Logistics

 

Overview

The huge potential that the logistics industry offers being a related industry to most of the industrial activity across sectors will unfold as and when the industrial activity of the economy increases in volume and size. This will have a direct positive effect on the need for logistics in the economy. In the past also, the boost in the economy has helped the logistics industry to grow at 15% p.a. It has to be noted though that the sub-sectors of the industry experience different levels of growth, where the lowest growth is seen in trucking operations and the highest is seen in the supply chain and e-tailing logistics. The logistics spend in the Indian economy is around 13% of the total billings. When this is compared to other economies, it is fairly high. This highlights the lack of infrastructure and the higher costs that the companies have to realise because of the inefficiencies that threaten the industry.

 

 

Buy Industry Analysis

 

This industry has five broad sub-sections namely; ocean freight, rail freight, air freight, trucking and third party Logistics (3PL) services. The future of this industry is very promising and thus we predict that the industry will grow at a 13-15% rate over the next few years.

 

Outlook

Factors that have considerably changed the industry are positive efforts and measures taken by the government to effect higher involvement of investors and ensure better infrastructure. A radical change with the tax regime and the growth in the FMCG, automobile and pharmaceuticals and retails sectors have helped in the industry becoming more organised and cost sensitive. In terms of the total freight transport segment 70% of the goods produced in India are transported through the road network and 15% from the rail network.

The Segments of this industry are show below, where the end user industries are also listed:

 

Poor infrastructure facilities, delay in giving out clearances and very high operating costs has been some of the challenges faced by the industry. The effective rise of freight costs has an indirect effect on the whole industrial production, which has mainly been because of the infrastructure bottlenecks and lacked of skilled manpower.

 

Future Potential

Looking into all these issues faced by the industry, the government has stepped up its initiatives to make this a profitable and viable sector. They have done this in the form of National Highway development project, development of dedicated freight corridors of Indian Railways, port infrastructure initiatives and thus have tried to boost the investment viability of the industry on a whole. GST which is expected to be passed in 2016 will also add to impetus to the whole Logistics industry.

An overhaul of the whole industry should also be focussed on by companies as viable technologies like the GPS and RFID aids may improve the live tracking of goods which in turn will emanate smooth flow of information between various stakeholders. Focus on skilled manpower and competitive pricing are the key strategies which should be adopted to be efficient in operations.

 

What this report contains:

  • A detailed overview of the industry

  • Structure of the industry from both, domestic and international perspectives

  • Related industries that this industry has inter-dependencies with and their understanding

  • Detailed analysis of industry segments in terms of the value and depth of corresponding market

  • Analysis & insights about the elements and critical success factors of this industry using strategic models

  • A forecast on the state of this industry in 2020, predicting the growth and movement patterns for 2016 - 2020

  • Our professional analysis on the future of the industry based on strategic actions adopted by major industry participants

  • Quantitative estimates and forecasts of the growth prospects of the industry using revenue and financial forecasting models

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