LOGISTICS & TRANSPORTATION

INDUSTRY IN INDIA

UNDERSTANDING AND ANALYZING

INDUSTRIAL ENVIRONMENT

OF

S. No. Content Slide No.

1. Executive Summary 03-05

2. Industry Analysis 06-14

3. Analysis Plan-Description of the Industry 15-22

4. Industrial Performance 23-26

TABLE OF CONTENT

I. EXECUTIVE SUMMARY

Logistics is an essential part of supply chain management. It

deals with the movement of goods and services from the point

of origin to the point of consumption. Transportation is a part of

the logistics function, which plays an important role in making

goods available at the consignment points.

Logistics is defined as a business planning framework for the

management of material, service, information and capital flows.

It includes the increasingly complex information,

communication and control systems required in today's business

environment.

Transportation refers to the movement of product from one

location to another as it makes its way from the beginning of

supply chain to the customer.

Transportation is an important supply chain driver because

products are rarely produced and consumed in the same

location.

It is the process of shipping or moving an item from point A to

Point B.

Transportation is also defined as the movement of people,

animals and goods from one location to another.

Cont……

MODES OF TRANSPORTATION

ROAD

RAIL

SEA

AIR

Modes of Transportation

II. INDUSTRY ANALYSIS

(A) Market Analysis- Growth Prospects & Trends

Increasing Focus on Regulatory Oversight and Easing Trucker/

Shipper Responsibilities.

Increasing Collaboration & Inter-management of Transportation

Management Trends.

Outsourcing of Freight Data and Payment Management.

Addressing the Truck Driver Shortage.

Using the IoT to Fix Problems in Today’s Logistics Industry

Focus on Implementation of the FAST Act.

(B) Analysis of Current and Potential Competitors

DHL

TNT

AFL

GATI

DTDC

BLUE DART

FIRST FLIGHT

The current and potential competitors of indian logistics and transport industry are:

(C) Internal Environmental Analysis- SWOT Analysis

1. Strong Management

2. Pricing Power

3. Innovative Culture

4. Superior Technology Allow

5. Cost Advantage

1. Weak Supply Chain

2. Online Presence

3. Lack of Scale

4. Lack of Funds

Strength

Weakness

Opportunities

Threats

1. Innovation

2. Online Market

3. Emerging Market

4. New Technology

5. New Market & New Product

1. Substitute Products

2. Mature market are competitors

3. Bad Economy

4. Talent Shortage

(D) External Environmental Analysis- PESTEL

The world is divided into numerous political units which are

formed for mutual protection, economic advantages and

development of common culture. Transportation plays an

important role in the functioning of such political units.

The government of an area must be able to send or get

information about its people. It may include laws to be

followed, security and other needful information needed to

generate awareness. An efficient administration of a country

largely depends on how effectively government could

communicate these information to all the country.

1. Political Environment

2. Economic Environment

Economics involves production, distribution & consumption of

goods and services.

People depend upon the natural resources to satisfy the needs

of life but due to non uniform surface of earth and due to

difference in local resources, there is a lot of difference in

standard of living in different societies. So there is an immense

requirement of transport of resources from one particular

society to other.

These resources can range from material things to knowledge

and skills like movement of doctors and technicians to the

places where there is need of them.

3. Social Environment

Transportation has always played an important role in

influencing the formation of urban societies.

Although other facilities like availability of food and water,

played a major role, the contribution of transportation can be

seen clearly from the formation, size and pattern, and the

development of societies, especially urban centers.

The social role of transport has caused people to live in

permanent settlements and has given chances of sustainable

developments.

4. Technological Environment

In 2015, the logistics and transportation industry has witnessed

some interesting transformation and trends.

The ever increasing demands, new consumption patterns,

digital age of commerce and global trade treaties has impacted

warehousing and transportation formats.

The First Mile facilities are expending with e-commerce boom

and the Last Mile facilities are becoming highly localized to

support quick deliveries to consumers.

For 2016, our logistics product experts and trend analyst are

looking forward to second generation of Internet of Things, Big

Data and cloud based product.

Transport or Transportation Law describes the body of law

dealing with all forms of transportation. These laws derive

from state, federal, and even local sources, and can apply very

broadly at a transport system level or more narrowly to specific

activities or things.

As globalization continues its juggernaut, government

regulations both national and international are becoming more

prevalent. Companies seeking to remain compliant will require

the guidance of workers with legal training. Not only that, but

while it used to be sufficient to specialize in one area or

another trucking or maritime law.

5. Legal Environment

III. ANALYSIS PLAN - DESCRIPTION OF THE INDUSTRY

(A) Description of Sectoral Growth

Indian Logistics Market is expected to grow at a CAGR of

12.17% by 2020 driven by the growth in the manufacturing,

retail, FMCG and e-commerce sector.

Indian Transport Market is expected to grow at a CAGR of

13.35% by 2020 driven by the growth in the manufacturing,

retail, FMCG and e-commerce sector.

Cont……

India spends around 14.4% of its GDP on logistics and

Transportation as compared to less than 8% spent by the other

developing countries.

3PL Logistics market in india is expected to be worth US $

301.89 Billion by 2020.

The Indian Logistic industry spends around 14% of the GDP on

different types of cost incurred in logistic operation. The

amount of cost incurred is very high in comparison to the

logistic cost incurred by different nations.

Cont……

This growth rate is based on the expectation that the new

government will soon implement the GST regime and the

logistics companies can optimize their operations to reduce cost

and increase their margins.

The Indian transportation services industry group had total

revenue of $114.8 billion in 2015, representing a compound

annual growth rate (CAGR) of 6.3% between 2011 to 2015.

The road freight segment was the industry groups most

lucrative in 2015, with total revenues of $94.8 billion equivalent

to 82.5% of the industry groups overall value.

(B) Government Role in Promotion of Selected Industry

Government initiatives to promote the manufacturing sector and

exports are likely to increase the demand for logistics functions.

Trade with Asia, Europe and North America are likely to remain

major drives for freight forwarding and transportation

companies in the region.

The booming e-commerce market in india is bringing in new

opportunities for LSPs. The evolving business models in this

space focuses on containing logistics and delivery costs.

In many term the government promote the logistics and transportation industry :

Major investment by both public and private sector in the last

five years on infrastructure, technology upgrades and expansion

of sea and airport facilities, and dedicated logistics corridor in

the rail network are expected to strengthen the indian logistics

infrastructure.

The expected implementation of nationwide uniform GST is

likely to transform the distribution structure of majority of

industries as it eliminates the needs for dedicated warehouses

for each individual administrative region.

Cont……

(C) Impact & contribution of selected sector in Indian Economy

The transport sector is an important component of the economy

and a common tool used for development.

The growth of logistics sector is directly proportional to overall

economic growth of india.

Transportation also contributes to the economy by providing

millions of job. It allows men and women to earn their living by

manufacturing vehicles and by driving, maintaining and

regulating them to allow for the safe and efficient movement of

goods and people.

(D) Understanding Government Environment

Government can play a proactive role in logistics market

development and transportation market development, but

government policies should concentrate on assisting logistics

enterprise to improve their business competitiveness and vitality,

and promote the development of a robust logistic market.

The government can serve three major logistics development function :

1) Guide the logistics sector towards safe, energy efficient and

environmentally friendly operations and reduce negative

externalities.

2) Establish, improve and maintain progressive laws, regulations

and institutional framework to ensure effective operation of the

logistics sector and to create a fair and equitable competitive

environment.

3) Develop appropriate policies to address areas where market

mechanisms may not work effectively, such as by improving

national transport and logistics infrastructure, expending the use

of information technology, and developing technical standards.

Cont……

IV. INDUSTRIAL PERFORMANCE

The indian logistics market is expected to grow at a CAGR of

12.17% during the next five years.

The indian transport market is expected to grow at a CAGR of

13.35% during the next five years.

Logistics market in india is expected to be worth US $307

billion by 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.

(A) Future Forecast

The Road freight movement is expected to increase at a CAGR

of 15%.

The Rail freight movement is expected to increase at a CAGR

of 27%.

The Sea freight movement is expected to increase at a CAGR

of 9%.

The Air freight movement is expected to increase at a CAGR

of 1% over the next 5 years.

Transportation costs are bound to come down in future with

improvement in infrastructure & growth in cargo movement.

Cont……

(B) New Innovations and Technological Development

The global logistics industry will continue to be impacted by

new technologies and business models in 2016. Do not expect a

revolution in the short term although autonomous vehicles, 3D

printing, sensor technology etc. will continue to influence the

way in which the industry evolves.

Many logistics companies are still trying to assess what impact

disruptive innovations will have upon their business. Disruptors

such as Uber, will undoubtedly make moves to shake up the

inefficient road freight sector, but more likely to have an

immediate impact is the adoption of Uber like technologies by

the incumbent operators.

The use of Autonomous vehicles will increase.

The use of Robots in warehouses will increase.

The use of Drones will increase.

The use of self driving vehicles.

The use of Sensor technology.

The use of 3D printing.

Crowd sourcing.

Augmented reality.

Such innovations that are making a play to change ‘traditional’ transportation today are:

Cont……

REFERENCES

Bhaskar, W. (2016, January 22). Top 6 Technology Trend in Logistics and Transportation Industry 2016. Retrieved from dreamorbit.com: http://dreamorbit.com/top-6-technology-trend-in-logistics-and-transportation-industry-for-2016

Bhattacharya, R. (2015, May 17). Logistics Market in India 2015-2020. Retrieved October 27, 2016, from www.researchandmarkets.com: http://www.researchandmarkets.com/report/3232004/logistics-market-in-india-2015-2020

Kadiyali, L. (2014, June 25). Role of Transportation in Socity. Retrieved October 28, 2016, from www.civil.iitb.ac.in: http://www.civil.iitb.ac.in/tvm/1111_nptel/102_TptnRole/plain.html

Logistics and Transportation Industry overview. (2014, April 30). Retrieved October 27, 2016, from www.selectusa.gov: http://selectusa.gov/logistics-and-transportation-industry-united-states

Logistics SWOT Analysis USP & Competitors. (2015, December 29). Retrieved November 1, 2016, from www.mbaskool.com: http://www.mbaskool.com/brandguide/transport-and-logistics/3337-afl-logistics.html

Notteboom, D. J.-P. (2013, March 14). The Geography of Transport System. Retrieved November 2, 2016, from people.hofstra.edu: http://people.hofstra.edu/geotrans/eng/ch7en/ch7c1en.html

Wood, L. (2016, July 15). Strategic Insight Indian Logistics Industry 2016. Retrieved October 26, 2016, from www.businesswise.com: http://www.businesswise.com/news/home/20160615005668/en/strategic-insight-indian-logistics-industry-2016

Cont……

THANK YOU