LOGISTICS

INDIAin

OVERVIEW

Rajath D. M. 12.12.2016

14.4%Logistics Cost asPercentage of GDP

Scenario

LPI3.42Logistics Performance Index

Ranks 35 Globally

Major contributing IndustriesAutocomponentsCementsTextilesPharmaceuticals

$300billionSize of India’s Logistics marketGrowing at a rate of 16% CAGR

ScenarioCost & Mode of logistics

TransportInfrastructure, Initiatives, Growth

Rail7,549Freight trains

239,321Freight Cars

64,600Route Kms

2.8M tonnesFreight Traffic per day

Dedicated Freight CorridorsEastern & Western DFCs comprising total of 3,360KMs completed

Additional DFCs under planning: North-South, East-West, East coast & South-West

The Golden Quadrilateral Freight Corridor - GQFC connects 10,122 kms & generates 55% of revenue

Ro-Ro schemeUnique Roll on - Roll off scheme introduced for Trucks by Konkan Railway

Allows trucks to be transported on flatbed trailers

110,000 trucks transported so far, bringing in ₹ 740 million in revenues

Private RailwaysFew private companies, ports own private railways

The Freight Charges on these routes are decided by Indian Railways

Some of these are joint sector companies and some work on a model similar to BoT

Road5 millionKms of Total road network

70,934Kms of National Highways

1,208Kms of Expressways

Public-Private PartnershipBuild Operate Transfer (BOT) Toll, BOT (Annuity) and the Hybrid Annuity Model (HAM)

Plan to build 2M Kms of NH & to convert 40,000 Kms of SH to NH

Investment opportunities in logistic parks, cold storage, warehousing along the Highways

Golden QuadrilateralGolden Quadrilateral project connecting 4 metropolitans completed in 2012

5th largest highway project in the world connecting 5,846 Kms

Major Industrial hubs planned across GQ to boost economy

Smart HighwaysSmart Highways initiative with Intelligent Traffic Management Systems, Variable Messaging Systems etc planned

Rs 5 to Rs 100 coupons introduced by MoRTH to promote cashless toll collection on National Highways

2.8 millionFreight trucks

50%Of total Freight Movement

Water7,517Kms of coastline

95%Of Foreign trade by Sea

12Major ports

Shipping Corporation of IndiaGovt owned company owns & operates 35% of tonnage

Has a fleet of 79 ships of 2750,000 GT (4.8 million DWT) and also manages 53 research, survey and support vessels of 120,000 GT (060,000 DWT)

Sagarmala InitiativeStrategic and customer-oriented initiative of the GoI to modernize India's Ports

6 megaports planned in states of Karnataka, Tamil Nadu, Kerala, West Bengal & Andhra Pradesh

Total investment of USD 10 Billion committed

Inland WaterwaysIndia has an extensive network of inland waterways in the form of rivers, canals, backwaters and creeks

5 National Waterways have been declared connecting over 2000Kms

Waterways have immense potential and are highly underutilized in India

1605MMetric Tonnes of Cargo in 2014-15

187Minor Ports

$2.69BInvested in ports & shipping in last 3 years

Air2.28millionMetric tonnes of cargo per year

350Major airports

Scope for growthWith Make in India and increased focus on electronics, Air Cargo has a lot of scope for growth

Key growth to come from light, high value goods

Great potential for foreign trade and exports

3PLs leading Air CargoEntry of DHL, TNT etc Third party logistics is fuelling Air Cargo logistics

$14BInvested in airports in last 3 years

12.5%CAGR for next 5 years

$85billionEstimated market in 2020

Dedicated Air Cargo terminalsDedicated terminals and private bonded facilities being set up at metro airports

Smaller, new airports being built to promote air cargo

Storage & Warehousing

Industrial WarehousingDriven by high retail demand and consumer appetite. Currently on most promising growth trajectory

Liquid WarehousingMainly refers to the storage of liquid bulk such as crude, petroleum products, chemical and edible oil

Cold StorageStorage of perishable goods. High potential of growth targeting un- broken cold chain

Agri WarehousingTargeted to store agricultural goods with larger shelf life

Container StoragePrimarily targeting export-import led container handling

Growth Drivers

Export Import Led Demand

In 2014-15, all major and non-major Indian Ports in India, as listed by Indian Ports Association (IPA) handled about 1605 Million Metric Tonnes (MMT) cargo

EXIM cargo is expected to increase to 2,800 MMT by 2020

Containers handling is growing at about 11% CAGR

Manufacturing Led Demand

Indian manufacturing GDP is approximately 15% of the total and stood at INR 8.6 trillion in 2013–14

The manufacturing sector is growing at a CAGR of 7.3% since the past nine years

The "Make in India" initiative is expected to boost the manufacturing sector to 10% growth

The manufacturing sector spends 2-20% of its revenue on logistics

Consumption Led Demand

Per capita income - Growth of 10.4% in 2013-14

Booming e-commerce industry

E-commerce industry to reach USD 20 billion to USD 25 billion by 2017

FMCG market is also gaining traction

Agriculture Led Demand

India is the second largest producer of vegetables and fruits after China

Because of the lack of infrastructure and broken cold chain, more than 30% of agri-produce is lost in fields post harvesting