Description
India is being touted as the land of opportunity for logistics service providers all over the world. The Indian logistics market represents $ 50billion and is growing at a rate of 7 percent annually.
CONSULTING
Study of Logistics in India
Roads Railways Sea Air
CONSULTING
Logistics Industry-India
India is being touted as the land of
opportunity for logistics service
providers all over the world.
India Logistics Industry
Railways
Road
Sea
The Indian logistics market represents $ 50billion
and is growing at a rate of 7 percent annually.
[source: Frost & Sullivan]
Air
CONSULTING
Environment Scan
Features of Indian Logistics Industry
•A number of small-integrated players.
•Transportation costs account for nearly 40% of
production costs.
•Logistics costs around 13% of GDP, compared
to 8% in the US.
•Growth in Indian economy is the major driving
factor for the demand in logistics industry.
•Chemicals, metals, FMCG, cement and textiles
have been identified as the top five contributors
to logistics revenues.
Logistics activities
4%
6%
24%
39%
27%
Transportation Warehousing Inventory carrying
Order processing Administration
11.5
17
8.7
10
11.07
0
2
4
6
8
10
12
14
16
18
L
o
g
i
s
t
i
c
s
c
o
s
t
India China US Europe Japan
Comparitive logistics cost
CONSULTING
ROADS
CONSULTING
Indian Road Network
• India has the second highest
largest road network-3.3 million
km.
• US has the largest road network
with 6.4 million km & China- 1.8
million km.
• National Highways- 2% of total
road length.
• But carry 40% of goods traffic of
India.
Source: National Highway Development Authority
100.00 3,315,231 Total
79.90 2,650,000 Village & Other Roads
14.10 467,763 Major District Roads
4.00 131,899 State Highways
2.00 65,569 National Highways
% of Total Length (km) Types of Roads
CONSULTING
Features of Indian Road Transport
•Road Network carry nearly 65% of freight and 85% of passenger traffic.
•Vehicle ownership is firmly in the hands of individual truck owners
• 67% of vehicle owners have fleets of less than five vehicles.
•Traffic on roads is growing at a rate of 7 to 10% per annum
•Government spends- 12 per cent of capital and 3 per cent of total
expenditure on roads.
CONSULTING
Major Roads Projects
• The Golden Quadrilateral (GQ;
5,846 km) connecting the four major
cities of Delhi, Mumbai, Chennai
and Kolkata.
• The North-South and East-West
Corridors (NS-EW; 7,300 km)
connecting Srinagar in the north to
Kanyakumari in the south and
Silchar in the east to Porbandar in
the west.
• Port connectivity and other projects.
CONSULTING
Future Road Projects
CONSULTING
The Golden Quadrilateral
CONSULTING
RAILWAYS
CONSULTING
Indian Rail Logistics
•The Indian Railways boasts of being the world’s 2
nd
largest rail network spread over
81,511 km and covering 6896 stations.
•The freight segment accounts for roughly two thirds of railway’s revenues.
•The tonne/kilometre costs for Indian rail freight at three times that of China. [Tata Iron &
Steel].
Railway Freight Revenue
26231
27646
33480
36490
40320
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2002-03 2003-2004 2004-05 2005-06 2006-07[E]
Years
R
s
.
c
r
o
r
Source: Ministry of Railways
CONSULTING
Rail Freight Privatization
• Rail services have been liberalized.
• Reliance Industries, P&O ports, APL Logistics, Maersk, Central Warehousing Corporation
and Adani Logistics have shown interest in this sector.
Railway Freight
518
557
635
668
800
0
100
200
300
400
500
600
700
800
900
2002-03 2003-04 2004-05 2005-06 2006-07[E]
Years
M
i
l
l
i
o
n
t
o
n
n
Source: Ministry of Railways
CONSULTING
SEA
CONSULTING
Indian Ports
• India has 12 major and 184 minor / intermediate ports spread across the vast
coastline of 7517km.
• The 12 major ports handle about 76 per cent of the traffic.
• India's West Coast ports handles almost 70% of traffic.
Source: Indian Ports Association
Total cargo handled at all ports
335.35
368.5
383.1
421.85
463.66
518.28
0 100 200 300 400 500 600
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
Y
e
a
Cargo-million tonnes
CONSULTING
India’s Sea Logistics
•India now has the largest merchant
shipping fleet among the developing
countries
•India ranks 17
th
in the world in
shipping tonnage.
•Indian share of maritime transport
services is 1% of world market.
•The container traffic has registered
an impressive growth of 15 per cent
over the last five years.
Indian Fleet
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
M
i
l
l
i
o
n
G
r
o
s
s
T
o
n
n
a
g
e
CONSULTING
Port Privatization
Source: Indian Ports Association
Traffic handled at 12 Major Ports
0
50
100
150
200
250
300
350
400
450
1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Years
T
o
n
n
e
s
i
n
m
i
l
l
i
o
n
•Port traffic to grow to a level of
650 Million Tonnes Per Annum
by 2008- Ministry of Shipping.
•Port Privatization is picking up
momentum-- USD1.39 billion
worth projects approved.
•Players ---P&O, PSA, Maersk,
Gammon India, CWC and the
Dubai Port Authority.
CONSULTING
Indian Ports
Source: Indian Ports Association
CONSULTING
AVIATION
CONSULTING
India’s Aviation Logistics Sector
•Aviation holds a small share of
India’ s freight market.
•Air Freight is very expensive in
India in comparison to road and
rail.
•The size of the world air cargo
market is estimated at 27
million tonnes valued at $200
billion.
•India accounts for meager 3%
of the global air cargo market
•As per an expert estimate,
Indian air cargo industry is
going to be double by the year
2010.
International Air cargo
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
2000-01 2001-02 2002-03 2003-04 2004-05
Year
C
a
r
g
o
i
n
t
o
n
n
e
s
Source: Airports Authority of India
CONSULTING
India’s Aviation Logistics Sector
Domestic Air Cargo
0
100000
200000
300000
400000
500000
2000-01 2001-02 2002-03 2003-04 2004-05
Year
C
a
r
g
o
i
n
t
o
n
n
e
s
• Cargo- garments, machinery,
components, pharmaceuticals, dyes,
chemicals and perishables [fruit,
vegetables, flowers, fish and meat].
• Major International cargo airports-
Mumbai, Chennai, Bangalore, Trichy,
Hyderabad, Delhi, Coimbatore,
Cochin.
• Major domestic cargo airports –
Ahmedabad, Goa, Lucknow,
Visakhapatnam,Madurai in addition to
the above.
• 25 non-metro airports identified by
The Airports Authority of India for
further development.
Source: Airports Authority of India
CONSULTING
India’s Aviation Growth Plans
• Investments of USD 5.07 billion over next 5
years in Indian Airport Infrastructure.
• Blue-Dart, the only dedicated freight carrier
in domestic sector.
• Air India plans to increase cargo revenue
from current 10% to 15-20% in 3yrs.
• Jet Air, GoAir, Kingfisher Airlines charting
out plans to play bigger role in Indian
domestic air cargo.
• International Airlines- Cathay Pacific and
BA increasing cargo capacity to and from
India.
Source: www.ibef.org
CONSULTING
Third Party Logistics-3PL
CONSULTING
3 PL
• 3
rd
Party Logistics imply that one company acts as an agent to look after the
logistics aspect of another company or group of companies.
• 3RD party logistics entails a study of the customer’s business, supply chain
and distribution network, in order to formulate a comprehensive integrated
logistics strategy, which will help render all supply-related services from a
single window.
• India's 3PL sector represents 3 percent of the country's total logistics spend.
• The Indian 3PL market is expected to grow at around 20 percent per annum
in the next 3-5 years
• The practice in India reveals that warehousing and outbound transportation,
custom clearing and forwarding are the most frequent outsourced activities.
• Activities such as packaging, fleet management and consolidation have
started gaining attention for outsourcing.
CONSULTING
3PL Survey in India
Reasons for Logistics Outsourcing
A survey by the Transport Corporation
of India (TCI) and the Management
Development Institute (MDI) shows
• less than 55% of Indian companies
subscribe to 3PL, compared to
more than 75% globally.
• about 57% of the companies plan
to outsource reverse logistics
within the next five years.
• 54% plan to outsource inventory
management
• 53% order processing.
• more than 50% of the companies
have outsourced activities like
transportation, warehousing &
customs clearing/forwarding.
Source: TCI & MDI Survey
CONSULTING
Growth Drivers for Logistics in India
• General growth of the Indian economy.
• Manufacturing boom- for exports as well as for domestic market.
• Expected rise in International trade from India.
• MNC’s setting up manufacturing in India- Nokia, Flextronics.
• Government’s thrust on Infrastructure -- US$17 billion to upgrade highway
networks.
• Implementation of VAT will lead to growth in warehousing business.
• Opening of organized retail sector -attracting retail chains like Wal-Mart
and Carrefour in addition to Indian players like Pantaloon and Reliance.
CONSULTING
Government Support
The Indian government is making great efforts by
• Privatizing ports and airports.
• Increasing the number of gateway ports
• Investing in highway projects
• Streamlining customs and excise procedures
• Implementing EDI systems
• Improving the rail network.
• The government plans to invest $17 billion in transport infrastructure between 2006-
2010.
Some of the projects are:
• Amend in the National Highway Act to expedite land acquisition, permit private
financing and allow tolling.
• Improvement in rural access by launch of the Prime Minister’s Rural Roads Program.
• Reduction of congestion on rail corridors and improvement of port connectivity by
launch of National Railway Development Program.
• Upgradation of infrastructure and connectivity in the country's twelve major ports by
initiating the National Maritime Development Program.
• Establishment of Tariff Authority for Major Ports to regulate tariffs.
On a per-annum basis, United States invests 5 percent of its annual logistics spend on
infrastructure, India is investing 23 percent or over four times as much.
CONSULTING
Industry Growth=Logistics Growth
• “Engineering goods, chemicals and gems & jewelry are the fastest-growing
sectors; manufacturing in India is expected to grow by 9.4 percent in coming
years.” says Jacques Green, Managing Director FedEx-India, Middle East &
Africa.
Auto
• Outsourcing in Auto sector could be worth $375 billion by 2015 and India
could capture up to $25 billion of this amount. [source:McKinsey]
Chemicals
• India ’s chemical exports could reach $15 billion by 2015. [source :
McKinsey].
Electrical and Electronic Products
• India’s export in electrical and electronic products could reach up to $18
billion a year by 2015.[source : McKinsey].
CONSULTING
Industry Growth=Logistics Growth
Retail
• Opening up of the organized retail sector is attracting big retail chains like
Wal-Mart and Carrefour in addition to big Indian retailers like Pantaloon and
Reliance.
• All this would require the presence of professional logistics players in the
market to carry out supply chain activities.
Thus demand for logistics services would be largely driven by the growth of the
Indian economy.
CONSULTING
Indian & Foreign Logistics Players
• Investing to upgrade and move into 3PL arena– Gati, Safexpress, Patel Logistics,
Blue Dart.
• Recent IPO- AllCargo Global Logistics.
• Container Freight stations and Inland Container depots- Container Corporation of
India, Gateway Distriparks and Balmer Lawrie & Company.
• Bharti, Taco MobiApps, Patni Computers and Reliance are focusing on telematics – a
technology based on telecommunications plus computing.
• Alliances & Acquisitions -DHL acquired Blue Dart, FedEx has a tieup with Prakash
Airfreight, Rhenus AG has tied up with Seaways Shipping Ltd.
• Redwood City expanding its India presence by nearly 50%.
• Strong Base in India- APL Logistics, TNT Express, UPS and Maersk Logistics.
• In the port terminal business, Maersk and P&O Ports are consolidating their position
by acquiring controlling stakes in private container terminals..
CONSULTING
Challenges for Indian Logistics Companies
• Competition from Indian and Foreign logistics companies.
• Technology to keep pace with demand for real time information.
• Corporatization and lack of skill sets.
• Shedding local mindset and move to a global mindset.
• Integration of services and value added services.
• Funds to fuel expansion & growth.
• Inadequate infrastructure and complex tax laws.
CONSULTING
Need for Strategic Alliances & Growth Funds
Indian Logistics Companies are looking for strategic alliances and funds to
• Improve their technology for value added services such as real time
information.
• Corporatize and attract talent.
• To build logistics infrastructure.
• To integrate services and thus become a multi-modal player.
CONSULTING
Future Projected Trends
• The Indian logistics market is likely to grow at a CAGR of 7% during the next
five years.
• The unorganized sector may find it difficult to exist at national level due to its
inability to keep pace with technology & customer demand.
• Transportation costs are bound to come down in future with improvement in
infrastructure and growth in cargo movement.
• 4
th
Party Logistics to take root in India.
[In 4PL, logistics is controlled by a service provider that does not own assets to carry out
logistics activities but outsources to sub-contractors, the 3PL].
CONSULTING
D’Essence in Logistics Industry
Office No.2, Bldg No.1, New Mhada Complex, Near PMGP Colony, Off Mahakali Caves Road
Andheri (E), Mumbai – 400 093 (INDIA)
Ph- +91 22 28347425 Fax- +91 22 28228142 Email: [email protected]
www.dessenceconsulting.com
D’Essence Consulting can help you to grow in line with the market potential.
D’Essence Consulting provides
• Business Plan Formulation & Review.
• Business Valuation.
• Market Entry Strategies.
• Strategic Alliances.
• Brand Building.
• Mergers & Acquisitions.
• Access to funds from Venture Capitalists, Private Equity Players, High Networth
Individuals & Banks.
doc_269704692.pdf
India is being touted as the land of opportunity for logistics service providers all over the world. The Indian logistics market represents $ 50billion and is growing at a rate of 7 percent annually.
CONSULTING
Study of Logistics in India
Roads Railways Sea Air
CONSULTING
Logistics Industry-India
India is being touted as the land of
opportunity for logistics service
providers all over the world.
India Logistics Industry
Railways
Road
Sea
The Indian logistics market represents $ 50billion
and is growing at a rate of 7 percent annually.
[source: Frost & Sullivan]
Air
CONSULTING
Environment Scan
Features of Indian Logistics Industry
•A number of small-integrated players.
•Transportation costs account for nearly 40% of
production costs.
•Logistics costs around 13% of GDP, compared
to 8% in the US.
•Growth in Indian economy is the major driving
factor for the demand in logistics industry.
•Chemicals, metals, FMCG, cement and textiles
have been identified as the top five contributors
to logistics revenues.
Logistics activities
4%
6%
24%
39%
27%
Transportation Warehousing Inventory carrying
Order processing Administration
11.5
17
8.7
10
11.07
0
2
4
6
8
10
12
14
16
18
L
o
g
i
s
t
i
c
s
c
o
s
t
India China US Europe Japan
Comparitive logistics cost
CONSULTING
ROADS
CONSULTING
Indian Road Network
• India has the second highest
largest road network-3.3 million
km.
• US has the largest road network
with 6.4 million km & China- 1.8
million km.
• National Highways- 2% of total
road length.
• But carry 40% of goods traffic of
India.
Source: National Highway Development Authority
100.00 3,315,231 Total
79.90 2,650,000 Village & Other Roads
14.10 467,763 Major District Roads
4.00 131,899 State Highways
2.00 65,569 National Highways
% of Total Length (km) Types of Roads
CONSULTING
Features of Indian Road Transport
•Road Network carry nearly 65% of freight and 85% of passenger traffic.
•Vehicle ownership is firmly in the hands of individual truck owners
• 67% of vehicle owners have fleets of less than five vehicles.
•Traffic on roads is growing at a rate of 7 to 10% per annum
•Government spends- 12 per cent of capital and 3 per cent of total
expenditure on roads.
CONSULTING
Major Roads Projects
• The Golden Quadrilateral (GQ;
5,846 km) connecting the four major
cities of Delhi, Mumbai, Chennai
and Kolkata.
• The North-South and East-West
Corridors (NS-EW; 7,300 km)
connecting Srinagar in the north to
Kanyakumari in the south and
Silchar in the east to Porbandar in
the west.
• Port connectivity and other projects.
CONSULTING
Future Road Projects
CONSULTING
The Golden Quadrilateral
CONSULTING
RAILWAYS
CONSULTING
Indian Rail Logistics
•The Indian Railways boasts of being the world’s 2
nd
largest rail network spread over
81,511 km and covering 6896 stations.
•The freight segment accounts for roughly two thirds of railway’s revenues.
•The tonne/kilometre costs for Indian rail freight at three times that of China. [Tata Iron &
Steel].
Railway Freight Revenue
26231
27646
33480
36490
40320
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2002-03 2003-2004 2004-05 2005-06 2006-07[E]
Years
R
s
.
c
r
o
r
Source: Ministry of Railways
CONSULTING
Rail Freight Privatization
• Rail services have been liberalized.
• Reliance Industries, P&O ports, APL Logistics, Maersk, Central Warehousing Corporation
and Adani Logistics have shown interest in this sector.
Railway Freight
518
557
635
668
800
0
100
200
300
400
500
600
700
800
900
2002-03 2003-04 2004-05 2005-06 2006-07[E]
Years
M
i
l
l
i
o
n
t
o
n
n
Source: Ministry of Railways
CONSULTING
SEA
CONSULTING
Indian Ports
• India has 12 major and 184 minor / intermediate ports spread across the vast
coastline of 7517km.
• The 12 major ports handle about 76 per cent of the traffic.
• India's West Coast ports handles almost 70% of traffic.
Source: Indian Ports Association
Total cargo handled at all ports
335.35
368.5
383.1
421.85
463.66
518.28
0 100 200 300 400 500 600
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
Y
e
a
Cargo-million tonnes
CONSULTING
India’s Sea Logistics
•India now has the largest merchant
shipping fleet among the developing
countries
•India ranks 17
th
in the world in
shipping tonnage.
•Indian share of maritime transport
services is 1% of world market.
•The container traffic has registered
an impressive growth of 15 per cent
over the last five years.
Indian Fleet
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
M
i
l
l
i
o
n
G
r
o
s
s
T
o
n
n
a
g
e
CONSULTING
Port Privatization
Source: Indian Ports Association
Traffic handled at 12 Major Ports
0
50
100
150
200
250
300
350
400
450
1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Years
T
o
n
n
e
s
i
n
m
i
l
l
i
o
n
•Port traffic to grow to a level of
650 Million Tonnes Per Annum
by 2008- Ministry of Shipping.
•Port Privatization is picking up
momentum-- USD1.39 billion
worth projects approved.
•Players ---P&O, PSA, Maersk,
Gammon India, CWC and the
Dubai Port Authority.
CONSULTING
Indian Ports
Source: Indian Ports Association
CONSULTING
AVIATION
CONSULTING
India’s Aviation Logistics Sector
•Aviation holds a small share of
India’ s freight market.
•Air Freight is very expensive in
India in comparison to road and
rail.
•The size of the world air cargo
market is estimated at 27
million tonnes valued at $200
billion.
•India accounts for meager 3%
of the global air cargo market
•As per an expert estimate,
Indian air cargo industry is
going to be double by the year
2010.
International Air cargo
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
2000-01 2001-02 2002-03 2003-04 2004-05
Year
C
a
r
g
o
i
n
t
o
n
n
e
s
Source: Airports Authority of India
CONSULTING
India’s Aviation Logistics Sector
Domestic Air Cargo
0
100000
200000
300000
400000
500000
2000-01 2001-02 2002-03 2003-04 2004-05
Year
C
a
r
g
o
i
n
t
o
n
n
e
s
• Cargo- garments, machinery,
components, pharmaceuticals, dyes,
chemicals and perishables [fruit,
vegetables, flowers, fish and meat].
• Major International cargo airports-
Mumbai, Chennai, Bangalore, Trichy,
Hyderabad, Delhi, Coimbatore,
Cochin.
• Major domestic cargo airports –
Ahmedabad, Goa, Lucknow,
Visakhapatnam,Madurai in addition to
the above.
• 25 non-metro airports identified by
The Airports Authority of India for
further development.
Source: Airports Authority of India
CONSULTING
India’s Aviation Growth Plans
• Investments of USD 5.07 billion over next 5
years in Indian Airport Infrastructure.
• Blue-Dart, the only dedicated freight carrier
in domestic sector.
• Air India plans to increase cargo revenue
from current 10% to 15-20% in 3yrs.
• Jet Air, GoAir, Kingfisher Airlines charting
out plans to play bigger role in Indian
domestic air cargo.
• International Airlines- Cathay Pacific and
BA increasing cargo capacity to and from
India.
Source: www.ibef.org
CONSULTING
Third Party Logistics-3PL
CONSULTING
3 PL
• 3
rd
Party Logistics imply that one company acts as an agent to look after the
logistics aspect of another company or group of companies.
• 3RD party logistics entails a study of the customer’s business, supply chain
and distribution network, in order to formulate a comprehensive integrated
logistics strategy, which will help render all supply-related services from a
single window.
• India's 3PL sector represents 3 percent of the country's total logistics spend.
• The Indian 3PL market is expected to grow at around 20 percent per annum
in the next 3-5 years
• The practice in India reveals that warehousing and outbound transportation,
custom clearing and forwarding are the most frequent outsourced activities.
• Activities such as packaging, fleet management and consolidation have
started gaining attention for outsourcing.
CONSULTING
3PL Survey in India
Reasons for Logistics Outsourcing
A survey by the Transport Corporation
of India (TCI) and the Management
Development Institute (MDI) shows
• less than 55% of Indian companies
subscribe to 3PL, compared to
more than 75% globally.
• about 57% of the companies plan
to outsource reverse logistics
within the next five years.
• 54% plan to outsource inventory
management
• 53% order processing.
• more than 50% of the companies
have outsourced activities like
transportation, warehousing &
customs clearing/forwarding.
Source: TCI & MDI Survey
CONSULTING
Growth Drivers for Logistics in India
• General growth of the Indian economy.
• Manufacturing boom- for exports as well as for domestic market.
• Expected rise in International trade from India.
• MNC’s setting up manufacturing in India- Nokia, Flextronics.
• Government’s thrust on Infrastructure -- US$17 billion to upgrade highway
networks.
• Implementation of VAT will lead to growth in warehousing business.
• Opening of organized retail sector -attracting retail chains like Wal-Mart
and Carrefour in addition to Indian players like Pantaloon and Reliance.
CONSULTING
Government Support
The Indian government is making great efforts by
• Privatizing ports and airports.
• Increasing the number of gateway ports
• Investing in highway projects
• Streamlining customs and excise procedures
• Implementing EDI systems
• Improving the rail network.
• The government plans to invest $17 billion in transport infrastructure between 2006-
2010.
Some of the projects are:
• Amend in the National Highway Act to expedite land acquisition, permit private
financing and allow tolling.
• Improvement in rural access by launch of the Prime Minister’s Rural Roads Program.
• Reduction of congestion on rail corridors and improvement of port connectivity by
launch of National Railway Development Program.
• Upgradation of infrastructure and connectivity in the country's twelve major ports by
initiating the National Maritime Development Program.
• Establishment of Tariff Authority for Major Ports to regulate tariffs.
On a per-annum basis, United States invests 5 percent of its annual logistics spend on
infrastructure, India is investing 23 percent or over four times as much.
CONSULTING
Industry Growth=Logistics Growth
• “Engineering goods, chemicals and gems & jewelry are the fastest-growing
sectors; manufacturing in India is expected to grow by 9.4 percent in coming
years.” says Jacques Green, Managing Director FedEx-India, Middle East &
Africa.
Auto
• Outsourcing in Auto sector could be worth $375 billion by 2015 and India
could capture up to $25 billion of this amount. [source:McKinsey]
Chemicals
• India ’s chemical exports could reach $15 billion by 2015. [source :
McKinsey].
Electrical and Electronic Products
• India’s export in electrical and electronic products could reach up to $18
billion a year by 2015.[source : McKinsey].
CONSULTING
Industry Growth=Logistics Growth
Retail
• Opening up of the organized retail sector is attracting big retail chains like
Wal-Mart and Carrefour in addition to big Indian retailers like Pantaloon and
Reliance.
• All this would require the presence of professional logistics players in the
market to carry out supply chain activities.
Thus demand for logistics services would be largely driven by the growth of the
Indian economy.
CONSULTING
Indian & Foreign Logistics Players
• Investing to upgrade and move into 3PL arena– Gati, Safexpress, Patel Logistics,
Blue Dart.
• Recent IPO- AllCargo Global Logistics.
• Container Freight stations and Inland Container depots- Container Corporation of
India, Gateway Distriparks and Balmer Lawrie & Company.
• Bharti, Taco MobiApps, Patni Computers and Reliance are focusing on telematics – a
technology based on telecommunications plus computing.
• Alliances & Acquisitions -DHL acquired Blue Dart, FedEx has a tieup with Prakash
Airfreight, Rhenus AG has tied up with Seaways Shipping Ltd.
• Redwood City expanding its India presence by nearly 50%.
• Strong Base in India- APL Logistics, TNT Express, UPS and Maersk Logistics.
• In the port terminal business, Maersk and P&O Ports are consolidating their position
by acquiring controlling stakes in private container terminals..
CONSULTING
Challenges for Indian Logistics Companies
• Competition from Indian and Foreign logistics companies.
• Technology to keep pace with demand for real time information.
• Corporatization and lack of skill sets.
• Shedding local mindset and move to a global mindset.
• Integration of services and value added services.
• Funds to fuel expansion & growth.
• Inadequate infrastructure and complex tax laws.
CONSULTING
Need for Strategic Alliances & Growth Funds
Indian Logistics Companies are looking for strategic alliances and funds to
• Improve their technology for value added services such as real time
information.
• Corporatize and attract talent.
• To build logistics infrastructure.
• To integrate services and thus become a multi-modal player.
CONSULTING
Future Projected Trends
• The Indian logistics market is likely to grow at a CAGR of 7% during the next
five years.
• The unorganized sector may find it difficult to exist at national level due to its
inability to keep pace with technology & customer demand.
• Transportation costs are bound to come down in future with improvement in
infrastructure and growth in cargo movement.
• 4
th
Party Logistics to take root in India.
[In 4PL, logistics is controlled by a service provider that does not own assets to carry out
logistics activities but outsources to sub-contractors, the 3PL].
CONSULTING
D’Essence in Logistics Industry
Office No.2, Bldg No.1, New Mhada Complex, Near PMGP Colony, Off Mahakali Caves Road
Andheri (E), Mumbai – 400 093 (INDIA)
Ph- +91 22 28347425 Fax- +91 22 28228142 Email: [email protected]
www.dessenceconsulting.com
D’Essence Consulting can help you to grow in line with the market potential.
D’Essence Consulting provides
• Business Plan Formulation & Review.
• Business Valuation.
• Market Entry Strategies.
• Strategic Alliances.
• Brand Building.
• Mergers & Acquisitions.
• Access to funds from Venture Capitalists, Private Equity Players, High Networth
Individuals & Banks.
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