LOGISTICS SECTOR

OF INDIA
Anish Kumar | Awaneesh Shukla | Abhisika Satpathy | Bhagya Shree
Jayas| Chetan Tidke | Himani Singh| Sashi Bothra | Sumit Suresh
WHAT IS LOGISTICS?
The movement of goods & information between the provider and
the receiver. It is also defined as the management of the flow of
things between the point of origin and the point of consumption to
meet the requirements of customers and simultaneously the
corporations.
 Disposal
Process
Logistics
Services

Consumers

Logistics
Services
Logistics Logistics
Info Distribution Info
Systems Systems
Logistics
Services

Production

Logistics
Services

Inputs
 Logistics
Cost and Quality Reduced operational
Efficient costs

Improved delivery Increased customer

performance satisfaction

Current scenario of the Indian logistics industry:

Department of Commerce, GOI, the aim is to reduce the Indian Logistics Sector (In Trillions)
logistics cost from the present 14% of GDP to less than 10% 10
by 2022.
India's logistics sector more than 40 partnering government
agencies (PGAs), 20 government agencies, 500 certifications, 7.5
37 export promotion councils, ten thousand commodities.
200 shipping agencies, 129 Inland Container Depots, 36
5
logistic services, 168 Container Freight Stations, 50 IT
ecosystems and insurance and bank agencies.
Employees over  22 million people. Reforms in logistics will
2.5
facilitate growth of 5 to 8% in exports by decreasing the
indirect logistics cost by 10 %.
Expected Growth - 160 billion to USD 215 billion by 2019. 0
FY2017 FY2022
Source: (Economic Survey 2017-18 suggests)
 Trends in Logistics Industry:
Global Logistics Market
Growth Reasons
Improved Improved
infrastructure transportation

Rise in trade Improved Information

agreements Technology

Global Logistics Market: Restricted by

Increasing environmental awareness and rising pollution level restrain its growth.
High inventory cost & low warehousing space are other reasons which further affect
growth. Air
Value added logistics Water
Freight forwarding 2%
5% 8%
10%

Rail
Warehousing 31%
Transportation 25% Road
60% 59%
EARLIER NOW
Export, Import cargo Organized retail
Agriculture IT & Telecommunication
Manufacturing Healthcare

Number of Transportation and logistics merger and

acquisition
Technological changes and major trends in Logistics IoT (Internet of Things) Blockchain Technology
Specialized sensors, GPS, RFID tags - for Decentralized ledger where all
real-time tracking of shipments transactions are present at each node.

3PL and 5PL Integration of drones

3PL involves outsourcing. 5PL involves Amazon plans to start a drone delivery
developing and implementing the best service that can provide its customers
supply chains or networks. delivery within 30 mintues (<$5)

Big data and Data Analytics Chatbots & collaborative robots

Analyzing a large data - improve customer Increasing using logistics robots and
experience, operational efficiency. collaborative bots. Robotics-as-a-Service

Cloud Autonomous vehicles

Efficiency - improved by going for Self-driving trucks - reduction in the
platform-based business models. human workforce, increase the efficiency

3D Printing Augmented Reality

Reduce shipping volumes and also Digital picking devices in their area of
inventory levels as a result reduce vision and reduce travel time by finding
warehousing requirements the best route.

Logistics safety as a topmost

priority
 Types of Logistics Providers in the Industry

A firm or an individual that needs to have cargo, freight, goods,

1 PL produce or merchandise transported from a point A to a point B.

Asset-based carrier, which actually owns the means of transportation.

2 PL
Have transportation they own or lease/charter

Provides outsourced or 'third party' logistics services to companies for

3 PL part or sometimes all of their supply chain management functions.

Independent, singularly accountable, non-asset based integrator

4 PL Capability and technology of its own organization and other organizations,
including 3PLs
 Major Players in the
Logistics Industry
Mahindra Logistics
Leading 3PL in India. Provides
warehousing, transportation, In-factory
logistics, people transportation
Solutions and Freight forwarding.
Market Cap (Rs Cr.): 2522.82

TVS logistics
Top supply chain management
companies in India. Among the best 3rd
party logistics companies in India and Future Supply Chain
provides integrated supply chain
India’s largest organised third-party supply chain
solutions across the world directly
and logistics service provider offers automated
and/or through joint ventures and
and IT-enabled warehousing, distribution.
subsidiaries. Market Cap: Unlisted
Market Cap (Rs Cr.): 2,159.34

Apollo LogiSolutions
Provides end to end integrated logistics services globally. Market Cap: Unlisted
Other Players E-Commerce Focused Players
TCI Express Delhivery
Operates across 2000 cities. Provides
Market Cap: 2399.51
express parcel transportation, B2B and B2C
warehousing and Technology services.
VRL Logistics Currently valued at 1.5 billion dollars
Market Cap: 2564.4
Ecom Express
Provides technology and automation solutions
Bluedart to enable last-mile pickup, delivery and
Market Cap: 5578.08 processing

XpressBees
Provides vendor pickup, try and buy and
reverse pick services to e-commerce
companies

Shadowfax
Uber of sorts for delivery personnel. Provides on-
demand last-mile logistics network offering tech-
enabled one-stop delivery solutions
 Railways
15.7%

Service Incidental to transport

15.3%

Road Transport Air Transport

64% 3.1%

Impact of GST:
Operational costs for the sector are expected to reduce significantly
due to dissolving multiple state taxes into a single tax throughout the
country
Reduce the logistics costs of non-bulk producer companies by up to
20%
Increase in the tax levied on storage & warehouse facilities, along
with labor services, from 15% to 18%. Encourages third-party logistics
providers to move towards services that have a high degree of value
addition and input tax credit (ITC) can be claimed
In the short run, initial adjustment costs are high, but operational
frequency will improve
Government Policies
Separate division has been created in the
Ministry of Commerce and Industry for
logistics
In the 2019,the government has allocated a
budget of Rs.100 lakh crores for the logistics
sector over the next five years
Set the target to reduce the logistics cost to
less than 10% of the GDP by 2022, from the
current 14%
Current share of coastal shipping in India is
only 4.5 to 5%, as compared to China’s 24%,
Germany 11%, and US 9%.So the government
is working on developing waterways
Launched Bharatmala Pariyojna, to improve
the efficiency of existing corridors by
developing multi-modal logistics hubs along
with the construction of new roads of up to
34,800 km. (by 2022)
New and emerging technologies
Logistics Industry has vast opportunities to
implement newer and make smarter technology
more feasible- has access to more data, both
customers, governments, and businesses
Implementations - like artificial intelligence and
machine learning, will eradicate the need for
manpower and outdated GPS tracking systems
Can use of cloud computing for platform solutions,
and impart standardization to logistic processes.
This implementation has so far been slow.
Worldwide, 28% of Logistics companies rated
themselves as advanced on digitization, lower than
Automotives (41%) and Electronics (45%).
In India, the biggest challenge faced today by the
industry is poor integration of information
technology,  facilities, warehouse availability, and
transport networks.
Many firms  know this and are trying to integrate
technology to their operations to reduce costs
FDI policies, Exports and Overseas
Opportunities:
Government of India-imposed new norms on FDI policies in
Feb 2019-hit the ecommerce industry hard, and affected
logistics companies too
Logistics industry has many new entrants and startups, and
these policies have affected their volumes and daily
operations, as many relied on ecommerce for bulk of the
volume transported. Now they are looking for other avenues
and export opportunities to continue operations
Effect of demonetisation: forced many small players, sellers
and truck drivers to become tech savvy, and open bank
accounts. opened up many players’ ability to cater better to
export demands in 2019
National Logistics Policy Draft (June 2019): Recommended-
Ministries of Railways, Road transport and highways,
Shipping and Civil Aviation must work in coordination to
bring down logistics costs
Predicted 10% decrease in indirect costs, allowing players
to focus on exports( projected to increase to about 5-8%)