Logistics company CJ Darcl bets big on AI to deliver outsized gains

We must have come across news articles on how important it is for legacy brands to adopt technology to stay relevant in this cut-throat competitive market. For the 50-year-old logistics and transportation company, CJ Darcl, technology is integral to its business.

Today, operating over 2,500 trucks daily, as well as cargo movement by rail, air, and waterways, the Gurugram-headquartered company is betting big on artificial intelligence to bring in outsized gains.

With 20 warehousing facilities and 200 branches across India, CJ Darcl moved more than 19 million metric tonnes in FY24, serving over 2,000 customers. And managing this vast network of operations requires robust software technology.

“We are at the early stage of looking at the use case of AI and seeing how it can make our lives better,” Nikhil Agarwal, President of CJ Darcl, tells SMBStory.

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CJ Darcl began as a family business in 1975 and, over the years, it has steadily expanded its operations. In 2017, it entered into a partnership, where the South Korean logistics company, CJ Logistics Corporation, acquired a 50% stake in the company.

Today, it has operations across India, Bhutan, and Nepal, serving multiple industry segments, including metals and mining, FMCG, automotive, and pharmaceuticals, with a fleet of over 1,600 trucks.

According to Agarwal, back in the late 90s, CJ Darcl was among the first logistics companies in India to implement an enterprise resource planning (ERP) platform. As the company’s business grew, it integrated an advanced accounting software platform.

As AI slowly takes over all businesses—regardless of their size—one of its most impactful capabilities is its ability to provide predictive answers, given that it examines vast datasets.

For CJ Darcl, an early potential AI use case would be determining the prices of goods to be transported and creating a freight exchange mechanism.

In the logistics and transportation business, the price for moving goods is generally determined through spot booking, especially in the case of road transport, which is largely based on supply and demand.

Agarwal believes an AI model can bring better transparency in determining prices and minimise the chances of an arbitrary setting of a price.

In fact, various studies have shown that companies in the supply chain sector are keen to implement AI and GenAI technology as it can bring a positive change—whether in planning, sourcing, and delivery of goods.

However, these are still early days for CJ Darcl to implement any meaningful AI solution. Agarwal says, “We are still trying to figure out the vendors that can provide us with AI solutions and, more importantly, how this can be integrated in our systems.”

Beyond AI, CJ Darcl is on a drive to digitise its operations. Its business operations require it to have partnerships with multiple organisations, including small and medium-sized enterprises, which may not be digitally savvy. Most importantly, it deals with the blue-collar workforce, i.e., truck drivers, daily.

In 2023, CJ Darcl implemented the Driver Fatigue Monitoring System (DFMS), which helps track driver behaviour and reduce accident risk. It took some time to convince the drivers, who were earlier reluctant to its implementation, as they saw it as an intrusion on their privacy.

According to Agarwal, CJ Darcl has seen a 60-70% reduction in accident rates following the implementation of DFMS.

The company is now working on a digital stack that will provide a complete overview of its business, as well as set the key performance indicators (KPIs) for its employees, thereby incentivising high performers.

“One cannot operate at scale without technology, and this is much needed if someone wants to build a sustainable business. Going digital brings the maximum value proposition,” remarks Agarwal.

CJ Darcl reported a consolidated revenue of Rs 4,594.46 crore for FY24—a growth of 9% compared to FY23. It clocked a profit of Rs 82.78 crore in the same period—a 22.27% YoY growth.

Agarwal believes CJ Darcl will continue with its growth momentum in the future, given its growing strength in multi-modal transportation. The company is also expanding its warehousing and distribution footprint.

“We are creating a robust digital ecosystem and bringing a lot of comfort to our associates in the business as we have become knowledge partners to them,” says Agarwal.