Container Logistics (CFS & ICD) - India

March 2009

Executive Summary
Estimated worth INR XX bn in 2008 & INR YY bn in 2013 ICD: Handles a% of containerized cargo CFS: Handles b% of containerized cargo Provides various services : Cargo consolidation, distribution as well as custom clearance activities ICD/CFS facilities are beneficial for importers/exporters as well as for port authorities Inter-Ministerial Committee (IMC) is the regulatory authority monitoring the growth of CFS/ICD All the proposals are considered by the Inter-Ministerial Committee Proposals submitted should include feasibility report, Land requirements, Design and lay-out, Equipping the facility Drivers: Growth in port traffic, custom clearance activities, high profit margins in comparison to other activities in the value chain, and the construction of dedicated freight corridor Challenges: High costs entailed for the development of a facility, archaic procedures for the movement of containerized cargo

Market

Benefits & Set-up Requirements

Drivers & Challenges

LE P M A S

Competition

X is the largest player in the market and is a government owned establishment The number of private players entering the market has been rising due to the market scenario

CONTAINER LOGISTICS (CFS & ICD) INDIA.PPT

Market Overview ICD/CFS - Functions and Benefits Set-up Requirements Drivers & Challenges Competition Key Developments

CONTAINER LOGISTICS (CFS & ICD) INDIA.PPT

Demand for ICD/CFS facilities increasing with the rising international trade scenario
ICD and CFS
ICD/CFS market estimated worth INR XX bn in 2008 ICD/CFS facilities have been rising due to increase in port traffic and containerization level in India CFS accounts for b% of the container load while ICD accounts for a% ICD/CFS act as transit facilities It offers handling and temporary storage services for containerized cargo being imported and exported
Less than container load Cargo arriving from different consignors; has to be stuffed/de-stuffed into/from containers Full container load Containers that are stuffed in factories and are ready to be shipped

Market Size
INR bn

150 100 50 0
U V W

a% X

LE P M A S

2008 2009 2010 2011 2012 2013

Difference between ICD and CFS

ICD Location It is an off dock facility located near the servicing ports Function Deals with break-bulk cargo originating/terminating in the immediate hinterland of a port; also serves as a destination for custom related activities CFS

In the interiors, away from the servicing ports Largely deals with full container load which is aggregated for onward movement to or from the ports

These establishments also act as a custom clearance hub

Source:

CONTAINER LOGISTICS (CFS & ICD) INDIA.PPT

The development of ICD/CFS has benefited players in the industry, importers and exporters as well as port authorities
Port authority receiving readyto-load containers hiking ports productivity and profitability

Allows exporters and importers to lower inventory costs

Exporter/Importer, Custom house agent, shipping companies use ICD/CFS facilities

Linkage to the port by rail resulting in quick transit and low transportation cost

Owned and operated by a public or private company, provides services at competitive rates

Consolidation of cargo has made it a logistics hub for LCL cargo

CONTAINER LOGISTICS (CFS & ICD) INDIA.PPT

Drivers & Challenges

Drivers
Growth in Port Traffic Custom clearance activities in ICD/CFS Higher margins in comparison with other logistics activities Construction of dedicated freight corridor

Challenges
High costs for the development of a facility Archaic procedures for the movement of cargo

CONTAINER LOGISTICS (CFS & ICD) INDIA.PPT

Company Snapshot : A (1/2)

Corporate Information
Headquarters Employees Services B C MTO, cargo handling, airfreight, transport logistics, equipment hiring, oil rig & supply vessels management U (Chairman &MD) V ( Executive Director)

Financial Performance
Revenue INR mn
4,000 3,000 2,000 1,000 0

Revenue Profit / Loss X U V W

Profit INR mn
600 400 200 0

Key People

Business Highlights
In 20-- vis--vis 20--

CFS throughput increased by a% CFS margins expanded to b% led by an increase in dwell time at A and B port CFS division registered a growth of c% due to increased traffic in B and C port

LE P M A S

2004-05

05-06

06-07

07-08

Revenue breakdown
b% c% CFS Others MTO

CFS segment accounts for <x% of sales but contributes ~y% of EBIT Heavy operating expenses in the MTO segment, high employee costs due to recent acquisitions has led to lower EBIT margins
Source: CONTAINER LOGISTICS (CFS & ICD) INDIA.PPT

a%