Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Market Research Report : Logistics services market in india 2013


Published on

For the complete report, get in touch with us at :
Logistics services marketIndiais on a growth trajectory owing to rapid globalization and 100% FDI allowance. Logistics services broadly encompass courier services, freight forwarding, third party logistics and reverse logistics. Growth in international trade is providing huge impetus to the demand for the logistics services. Growing competition in retail sector transcends need of reverse logistics to handle returns and store upgradation. Third party logistics providers need to customize their services and charge competitive rates to benefit from retail boom inIndia. E-tailing has revamped shopping experience by transforming it from a weekend to anytime activity that is having a favorable impact on courier and reverse logistics sectors.
The report begins with an introduction section, classifying the logistics sector into transportation, storage and logistics services. The logistics services being the focus of the report are then segmented into four parts including Courier Services, Freight Forwarding, 3PL and Reverse Logistics. These four segments are then briefly introduced.
The next section briefly illustrates the evolution of the four segments of logistics services that are considered in the report.
Market overview section provides a brief snapshot of the logistics services market inIndia. To begin with, the share of logistics services in overall logistics market is shown, followed by the market size and growth in logistics services market inIndia. A brief snapshot of the overall market attractiveness of each of the segments has also been incorporated. The share and growth of the four segments in logistics services is also shown. Subsequently a brief overview followed by its market size & growth of the four segments are demonstrated.
Advantages of Services section deals with the beneficial features of the four segments considered in the logistics services.

Published in: Business
  • Be the first to comment

Market Research Report : Logistics services market in india 2013

  1. 1. Insert Cover Image using Slide Master View Do not distortLogistics Services Market – IndiaFebruary 2013
  2. 2. Executive Summary • Share of Logistics Services in Total Logistics Market in India was estimated to be c1% in 2011 and is expected to  Market reach c6% in 2016 • Logistics services accounts for around c% of the total logistics market Drivers LE   • Courier, Freight Forwarding, 3PL and Reverse Logistics exhibits significant market potential in India Challenges Drivers &  Challenges – Global Trade Boom MP – Rapid Economic Growth & FDI in Logistics   – Growth in Retail Sector – Poor Infrastructure – Lack of Skilled Manpower SA – Warehouse Space Deficit – Rise in e‐Tailing  – Increased demand for Consumer Electronics and Durables – Expansion of Auto & Auto Components Sector  Enterprise  Application  – ERP,  eBizNET –  Identification Technology – Barcode, RFID SC suite, Vin eRetail  Material  Handling  Technology  ‐ Automated  Technology  Communication  Technology  ‐ Global  Guided  Vehicle  System  (AGVS)  ,  Information  Adoption Positioning System (GPS) Tracking directed System  Software Solution Providing Companies  Technology Adoption by Leading Players  Major Players Player A Player B Player CCompetition Player D Player E Player F Player G Player H Player I LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 2
  3. 3. •Introduction•Evolution•Market Overview  LE   MP•Advantages of Services•Segments & Features SA•Distribution Channel•Role of Regulatory Bodies•Drivers & Challenges•Key Issues•Technology Adoption •Competitive Landscape•Transactions•Strategic Recommendations•Appendix LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 3
  4. 4. Logistics sector primarily deals in transportation and storage operations and is significantly aided by logistics services  LOGISTICS  SECTOR TRANSPORTATION STORAGE LOGISTIC SERVICES Container Rail Transport Road Transport Warehousing Logistics Park LE   Courier Service Express Logistics MPInland Container Depot Freight Forwarding Coastal Shipping Air Cargo S A Container Freight Station Cold Chain 3PL/ 4PL Reverse Logistics Project Logistics PortLogistics services also include import/export management, customs clearance, clearance, freight forwarding, customer  service, rate negotiation, order processing, assembly/installation, distribution, order fulfillment, reverse logistics,  consulting services that include distribution network planning, site selection for facility location, fleet management,  freight consolidation and logistics audit amongst others LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 4
  5. 5. Logistics Services ‐ Segmentation Logistics services has significant business earning potential in business services that require courier; movement of heavy  commodities that require freight forwarding, outsourcing of logistics activities by business houses as well as logistics companies  that boosts 3PL and returns processing that involve key sectors that has built a favorable position for reverse logistics    Courier Service Freight Forwarding Services of any kind relating to the carriage,  consolidation, storage, handling, packing or    A Courier is a person or company that is engaged in  distribution of the goods with ancillary and advisory  E transporting, dispatching and delivering messages,  services in connection therewith, including but not  L packages and mail at some extra cost limited to customs and fiscal matters, declaring the  P goods for official purposes, procuring insurance of  the goods and collecting or procuring payment or  M documents relating to the goods Third Party Logistics (3PL) Third Party Logistics (3PL) involves outsourcing  activities related to logistics and distribution  S A Reverse Logistics Process of planning, implementing, and controlling  efficient and cost effective flow of raw materials, in‐ process inventory, finished goods and related  3PL industry includes Logistics Solution Providers  information, from point of consumption to point of  (LSPs) and shippers whose business processes they  origin, for purpose of recapturing value of proper  support. disposal Key Courier Service Freight Forwarding  3PL Reverse Logistics  LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 5
  6. 6. Evolution of Courier Services LE   1980s P 1977 SAM 1837 Organized Courier  Courier industry  came into existence  started gaining  momentum  Introduction of  1774 India Post Office  Act Indian Postal System  came into existence LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 6
  7. 7. The logistics market is growing at a CAGR of X% of which c% is comprised by Services segment Logistics Market Size and Growth Logistics Market – Segmentation  INR units c% 25 X6 X% X5   20 X4 a% E 15 X3 X2 L X1 10 b% P 5 0 20‐‐ 20‐‐ 20‐‐e 20‐‐e 20‐‐e SAM20‐‐e Share of Logistics Services in Total Logistics Market in India A B C 20‐‐ 20‐‐ 20‐‐e 20‐‐e 20‐‐e 20‐‐e LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 7
  8. 8. Growing business opportunities in India is driving the need for time bound service Market Overview – India  Courier Market Size and Growth – India • The courier/ express courier market is highly fragmented  INR units with numerous small unorganized players   400 f LE• The market was valued at INR a units in 20‐‐ and is  A% e expected to reach ~INR f units in FY 20‐‐ 300 d P c• The market is estimated to maintain a steady growth  200 b a rate of around A% between 20‐‐ to 20‐‐• With over a lakh of pin codes in India, only around  10,000 are  connected by courier service SAM  It thus makes the lesser known players very significant in the  market as they take upon the responsibility of providing last  mile service for large organized players  100 0 20‐‐ 20‐‐ 20‐‐e 20‐‐e 20‐‐e 20‐‐e Revenue Split of Courier Sector  Express/ Courier Categories in India Government  o% India Post AdministeredGlobal Integrators UPS, FedEx, TNT and DHL n% m% Large Indian  Companies Blue Dart, DTDC, First Flight etc. Other Small Courier  M N O Regional Players Companies LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 8
  9. 9. Freight forwarders’ exhaustive understanding of transport business ensures cost effectiveness for its clients Freight Forwarder• Forwarders offer flexibility with customers • Able to customize their services to specific requirements because they do not need to fill planes or ships each day• Freight Forwarders have competitive advantage on the human resources front LE  • Many forwarders reward employees based on area level profitability, attracting more quality people to freight forwarding• Better understanding of cost and effectiveness of transportation business P• Forwarders are far less complex because they focus on the basic factors such as sales, terminal operations, procurement of transport  services etc Factors Favoring Freight Forwarder  S AM • Control  of  the  end‐user  customer  as  asset  • Flexibility  of  services  across  different  carriers  and  operating  air  and  container  carriers  increasingly  modes of transportation rely on forwarders wholesaling capacity  • Ability  to  provide  better  supply  chain  information  • Ability to attract and retain high quality clients due  to customers to higher growth and profitability LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 9
  10. 10. SAMPLE 3PL Providers – Types Based on their Functions Types of 3PL Providers Based on Transportation Based on Warehouse/Distribution Based on Forwarder • Services extend beyond transportation  to offer a comprehensive set of  • Very  independent  middlemen  with  logistics offerings • Many  have  former  warehouse  and/or  forwarder roles • Leveraged 3PL service providers use  distribution experience • Non‐asset  owners  that  provide  a  wide  assets of other firms • Examples: DSC Logistics, USCO, Exel,  range of logistics services • Non‐leveraged 3PLs use assets  Caterpillar Logistics, IBM • Examples: AEI, Kuehne & Nagle, Fritz,  belonging solely to the parent firm Circle, C. H. Robinson, Hub Group • Examples: Ryder, Schneider Logistics,  FedEx Logistics, UPS Logistics  Based on Financial Issues  Based on Information • Provide  freight  payment  and  auditing,  • Significant growth and development in  cost  accounting  and  control,  and  tools  this category of Internet‐based,  for  monitoring,  booking,  tracking,  business‐to‐business, electronic  tracing, and managing inventory markets for transportation and logistics  • Examples: Cass Information Systems,  services CTC, GE Information Services,  • Examples: Transplace, Nistevo FleetBoston LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 10
  11. 11. 3PL – Distribution Channel SAMPLE  Transaction Transaction Third  Third  Retailer/  Supplier Party Logistics  Manufacturer Party Logistics  Buyers Provider Provider Logistics Services Logistics Services LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 11
  12. 12. Role of Government: Summary Ensuring    Competitiveness P LE Laws SAM Role  of  Infrastructure Development Government India Post Office  Foreign Direct Amendment Bill Investment LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 12
  13. 13. Drivers ‐ Summary SAMPLE  Common Drivers Key Impact Global Trade Boom Rapid Economic Growth & FDI in Logistics Growth in Retail Sector Rise in e‐Tailing  Increased demand for Consumer Electronics and Durables Expansion of Auto & Auto Components Sector Freight  Reverse  Courier 3PL Forwarding Logistics Government Financial  Diversification into  High cost of  Concern for Institutions  Logistics Business Logistics in India SustainabilityDependence on Courier  Garnering Customer  Improved  Satisfaction Phased  Transportation  implementation of  Growing Growing Business  Infrastructure VAT Consumerism of Private Telecom Sector  among Indians Rising  Economic Viability  Competitiveness  Government Seasonal Business  of Reusing Goods among Domestic  Infrastructure Upsurge Due to  Companies Initiatives Growth of PharmaOccasions Market LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 13
  14. 14. Reverse logistics is plagued by mismanaged returns, high  SAMPLE distribution cost and retailer‐manufacturer conflicts Mismanagement  • Retail outlets and showrooms are often not systematic enough in smoothly  in Segregating  segregating the articles to be sent to manufacturers that leads to loss of time for  Returns reverse logistics service providers • Transportation, warehousing, distribution and inventory management are the  major cost components of reverse logistics  • If companies find that total costs associated with reclamation High Distribution  efforts exceed total costs of new materials or products, firms would have no  Key  Costs financial incentive for implementing a reverse logistics system Issues • So it becomes very important for logistics service providers to provide services at  competitive rates • Conflicts arise between retailers and manufacturers due to reasons involved in  product recall Retailer‐ • Retailers perceive that every product damages happen in the process of logistics  or in the production process, so every product demands full compensation Manufacturer  • Manufacturers, on the other hand, perceive that recalled products may be  Conflict damaged by retailers, so every recalled product should not be given full  compensation • The above factors result in confusion of reverse logistics process initiation LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 14
  15. 15. 3PL is witnessing better productivity with rising investments in A, B, C & new supply chain tools  • IT implementation comprises  LE   P mainly ZZ packages • A is one of the most popular IT  M tool being used across logistics  S A Applications Enterprise  • Communication plays a key  • Direct data entry into  role in logistics business computer • Ensures speed and  • Technologies x, Y, Z,  Identification Communication Competitive accuracy in customer  magnetic strip and A  are  Technology Technology Advantage service used • Helps in bringing in  • Used for tracking rail cars  competitiveness among  and carton movement  Handling Material service providers • Loading, unloading and storage of  goods in warehouses • Reduces need of labor force • Automated material handling  becomes useful in areas of  hazardous goods  LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 15
  16. 16. Public: Domestic Company – Player A (1/3)Company Information Offices and Centres – India  Player ACorporate Address 5th Road, 6th Street,  City A – 700 xxxTel No. 91 22 6679 xxxxFax No. 91 22 6679 xxxxWebsiteYear of Incorporation 19‐‐ LE  Ticker SymbolStock Exchange 53xxxx (BSE) MP Bombay Stock Exchange City X Head OfficeProducts and ServicesCategory S Products/Services A Key People Name Designation Person A MD Person B CFO Person C CEO LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 16
  17. 17. Financial Snapshot SAMPLE  Public: Domestic Company ‐ Player A (2/3) Key Ratios y‐o‐y change  Total Income Net Profit/Loss INR mn Particulars  2012 2011 2010 2009 INR mn (2012‐11) 35,858.4 Profitability Ratios40,000 34,381.0 3000 28,803.1 Operating Margin ‐0.19 8.78% 8.97% 7.61% 8.01%30,000 Net Margin 0.06 6.54% 6.48% 5.76% 6.24% 20,836.4 200020,000 Profit Before Tax Margin ‐0.15 8.44% 8.58% 7.77% 8.13% 1000 Return on Equity 0.48 15.42% 14.94% 13.74% 13.07%10,000 Return on Capital Employed 1.52 14.71% 13.18% 13.53% 13.95% 0 0 Return on Working Capital ‐11023.91 ‐ 50.35% 46.22% 36.95% 10973.56% 2009 2010 2011 2012 Return on Assets 0.32 8.27% 7.95% 8.07% 8.62% Financial Summary  Return on Fixed Assets 4.55 16.76% 12.20% 19.68% 23.75% Cost Ratios• The company earned a net profit of INR 2,345.9 mn in FY 2012, as Operating costs (% of Sales) 0.19 91.11% 90.92% 92.34% 91.90% compared to net profit of INR 2,228.7 mn in FY 2011 Administration costs (% of  17.24 17.24% 0.00% 6.07% 8.64%• The company reported total income of INR  35,858.4 mn in FY 2012,  Sales) registering an increase of 4.3% over FY 2011 Interest costs (% of Sales) 0.03 1.65% 1.62% 0.68% 1.12%• The company earned an operating margin of 8.78% in FY 2012, a  Liquidity Ratios decrease of 0.19 percentage points over FY 2011 Current Ratio ‐48.94% 1.00 1.95 1.82 2.13 Cash Ratio ‐43.37% 0.26 0.47 0.63 0.83• The company reported debt to equity ratio of 0.86 in FY 2012, a  Leverage Ratios decrease of 1.63% over FY 2011 Debt to Equity Ratio ‐1.63% 0.86 0.88 0.70 0.52 Key Financial Performance Indicators Debt to Capital Ratio ‐20.15% 0.27 0.34 0.24 0.17 Interest Coverage Ratio ‐3.90% 5.39 5.61 11.27 7.20 Indicators Value (09/01/2013) Efficiency Ratios Market Capitalization (INR mn) xx Fixed Asset Turnover 35.97% 2.53 1.86 3.39 3.77 Total Enterprise Value (INR mn) xx Asset Turnover 3.01% 1.25 1.21 1.39 1.37 Current Asset Turnover 36.26% 5.10 3.74 3.59 3.11 EPS (INR) xx Working Capital Turnover ‐21677.73% ‐1655.74 7.67 7.97 5.86 PE Ratio (Absolute) xx Capital Employed Turnover 2.23% 2.33 2.28 2.37 2.07 Improved Decline LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 17
  18. 18. Public: Domestic Company – Player A (3/3) Key Business Segments Key Geographic Segments A B100% 100% X X  50% 50% 0% 20‐‐ P 0% LE 20‐‐Business HighlightsDescription  News SAMOverviewRecent TransactionsReverse Logistics LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 18
  19. 19. Appendix SAMPLE Ratio Calculations Ratio Calculations (Operating  Current Assets / Current Operating Margin Current Ratio Income/Revenues)*100 Liabilities Net Margin (Net Profit / Revenues) *100 {(Cash & Bank Balance +  Cash Ratio Marketable Securities) / Current  (Income Before Tax / Revenues  Liabilities)} Profit Before Tax Margin *100  Total Liabilities / Shareholders  Debt to Equity  (Net Income / Shareholders  Equity Return on Equity (ROE)  Equity)*100  {Total Debt / (Shareholders  Debt to Capital Ratio EBIT / (Total Assets – Current  Equity + Total Debt)} Return on Capital (ROCE)  Liabilities)*100  Interest Coverage Ratio EBIT / Interest ExpenseReturn on Working Capital (EBIT / Working Capital) *100 Fixed Asset Turnover Sales / Fixed Assets Return on Assets (EBIT / Total Assets)*100  Asset Turnover Sales / Total Assets Return on Fixed Assets (EBIT / Fixed Assets) *100  (Operating Expenses / Sales)  Current Asset Turnover  Sales / Current Assets Operating Costs (% of Sales) *100 Administration Costs (% of  (Administrative Expenses / Sales)  Working Capital Turnover Sales / Working Capital Sales) *100  Sales / (Shareholders Equity +  Capital Employed Turnover Interest Costs (% of Sales) (Interest Expenses / Sales) *100  Total Debt) LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 19
  20. 20. Thank you for the attentionThe Logistics Services  Market – India report is part of Netscribes, Inc. Transportation & Logistics Series.For any queries or customized research requirements please contact:Phone: +91 33 4027 6214/6215E‐Mail: info@netscribes.comFollow us on:About Netscribes, Inc.Netscribes is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content‐management services, and knowledge‐software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one‐stop shop designed to fulfil clients’ profitability and growth objectives.Disclaimer: This report is published for general information only. Although high standards have been used in the preparation, “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes and prior permission is required for guidelines on reproduction. LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 20