INDIAN LOGISTICS

By: Anshuman Singh

Salman Shiras

Sayeka Mehjabin

Asha Chauhan

INTRODUCTION
Logistics took way in 1980 with door to door
activities.
Need of products and services across the globe.
In 2014, US $ 98.10 Bn with 4.9% growth from
last year.
It grows around 2 times of GDP.

Logistics Industry Structure

Logistics Industry Structure
Indian Logistics
Market

Road
Freigh
t

Expres
s
logistic
s

Container
Haulage

Contain
er
Logistic
s
Inland Container
Depot(ICD) and
Container
Freight Station

Liquid
Logistic
s

Multimodal
Transport
Operator(MTO)

3PL (Third
Party Logistics) services can be a combination of
all activities provided by the logistics supplier
these

NATURE OF INDUSTRY
Cyclical
Dependent upon spending from different
business.
Grows as economy grows.

MARKET SHARE

Source: Frost & Sullivan Research

Key Players in Logistic Industry

END USERS

Business

Government

E-commerce Companies

Individual Customers

Farmers

INDIAN LOGISTICS INDUSTRY

PORTERS FIVE FORCES MODEL
threat

threat

of new
entrants
No entry
barrier in terms of
requirement for licensing
needs and industry is
vulnerable to easy scale
up and intense competition

bargaining
power of
consumers
A few large users of the industry
and companies (e.g. the
automobile
industry ) are able to
significantly
squeeze transporters

of
Substitutes
The industry is highly

customer oriented with

multiple vendor
options available to
customers
Forces
Impacting
bargaining
Logistics
Industry

power of Suppliers

Government influence
on fuel prices makes it
rivalry
difficult for players to
among competitors predict, control and pass
through fuel costs to
Lack of differentiation
customers
in services leads to
commoditization and
further price erosion

PEST ANALYSIS
Political

Economic

Technological

Social

SEZ
National Highways
Infrastructure
Spending

Inventory
Management
Bar Code System
Radio Frequency
Web Enabled System

VAT
GST
GDP Growth
Import and Exports

E-Waste Solution
Innovation

IMPACT OF GST
Good and Service Tax (GST) simplified and
uniform tax system.
Easy Inter-State Movement.
Optimization of cost.
Challenges:
High Investment.
Realignment of Routes and Volumes.

LAND ACQUISITION IMPACT

Investment in Rural areas.
Highways, Corridor and etc.
New Projects can take place.
No Delay.

INDIAN LOGISTICS INDUSTRY

GROWTH DRIVERS
Streamlining
of Indirect Tax
Structure

Investment in
Transportatio
n
Infrastructure

Infusion of
Qualified Work
Force

Growt
h
Drive
rs

Increased
Demand of 3 PL
services

Recognition of
logistics
management as
a strategic tool

Globalization of
Manufacturing
Sectors

CHALLENGES

Source: KPMG, McKinsey, MOSL

SUPPLIERS
Fuel
Containers
Warehouses
Package
Trucks
Ports

Apm Maersk, Mediterranean Shg Co, Cma cgm

group, Evergreen Line, Hapag Lloyd, etc.

EXPECTED GROWTH FACTORS

CAGR of 6-7% till 2020 reaching revenues US
$150-$160 Bn.
E-tailing expected to grow at 60% for next few
years which logistics contribution is around 10%.
Infrastructure spending.
GST and Land Acquisition.
100% FDI.

REVENUE FORECAST

Source: Frost & Sullivan Research

BROKERAGE REPORTS
1. Changing demographics
60 % of Indian population to be in 20-25 clusters by 2030.
2. Evolving trade requirements
Growth in domestic manufacturing and retail sector
Make in India
Booming e-commerce sector
Growth of niche industries cold chain warehousing
Integration of IT and technology
3. Increasingly skewed modal mix
Lack of infrastructure
Misuse of modes of transportation
Overutilization of roadways
Underutilization of waterways and railways
Need for world class facilities like Logistics parks, Free trade and
warehousing zones, Containerization, Multi modal freight corridors,
Hub-and-spoke model of freight movement etc.

4. Developments in each mode of transports

Air
Emergence of new cargo centers tier I and tier II cities
Air freight stations
Ports
Mega ports
Development of non major ports
Containerization
Rail
Direct freight corridors
Container train operators
Assembly and light manufacturing services
Rail side warehousing
Warehousing
GST

THE FUTURE

Logistics Market in India is expected to be worthUS$ 301.89 billionby 2020

India spends around 14.4% of its GDP on logistics and transportation as
compared to less than 8% spent by the other developing countries.
Indian logistics market is expected to grow at a CAGR of 12.17% by 2020driven
by the growth in the manufacturing, retail, FMCG and e-commerce sectors.
3PL logistics market in India is expected to be worth US$ 301.89 billion by
2020.
Indian freight transport market is expected to grow at a CAGR of 13.35% by
2020.
The road freight movement is expected to increase at a CAGR of 15%.
The rail freight movement will grow at a rate of around 10% CAGR over the
next 5 years.
Indian sea freight market will grow at a CAGR of 12% in the next 5 years.

Warehouse market in India is expected to grow at a CAGR of 10%.

Indian cold storage market is expected to grow at a CAGR of 16.09%
by 2020 driven by the growth in the organized retail,Indian fast food
market, food processing industry and e-commerce sectors.
Cold storage market in India is expected to be worth US$ 8.57 billion
by 2020.

Goods and services Act

Increasing trade with South east Asia & Asia.

REFERENCE LIST
Mehatha, A et al (n.d.) A Macro-environment
analysis of reverse logistics practices in India.
Frost & Sullivan (2015) Mega Trend in Indian
Logistics Sector for 2015-16, CII.
Borawake, H (2015) Transformational Times,
Motilal Oswal.
Dinodia Capital Advisors (2012) Indian Logistics
Industry.
KPMG (2013) Logistics Game ChangerTransforming Logistics, CII.
Religare (2012) Indian Logistics.