Growth in Retail, Agri, Pharma, Automobile, FMCG, Textile sectors .
Opportunity to reduce logistics cost.
Investment in logistics by Companies.
Change in tax laws –VAT/CST.
Industry moving toward outsourcing logistics
Moving toward shift to organised players
India’s Economy & Logistics Industry India’s GDP is USD 750 billion and would touch USD 1.4 trillion in the next two decades (as per Goldman Sach). Currently it is 10 th largest economy Logistics Spend is currently 13% compared to 8.7% of US . Enough Scope to reduce the Logistics Spend which would require growth of 3PLs and 4PLs and improvement in Infrastructure 23% 51% Service 17% 28% Manufacturing 60% 21% Agriculture Work Force Employment Contribution to GDP
Setting up of NHAI Setting Up of IRMP ( Integrated Railways Modernization Plan) Privatization of ICD Proposal of setting up a NMDP (National Maritime Development Programme) for improving Port Infrastructure. Capacity Expansion of Delhi/ Mumbai Airport; Setting up of International Airports at Bangalore/ Hyderabad. Most Infrastructure projects are through Public- Private partnership. 100% FDI Allowed for Port, Greenfield Airports, Road . “ Initiative taken by Government will usher in a more efficient and cost competitive Logistics Service Market” Government Initiatives
Logistics In India Current Logistics services and challanges Piecemeal outsourcing No industry focus – Segmentation would be the next key thing! Improving capability and experience Improving level of supply chain expertise Unorganised players Govt. Policies-Consider logistics as Industry. Infrastructure, no urgency Transportation High fragmentation (87 % of trucks with owners having 10 trucks or less) Complex value chains with many intermediaries (Shipper - Transporter - Broker - Financier - Truck Driver / Owner) Lack of focus on time-sensitivities Poor utilization of assets