Mumbai: Allcargo Logistics is turning to artificial intelligence, automation and data-driven decision-making as it seeks to lift its Express business EBITDA margin to around 10% by FY28.
The company, which recently returned to profitability with a quarterly profit after tax of ₹15 crore, is moving away from a growth-at-all-costs strategy towards a model focused on yield, productivity and profitability. Allcargo Group Chief Business Officer Punit Misra said AI is increasingly being used to improve operational decisions across the company’s logistics network.
The company currently operates across a network covering 19,800 pin codes and more than 730 districts in India. Its AI strategy is focused not just on tracking shipments but on using operational data to determine what should happen next, a shift Allcargo describes as moving from visibility to “decision intelligence”.
Allcargo targets 10% EBITDA margin by FY28
Allcargo’s Express business recorded an EBITDA margin of around 6.2% in the first quarter. The company is targeting 7.5% for FY27 and expects to reach around 10% by FY28, with a longer-term ambition of moving beyond double-digit margins.
According to Misra, three broad factors will drive the improvement — pricing, productivity and operating leverage.
The company is working on a more data-driven approach to customer pricing to improve yield and respond more quickly to market conditions. At the same time, technology and automation are being integrated into everyday operations.
Allcargo has rolled out a docket-booking application, a delivery-booking application, GPS and vehicle-monitoring systems and a control tower for line-haul operations.
As volumes increase on a more efficiently managed network, the company expects operating leverage to further support margins.
AI moves beyond shipment tracking
The logistics industry has traditionally relied heavily on track-and-trace systems that tell companies where a shipment or vehicle is located.
Allcargo is now attempting to use AI to go a step further by helping its teams determine what action should be taken based on real-time information.
The company’s cloud-based data lake brings together operational, shipment and vehicle information. Its in-house data science team is developing use cases around network optimisation and line-haul profitability.
Real-time vehicle and network data are also fed into a cloud-based control tower, allowing the company to identify movement patterns and improve its ability to predict and manage fleet turnaround times.
One practical application is an AI-led Gate Scan and Bay Management system, which is designed to manage vehicle entry and dock allocation at logistics hubs more intelligently.
Such applications can potentially reduce waiting times, improve asset utilisation and make the movement of vehicles through hubs more efficient.
Profitability takes priority over growth at any cost
Allcargo returned to profitability with a ₹15 crore PAT in the first quarter, and management expects its Express business to continue growing in double digits in the coming quarters.
Its Consultative Logistics business, which includes contract logistics and third-party logistics services, is expected to deliver high-single-digit growth.
Misra said the company’s revenue strategy is based on two fundamental drivers — volume and yield.
Rather than chasing volumes regardless of profitability, Allcargo is prioritising service quality, customer retention and pricing discipline.
The company believes consistent service quality allows it to command better yields, creating a more sustainable path to profitability.
This approach reflects a wider change in the logistics industry, where companies are increasingly looking beyond revenue growth and focusing on the quality and profitability of that revenue.
Enterprise customers remain key
Allcargo’s domestic Express volumes grew nearly 7% year-on-year to more than 312,000 tonnes in the first quarter.
Enterprise customers remain its strongest source of customer stickiness, with the company reporting double-digit growth among key enterprise accounts.
The overall customer mix remains broadly stable, with around 60% coming from key enterprise customers and 40% from retail and SME customers.
Automotive, electricals and white goods have remained relatively consistent categories, while fashion and apparel demand tends to be more seasonal.
However, Allcargo sees significant potential in the SME segment. Since July, it has introduced cluster-level initiatives, including dealer-leader and franchise incentive programmes, alongside stronger local engagement in important SME markets.
ONDC opportunity still evolving
Allcargo has also integrated into the Open Network for Digital Commerce (ONDC) as part of its efforts to expand its reach among MSMEs.
However, the company is not yet assigning a specific revenue or volume target to ONDC.
Misra said the digital commerce network is still evolving for Allcargo’s business. Many SME customers already use a combination of offline and online channels, and the company’s broader objective is to make its logistics capabilities available regardless of how customers conduct their transactions.
Allcargo plans to assess emerging digital ecosystems based on the value they create for customers and the growth opportunities they generate.
Demerger gives domestic business more focus
Allcargo’s domestic business has also undergone a structural change.
The NCLT-approved restructuring became effective on November 1, 2025, bringing its Express Distribution and Consultative Logistics businesses under a focused domestic platform.
According to Misra, the restructuring has created opportunities for greater customer integration, cross-selling and network efficiencies.
It has also allowed the domestic business to share capabilities, talent and skills, particularly in workforce management and operating efficiency.
More importantly, the restructuring has given the company greater strategic clarity and accountability, allowing management to focus investments and resources specifically on India’s domestic logistics market.
Domestic focus provides some protection from global shocks
Global trade continues to face uncertainty because of geopolitical disruptions and instability in major trade routes.
However, Allcargo says the impact on its domestic logistics business remains relatively limited because it is primarily focused on movement within India.
Fuel-price increases are also largely passed through to customers under contractual mechanisms, providing some protection against fuel-cost volatility.
The impact is more significant for businesses exposed to international trade and export-import activity, where disruptions can alter cargo flows, trade lanes and shipping routes.
Misra noted that recent disruptions have shown that supply-chain shocks can sometimes be structural rather than temporary. Companies therefore need to build resilience through alternative sourcing, diversified routes and better visibility across their supply chains.
AI could reshape India’s logistics playbook
Allcargo’s strategy illustrates how AI is increasingly moving from an experimental technology to an operational tool within India’s logistics industry.
For the company, the objective is not simply to introduce AI for automation but to use data to improve pricing, network planning, vehicle utilisation and operational efficiency.
The push towards a 10% EBITDA margin by FY28 will therefore depend on how successfully Allcargo combines technology with pricing discipline, productivity improvements and higher volumes.
As India’s logistics sector becomes more digitised and competitive, the ability to make faster and better operational decisions could become an important differentiator. For Allcargo, AI-led decision intelligence is now central to its attempt to turn network scale into stronger and more sustainable profitability.