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.

CHA Industry Analysis 2


Published on

Published in: Business, Economy & Finance
  • Be the first to comment

  • Be the first to like this

CHA Industry Analysis 2

  1. 1. 18 TH FFFAI BIENNIAL CONVENTION FEDERATION OF FREIGHT FORWARDERS’ ASSOCIATIONS IN INDIA INDUSTRY TRENDS & INDUSTRY ANALYSIS <ul><li>Convention Theme: CHA: BEYOND HORIZON </li></ul><ul><ul><ul><li>Increasing Opportunities - </li></ul></ul></ul><ul><ul><ul><li>Diminishing Yields, Escalating Responsibilities, Forced Liabilities </li></ul></ul></ul>
  2. 2. Colour Palette <ul><li>Background & Review </li></ul><ul><li>Statistics & Economic Indicators </li></ul><ul><ul><li>Planning For Growth </li></ul></ul><ul><li>Survey Reports </li></ul><ul><li>Market Forces </li></ul><ul><li>Analysis </li></ul>
  3. 3. India Story <ul><li>India has 27 Billionaires & 83000 Millionaires </li></ul><ul><ul><li>Mumbai has more Millionaires per square mile than Manhattan </li></ul></ul><ul><li>April 2006 – March 2007 </li></ul><ul><ul><li>Exports : US$124.6 billion </li></ul></ul><ul><ul><ul><li>Increase of almost 24% </li></ul></ul></ul><ul><ul><li>Imports to US$181.4 billion. </li></ul></ul><ul><ul><ul><li>Rose by 29% </li></ul></ul></ul>Global interest in India is escalating, and the world’s perception of India as a competitor to China is shifting from “also ran” to “a force to be reckoned with”.
  4. 4. Advantage India <ul><li>India’s Geographical Position As a Major Asian Transport and Distribution Hub </li></ul><ul><li>Location for Outsourcing a Range of Activities (Including Manufacturing, IT and Communication Services, Etc.) </li></ul><ul><li>Highly Evolved Banking System </li></ul><ul><li>India’s Security Focused Banking Regulations </li></ul>Eyefortransport India Market Report 2007
  5. 5. Shipping & Ports Initiatives <ul><li>Port Privatisation Gaining Momentum </li></ul><ul><li>Foreign Players In Container Terminal Development </li></ul><ul><li>National Maritime Development Programme: </li></ul><ul><ul><li>Launched 30.12.2005 Envisage Investment Rs. 1,003 B (Us$ 22 B) In 387 Port & Shipping Sector Projects Over 20 Years </li></ul></ul><ul><ul><li>Port Sector Investment: Rs. 558 B (Us$ 12 B) Over Next 6 Years - Public Private Partnership Funding </li></ul></ul><ul><ul><li>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 </li></ul></ul><ul><li>Shipping & LWT Sector Investment: Rs. 445 B (Us$ 10 B) – Ship Acquisition, Coastal Shipping, Etc. </li></ul>
  6. 6. NATIONAL HIGHWAY DEVELOPMENT PROGRAMME <ul><li>Phase I: Golden Quadrilateral Project </li></ul><ul><ul><li>Widening (4/6 Lane) 5,500 Km Of National Highways (NH) Connect Delhi - Mumbai – Chennai – Kolkata. </li></ul></ul><ul><li>Phase II: 4/6 Lane 7,500 Km Of NH Connect Diagonals </li></ul><ul><li>Phase III: 11,113 Km - Connect Cities Of Economic & Religious Importance </li></ul><ul><li>Other Phases: </li></ul><ul><ul><li>Upgrading NH (2 Lane 20,000 Km, 6 Lane 6,500 Km) </li></ul></ul><ul><ul><li>Develop 1000 Km Expressway </li></ul></ul><ul><ul><li>Bypasses, Railway Over-bridges Etc </li></ul></ul>
  7. 7. RAIL-PORT CONNECTIVITY <ul><li>NATIONAL RAIL VIKAS YOJANA </li></ul><ul><li>Freight Corridor: Dedicated Rail Corridor Between Delhi & Kolkata And Delhi & Mumbai - Investment Over Rs 250 B (Us$ 5.4 B) Delhi-Mumbai </li></ul><ul><li>Rail Privatisation: Containerised Operations Open To All Private & Public Carriers </li></ul>
  8. 8. Civil Aviation & Trade CIVIL AVIATION
  9. 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. 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. 11. Global Logistics Industry Interest <ul><li>A survey among European & North American 3PLs placed India second to China in terms of growth potential </li></ul><ul><li>DOMESTIC </li></ul><ul><ul><li>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%). </li></ul></ul><ul><li>INTERNATIONAL </li></ul><ul><ul><li>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. </li></ul></ul>Eyefortransport India Market Report 2007
  12. 12. Expansion Strategy <ul><li>Almost half of all respondents are planning to expand their international networks. </li></ul><ul><li>Another high priority is the development of infrastructural and operational strengths throughout India. </li></ul><ul><li>Interest Group Covers Not Just Multinational Forwarders but also SME </li></ul>Eyefortransport India Market Report 2007
  13. 13. Key Focus Areas For Business Expansion Eyefortransport India Market Report 2007
  14. 14. Joint ventures <ul><li>28%are engaged in joint ventures </li></ul><ul><li>2% are global companies with Indian Operations </li></ul><ul><li>Many are actively looking for either suitable joint venture opportunities or potential acquisitions. </li></ul><ul><li>Others prefer to work together with local associates, rather than formal partnership agreement. </li></ul>Eyefortransport India Market Report 2007 Greatest Level Of Joint Venture Participation Is By 3pls And Freight Forwarders
  15. 15. Key Benefits Of A Joint Venture Eyefortransport India Market Report 2007
  16. 16. Industry Specific Growth Opportunities Eyefortransport India Market Report 2007
  17. 17. Foreign Companies Looking For Opportunities Eyefortransport India Market Report 2007
  18. 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. 19. MULTIMODAL TRANSPORT <ul><li>30% Of Total Container Traffic Handled By Major Ports Moves Between Gateway Ports And Inland Centres </li></ul><ul><li>More Reliance On Smaller / Feeder Vessels </li></ul><ul><li>Higher Cost Of Inland Container Movement, In Comparison To ASEAN </li></ul>
  20. 20. Emerging Security Concerns Multiple Security Regimes Will We Need To Be Security Experts?
  21. 21. Safety Vs Security BALANCING SECURITY & SAFETY Common & Divergent Elements
  22. 22. GOOD NEWS & BAD NEWS <ul><li>‘ This year we got 30% increment but we have cost reduction exercise & we want you to reduce your rates by at least 30%’ </li></ul><ul><li>- Sometimes 50% </li></ul>
  23. 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 <ul><li>Unjust Enrichment </li></ul><ul><li>Blank Cheques With Shipping Lines </li></ul><ul><li>Liability For Demurrage & Detention Charges </li></ul><ul><li>Liability of Charges for Change of Vessel </li></ul>
  24. 24. Banking & Insurance <ul><li>Lending without Interest </li></ul><ul><li>- Partnership </li></ul><ul><ul><li>No Security </li></ul></ul><ul><ul><li>Not Even Credit Check </li></ul></ul><ul><li>Insurance Without Premium </li></ul><ul><ul><li>Settlement Beyond Principles of Insurance </li></ul></ul>
  25. 25. Feelings Shared In FIATA Meeting <ul><ul><ul><li>Security : Uniform Standards that are globally acceptable to all stake holders. </li></ul></ul></ul><ul><ul><ul><li>Authorities have recognised, regulating i.e. passing regulations is one thing and successfully implement is another. Even well intentioned are often impractical. </li></ul></ul></ul><ul><ul><ul><li>We can't accept regulations that make our lives miserable. </li></ul></ul></ul>
  26. 26. GLOBALISATION Implement Best Practices Ahead of Times EMERGING TRADE REQUIREMENTS <ul><li>New Markets </li></ul><ul><ul><li>Premium On Competitiveness </li></ul></ul><ul><ul><li>Cheaper & Better Suppliers </li></ul></ul><ul><ul><ul><li>Production Facilities Spread Globally </li></ul></ul></ul><ul><ul><ul><li>Global Distribution Facilities & Reach </li></ul></ul></ul><ul><ul><ul><ul><li>End-to-end Logistics Solutions </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Realtime Visibility On Supply Chain </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Realtime Control On Supply Chain </li></ul></ul></ul></ul>
  27. 27. Summary <ul><li>Global Trade Expected To More Than Double In Less Than 20 Years </li></ul><ul><li>Global Container Trade Growth About 9% P.A. Over Last Decade, India Matched This </li></ul><ul><li>Expected Addition Of 80 Million To Country’s Labour Pool By 2010 </li></ul><ul><li>If Integrated Into Global Supply Chain, Could Yield Still Faster Growth Of Indian Economy </li></ul><ul><li>Growth In Logistics Sector has been almost Double of GDP Growth </li></ul><ul><li>Competition at arms breaking barrier </li></ul><ul><li>More & More Cargo on Delivered Terms </li></ul>
  28. 28. THANKS <ul><li>CHA: BEYOND HORIZON </li></ul><ul><ul><ul><li>Increasing Opportunities - </li></ul></ul></ul><ul><ul><ul><li>Diminishing Yields, Escalating Responsibilities, Forced Liabilities </li></ul></ul></ul>