CHA Industry Analysis 2
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  • 1. 18 TH FFFAI BIENNIAL CONVENTION FEDERATION OF FREIGHT FORWARDERS’ ASSOCIATIONS IN INDIA INDUSTRY TRENDS & INDUSTRY ANALYSIS
    • Convention Theme: CHA: BEYOND HORIZON
        • Increasing Opportunities -
        • Diminishing Yields, Escalating Responsibilities, Forced Liabilities
  • 2. Colour Palette
    • Background & Review
    • Statistics & Economic Indicators
      • Planning For Growth
    • Survey Reports
    • Market Forces
    • Analysis
  • 3. India Story
    • India has 27 Billionaires & 83000 Millionaires
      • Mumbai has more Millionaires per square mile than Manhattan
    • April 2006 – March 2007
      • Exports : US$124.6 billion
        • Increase of almost 24%
      • Imports to US$181.4 billion.
        • Rose by 29%
    Global interest in India is escalating, and the world’s perception of India as a competitor to China is shifting from “also ran” to “a force to be reckoned with”.
  • 4. Advantage India
    • India’s Geographical Position As a Major Asian Transport and Distribution Hub
    • Location for Outsourcing a Range of Activities (Including Manufacturing, IT and Communication Services, Etc.)
    • Highly Evolved Banking System
    • India’s Security Focused Banking Regulations
    Eyefortransport India Market Report 2007
  • 5. Shipping & Ports Initiatives
    • Port Privatisation Gaining Momentum
    • Foreign Players In Container Terminal Development
    • National Maritime Development Programme:
      • Launched 30.12.2005 Envisage Investment Rs. 1,003 B (Us$ 22 B) In 387 Port & Shipping Sector Projects Over 20 Years
      • Port Sector Investment: Rs. 558 B (Us$ 12 B) Over Next 6 Years - Public Private Partnership Funding
      • Augmenting Container Capacity At Indian Ports From 49.55 Mt (4.13 M. TEU) On 31.03.2005 To 235.56 Mt (19.63 M TEU) By 2013-14
    • Shipping & LWT Sector Investment: Rs. 445 B (Us$ 10 B) – Ship Acquisition, Coastal Shipping, Etc.
  • 6. NATIONAL HIGHWAY DEVELOPMENT PROGRAMME
    • Phase I: Golden Quadrilateral Project
      • Widening (4/6 Lane) 5,500 Km Of National Highways (NH) Connect Delhi - Mumbai – Chennai – Kolkata.
    • Phase II: 4/6 Lane 7,500 Km Of NH Connect Diagonals
    • Phase III: 11,113 Km - Connect Cities Of Economic & Religious Importance
    • Other Phases:
      • Upgrading NH (2 Lane 20,000 Km, 6 Lane 6,500 Km)
      • Develop 1000 Km Expressway
      • Bypasses, Railway Over-bridges Etc
  • 7. RAIL-PORT CONNECTIVITY
    • NATIONAL RAIL VIKAS YOJANA
    • Freight Corridor: Dedicated Rail Corridor Between Delhi & Kolkata And Delhi & Mumbai - Investment Over Rs 250 B (Us$ 5.4 B) Delhi-Mumbai
    • Rail Privatisation: Containerised Operations Open To All Private & Public Carriers
  • 8. Civil Aviation & Trade CIVIL AVIATION
  • 9. Ease Of Doing Business 175 COUNTRIES Ease Of Doing Business Rank : 134 World Bank Report World Bank Ease Of Doing Business Index is more important & the most relevant factor for Reducing the Transaction Cost in India. Not more regulations & penal provisions, we have excessive controls already. 133 Closing A Business 65 Getting Credit 173 Enforcing Contracts 110 Registering Property 139 Trading Across Borders 112 Employing Workers 158 Paying Taxes 155 Dealing With Licenses 33 Protecting Investors 88 Starting A Business RANKING ACTIVITY
  • 10. Corruption Perceptions Index The 2006 Transparency International Corruption Perceptions Index India has significantly improved rating since the 2005 index 0 Highly Corrupt   5 Borderline   10 Squeaky Clean   3.3 India   70 2006 CPI Score Country (163 Countries) Country Rank
  • 11. Global Logistics Industry Interest
    • A survey among European & North American 3PLs placed India second to China in terms of growth potential
    • DOMESTIC
      • 42% of air, road and rail carriers say that India’s domestic market is the focus for 80% or more of their business, followed by 3PLs (22%).
    • INTERNATIONAL
      • Only a small percentage of freight forwarders (5%) and ocean carriers(4%) focus more than 80% of their energies on the local market, which suggests that they concentrate primarily on international markets.
    Eyefortransport India Market Report 2007
  • 12. Expansion Strategy
    • Almost half of all respondents are planning to expand their international networks.
    • Another high priority is the development of infrastructural and operational strengths throughout India.
    • Interest Group Covers Not Just Multinational Forwarders but also SME
    Eyefortransport India Market Report 2007
  • 13. Key Focus Areas For Business Expansion Eyefortransport India Market Report 2007
  • 14. Joint ventures
    • 28%are engaged in joint ventures
    • 2% are global companies with Indian Operations
    • Many are actively looking for either suitable joint venture opportunities or potential acquisitions.
    • Others prefer to work together with local associates, rather than formal partnership agreement.
    Eyefortransport India Market Report 2007 Greatest Level Of Joint Venture Participation Is By 3pls And Freight Forwarders
  • 15. Key Benefits Of A Joint Venture Eyefortransport India Market Report 2007
  • 16. Industry Specific Growth Opportunities Eyefortransport India Market Report 2007
  • 17. Foreign Companies Looking For Opportunities Eyefortransport India Market Report 2007
  • 18. Key Challenges Eyefortransport India Market Report 2007 While rest of the world is moving determinedly towards compliance with standards set by trade-related global bodies to simplify and speed up the international trade processes, India needs to catch up.
  • 19. MULTIMODAL TRANSPORT
    • 30% Of Total Container Traffic Handled By Major Ports Moves Between Gateway Ports And Inland Centres
    • More Reliance On Smaller / Feeder Vessels
    • Higher Cost Of Inland Container Movement, In Comparison To ASEAN
  • 20. Emerging Security Concerns Multiple Security Regimes Will We Need To Be Security Experts?
  • 21. Safety Vs Security BALANCING SECURITY & SAFETY Common & Divergent Elements
  • 22. GOOD NEWS & BAD NEWS
    • ‘ This year we got 30% increment but we have cost reduction exercise & we want you to reduce your rates by at least 30%’
    • - Sometimes 50%
  • 23. Forced Liability Liability Insurance Does Not Cover Such Claims & Liabilities FIATA view is Forwarders should not be responsible / liable actions & consequences not in their control. Customers should not hold Forwarders responsible for issues they can't hold Carriers responsible / liable
    • Unjust Enrichment
    • Blank Cheques With Shipping Lines
    • Liability For Demurrage & Detention Charges
    • Liability of Charges for Change of Vessel
  • 24. Banking & Insurance
    • Lending without Interest
    • - Partnership
      • No Security
      • Not Even Credit Check
    • Insurance Without Premium
      • Settlement Beyond Principles of Insurance
  • 25. Feelings Shared In FIATA Meeting
        • Security : Uniform Standards that are globally acceptable to all stake holders.
        • Authorities have recognised, regulating i.e. passing regulations is one thing and successfully implement is another. Even well intentioned are often impractical.
        • We can't accept regulations that make our lives miserable.
  • 26. GLOBALISATION Implement Best Practices Ahead of Times EMERGING TRADE REQUIREMENTS
    • New Markets
      • Premium On Competitiveness
      • Cheaper & Better Suppliers
        • Production Facilities Spread Globally
        • Global Distribution Facilities & Reach
          • End-to-end Logistics Solutions
          • Realtime Visibility On Supply Chain
          • Realtime Control On Supply Chain
  • 27. Summary
    • Global Trade Expected To More Than Double In Less Than 20 Years
    • Global Container Trade Growth About 9% P.A. Over Last Decade, India Matched This
    • Expected Addition Of 80 Million To Country’s Labour Pool By 2010
    • If Integrated Into Global Supply Chain, Could Yield Still Faster Growth Of Indian Economy
    • Growth In Logistics Sector has been almost Double of GDP Growth
    • Competition at arms breaking barrier
    • More & More Cargo on Delivered Terms
  • 28. THANKS
    • CHA: BEYOND HORIZON
        • Increasing Opportunities -
        • Diminishing Yields, Escalating Responsibilities, Forced Liabilities