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  1. 1. Third Party Logistics - India November 2009
  2. 2. 2THIRD PARTY LOGISTICS – INDIA.PPT SAMPLE Executive Summary Market Drivers & Challenges Competition 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 comprises of two major segments: – Asset-based 3PLs – Non-asset based 3PLs a% of companies are outsourcing services like supply chain management and warehousing Drivers: – Economic Growth – High Cost of Logistics in India – Phased Implementation of VAT – Government Infrastructure Initiatives – Growth in Auto Sector – Growth in Retail Sector Challenges: – Infrastructure Congestion – Lack of Trust and Awareness Market comprises of public sector, private sector and foreign companies Majority of 3PL Players are currently providing disintegrated services 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
  3. 3. 3THIRD PARTY LOGISTICS – INDIA.PPT •Introduction •Market Overview •Drivers & Challenges •Competition •PE Investments •Key Developments
  4. 4. 4THIRD PARTY LOGISTICS – INDIA.PPT 3PL firm acts as a ‘third party’ facilitators between manufacturers and the buyers Source: Logistics • Logistics is a three-way relationship between a buyer, the supplier of goods and a logistics service provider Third Party Logistics First Party Shipper or Supplier • Third-party Logistics is the use of an outside company to perform all or part of the firm’s materials management and product distribution function Second Party Buyer Third Party Firm acting as a Middleman Supplier Manufacturer Third Party Logistics Provider Third Party Logistics Provider Retailer/ Buyers Logistics Services Transaction Transaction Logistics Services
  5. 5. 5THIRD PARTY LOGISTICS – INDIA.PPT SAMPLE Third party logistics is fast gaining popularity in the Indian logistics market • Third party logistics (3PL) market in India is at a nascent stage • Companies in textile, automotive, pharmaceutical, manufacturing, retail and FMCG sectors are increasingly opting to outsource their logistics requirements to specialized service providers • According to a recent survey of 3PL service providers Engineering, automotive & retail sectors were top revenue earners Overview Overall Market Size and Growth Source: 0 50 100 150 200 X 2005 Y 2008 Z 2012e b% INR bn Share of 3PL firms in Logistics Industry 0 5 10 15 20 U 2005 V 2008 W 2012e % Asset Based Non-Asset Based Own some of the assets used in supply chain management which often include trucks, distribution centres and warehouses Does not own such assets 3PL Market comprises of two segments
  6. 6. 6THIRD PARTY LOGISTICS – INDIA.PPT Drivers & Challenges Government Infrastructure Initiatives Growth in Auto Sector Growth in Retail Sector Economic growth Phased implementation of VAT High cost of Logistics in India Drivers Infrastructure Congestion Lack of Trust and Awareness Challenges
  7. 7. 7THIRD PARTY LOGISTICS – INDIA.PPT SAMPLE There are few 3PL players with nationwide presence with majority of players providing disintegrated services •Currently, there are only a few 3PL players with a national network •Majority of 3PL Players are currently providing disintegrated services 3PL service providers are expanding their basket of services as companies are now looking beyond transportation of their products and raw materials Many 3PL players are investing to become end-to- end integrated players •Indian corporates like Company 4 and Company 5 have entered the 3PL business Initially these corporates had divisions to handle internal logistics •Large express cargo and courier companies like Company 1, Company 2 and Company 3 have also started offering 3PL services Competition Overview Local Firms Outsourcing Logistics Services Source: Market Structure 3PL Market Public Sector Companies Private Sector Companies Foreign Companies 0 10 20 30 40 50 60 P 1998 Q 2008 % Global average stands at c%
  8. 8. 8THIRD PARTY LOGISTICS – INDIA.PPT SAMPLE Major Players – Private Sector Companies (1/5) Source: • 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 2 • It offers domestic and international cargo handling services, complete logistics solutions which includes sourcing raw-materials to exporting finished products, and documentation support • It owns more than x cubic meters of storage space • It has its own Custom House Agent License to facilitate the customs clearance of imported or exported cargo Financials: • It reported net sales of INR A mn and a net profit of INR B mn in FY 20-- - - - Company 1 • 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 5 Company 3 Players Business Description
  9. 9. 9THIRD PARTY LOGISTICS – INDIA.PPT Thank you for the attention About Netscribes 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. The 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: 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 the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. Research on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quick insights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries on Gaurav Kumar Phone: +91 33 4064 6214 E-Mail: Gagan Uppal Phone: +91 22 4098 7530 E-Mail: