Group 10

Logistic industry in India

 India’s current logistic market is around Rs.200 billion expected to be double by 2012 and main
drivers of this growth will be government tax structure, infrastructure development and
production growth.
 Total logistic spends covering primary and secondary movement to be around 13% of India’s
GDP in 09/10 as compare to 10% of USA and 10% of Japan.
 Logistic industry in India is divided in to 2 parts mainly which is organized and unorganized,
Unorganized sector consists of 80 to 85% and rest is being served by organized sector.

FedEx:

 FedEx is world’s largest transportation company with presence in nearly 220 countries with over
1, 36,000 employees.
 FedEx was established in 1971 and its HQ is in Memphis which build in 1973, USA and in India,
FedEx started in 1997. FedEx provides its service in which are Delhi, Mumbai, Chennai,
Bangalore, Kolkata, Hyderabad, Ahmadabad, Pune, Jaipur, Ghaziabad, Noida and Coimbatore
and FedEx hub is Delhi, Mumbai and Bangalore.
 Blue-Dart, jet airways and kingfisher airlines are offline vendors of FedEx in India while
Khambatta associates does all the ground handling works for FedEx in India and Jinnah &
associates does custom clearance works for them.

Operational Issues:

 There can be a transportation problem, mainly due to traffic jams, blockades, poor road conditions.
 There can be delay in flight departure due to problems like heavy rain, snowstorm. Likewise, there
can be problem due to air traffic, signaling problem & other technical problems.
 Sometimes, it occurs that due to delays, there is haste in dispatching the consignment; as a result
the consignment data is not maintained properly.
 Low level of road infrastructure and network in India doesn’t allow FedEx to serve bigger population
in India.

HR Issues:

 Very few people want to work in this industry so they are always with less number of people.
 When FedEx invests in the training and developments of an employee, FedEx is not getting its
appropriate ROI as employees switches the company frequently.
 FedEx has invested largely on its personal development programs (PDP) and it has online training
development of around 600 courses on subjects on leadership, project management etc. but the
utilization and implementation of those courses are as per the expectation.
 It has 360 degree performance appraisal so, it generates disputes within the organization.

Marketing Issues:

 FedEx provides a high level of quality services to its customer which is difficult for its
competitors to match so, FedEx charges higher prices for its services than many of its
competitors, so they are trying to be differentiated in this competitive market.
 This industry is price sensitive, so customer may not be loyal to FedEx just for innovative
services.
 FedEx tries to differentiate by its aircraft fleet, its hub and packaging system, package tracking
(online), customer support functions (online) but it is very difficult to differentiate from these
factors as competitors are also providing this level of service.
 It is very difficult to convince the masses that they are providing superior services.
 FedEx’s pricing differs in different states as law differs in every state.

Finance Issues:

 Fuel hiking is one of the biggest issue for FedEx as it is increasing its cost and every time fuel
price increases they have to change their pricing policy.
 They have to maintain different storage for different kind of goods so it also increases their
costs.
 FedEx has to maintain its network even though that particular network is not generating
sufficient business for them.

Opportunities:

 India’s young population and growing middle class make it one of the world’s most attractive
Marketplaces for U.S. exporters.
 To leverage its technology in India.
 To leverage India-US business relationship
 To connect semi urban areas throughout India, this can generate large amount of business for
FedEx. (expand its network)
 Leveraging India for software development
 Outbound cargo from India as India is increasing its export day by day to US, Europe and other
parts of Asia.
 Indian government has started working towards developing road infrastructure, so FedEx has
opportunity in terms of more connectivity to rural India.
 Outsourcing trend in India may open opportunities of whole “whole supply chain network” in
India.

Threats
  Competition in this market is very tough as DHL, Blue-Dart, UPS, TNT and other local players are
present aggressively in Indian market.
 This industry is price sensitive, so highest price charged by FedEx in industry may work as a
negative point for them.
 Non performance of commitment (due to strikes, weather etc.) may affect the brand FedEx in
India.
 Rising inflation will reduce the level of export and import and domestic customer will also shift
to local player to reduce the total cost.
 Rising fuel prices will affect the overall cost structure of the FedEx.

Industries which are dependent upon FedEx:

 Leather and garment export

 Marine product exports
 Food industry
 Machinery and equipments industry
 Small Parcel services
 Packaging industry
 Insurance industry
 Petroleum industry and etc.

By,

AMIT VAGHELA
ABHIJIT CHAKRABORTY
VIVEK MOHTA
VISHVAS PATEL
JYOTSNA YADAV