market research report : freight forwarding market in india 2012

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Freight Forwarding Market – India

September 2012

2

SAMPLE

Executive Summary

Market

Competition

xx Region is the 2nd largest freight forwarding market in the world after yy

xx and yy are the global leaders in the air and ocean freight markets for the year 20‐‐

Freight forwarding market in India is estimated to reach INR xx bn by 20‐‐ at a CAGR of x%

India is expected to witness considerable growth in freight business by 20‐‐ compared to European nations

Major Players

Company A Company B Company C

Company D Company E Company F

Company G Company H Company I

Drivers & Challenges

Drivers– Growth in International Trade

– Rapid Economic Growth & FDI in Logistics

– Diversification into Logistics Business

– Improved Transportation Infrastructure

– Rising Competitiveness among Domestic Companies

Challenges– Stiff Competition from International Counterparts

– Rising Freight Costs

– Complex Operation

– Lack of Skilled Manpower

– Poor Infrastructure

FREIGHT FORWARDING MARKET IN INDIA 2012.PPT

Technological Trends

EDI Platform UPLIFT 4S eTrans

Technology Adoption by Leading Players Technology Adoption ‐ Case Study

3

SAMPLE


•Introduction

•Freight Forwarding – Segments & Features

•Market Overview

Global

India

•Sustainable Procurement Guidelines

•Standard Trading Conditions

•Drivers & Challenges

•Technological Trends

•Competition

•Investments

•Strategic Recommendation

•Appendix

4

SAMPLE

Freight Forwarding – Definition & Types

Services of any kind relating to the carriage, consolidation, storage, handling, packing or distribution of the goods with ancillary and

advisory services in connection therewith, including but not limited to customs and fiscal matters, declaring the goods for official

purposes, procuring insurance of the goods and collecting or procuring payment or documents relating to the goods

Freight Forwarding (IFFA)

Note: IFFA ‐ International Federation of Freight Forwarders Associations

Types of Freight Forwarding

Air Freight

Forwarding

Sea / Ocean / Ship

Freight Forwarding

Land Freight

Forwarding

Rail Freight

Forwarding


Mode of Transport

Air Cargo

Mode of Transport Mode of Transport Mode of Transport

Sea Freight Road Transport Rail Freight

5

SAMPLE Freight Forwarding – Segments, Services & Benefits (1/2)

Types of Freight Forwarding

Segments Served Services Customer Benefits

Air Freight Forwarding • xx • xx • xx

Sea Freight Forwarding • xx • xx • xx


6

SAMPLE

Freight Forwarding Market ‐ Global

• Findings

Freight Forwarding Market ‐ Global ‐ Overview

Market Size by Region (2010)

29%

2%5%

25% 39%


Region E

Region D

Region C

Region B

Region A

xx Region is the 2nd

largest freight forwarding market in the world after yy

0

2,000

4,000

6,000

8,000

10,000

INR bn

1.8%

20‐‐e

x2

20‐‐

x1

Market Size & Growth

7

SAMPLE Major Players in Global Freight Forwarding Market

Market Share – Air Freight (20‐‐) Market Share – Sea Freight (20‐‐)

6.8%

1.8%

1.4%

3.0%

1.5%

1.7%

2.9%

1.5%

3.5%

1.7%

0.5%

0.7%

0.5%

1.5%

0.5%

0.9%

0.5%

2.0%0.4%

1.0%

Company HCompany C

Company JCompany E

Company GCompany B

Company ICompany D

Company FCompany A

• Findings

Note: Market Share ‐ % of total freight forwarding market

xx is the market leader in global air freight forwarding

market

yy is the market leader in global sea /

ocean freight forwarding market

Company C Company H

Company FCompany A

Company D Company I

Company B Company G

Company E Company J

8

SAMPLE

Freight Forwarding Market ‐ India

•Findings

Freight Forwarding Market ‐ India ‐ Overview

0

200

400

600

800

INR bn

x4

20‐‐

16.5%

20‐‐

x6

20‐‐

x5

20‐‐

x3

20‐‐

x2

20‐‐

x1


Market Size & Growth

9

SAMPLE India is expected to witness considerable growth in freight business by 2020 compared to the European countries

• Findings

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

bn tkm

Country 6

x6

Country 5

x5

Country 4

x4

Country 3

x3

Country 2

x2

Country 1

x1

0

2,000

4,000

6,000

8,000

10,000

12,000

y4

Country 3 Country 6

y6

Country 5

y5

Country 4

bn tkm

y3

Country 2

y2

Country 1

y1

Top 5 Freight Markets (20‐‐) Top 5 Freight Markets (20‐‐e)

Findings

Note: Market size is for overland freight (road, rail and inland waterways) markets (billion tkm – unit of freight transport volume)

10

SAMPLE Freight forwarding is emerging as the businesses with high market attractiveness

Attractiveness in Freight Forwarding Market in India

Current Market Size Growth Potential Innovation Potential ProfitabilityCompetitive Intensity

Overall Attractiveness

‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐

Note: Attractiveness is rated in accordance with 1 < 2 < 3 < 4 < 5

Areas of Improvements

Relative weight based on world average

Level of improvem

ent d

esired

Area 1

Area 2

Area 3

Area 4

Area 5

Area 6

11

SAMPLE

Elements considered by shippers while selecting a mode of transportation

x3%

x6%

x5%

x2%

x4%

x1%

C FEB DA

Factors for Selecting Transportation Mode


Findings

12

SAMPLE Freight Forwarding Market in India – SWOT Analysis

• xx

SWOT Analysis

Strength

• xx

Weakness

• xx

Threat

• xx

Opportunity


13

SAMPLE Sustainable Procurement Guidelines for Freight Forwarding (1/5)

Findings

Sustainable Procurement of

Freight Forwarding Services

• xx

Key Environmental Impacts

•Greenhouse Gas Emissions• xx

•Air Pollutants• xx


14

SAMPLE Standard Trading Conditions for Freight Forwarders (1/3)

• xx

Freight Forwarder’s Role

Performance of the Contract

• xx


15

SAMPLE

Drivers & Challenges

Drivers

Growth in International Trade

Rapid Economic Growth & FDI in Logistics

Diversification into Logistics Business

Improved Transportation Infrastructure

Rising Competitiveness among Domestic Companies

Challenges

Stiff Competition from International Counterparts

Rising Freight Costs

Complex Operation

Lack of Skilled Manpower

Poor Infrastructure


16

SAMPLE

Growth in International Trade (1/2)

Growth in international trade is providing huge impetus to the demand for freight forwarding

•Findings

India’s Total Export India’s Total ImportGovernment of India plans to double India’s export of goods and services by 2014‐15

0

5,000

10,000

15,000

INR bn

20%

20‐‐

x4

20‐‐

x3

20‐‐

x2

20‐‐

x1

0

5,000

10,000

15,000

20,000 18%

INR bn

20‐‐

y4

20‐‐

y3

20‐‐

y2

20‐‐

y1

India’s import is also expected to grow

further, particularly of oil and capital goods


Impact

17

SAMPLE

Intercontinental trade is expected to witness considerable growth in next five years

Growth in International Trade (2/2)• Findings

0

2,000

4,000

6,000

INR bna%

20‐‐

a2

20‐‐

a1

Growth in India – US Bilateral Trade Growth in India – Russia Bilateral Trade

0

500

1,000

INR bnb%

20‐‐

b2

20‐‐

b1

Growth in India – LithuaniaBilateral Trade

Growth in India – Latin AmericaBilateral Trade

Growth in India – ChinaBilateral Trade

0

5,000

10,000

15,000

INR bn

c%

20‐‐

c2

20‐‐

c1

0

2,000

4,000

6,000

INR bnd%

20‐‐

d2

20‐‐

d1

0

2,000

4,000

6,000

INR bn

e%

20‐‐

e2

20‐‐

e1


18

SAMPLE

Impact

Freight forwarding sector in India has witnessed a significant growth due to robust economic growth

Rapid Economic Growth & FDI in Logistics (1/2)

• Findings

Key Economic Indicators

GDP Growth Trend* Rapid Urbanization

02468

10%

20--

a5

20--

a4

20--

a3

20--

a2

20--

a1

0

10

20

30

40%

20--

b5

20

b4

20--

b3

20--

b2

20--

b1

*Note: Figures for financial year – April to March


19

SAMPLE

Key economic indicators including 100% FDI in logistics shows a healthy economic outlook for India

**Note: Figures for Apr to Jan

Employment Growth Rise in Aggregate Annual Disposable Income

India is the 3rd largest investor base in the world

Total FDI in India* FDI in Logistics SectorFDI Inflow

~66% of the total population will be in the working age group by 2020

Note: Working age group refers to 15‐64 years old

y1 y2 y3 y4 y4 y5

0

200

400

600

mn+2.3%

20‐‐20‐‐20‐‐20‐‐20‐‐20‐‐0

20

40

60

80

100

INR tr

+6.9%

20‐‐e

z

3%15%

34%

23%

24%

20‐‐e

y

9%33%

34%9%15%

20‐‐

x

23%49%

13% 7%9%

FDCBA

x4

x3

x2x2

0

500

1000

1500

INR bn

20‐‐**20‐‐20‐‐20‐‐

*Note: Figures for financial year – April to March

0

50

100

% Share

Logistics

X%


Rapid Economic Growth & FDI in Logistics (2/2)

20

SAMPLE

Freight rates in India are zooming up owing to diesel price hike

•xx


Cost to Import‐Export Per Container

Hike in Diesel Price Destinations Rate Increased by (in INR) Freight Rate Now (in INR)

Delhi to A ‐‐ ‐‐

Delhi to B ‐‐ ‐‐

Delhi to C ‐‐ ‐‐

Delhi to D ‐‐ ‐‐

Delhi to E ‐‐ ‐‐

Delhi to F ‐‐ ‐‐

Delhi to G ‐‐ ‐‐

Delhi to H ‐‐ ‐‐

Delhi to I ‐‐ ‐‐0

10

20

30

40

50

INR / litre

x214%

NowEarlier

x1

0

20

40

60

4%

2011

b5a5

2008

b4a4b3a3b2a2

2010

INR ‘000

20092007

b1a1

ExportImport

Rise in Freight Costs (2/2)

21

SAMPLE

Process improvement and greater use of technology have the potential to…

xx xx xxxx xx xx xx

Information flow through the Logistics Value Chain

Electronic Data Interchange (EDI) Needed across the Entire Supply Chain

EDI Platform

xx

xx

xx

xx

xxxx

xx

xx


22

SAMPLE

…significantly improve operating efficiencies for the Indian logistics sector

UPLIFT

Universal Platform for Logistics & Integrated Freight Transport

CHAs / Forwarders

• xx

Customs

• xx

xx

Custodian

• xx

Shippers & Consignees

• xx

xx

xx

Carriers

• xx

Benefits


23

SAMPLE

Technology Adoption by Leading Players (1/2)

Freight Forwarding Industry & Four Soft Alliance (FFIFA)

• xx

• xxIT Awareness

xxGreatly facilitates the freight forwarding

/ CHAs industry


24

SAMPLE

Major Public Companies ‐ Summary

Note: All figures are in INR mn and are based on the latest financials available

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

2,600

2,800

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000

Total income

Net Profit/Loss

m3

m2

m1

m4

Size of the Bubble represents Market Capitalization in INR mn

Company A Company C Company DCompany B


25

SAMPLE

Key People

Products and Services

Company Information Offices and Centres – India

Corporate Headquarter

Tel No.

Fax No.

Website

Year of Incorporation

Ticker Symbol

Stock Exchange

Category Products/Services

Logistics solutions

Name Designation

Head Office

Public: Domestic Company – Company A (1/3)

Mumbai


26

SAMPLE Financial Snapshot Key Ratios

Financial Summary

Improved Decline

Net Profit/LossTotal Income

35,85834,38128,803

20,836

0

10,000

20,000

30,000

40,000

0

1,000

2,000

3,000

20102009

INR mnINR mn

20122011

Public: Domestic Company ‐ Company A (2/3)

Particulars y‐o‐y change (2012‐11)

2012 2011 2010 2009

Profitability RatiosOperating Margin ‐0.19 8.78% 8.97% 7.61% 8.01%

Net Margin 0.06 6.54% 6.48% 5.76% 6.24%

Profit Before Tax Margin ‐0.15 8.44% 8.58% 7.77% 8.13%

Return on Equity 0.48 15.42% 14.94% 13.74% 13.07%

Return on Capital Employed 1.52 14.71% 13.18% 13.53% 13.95%

Return on Working Capital ‐11023.91‐

10973.56%50.35% 46.22% 36.95%

Return on Assets 0.32 8.27% 7.95% 8.07% 8.62%

Return on Fixed Assets 4.55 16.76% 12.20% 19.68% 23.75%

Cost RatiosOperating costs (% of Sales) 0.19 91.11% 90.92% 92.34% 91.90%

Administration costs (% of Sales)

17.24 17.24% 0.00% 6.07% 8.64%

Interest costs (% of Sales) 0.03 1.65% 1.62% 0.68% 1.12%

Liquidity RatiosCurrent Ratio ‐48.94% 1.00 1.95 1.82 2.13

Cash Ratio ‐43.37% 0.26 0.47 0.63 0.83

Leverage RatiosDebt to Equity Ratio ‐1.63% 0.86 0.88 0.70 0.52

Debt to Capital Ratio ‐20.15% 0.27 0.34 0.24 0.17

Interest Coverage Ratio ‐3.90% 5.39 5.61 11.27 7.20

Efficiency RatiosFixed Asset Turnover 35.97% 2.53 1.86 3.39 3.77

Asset Turnover 3.01% 1.25 1.21 1.39 1.37

Current Asset Turnover 36.26% 5.10 3.74 3.59 3.11

Working Capital Turnover ‐21677.73% ‐1655.74 7.67 7.97 5.86

Capital Employed Turnover 2.23% 2.33 2.28 2.37 2.07

Note: FYC 2012


• The company earned a net profit of INR xx mn in FY 20‐‐, as compared to net profit of INR xx mn in FY 20‐‐

• The company reported total income of INR xx mn in FY 20‐‐, registering an increase of xx% over FY 20‐‐

• The company earned an operating margin of xx% in FY 20‐‐, a decrease of xx percentage points over FY ‐‐

• The company reported debt to equity ratio of xx in FY 20‐‐, a decrease of xx% over FY ‐‐

Key Financial Performance Indicators

Indicators Value (25/09/2012)Market Capitalization (INR mn) xx

Total Enterprise Value (INR mn) xx

EPS (INR) xx

PE Ratio (Absolute)‐25th Jun, 2012 xx

27

SAMPLE

Key Business Segments Key Geographic Segments

Business Highlights

Description NewsOverview

ICD/CFS Facilities

Rank

Acquisitions

7%7%

0%

50%

100%

%

2010

83%

10%

2009

83%

10%

2008

94%

6%

Multimodal Transport Operations

Project & Engineering Solutions

Container Freight Stations

Public: Domestic Company ‐ Company A (3/3)

28% 27% 29%16%

15%15%4%5%

6% 2%2%2%2%2%

0%

50%

100%

%

2010

29%

19%

2009

31%

18%

2008

30%

16%

Europe

India

Far East

America

Mediterranean

Africa

Australia & New Zealand


28

SAMPLE

Major Private Companies ‐ Summary

Size of the Bubble represents Total Assets in INR mn

Note: All figures are in INR mn and are based on the latest financials available

Total income

Net Profit/Loss

800

700

600

500

300

200

100

0

‐100

400

15,00010,0005,0000‐5,000

t2t7

t1

t6 t4

t3t5

Company FCompany ECompany DCompany CCompany B Company GCompany A


29

SAMPLE

Private: Domestic Company ‐ Company B (1/3)

Key People

Products and Services

Company Information Offices and Centres – India

Category Products/Services

Diversified Support Services

Name Designation

Corporate Headquarter

Tel No.

Fax No.

Website

Year of Incorporation

Delhi

Head Office


30

SAMPLE

Financial Snapshot Key Ratios

Particulars y‐o‐y change (2010‐09)

2010 2009 2008 2007

Profitability RatiosOperating Margin N.A. N.A. N.A. N.A. 90.63%

Net Margin N.A. N.A. N.A. N.A. 4.46%

Profit Before Tax Margin N.A. N.A. N.A. N.A. 5.61%

Return on Equity 0.00 0.00% 0.00% 0.00% 19.13%

Return on Capital Employed 0.00 0.00% 0.00% 0.00% 1438.72%

Return on Working Capital 0.00 0.00% 0.00% 0.00% 34.87%

Return on Assets 0.00 0.00% 0.00% 0.00% 16.44%

Return on Fixed Assets 0.00 0.00% 0.00% 0.00% 325.58%

Cost RatiosOperating costs (% of Sales) N.A. N.A. N.A. N.A. 6.54%

Administration costs (% of Sales)

N.A. N.A. N.A. N.A. 6.13%

Interest costs (% of Sales) N.A. N.A. N.A. N.A. 0.09%

Liquidity RatiosCurrent Ratio 32.99% 2.67 2.01 2.08 1.61

Cash Ratio 16.04% 1.28 1.10 1.38 0.80

Leverage RatiosDebt to Equity Ratio 2.26% 0.18 0.17 0.05 0.16

Debt to Capital Ratio 1.92% 0.15 0.15 0.05 0.14

Interest Coverage Ratio N.A. N.A. N.A. N.A. 1098.85

Efficiency RatiosFixed Asset Turnover N.A. 0.00 0.00 0.00 70.86

Asset Turnover N.A. 0.00 0.00 0.00 3.58

Current Asset Turnover N.A. 0.00 0.00 0.00 2.89

Working Capital Turnover N.A. 0.00 0.00 0.00 7.59

Capital Employed Turnover N.A. 0.00 0.00 0.00 4.16

Private: Domestic Company ‐ Company B (2/3)

Improved Decline

Financial Summary


Net Profit/LossTotal Income

1376.61169.3

559.6

222.9

0

500

1000

1500

‐600

‐400

‐200

0

INR mn INR mn

2011201020092008

• The company incurred a net loss of INR xx mn in FY 20‐‐, as compared to net loss of INR xx mn in FY 20‐‐

• The company reported total income of INR xxmn in FY 20‐‐, registering an increase of xx% over FY 20‐‐

• The company earned an operating margin of xx% in FY 20‐‐, an increase of xx percentage points over FY 20‐‐

• The company reported debt to equity ratio of xx in FY 20‐‐, an increase of xx% over FY 20‐‐

31

SAMPLE Business Highlights

Private: Domestic Company – Company B (3/3)

Description News

Overview

Network

Awards


32

SAMPLE Significant M&A activity being witnessed in this sector over the last few years

Outbound M&A Deals, JVs & other Investments

Date Target Acquirer/Investor Amount (INR mn) Stake

mm‐yy Company 1 Company 11 ‐‐ ‐‐










Investments in Freight Forwarding Market in India


33

SAMPLE Strategic Recommendation for Freight Forwarders


• xx • xx

• xx • xx

34

Thank you for the attention

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