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Thirdpartylogistics india-sample-091119005136-phpapp01

  1. 1. Third Party Logistics - IndiaNovember 2009
  2. 2. Executive Summary Total market for Third Party Logistics (3PL) in India is valued at INR XX bn in 20- -; Estimated to reach INR YY bn in 20- - Third party logistics (3PL) market in India is at a nascent stage Market LE Market comprises of two major segments: – Asset-based 3PLs P – Non-asset based 3PLs a% of companies are outsourcing services like supply chain management and warehousing M Drivers & Drivers: – – – SA Economic Growth High Cost of Logistics in India Phased Implementation of VAT Challenges: – Infrastructure Congestion – Lack of Trust and Awareness Challenges – Government Infrastructure Initiatives – Growth in Auto Sector – Growth in Retail Sector Market comprises of public sector, private sector and foreign companies Majority of 3PL Players are currently providing disintegrated servicesCompetition Many 3PL players are investing to become end-to-end integrated players Express cargo and courier companies like Compan1, Company 2 and Company 3 also offer 3PL services THIRD PARTY LOGISTICS – INDIA.PPT 2
  3. 3. •Introduction•Market Overview•Drivers & Challenges•Competition•PE Investments•Key Developments THIRD PARTY LOGISTICS – INDIA.PPT 3
  4. 4. 3PL firm acts as a ‘third party’ facilitators between manufacturers and the buyers Transaction Transaction Third Third Retailer/ Supplier Party Logistics Manufacturer Party Logistics Buyers Provider Provider Logistics Services Logistics Services • Logistics is a three-way relationship between a buyer, the supplier of goods and a logistics service provider Logistics First Party Second Party Third Party Shipper or Supplier Buyer Firm acting as a Middleman Third Party • Third-party Logistics is the use of an outside company to perform all or part of the firm’s Logistics materials management and product distribution functionSource: THIRD PARTY LOGISTICS – INDIA.PPT 4
  5. 5. Third party logistics is fast gaining popularity in the Indian logistics market Overview Overall Market Size and Growth • Third party logistics (3PL) market in India is at a INR bn nascent stage 200 Z LE • Companies in textile, automotive, pharmaceutical, 150 b% manufacturing, retail and FMCG sectors are requirements to specialized service providers MP increasingly opting to outsource their logistics 100 50 X Y A • According to a recent survey of 3PL service providers S Engineering, automotive & retail sectors were top 0 revenue earners 2005 2008 2012e Share of 3PL firms in Logistics Industry 3PL Market comprises of two segments % Asset Based Non-Asset Based 20 W 15 Own some of the assets used V 10 in supply chain management U which often include trucks, Does not own such assets 5 distribution centres and 0 warehouses 2005 2008 2012eSource: THIRD PARTY LOGISTICS – INDIA.PPT 5
  6. 6. Drivers & Challenges Drivers Economic growth High cost of Logistics in India Challenges Infrastructure Congestion Phased implementation of VAT Government Infrastructure Initiatives Lack of Trust and Awareness Growth in Auto Sector Growth in Retail Sector THIRD PARTY LOGISTICS – INDIA.PPT 6
  7. 7. There are few 3PL players with nationwide presence with majority of players providing disintegrated services Competition Overview Local Firms Outsourcing Logistics Services •Currently, there are only a few 3PL players % with a national network 60 Q LE •Majority of 3PL Players are currently providing 50 disintegrated services 40 MP 3PL service providers are expanding their basket of services as companies are now looking beyond 30 20 P Global average stands at c% A transportation of their products and raw materials 10 S Many 3PL players are investing to become end-to- 0 end integrated players 1998 2008 •Indian corporates like Company 4 and Market Structure Company 5 have entered the 3PL business Initially these corporates had divisions to handle 3PL Market internal logistics •Large express cargo and courier companies like Company 1, Company 2 and Company 3 have also started offering 3PL services Public Sector Private Sector Foreign Companies Companies CompaniesSource: THIRD PARTY LOGISTICS – INDIA.PPT 7
  8. 8. Major Players – Private Sector Companies (1/5) Players Business Description Company 1 • It offers domestic and international cargo handling services, complete logistics solutions which includes sourcing raw-materials to exporting finished products, and LE documentation support • It owns more than x cubic meters of storage space P • It has its own Custom House Agent License to facilitate the customs clearance of imported or exported cargo M Financials: Company 2 SA • It reported net sales of INR A mn and a net profit of INR B mn in FY 20-- - - - • The company is based in Mumbai • It provides supply chain solutions, value added services, warehousing and packaging solutions • It is planning to double its current warehouse space to T mn sq. ft. Company 3 • It provides container freight services , warehousing solutions and project logistics • It entered into a strategic alliance with Hind terminals for setting up, commissioning, operating , managing and commercially running container freight stations at location 1, location 2 and location 3 • Planning to invest INR C bn in order to set up d logistic parks at location 1, location 2, location 3, location 4 and location 5Source: THIRD PARTY LOGISTICS – INDIA.PPT 8
  9. 9. Thank you for the attentionThe Third Party Logistics report is a part of Research on India’s Logistics Industry Series.For more detailed information or customized research requirements please contact:Gagan Uppal Gaurav KumarPhone: +91 22 4098 7530 Phone: +91 33 4064 6214E-Mail: E-Mail: gaurav.kumar@netscribes.comResearch on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quickinsights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries onAbout NetscribesNetscribes 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 truevalue proposition that draws upon a vast knowledge base. Netscribes is a one-stop shop designed to fulfil clients’ profitability and growthobjectives.Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India,Netscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is thesole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. THIRD PARTY LOGISTICS – INDIA.PPT 9