AN OVERVIEW OF THE

LOGISTICS INDUSTRY IN
INDIA AND ITS CHALLENGERS
BY
K.C.RAMAN

STRUCTURE OF
PRESENTATION

1.BROAD UNDERSTANDING OF THE

ROLE OF LOGISTICS IN BUSINESS
2.THE GROWTH OF THE LOGISTICS
INDUSTRY IN INDIA
3.THE MAJOR LOGISTICS DRIVERS
4.THE CHALLENGES OF THE
LOGISTICS INDUSTRY
5.THE WAY AHEAD

 THE WORLD TODAY IS NO LONGER AN

AGGREGATE OF ISOLATED LAND
MASSES SURROUNDED BY LARGE
OCEANS.IT IS A GLOBAL VILLAGE
INTERLINKING
COMPANIES,ECONOMIES AND PEOPLE
FROM VARIOUS COUNTRIES.
IN THIS GLOBALIZED MULTI-CULTURAL
WORLD AND BUSINESSES, THE
SUCCESS OF AN ENTERPRISE DEPENDS
UPON ITS ABILITY TO
UNDERSTAND,ADOPT AND OPERATE IN
THE GLOBALIZED MARKET PLACE.

THERE ARE MORE TRANSNATIONAL

AND MULTINATIONAL CORPORATIONS
OPERATING TODAY THAN IN THE
PAST AND CORPORATIONS ARE
LEVERAGING CROSS-CULTURAL
TALENT TO OPTIMISE RESOURCES.

 THE CORPORATE WORLD TODAY

REQUIRES ONLY SUCH HUMAN
CAPITAL WHO ARE TRAINED ,
EQUIPPED WITH KNOWLEDGE SKILLS
AND THE RIGHT ATTITUDES TO
WORK IN A HIGHLY CHALLENGING
GLOBAL MARKETS.
A PASSION FOR PERFORMANCE AND
A THIRST FOR CHALLENGERS IS
WHAT COMPANIES ARE SEEKING
TODAY WHILE APPOINTING PEOPLE.

 BUSINESS SCHOOLS HAVE A MAJOR

ROLE TO PLAY IN TRAINING YOUNG
ASPIRING MANAGERS TO DEVELOP
THE REQUIRED SKILLS ,
ADAPTIBILITY TO THE FAST
CHANGING BUSINESS AND
TECHNOLOGICAL WORLD , FOSTER
GOOD LISTENING AND NEGOTIATING
SKILLS,BUILD AND NURTURE
RELATIONSHIPS AND UNDERSTAND
THE EVOLVING CHANGES IN THE

BUSINESS SCHOOLS-FEW
OBSERVATIONS

NUMBER OF SCHOOLS HAVE INCREASED

MANIFOLD
INFRASTRUCTURE IS LACKING IN MANY
SCHOOLS
SHORTAGE OF FACULTY AND POOR TERMS
INTERACTION WITH INDUSTRY IS NOT
ADEQUATE BOTH FOR FACULTY AND
STUDENTS

 MORE STUDENTS BOTH URBAN AND

RURAL ASPIRING TO BECOME
CORPORATE MANAGERS WITH
INDIA'S ECONOMIC GROWTH
RIGHT PLACEMENTS FOR ALL
STUDENTS
STEEP DROP IN EMPLOYABLE
CANDIDATES
DISCIPLINE AND QUALITY

WHAT OUR GREAT

LEADERS HAVE TAUGHT
US ..

NO INDIVIDUAL CAN REACH GREAT

HEIGHTS WITHOUT THE INFLUENCE
OF A GOOD TEACHER
ALL THE RICHES IN THE WORLD
CANNOT MATCH THE WEALTH OF
EDUCATION
THERE IS NO ELEVATOR TO
SUCCESS .WE HAVE TO USE ONLY THE
STAIRS

 THE MORE YOU TEACH THE MORE

YOU LEARN.
DREAM,DREAM,DREAM.CONVERT THE
DREAMS INTO THOUGHTS AND
THOUGHTS INTO ACTION
DR.ABDUL KALAM
WINNERS DONT DO DIFFERENT
THINGS THEY DO THINGS
DIFFERENTLY

KASHTAPADAMA ETUVAM
KIDAIKATHU,
KASHTAPADAMA KIDAIKARATHU
ENNAIKUMAE NILAIKATHU..
YOU DONT GET SOMETHING
WITHOUT REAL EFFORT,EVEN IF YOU
GET IT WITHOUT ANY EFFORT,IT
WONT STAY WITH YOU FOR LONG

.RAJANIKANTH

THE FIRST STEP

INTO
LOGISTICS

UNDERSTANDING

BUSINESS AND
CUSTOMER
ANY BUSINESS EXISTS AND REVOLVES
AROUND A CUSTOMER.
THE VERY PURPOSE OF A BUSINESS IS
TO FULFIL THE NEEDS,WANTS,DESIRES
AND ASPIRATIONS OF THE CUSTOMER.
THE CUSTOMER IS THE CENTRAL
FOCUS OF ALL BUSINESS ACTIVITY

THE IMPORTANCE OF A CUSTOMER

A CUSTOMER IS THE MOST IMPORTANT
VISITOR ON OUR PREMISES. HE IS NOT
DEPENDENT ON US. WE ARE
DEPENDENT ON HIM.
HE IS NOT AN INTERRUPTION IN OUR
WORK. HE IS THE VERY PURPOSE OF IT.
WE ARE NOT DOING A FAVOUR BY
SERVING HIM. HE IS DOING A FAVOUR
BY GIVING US AN OPPORTUNITY TO
SERVE HIM.
MAHATMA
GANDHI.

BUSINESS AND CUSTOMERS

THERE ARE THREE LEVELS OF CUSTOMER
SATISFACTION
1.MEETING THE BASIC NEEDS OF A
CUSTOMER
2.MEETING THE CUSTOMERS
EXPECTATIONS SO THAT THEY RETURN TO US.
3.GOING BEYOND THE CUSTOMERS
EXPECTATIONS, DOING MUCH MORE THAT
WHAT THEY EXPECT.

ROLE OF THE CUSTOMER

IN PRE-LIBERALIZED INDIA
SELLERS MARKET-CUSTOMER WAS A
SLAVE TO MARKET FORCES
WITHOUT ANY CHOICE
THERE WAS NO COMMITMENT ON
QUALITY COST AND DELIVERY OF
PRODUCTS AND SERVICES

Customer service before

liberalisation

ROLE OF CUSTOMER IN
POST-LIBERALIZED INDIA

BUYERS MARKET-CUSTOMER IS
THE KING,SUPER BOSS WITH
MULTIPLE CHOICES
COMPANIES ARE STRUGGLING TO
WIN OVER CUSTOMERS AND
RETAIN THEM.

Customer is the King

Business Challengers
Today

INCREASING VARIETY OF PRODUCTS

DECREASING PRODUCT LIFE CYCLES

INCREASE IN DEMANDING CUSTOMERS

GLOBALIZATION
SUPPLY CHAIN AND LOGISTICS
CHALLENGERS

What does a Customer

Expect?

QUALITY AND RELIABILITY

PRODUCT VARIETY
PRODUCT AVAILABILITY
COMPETITIVE PRICING
RESPONSE TIME AND DELIVERY
CUSTOMER EXPERIENCE
AFTER SALES SERVICE
ORDER VISIBILITY
RETURNABILITY

THE ROLE OF A BUSINESS

ENTERPRISE
MANUFACTURING ON TIME WHAT IS
REQUIRED BY CUSTOMERS
DISTRIBUTION ON TIME TO THE
MARKETS/CUSTOMERS
A COMPANY HAS TO BE COST
EFFECTIVE AND RESPONSIVE IF IT
HAS TO REMAIN IN BUSINESS.

WHAT IS LOGISTICS ?
LOGISTICS IS CONCERNED WITH
THE PHYSICAL DISTRIBUTION OF
PRODUCTS AND SERVICES FROM
THE SUPPLIERS TO
MANUFACTURERS TO
DISTRIBUTORS TO RETAILERS TO
CUSTOMERS.

What are the Major

Drivers of Logistics ?
INFRASTRUCTURE
TRANSPORTATION
WAREHOUSING
LOGISTICS MANAGEMENT SKILLS
INFORMATION TECHNOLOGY

WHAT IS LOGISTICS MANAGEMENT?

LOGISTICS MANAGEMENT IS
CONCERNED WITH GETTING THE
RIGHT PRODUCT, IN THE RIGHT
QUANTITY, IN THE RIGHT
CONDITION, TO THE RIGHT
PLACE, AT THE RIGHT TIME, TO
THE RIGHT CUSTOMER AND AT
THE RIGHT COST.

The Evolution of
Logistics
LOGISTICS AS A DISCIPLINE STARTED WITH
THE EUROPEAN ARMED FORCES.
DURING TIMES OF WAR MAINTAINING ONES
SUPPLY LINES WHILE DISRUPTING THOSE OF
THE ENEMY IS A CRUCIAL ELEMENT OF
MILITARY STRATEGY.
SOLDIERS MOVED FROM THEIR BASE TO A
FORWARD POSITION AND ALONG WITH THEM
ARMS,AMMUNITION,FOOD,EQUIPMENT HAD
TO BE MOVED QUICKLY WITHOUT ANY
ERRORS OR OMISSIONS.

 WARS WERE WON OR LOST

DEPENDING UPON THE STRENGTH OF
A COUNTRYS LOGISTICS CAPABILITY
OR THE LACK OF IT.

IN TODAY'S GLOBALIZED
COMPETITION AND BUSINESS
WARFARE, COMPANIES EITHER
SURVIVE OR PERISH DEPENDING
UPON THE STRENGTH OF THEIR
LOGISTICS CAPABILITIES.

Business Logistics

THE TERM LOGISTICS IS EXTENSIVELY USED

IN BUSINESS TODAY AND MANY COMPANIES
ATTACH GREAT IMPORTANCE TO LOGISTICS .

COMPANIES ARE INCREASINGLY FOCUSSING

ON PROCESSES LIKE CRM ISCM AND SRM
TO IMPROVE THEIR QUALITY COST AND
DELIVERY TO FULFIL THE REQUIREMENT OF
THEIR CUSTOMERS AND CAPTURE A LARGER
SHARE OF THE MARKET.

PERFORM OR PERISH EQUALLY APPLIES TO

COMPANIES AND EMPLOYEES.

THE GROWTH OF THE

LOGISTICS INDUSTRY IN
INDIA

 INCREASE IN TRADE POST

LIBERALIZATION, FROM 250 MILLION
TONNES TO 3000 MILLION TONNES IN
2010-11
INDIAN ECONOMY GROWING AT ABOUT 8
PERCENT EVERY FIVE YEARS WITH
SERVICES CONTRIBUTING ABOUT 55
PERCENT TO GDP,MANUFACTURING 30
PERCENT AND AGRICULTURE 15 PERCENT
INDIA WITH ITS LARGE MARKET SIZE
AND OTHER ADVANTAGES EMERGING AS
A MANUFACTURING HUB.

 GLOBALIZATION-COMPANIES CAN
MANUFACTURE AND SELL IN ANY PART
OF THE WORLD
INDIA EMERGING AS THE WORLDS
RETAIL MARKET WITH MANY LARGE
WORLD RETAILERS ENTERING INDIA
RISING INCOME OF INDIA'S MIDDLE
CLASS AND UPPER MIDDLE CLASS
LEADING TO AN EXPLOSION OF MALLS,
HYPER MARKETS, MEGA SHOPPING
CENTERS,BEAUTY PARLOURS ETC

 ECONOMIC GROWTH IN RURAL INDIA HAS

RISEN INCOME LEVELS IN OUR RURAL
POPULATION
WITH
INCREASED
CONSUMPTION OF GOODS AND SERVICES
INCREASING
FLOW
OF
FOREIGN
INVESTMENTS
IN
INFRASTRUCTURE,AUTOMOBILES,RETAIL,
FOOD,PHARMACEUTICALS,TELECOMMUNICATIONS,EL
ECTRONICS AND OTHER INDUSTRIES.
THE
GROWTH
OF
E-COMMERCE
WARRANTS A SUBSTANTIAL INCREASE IN
WAREHOUSING AND TRANSPORTATION.

The Role and importance of Logistics

WITH GLOBALIZATION OF MARKETS AND
GLOBAL COMPETITION THE PERFORMANCE OF
THE INDIAN ECONOMY WOULD ESSENTIALLY
DEPEND UPON HER LOGISTICS CAPABILITIES.
LOGISTICS INDUSTRY GROWING AT ABOUT 15
PERCENT EVERY YEAR WITH REVENUES
TOUCHING ABOUT USD 125 BILLION IN 2012
FOREIGN GLOBAL COMPANIES DOMINATING IN
INDIA'S LOGISTICS INDUSTRY WITH MASSIVE
INVESTMENTS

 LOGISTICS BEING A SUNRISE INDUSTRY IN

INDIA, KNOWLEDGE AND SKILLS ARE BEING
DEVELOPED THROUGH MANY INSTITUTIONS.
WITH DOMESTIC AND FOREIGN INVESTMENTS
IN LOGISTICS INFRASTRUCTURE, A SOLID
FOUNDATION HAS BEEN ESTABLISHED FOR
THE GROWTH OF THE LOGISTICS INDUSTRY.
WITH GLOBALIZATION AND DEVELOPING
LOGISTICS SKILLS, COMPANIES ARE
FOCUSSING ON THEIR CORE MANUFACTURING
PROCESSES AND OUTSOURCING ALL
LOGISTICS ACTIVITIES.

 INDIAN COMPANIES TODAY OUTSOURCE

ABOUT 52 PERCENT OF THEIR
LOGISTICS REQUIREMENT TO 3 PL
COMPANIES .
THE 3 PL INDUSTRY HAS ACHIEVED
MASSIVE GROWTH IN THE LAST DECADE
AND GROWING AT ABOUT 20 PERCENT.
THE NUMBER OF EMPLOYEES IN THE
LOGISTICS SECTOR IN INDIA IS
ESTIMATED AT 4.5 MILLION AND THE
NUMBERS ARE GROWING

The Major Logistics

Sectors and the
Challengers

 THE LOGISTICS SECTOR IS HEAVILY

DEPENDENT
ON
ROADS,RAIL,SEAPORTS,AIRPORTS,WAREH
OUSING ETC AND THE INFRASTRUCTURE
IN THESE SECTORS REQUIRE MASSIVE
IMPROVEMENTS.
LOGISTICS
COSTS
IN
INDIA
ARE
ESTIMATED AT ABOUT 13-14 PERCENT OF
INDIA'S GDP AS AGAINST 7-8 PERCENT IN
DEVELOPED COUNTRIES.
AS PER WORLD BANK 2011 LOGISTICS
SURVEY INDIA RANKS IN THE 46 TH
POSITION
AMONG
155
COUNTRIES
SURVEYED WHICH IS RATHER POOR AND
UNSATISFACTORY.

 INDIA'S RATING HAS DROPPED

BECAUSE OF MAJOR INEFFICIENCIES
IN THE LOGISTICS SECTOR
VIZ.ROADS,RAIL,PORTS,WAREHOUSI
NG, COMPLEX TAX STRUCTURE,
CONGESTION AND BOTTLE NECKS,
STRIKES AND WORK STOPPAGES,
LOW RATE OF TECHNOLOGY
ADOPTION, POOR SKILLS OF
LOGISTICS PERSONNEL ETC.

ROAD TRANSPORT

 INDIA HAS THE SECOND LARGEST

ROAD NETWORK IN THE WORLD OF
ABOUT 4.2 MILLION KMS.
GOODS ARE MAINLY TRANSPORTED
BY ROAD AND RAIL IN INDIA WITH
ROAD TRANSPORT CARRYING ABOUT
65 PERCENT AND RAIL ABOUT 30
PERCENT.
FREIGHT MOVEMENT GRADUALLY
SHIFTING FROM RAIL TO ROAD AS
ROAD TRANSPORT OFFERS
FLEXIBILITY, DOOR TO DOOR
MOVEMENTS AND SEVERAL OTHER

 HOWEVER THE CHALLENGERS ARE:

NATIONAL HIGHWAYS CONSTITUTE ONLY
ABOUT 2 PERCENT OF THE ROAD NETWORK
OF 4.3 MILLION KMS WITH A HEAVY
TRAFFIC FLOW OF 40 PERCENT.
POOR CONDITION OF ROADS LEADING TO
TRAFFIC CONGESTION AND EXCESS FUEL
CONSUMPTION
AVERAGE SPEED OF TRUCKS IS ONLY ABOUT
25 KMS PER HOUR. AVERAGE DISTANCE
COVERED 250 KMS PER DAY COMPARED TO
800 KMS IN DEVELOPED COUNTRIES.

 OVERLOADING OF TRUCKS TO INCREASE

PROFITS RESULTING IN DAMAGE TO ROADS
AND VEHICLES, REDUCES SPEED, CAUSES
CONGESTION AND ACCIDENTS
MULTIPLE CHECK POINTS-AT STATE
BORDERS, PAYMENT OF TOLLS,RTO
INSPECTIONS,OCTROI,POLICE CHECK ETC
ETC

TRUCKS AT STATE BORDERS HAVE TO WAIT

FROM 4 HRS TO 26 HRS TO GET THE
NECESSARY CLEARANCE WHILE IN CHINA IT
TAKES 15 MINS AND IN EUROPE FEWER
MINS.

 TAXATION-MULTIPLE TAXES, VARIATION OF

TAXES ACROSS STATES RESULTING IN HIGH
COSTS AND EXCESSIVE DOCUMENTATION.
UNATTRACTIVE WORKING CONDITIONS
POOR PAY SCALES, POOR OR NON EXISTENT
MANPOWER POLICIES, MALPRACTICES ,LONG
HRS OF WORK ETC HAVE CAUSED SEVERE
SHORTAGE OF DRIVERS AND CLEANERS.
ROAD TRANSPORT INDUSTRY IS HIGHLY
UNORGANIZED WITH LARGE NO OF PLAYERS
OWNING LESS THAN 5 TRUCKS.
HEAVY COMPETITION WITH LOW MARGINS,
POOR WAGES, MAINTENANCE etc.

Road transport-Way forward

THE NHDP PROGRAMME TO DEVELOP NATIONAL
HIGHWAYS-GOLDEN QUADRILATERAL, EASTWEST,NORTH-SOUTH AND OTHER CONNECTING
EXPRESSWAYS HAVE TO BE SPEEDED UP.
LIKEWISE STATES MUST UPGRADE THEIR ROADS.
PPP SCHEME FOR DEVELOPMENT OF ROADS
NEEDS CHANGES
REDUCE BURDEN OF MULTIPLE TAXES BY
IMPLEMENTING GST
REDUCE MULTIPLE CHECK POINTS AT BORDERS
RATIONALIZE TOLL PRICING FOR FREQUENT AND
HEAVY USERs

 Safety-govt to enforce safety

regulations, driver licensing, improve
working conditions of employees etc
Hinterland connectivity between
ports and cargo centres to be
actively developed.
Encourage investments to build
world class roads to enable higher
speed and greater load capacity
Introduce electronic toll collection at

RAILWAYS

RAILWAYS
Second
Largest in
in world
world spanning
Second
Largest
spanning65000kms
65000kms
Operates 19000 trains daily transporting 2.6
mt of goods and 23 million passengers.

Operates 19000 trains daily transporting 2.6

mt of goods and 23 million passengers.
Railways carry about 30 percent of freight

Railways
carry
about 30 percent of freight
Passenger
traffics enjoys priority over
freight

Passenger traffics enjoys priority over

To divert cargo from road to rail Dedicated
freight
rail corridors are being developed on the
west and east coast.

To divert cargo from road to rail Dedicated

rail corridors are being developed on the

 Eastern corridor from Ludhina to

Dankuni in West Bengal and Western
corridor from Dadri to Mumbai
DRCs will create additional freight
capacity, establish time-tabled
freight services with guaranteed
transit time and better service
quality
Adoption of high-end technology to
track freight

 Reduction in unit cost of

transportation by speeding up
freight train operations and
increasing productivity.
Increase in the rail share of freight
from the present 30 percent to 50
percent
Total Segregation of freight and
Passenger lines for focussed
approach.

Rail Transport- Challengers

Rail freight tariffs are high to subsidize
passenger traffic
Transit times are long and uncertain.
Priority given to Passenger trains
Rail terminals used for loading and
unloading inadequate with poor quality
Railways are inflexible and bureaucratic
Poor customer service
Container freights are hiked often to
discourage private agencies from
operating freight trains

 Railways prefer customers who can

provide full wagon loads
Special wagons for carrying different
types of cargoes not available.
Privatization has not made much
headway.

WAY FORWARD
Create adequate freight carrying
capacity with ability to carry different
types of cargoes
Develop additional DFC North-South
Delhi-Chennai, East-West- KolkotaMumbai
Improve quality of services to world
standards
Improve connectivity between
ports,road networks and terminals to
provide intermodal services for first and
last mile delivery

 Develop warehousing and Logistics

parks alongside railway lines to
facilitate direct loading/unloading
operations
Rationalization of freight structure
to encourage freight movement
Encourage privatisation
Increase use of IT enabled services
Give top priority for export cargoes
Operate scheduled freight services
guaranteeing transit time

INDIA
PORTS AND SEA TRANSPORT

 India has along coastline of about

7500 kms with 13 major ports and
187 non-major ports
95percent of India's overseas trade
carried by sea transport
Major ports handled 545 mt in 201213 and 350 mt by non-major ports
Cargoes handled include petroleum
products,iron
ore,coal,fertilizers,containers
Container traffic is growing and
indian ports currently handle about 9
million Teus.

 Port capacity expected to increase

from 1020 mt to 3200 mt in 2020.
Govt have approved several projects
involving foreign and domestic
investments.
In 2012-13,32port projects have
been approved incl 13 PPP,13 non
PPP and 6 captive projects.
Several private ports are emerging
such as

The Challengers
Major Ports have to be modernized
and become more customer oriented
Waiting time for ships is still about
3/4 days compared to few hrs in
international ports
Ports often suffer congestion and
evacuation bottle necks
Draft restrictions are impeding
handling of large ships. Dredging
contracts take long time to get
approval.

 Lack of proper connectivity to

inland areas is slowing down the
evacuation of cargoes
Major ports are overstaffed and
suffer from Unionization
Labour productivity is poor
High costs and poor productivity
are diverting foreign ships to call
at neighbouring ports.
Major ports governed by TAMP
tariffs while non-major ports are
ruled by market driven forces

 The approach of TAMP has a negative

impact on profitability and Returns on
PPP projects
Coastal shipping accounts for only 8
percent of the total domestic movement
Inland waterways has not taken off due
to lack of draft,infrastructure,poor
connectivity etc
Countries such as Bangaldesh
,Germany,US and UK transport major
volumes via Inland Waterways.
Management of Indian ports suffer from
Bureaucracy and lack of customer
orientation

Ports Way forward

NMDP programme envisages investments of
USD 200 billion in developing 350 projects
These projects hopefully would increase
capacity and improve the standards of ports
Speedy implementation of PPP projects is
vital
Private sector has to be motivated to
develop cargo handling Berths,Container
terminals,CFS,drydocks etc etc
Restructure TAMP to Facilitate privatization
Tendering procedures to be simplified.

 Simplification of procedures and

documentation would enhance the
speed of handling
Develop infrastructure in line with
Global standards,
Increase competition through private
participation
Improve hinterland connectivity
through better roads,rail and Inland
waterways.
IT implementation should be faster
and cover many more areas.

THE AIR CARGO

INDUSTRY

 INDIA HAS 136 AIRPORTS BOTH DOMESTIC AND

INTERNATIONAL
AIR-CARGO TRAFFIC HAS INCREASED FROM 0.7
MT IN 1995-96 TO 2.7 MT IN 2011-12.
INTERNATIONAL 1.5MT AND DOMESTIC 0.8MT
THE PRESENT TREND INDICATES THAT
AIRCARGO TRAFFIC CAN INCREASE TO ABOUT 6
MT BY 2020.
AIR CARGO FORMS ONLY 1 PERCENT OF THE
TOTAL TRADE BUT ACCOUNTS FOR 30 PERCENT
OF VALUE.
INTERNATIONAL CARGO ACCOUNTS FOR TWOTHIRD VOLUME IS HANDLED AT
MUMBAI,DELHI,CHENNAI,BANGALORE AND
HYDERABAD.

 Besides Metros, the other areas which

are experiencing significant growth are
Pune,Kozhicode,Cochin,Amritsar,Jaipur,
Guwathi,Agartala
Passenger traffic increased from 73
million in 2005 to 205 million in 201112
FDI has been allowed for development
of airports
Besides boosting investments in
existing metro airports 37 non metro
airports would be developed.

Challengers
Inadequate Cargo handling and
Storage Infrastructure
Most terminals do not offer
separate facilities for different
types of Cargo
Congestion at airports and delay
in clearance is a perennial
problem
Cold chain facilities to handle
perishable ,temperature
controlled and other sensitive

 Unlike ports, facilities have not

been developed to handle air
cargo in inland areas

Way Forward
Foreign airlines can invest 49
percent in Indian carriers
Airlines can directly import ATF
Expand the airport network and
provide connectivity to tier ll and
tier lll cities
Development of airfreight
stations just like icds/cfs
Round the clock operations by
customs

 Professional training
programmes to offer
programmes on
policy,regulations,operations,tec
hnology etc
Development of IT systems for
better connectivity and
information flow between all
agencies.

WAREHOUSING
Warehousing is a major link in
Logistics and forms 20 % of the
Logistics market
This industry is growing at about
35% annually
About 92 % is dominated by
unorganized sector with small
godowns,unskilled labour and
outdated cargo handling
equipment
Agri-Warehousing is dominated

 With the growth of the manufacturing and

Retail,increasing International
trade,emergence of organized
Retail,Increasing domestic and Foreign
investments and 3 PL players ,the
warehousinghas become a major business
today.
Warehouses today are being modernized with
better storage and layout management and
fully supported by IT systems.
It has take various forms today such as
Logistics parks,SEZ,CFS etc and the capacity
is increasing

Challengers
There is an acute shortage of
good warehousing space.
Warehouses owned by Govt
agencies are old and
Leaking.Millions of tonnes of
farm produce are rotting
because of lack of warehousing
space.
Warehouses at ports,airports
and railway terminals are
congested.

 India is the second largest

producer of fruits and
vegetables but lot of it is wasted
because of lack of cold storage.
Poor infrastructure
Fragmented market with
unorganized players
Power shortage and increasing
power costs
Lack of expertise in planning and
warehousing techniques
Lack of IT penetration

Way Forward
Warehousing capacity has to be
increased with construction of
modern warehouses with full IT
backing
Govt warehouses require
immediate renovation to fully
protect the farm produce
More govt intervention ,
regulations and initiatives are
required to expand and grow this
activity

 FCI has rolled out a PPP scheme to

construct warehouses to increase
capacity from 97 mt to 4.5 mt
Hub and Spoke model to be developed
with smaller warehouses at agri- centres
and larger warehouses near ports and at
major mundies and consumption centres.
IT systems need to be injected at all
warehouses
A modern technologically aided,
integrated warehousing and cold chain
infrastructure is the need of the hour.

THANK YOU