not reach the destination, the transporter is liable for the value in the invoice. Customers also take fidelity and negligence coverage. “In the last 15 years, we have had five cases, including highway robbery, but in all of them we have had 70-80 per cent recovery.”
As part of its expansion, Sequel also moves critical healthcare shipments – investigational products, medical equipment, biological samples, cord blood samples and live animals – in both the domestic and international markets.