ANALYSIS OF

LOGISTICS INDUSTRY
By:- Group No. 7
Prijo Mathew
Sivaramakrishnan
Suvrata Nandy
Gaurav Verma
Dhinesh Kumar

Objectives
To study in detail about the Global Logistics Industry

To study in detail about the Indian Logistics Industry

To find out the areas where Logistics Industry in India
is lacking

To compare the Global Companies (UPS, FedEx and
DHL) with the Indian Logistics Companies (Gati, DTDC
and First Flight)
INTRODUCTION
What is Logistics?

Management of flow of goods and services

Integration of information, transportation, inventory etc

Reduces operational cost, improve delivery performance and
enhance customer satisfaction

The importance of logistics is growing and now the logistics
industry has become highly recognized in the global scenario
Evolution of Logistics Industry
Global Scenario of Logistics
Industry

Size of the Global Logistics Industry


Annual logistics cost of the world is USD 3.5 trillion
The annual logistics cost in any country varies in between 9%
to 20% of their GDP
Logistics market in US is 10% of its annual logistics cost
Global Logistics industry is estimated to be worth USD 300
billion
Largest service providers are located in Europe
Biggest market - US

Current Status and Dynamics of the Industry

Issues Pricing pressures, high cost of operations, low returns
on investment, hiring and retaining talent and pressure from
the client

Role of service providers have become very important to
complete supply chain integration

Demand for third party logistics providers is increasing

Growing at a very fast rate in South-East Asian countries

Technology used in Global Logistics Industry

Warehouse Management System
Material Flow Control System
Portal Application
Automated Storage and Retrieval Systems
Mini Trolley System
Lean lift Systems
Sorter Systems
Light to Pick
RFID
Global Positioning Systems
MERGERS AND ACQUISITIONS
Tibbett & Britten Group acquired by Excel logistics
Deutsche Post World Net took over Excel Logistics
Bax Global was taken over by Deutsche Bahn
A.P. Moller acquired P&O Nedlloyd
Apollo Management took over TNT Logistics

Pros of Mergers and Acquisitions
Growth and Coverage

Cons of Mergers and Acquisitions
Integration of two different cultures









Top 10 Logistics Companies In The World
UPS
FedEx
DHL
A.P. Moeller
Nippon Express
Ryder
TNT Post Group
Expeditors
Panalpina
Exel
Indian Scenario of Logistics Industry

Size of Indian Logistics Industry

Annual logistics cost is estimated to be 14% of GDP
Out of the total cost 99% is accounted by the unorganized
sector
Is growing at a very fast pace of 12% per annum
The market is estimated to be around USD 100 billion
Has generated employment for 43 million people in the
industry
Third Party Logistics Solutions is expected to grow at 16% in
2011

Indian Logistics Industry
Pie Chart showing the total logistics
market of India
Current Status and Problems in the Industry
Is in nascent stage
Is considered to be a weak link of Indian Economy
Is a high cost, low margin business
Economies of scale is absent
High tax
Lack of trust and awareness among the Indian shippers
Poor physical and communication infrastructure
Stiff competition from international firms
Lack of skilled labor
Lack of technology being used
Positive Trends Seen In Indian Logistics Industry
The industry has got the desired momentum
Logistics has become a strategic source of competitive
advantage
Huge investments are made by foreign investors
High investments are made by government to improve the
infrastructure
Companies are re-engineeering their supply chain to make it
more responsive
India is becoming the auto hub of the world


Technology Used By Indian Logistics Industry

Online Tracking
E-pod
E-mail Updates
Toll Free Number with 24 x 7 service
SMS Updates
Enterprise Management System
Business Accounting Software
Customer Relationship Management Software


Top Logistics Companies In India
TNT Express
AFL
DHL
Blue Dart
Gati
Safexpress
Ashok Leyland
Agarwal Packers & Movers
DTDC
First Flight
Corporate Social Responsibility


Green Mission
Reduction in Greenhouse gas emission
Carbon Tax
Fun Bus
Driver Training Centre
AIDS Awareness


Market Analysis
Pricing Strategy

Driver of the performance of the Logistics Industry
Is decided on the basis of the competitive strategy
Overall Trade off: Increase firm profits
Everyday low pricing versus high low pricing
Fixed prices versus menu pricing

Nature of the Market

Industry is homogenous
It is a oligopoly Industry
HH Index is 1004 (UPS, FedEx, DHL, A.P. Moeller)
Concentration Ratio of the first four companies in India is around 65%
(TNT Express, AFL, DHL and Blue Dart)


Advertising Strategies
Press
Media
Print Ads
Interviews
Internet

Promotion
Efficient Distribution Network
Provides Supply Chain Solutions
Comparison of Logistics Industry of the
Developed Countries and the Developing
Countries
Graph showing the LPI of India and its
Neighborhood Countries
Diagram showing the LPI of the different countries and is ranked
accordingly. India is ranked at the 47
th
position
Company overview of DHL

DHL is the global market leader in international
express, overland transport and air freight,
It is also the world's No.1 in ocean freight and contract
logistics,
DHL's international network links almost 220 countries
and territories worldwide,
Around 285,000 employees are dedicated to providing
fast and reliable services that exceed customers
expectations in 120,000 destinations in all continents

Overview of Gati

Gati Limited is a pioneer and leader in the Express
Distribution and Supply Chain Solutions in India
It has grown into an organization with more than 3500
employees and a turnover of Rs 630 crore
19 Million Packages Handled Annually
1 Million Sft Warehouse Space
Capabilities to Deliver at 622 out of 626 districts of India
Best of the IT in Logistics Industry




PESTL Analysis


P Political and L - Legal

Legal permit to cross the national and state borders
Excise duties and tariffs are charged
Regulations for transporting dangerous goods by
Road ADR
Air- ICAO
Sea MCA
Motor Vehicle Act


E - Economic
The annual logistics cost in any country varies in between 9%
to 20% of their GDP (US being 9% and India being 14%)
In India, logistics industry has created employment for more
than 43 million people
Exchange Rate and Demand Risk

S Social
E-Business
Switch to alternative fuels to reduce emission of green house
gases

T Technology
Logistics Industry has become technology driven industry



Porters Five Force Model

Threat of Entry High

Intensity of rivalry High

Substitutes Medium

Bargaining Power of Buyers High

Bargaining Power of Suppliers - High
Future Prospects of Indian Logistics
Industry
Many large Indian corporate are been attracted by the
potential of this sector
Large express cargo and courier companies such as Transport
Corporation of India (TCI) have started logistics operations
Growing interest among entrepreneurs to venture into this
business
Indian shippers are gradually becoming more aware of the
benefits of logistics outsourcing
Faster growth rate of Indian GDP
The Indian government has focused on infrastructure
development
In India, 100% FDI is allowed in logistics
Lets Do A Business To Make A
Difference