Four-S India Logistics Report 2011-2012
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Executive Summary
The logistics and supply chain sector came to the fore in the late '90s as the manufacturing sector struggled to cope with the opening up of the Indian economy. While the 2000-10 decade saw the initial change, we believe that this decade will unlock the true growth potential of this sector.
Several fundamentals are now in place to drive profitable growth for companies in the sector. Factors like surging external trade, steady expansion of modern retail, tax reforms, agriculture reforms, and increasingly ambitious sector companies – all point to a period of sustained value creation by this sector.
Despite the size and promise of the sector, we find considerable ignorance about the sector. In this report, Four-S aims to provide a detailed sector framework to help analyse the sector. We list out the various key segments, their size and growth rates, key issues driving each segment, and the key players therein. We believe our research would be of use to companies looking for reliable set of analytical numbers upon which to base their growth plans.
Summary of key points:
Executive Summary
The logistics and supply chain sector came to the fore in the late '90s as the manufacturing sector struggled to cope with the opening up of the Indian economy. While the 2000-10 decade saw the initial change, we believe that this decade will unlock the true growth potential of this sector.
Several fundamentals are now in place to drive profitable growth for companies in the sector. Factors like surging external trade, steady expansion of modern retail, tax reforms, agriculture reforms, and increasingly ambitious sector companies – all point to a period of sustained value creation by this sector.
Despite the size and promise of the sector, we find considerable ignorance about the sector. In this report, Four-S aims to provide a detailed sector framework to help analyse the sector. We list out the various key segments, their size and growth rates, key issues driving each segment, and the key players therein. We believe our research would be of use to companies looking for reliable set of analytical numbers upon which to base their growth plans.
Summary of key points:
- Our estimate of the size of Logistics and Supply Chain sector is close to US$150bn business (US$142bn in 2010-11), amounting to 8.9% of India's nominal GDP; against estimates pegging the sector at 12- 14% of India's GDP.
- The sector will grow in line with the GDP to reach a size of around US$ 223bn by 2014-15, and US$ 376bn by 2019-20. The sector will need, directly or indirectly, investment of around US$14bn per annum during 2011-20. This indicates scope of greater PE investment in this sector.
- Amongst modes of transport, road is the biggest segment, with revenues of around US$56bn in 2010-11. While the largest share is garnered by commodity trucking, there are profitable niches – such as express, containerised cargo, and less than truck load.
- Private sector has struggled in rail, given difficult operating environment. However, given the strong growth potential of container transport, the sector is attractive over the long term Air cargo and shipping are less attractive given the inability of Indian companies to compete with MNC majors here.
- Amongst business sectors, EXIM logistics, with a size of US$30bn, and 15-20% growth, offers the most attractive segment in logistics.
- Agri logistics has fast emerged as an area with attractive business economics. With government intent on increasing private sector participation in agri value chain, this segment should attract new players.
- We find Indian manufacturing is ready for outsourcing logistics requirements, and demand for contract logistics/3PL should increase strongly. Leading logistics services are keenly targeting such business.
- We believe there is considerable scope for consolidation in Indian logistics industry, given the extent of market fragmentation. At the same time, new entrants shall continue to enter, given the industry structure is far from settled. We also expect MNCs to target the Indian market for more aggressively than they have so far. While most leading MNCs are present in India, their presence is not in line with their global scale.
EXECUTIVE SUMMARY
1 SECTOR OVERVIEW
2 ROAD
3. RAIL
4 AIR CARGO
5 SHIPPING
6 EXIM LOGISTICS
7 WAREHOUSING
8 3PL
9 IT IN SUPPLY CHAIN AND LOGISTICS
10 COMPANY PROFILES
11 GLOBAL SCENARIO
12 GLOSSARY
1 SECTOR OVERVIEW
2 ROAD
3. RAIL
4 AIR CARGO
5 SHIPPING
6 EXIM LOGISTICS
7 WAREHOUSING
8 3PL
9 IT IN SUPPLY CHAIN AND LOGISTICS
10 COMPANY PROFILES
11 GLOBAL SCENARIO
12 GLOSSARY
