SUMMARY

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EXECUTIVE SUMMARY

It is clear that the 3PL market in India is relatively new and fragmented where a few large players dominate the entire market. One of the most important factors plaguing the growth of 3PL in India is poor infrastructure, as also evident from the respondents¶ feedback. Slow movement of cargo and congestion at the seaports due to insufficient infrastructure, bureaucracy, red-tapeism and delay in government clearances coupled with unreliable power supply and slow banking transactions add to the woes of the exporters and make it difficult for them to meet the deadlines for their international customers. To expedite shipments, the exporters have to book their consignments as airfreight rather than sea freight, which adds to the cost of the goods making them uncompetitive in the international market. Many large shipping liners avoid Indian ports in order to avoid delays in loading and unloading, and hence the Indian exporters have to resort to transshipments at ports like Singapore, Dubai and Colombo, which again adds to the cost of shipments and delays the delivery of export goods. In domestic transportation of goods by rail, which accounts for 35% of the total cargo movement, Container Corporation of India (CONCOR), a subsidiary of Indian Railways, has a monopoly. The global 3PL providers have to depend on CONCOR for containerized transportation of goods by rail from one part of the country to another. This adds to the transaction costs of the service providers, and also affects their service. Moreover, due to insufficient number of rakes and Inland Container Depots (ICD), CONCOR is not being able to manage the growing volumes of exports from the country. All these facts ultimately point to the suggestion that the monopoly of CONCOR should be done away with and private participation in development of infrastructure should be allowed. Another important factor responsible for the slow growth of 3PL in India so far, perceived by there spondents, is the lack of trust and awareness among the Indian firms. On the one hand, the Indian firms have not been aware of the benefits of 3PL. On the other hand, they do not trust the 3PL providers and do not want to share with them sensitive organizational

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information. One Delhi-based respondent said during a personal interview that many firms do not want to outsource logistics activities because of vested interests.

VISION:- TO lead the Logistics industry into a new Era of Innovation, Quality, Productivity, employee Opportunity and Social Responsibility.

Mission:- Making the most of our collective Passion, Experience and Scale, to build the best Logistics company and become our customers and our employees¶ first choice, worldwide.

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INTRODUCTION

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INTRODUCTION OF DHL
In (D, 1969, Adrian Dalsey, Larry Hillblom and Robert Lynn H, and L) founded DHL as a service shuttling bills of lading between San Francisco and Honolulu. The company grew

rapidly and in a few years initiated service to the Philippines, Japan, Hong Kong, Singapore and Australia, creating an entirely new industry of international door-to-door express service in the Pacific Basin. Steady expansion continued in the 1970's as DHL initiated service to Europe (1974), Latin America (1977), the Middle East (1978) and Africa (1978). The international delivery company was the first to bring air express to the Eastern Bloc countries in 1983 and to the People's Republic of China in 1986. DHL's rapid growth reflects the globalization of trade. As our customers expand into international markets, DHL is there to meet their needs. Today, DHL is the world's largest and most experienced international air express network with service to 120,000 destinations in more than 220 countries and territories. DHL maintains its position as the world's leading international air express network by continually expanding and upgrading its network of offices, hubs and gateways, and by offering superior service. More than 4,400 offices support DHL's extensive worldwide coverage. Of that total, over two-thirds are owned and operated by DHL, far greater than any other company in the air express industry. As a result, DHL has a significant advantage over other air express carriers who use more third party agents in the

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foreign countries they serve. DHL also has dedicated customs personnel in nearly every country where it operates to assist with customer shipments. These advantages result in faster transit times, streamlined customs clearance ,effective tracking of shipments and billing.DHL operates an unmatched global system of 238 gateways and more than 450 hubs, warehouses and terminals. This allows for the rapid and efficient movement of shipments, resulting in fast, reliable and cost-efficient service to over 4.2 million customers worldwide. More than 400 aircraft operate for or on behalf of DHL, giving DHL the flexibility to use the fastest possible. As important as these facilities and equipment are to supporting DHL's global network, it is the worldwide team of more than 170,000 professionals whose commitment to anticipating, understanding and meeting each customer's unique shipping needs that makes DHL the industry leader. DHL Express Worldwide (2009)

more than 124,000 more than 220 Hubs 36 4,700 Employees Countries and territories Packstations (only Germany) DHL Logistics worldwide (2009) Employees * more than 162,500 72,000 350 900

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Countries and territories Terminals, warehouses, offices Air freight volume Ocean freight volume TEU ** DHL Exel Supply Chain Countries and territories Centers, warehouses, terminals Storage area sqm DHL Freight Countries and territories Full truckload movements p.a. Terminals

150 813 4,110,000 tones 2,400,000

59 2,500 23,000,000

more than 30 2,000,000 more than 160

* Full-time employees at cut-off date

DHL NAMED GLOBAL 3PL OF THE YEAR AT SUPPLY CHAIN ASIA LOGISTICS AWARDS

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DHL, the world¶s leading express and logistics company, has won the coveted Global 3PL (third-party logistics) of the Year award at the Supply Chain Asia Logistics Awards 2007, organized by Supply Chain Asia magazine. Readers of Supply Chain Asia magazine and a panel of experts have bestowed this accolade on DHL for its innovation, service excellence and commitment to providing customers with superior express and logistics solutions. DHL received the award at a ceremony held at the Hong Kong Convention and Exhibition Center yesterday The criteria for the Global 3PL of the Year takes into account customer service, product and service innovation, as well as network and technology. DHL¶s quest to provide customized solutions and efficient service made it a perfect candidate for this award. We are very honored to be the recipient of this award. Our objective is to provide our customers with best-inclass outsourcing and logistics services. To be voted Global 3PL of the Year speaks volumes of how far we have gone to produce the best results for our customers,´ said Paul Graham, Chief Executive Officer, DHL Exel Supply Chain ± Asia Pacific. The annual awards ceremony is organized by Supply Chain Asia magazine, a leading logistics and supply chain publication. Through votes cast by readers, finalists were short-listed in each of the 15 categories. An independent panel of 15 judges then selected the winners. This latest award further attests to DHL¶s leadership position in the industry, having also received a string of awards this year. It won Best Express Operator, Best Lead Logistics Provider, Best 3PL, Best Air Freight Forwarder, Best Project Cargo Forwarder and Best Sea Freight Forwarder - at the prestigious 2007 Asian Freight & Supply Chain Awards (AFSCAs). It was also named ³International Express Operator of the Year 2007´ at the World Air Cargo Awards.

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Types of 3PL providers
Hertz and Alfredsson (2003) describe four categories of 3PL providers:
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Standard 3PL provider: this is the most basic form of a 3PL provider. They would perform activities such as, pick and pack, warehousing, and distribution (business) ± the most basic functions of logistics. For a majority of these firms, the 3PL function is not their main activity.

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Service developer: this type of 3PL provider will offer their customers advanced value-added services such as: tracking and tracing, cross-docking, specific packaging, or providing a unique security system. A solid IT foundation and a focus on economies of scale and scope will enable this type of 3PL provider to perform these types of tasks.

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The customer adapter: this type of 3PL provider comes in at the request of the customer and essentially takes over complete control of the company¶s logistics activities. The 3PL provider improves the logistics dramatically, but do not develop a new service. The customer base for this type of 3PL provider is typically quite small.

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The customer developer: this is the highest level that a 3PL provider can attain with respect to its processes and activities. This occurs when the 3PL provider integrates itself with the customer and takes over their entire logistics function. These providers will have few customers, but will perform extensive and detailed tasks for them.

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2009 TOP 10 3PL SERVICES

1. DHL

2. SCHENKER

3. KUEHNE&NAGAI

4. TPG/TNT

5. UPS

6. P&O NEDLYOD

7. NIPPON EXPRESS

8. PANAPIINA

9. CH ROBINSON

10. NYK LOGISTICS 003 Top 25 3PLs13 Expeditors Intl 2,625 (all Revenue US$ Millions)12

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3rd Party Logistics (3PL) is the supply chain practice where one or more logistics functions of a firm are outsourced to a 3PL provider. Typical outsourced logistics functions are: inbound freight, customs and freight consolidation, public warehousing, contract warehousing, order fulfillment, distribution and management of outbound freight to the client's customers.On top of this, also Value Added Services can be provided, such as: repackaging, assembling and return logistics. The 3PL Provider manages and executes these particular logistics functions using its own assets and resources, on behalf of the client company. The thoughts behind this are to keep the firm competitive by keeping it lean without owning much assets, allowing it to focus on niche areas and to reduce operational costs. Third Party Logistics is also referred to as Contract Logistics. 3PL is evolving from predominately transactional-based to more strategic in nature. At the same time 3PL is gradually evolving into 4PL. A Fourth Party Logistics provider is a supply chain services provider that searches the best logistical solutions for its client, typically without using own assets and resources. Relatively new is the term 5PL or even 7PL, indicating Total Supply Chain Management Outsourcing.

Evolution of 3PL The concept of logistics outsourcing can be traced back as far
as one goes down the history of mankind. In Europe, a number of logistics service providers can trace their origins back to theMiddle ages1. We restrict ourselves to the recent decades, and trace below the evolution of 3PLFrom the 1950¶s.1950¶s & 1960¶s Logistics outsourcing was limited to transportation and warehousing. The transactions were mainly short-term in nature.

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1970¶s Emphasis was on improved productivity, cost reduction and long-term contracts1980¶s Value-added services such as packaging, labeling, systems support and inventory management were on offer1990¶s to present import/export Outsourcing has picked up momentum, and more value-added services are being offered. Some of them are management, customs clearance. Firms with a wide and/or complex distribution network

Example: IBM Firms that do not focus on logistics as one of their core competencies

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In strategic discussions on Core Competence.

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In the case of the creation of a new product group.

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When a company is integrating activities of a takeover,Compare Acquisition Integration Approaches

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Steps in 3rd Party Logistics (3PL). Process
The application of 3PL is normally done in a number of phases:
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Awareness. Investigate possibilities, inform employee Market Research. Investigate market trends, in particular service

demands. See: SERVQUAL, Customer Satisfaction Model, and Quality Function Deployment. 1. Strategy. Develop and compare logistics concepts. 2. Make or Buy. Build own competence or outsource. 3. Business Plan. Costs, benefits. Phasing. Timing. 4. Selection. Selecting partner based on market coverage, competency, integrity, vision, etc. 5. Agreement. Agreeing on mutual expectations using set of Performance metrices. 6. . Evaluation and Renewal. Sustain partnership via mutual financial costs and benefits.

STRENGTHS OF 3RD PARTY LOGISTICS (3PL). BENEFITS 
  Allowing firms to focus on developing their Cost competencies. Freeing up resources (money).

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Benefit from the logistics know-how and international networks of specialized 3PL LOGISTICS PROVIDER.

ROLE OF 3PL IN INTEGRATION&SECURITY
Paris, October 6, 2008 ± Capgemini, one of the world¶s FOREMOST providers of consulting, technology and outsourcing services, in cooperation with the Georgia Institute of Technology, Oracle and DHL today released an in-depth study into the current state of logistics outsourcing. The study is based on a survey of 1,644 logistics executives from North America, Europe, Asia Pacific and Latin America and identifies a number of key findings:

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Green supply chain initiatives are essential for future business success according to 98% of logistics executives, yet the majority are unwilling to invest any additional funds in the greening of the supply chain.

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The theft of material goods continues to be the top security concern. But the changing business environment means that companies must focus more attention on other causes of supply chain

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Underpinning sustainability and security are strong

relationships across the different

parties in the supply chain achieved through integrated systems and services. Through deliberate efforts to form solid relationships with logistics providers using detailed contracts and metrics, companies can achieve significant cost savings, shorter order cycles, better customer service and improved.

Business Efficiency

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Although the survey shows that 3PLs and their users believe the associated costs of creating a more secure,-integrated, environmentally-friendly supply chain should be split, there is continued resistance to collaboration and the unspoken assumption that costs will ultimately be carried by the customer.

Green supply chain:
Companies are almost unanimous in their belief that green supply chain initiatives, such as local sourcing, are important but there is widespread uncertainty about how to move forward with sustainable supply chain.

Integrated Logistics
The benefits of supply chain collaboration and logistics integration can be huge, but this can only be achieved µby putting aside fears over loss of control, visibility, internal competency, and of being too dependent on a third party service provid er. However, through the use of comprehensive service level

agreements that balance cost sand risks and 3PLs investing in their own service offerings, companies will begin to experience the payoffs of working so closely together. By adopting integration-enabling, open standards-based technologies together.

3PL MARKET
. Currently, the logistics cost around the world is about $2 trillion. For any country, the logistics cost is pegged between 9% and 20% of GDP. For India, the figure is about 13%. Considering a GDP of over $475 billion, the logistics cost in India turns out to be about $62 billion2.The 3PL market across the world is increasing at a rapid rate. According to Armstrong & Associates, the world 3PL revenues in 1992, 1996 and 2000 were $10 billion, $25 billion and $56 billion respectively. According to 15

another research firm IDC, the 3PL revenue was $141billion in 2003, and it will touch $300 billion in 2006 growing at a compounded annual rate of 17%3. The world¶s largest 3PL providers are headquartered in Europe (Top seven 3PL providers in terms of revenues are European-based, UK-based Exel plc being the largest in the world with $8.3 billion in revenues), but the largest market is the U.S., which was about $80 billion in 2003 accounting for nearly 60% of the world market4. The 3PL market in India is least developed. The market is highly fragmented, and there are very few service providers, who generate substantial revenues (more than Rs. 50 crore). A survey conducted by Frost & Sullivan estimates the logistics market in India at $298.7 million in 2003 or 0.48% of the logistics cost in that year5. Compare this figure with 7% across the world and 9% in the U.S. considering a GDP of over $10 trillion and 8.7% of the GDP being the logistics cost. There is an immense potential for cost savings for India if it can bring down its logistics costs from the current level of 13% of GDP to 8.7% (level in the U.S.). The savings would be around$20 billion resulting in a potential 4.3% cut in prices of Indian goods globally making them more competitive, a Logistics Institute Asia-Pacific study estimate.

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OBJECTIVE

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OBJECTIVES

PRIMARY OBJECTIVES
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TO UNDERSTAND 3PL SERVICES OF DHL

SECONDARY OBJECTIVES

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TO STUDY ABOUT THE CUSTOMERS OF 3PL

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TO STUDY THE BENEFITS OF 3PL & ITS MARKET IN INDIA

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TO KNOW THE STRENGTH AND WEAKNESS OF 3PL PROVIDERS IN TERMS OF THEIR ASSETS &SERVICES OFFERED

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SIGNIFICANCE OF THE PROJECT

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SIGNIFICANCE OF PROJECT
It helps in getting clear view that how Logistics has become so important , & how third party logistics is helping DHL in providing different services to their customers. It also helped in getting clear knowledge about how these can help in achieving success in terms of more and more market share.

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RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY
The research methodology was based on collection of data from and secondary sources. The primary sources were the 3PL providers, and data collection was through questionnaire surveys, telephonic interviews and personal visits. The secondary sources were books, published reports, journal articles and the Internet. The details of the questionnaire design and the process of administering the questionnaire to potential respondents are outlined below.

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THIRD PARTY LOGISTICS

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DEFINITION
t Logi ti i si l the use of an outsi e company to perform all or ³Thi part of the firm¶s materials management and product distri ution function.´ -- Simchi-Levi (2000) ³A relationship bet een a shipper and third party which, compared with the basic services, has more customi ed offerings, encompasses a broad number of service functions and is characteri ed by a long-term, more mutually beneficial relationship´ -Murphy & Poist (1998)

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Characteristics of 3PL 
    Perform outsourced logistics activities Process management / Multiple activities More customized services Mutually beneficial and risk-sharing relationship Long-term commitments (1~ 3 years)

Advantages
o o o o Cost reduction Focus on core competency Improved efficiency, service and flexibility Industry-specific application ± ³build-to-order´ systems and e-merchants

Disadvantages
o Loss of control o Impact on in-house workforce

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Current State-- Servi e Offerings 

     

Dedicated Contract Transportation / Transportation Procurement Inventory Management Logistics Management and Consulting Freight Audit and Bill Payment Customs Services Shipment Tracking and Tracing Reverse Logistics and Value-added Services

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Current Industry Status
‡ ‡ ‡ ‡ No commonly accepted terminology Technologies increase visibility, efficiency and integration The service menu is rapidly changing New breed of companies are emerging

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3PL SERVICES

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THIRD PARTY SERVICES

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Any form of transportation that is offered to a shipper or a receiver ads part of a total package of logistic services in which transportation is one component.

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Use of a hire firm to perform all or part of a company¶s supply/distri ution function.

SERVICES OFFERED BY THIRD PARTIES
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TRANSPORTATION .Freight forwarding .Freight brokerage .Dedicated carriage .Traffic management .Intermodal services .consolidation .Freight bill auditing. .Career selection. Rate negotiation .International services Logistics .Warehousing .Inventory control .Information systems .Network design 30

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.Facility location .Order processing .Customer service . Assembly packing .Product return /repair .Supply chain mgmt

SERVICES OFFERED BY THIRD PARTIES
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.Transportation firms .Motor, Air Rail&Ocean carriers .Transportation mediaries ..Forwarders,Brokers,Imcs,Agents .Warehousing companies .Public ,Contract ,Dedicated Consulting firms Financial institutions Manufacturers Computer companies

REASON FOR THIRD PARTY USAGE
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Return to core competencies Reduction in headcount Provide operational flexibility Provides economics of scale Need for improved customer service Increased awareness of l&t value Trigger event

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THIRD PARTY BUYING PROCESS
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Diagnose need Identify alternatives Select provider Negotiate&implement agreement Process improvement

THIRD PARTY SELECTION CRITERI
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.Financial strength of provider .Expertise &experience Customer references .Integrated capabilities Information system capabilities

POTENTIAL LIMITATIONS TO THIRD PARTY SUCCESS
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Fear of losing control Fear of losing internal skill Managers do not want to lose their powers Reliance on outside firms can e dangerous

Pro lems in the growth of the 3PL market in India
There are some operational and regulatory roadblocks to the growth of the 3PL market in India. The major problems are outlined below. The Indian firms are still wary of outsourcing their logistics activities due to lack of trust and awareness. The 3PL activity is less than 10% of the total logistics operations in India, whereas the corresponding figures for the U.S., Europe and Japan are 57%, 40% and 80% respectively2.

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According to a TCI-MDI survey6 of 130 Indian firms, 55.4% respondents indicated that their firms use 3PL services. The mostly used 3PL services are inbound and outbound transportation and customs clearing and forwarding. Outsourcing of other value added services such as warehousing, inventory management, distribution and order.

Prospects of the 3PL market in India
Despite the problems mentioned above, the 3PL market in India is poised to grow at over 20% compared to the average world growth rate of 10%7. Some of the large Indian corporate such as Reliance, Tata, Mahindra and Mahindra, TVS Group and Essar Shipping have already forayed into the logistics business. Initially these corporate formed divisions to handle internal logistics, but sensing the potential of the market, they have started offering logistics solutions to other Indian corporate and have already turned these logistics divisions into profit centres8. Some large express cargo and courier companies such as Transport Corporation of India Ltd. (TCIL), Gati, Safexpress and Blue Dart have also started offering 3PL services. Owing to the large asset base and distribution networks that are already put in place, it was just a matter of time for these companies to venture into the logistics business. Some of the reasons for the prospects of the3PL market in India are given below.

3PL market in India are given elow
‡ Indian firms increasingly realize the importance of reducing cost and staying competitive in the world market. One of the means of reducing cost is through outsourcing logistics. ‡ The Indian GDP is growing steadily at 6% compared to the world GDP growth rate of 3%,which even beats the GDP growth rates in the U.S. (3.3%), U.K. (2.6%) and

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Japan (1.3%)9.This eventually will translate into more outputs and more demand for specialized logistics services. ‡ The Indian Government has focused on infrastructure development. One of the initiatives is the golden quadrilateral project of the National Highway Development Program, which will connect all the four metros and will act as East-West and NorthSouth corridors. Once completed, it will give a boost to the road transportation network in India. ‡ 3PL services come under the purview of the BPO sector. The BPO sector in India, mainly IT and ITES, is growing at a rapid rate, and the Indian Government has declared many sopsincludingallowing 100% FDI though with certain restrictions in some cases. This is in contrast with China where foreign investment in domestic logistics is still not permitted. Almost all the large global 3PL providers have their presence in India doing mainly customs clearance and freight forwarding for their international clients. With the logistics market growing at a rapid rate and infrastructure developing, it is just a matter of time before global 3PL providers invest in domestic logistics. The possible routes may be acquisitions, quickand easy for the fragmented logistics market, and forming wholly owned subsidiaries or joint ventures. ‡ The Indian Government is working towards a uniform VAT regime. Once implemented, it will enable the 3PL providers to consolidate the warehousing facilities currently maintained in different states bringing in economies of scale.

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FOURTH PARTY LOGISTICS

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Fourth Party Logistics (4PL
Fourth Party Logistics provider (4PL is a supply chain integrator that assembles and manages the resources, capabilities and technology of its own organization with those complementary service providers to deliver a comprehensive supply chain solution In Europe, most of the large 3PLs move towards being 4PLs, alone of thru partnerships, by integrating a large range of operations and new added value services addressing forecasting, planning and supply chain global optimization

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A Note on Fourth-Party Logistics (4PL Evolution?

The Next 

Thought of as supply chain integrator, a firm that ³assembles and manages the resources, capabilities, and technology of its own organi ation with those of complementary service providers to deliver a comprehensive supply chain solution.´  4PLs manage and direct the activities of multiple 3PLs, serving as an integrator.

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CONCLUSION

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CONCLUSION
It is concluded from the project that 3pl services is growing around the world as more and more corporations prefer to outsource their logistics operations to the 3pl or logistics service providers. The 3PL market in India is still in its infancy and is highly fragmented. However, there is a high potential for growth of the market, which was evident from the survey of the Indian logistics service providers. The respondents held the poor infrastructure and the lack of awareness and trust among the Indian firms responsible for the low growth of 3pl in India so far.DHL is one of the largest 3pl service provider in the world. It is well equipped with modern technology to meet present day requirement. It is attired with sophisticated computerized system like ERP and SAP as per the requirement of the branches. The 3pl services became very efficient by the use of such software there is no space for human error after implementation of these gizmo.

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BIBLIOGRAPHY

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BIBLIOGRAPHY
WWW.DHL.COM WWW.AMAZON.COM WWW.ALIBRIS.COM WWW.GOOGLE.COM LOGISTICS IN INTERNATIONAL BUSINESS( RAJIV ASERKAR) THE TEXT BOOK OF LOGISTIC MANAGEMDENT(D.K.

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AGGARWAL)
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WWW.WIKEPEDIA.COM

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