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Analysis of Logistics Industry

The document analyzes the global and Indian logistics industries. It discusses that the global logistics industry is estimated to be worth $300 billion annually, while the Indian logistics industry's annual costs are about 14% of India's GDP. Some key issues facing the Indian industry are a lack of infrastructure, skills, and technology usage. The top companies globally are UPS, FedEx, and DHL, while in India they are TNT Express, AFL, DHL, and Blue Dart. The industry is growing rapidly but still faces challenges around integration, costs, and talent retention.

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Ankita Verma
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313 views

Analysis of Logistics Industry

The document analyzes the global and Indian logistics industries. It discusses that the global logistics industry is estimated to be worth $300 billion annually, while the Indian logistics industry's annual costs are about 14% of India's GDP. Some key issues facing the Indian industry are a lack of infrastructure, skills, and technology usage. The top companies globally are UPS, FedEx, and DHL, while in India they are TNT Express, AFL, DHL, and Blue Dart. The industry is growing rapidly but still faces challenges around integration, costs, and talent retention.

Uploaded by

Ankita Verma
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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ANALYSIS OF

LOGISTICS INDUSTRY

By:- Group No. 7


Prijo Mathew
Sivaramakrishnan
Suvrata Nandy
Gaurav Verma
Dhinesh Kumar
Objectives
• To study in detail about the Global Logistics Industry

• To study in detail about the Indian Logistics Industry

• To find out the areas where Logistics Industry in India


is lacking

• To compare the Global Companies (UPS, FedEx and


DHL) with the Indian Logistics Companies (Gati, DTDC
and First Flight)
INTRODUCTION
• What is Logistics?

 Management of flow of goods and services

 Integration of information, transportation, inventory etc

 Reduces operational cost, improve delivery performance and


enhance customer satisfaction

 The importance of logistics is growing and now the logistics


industry has become highly recognized in the global scenario
Evolution of Logistics Industry
Global Scenario of Logistics Industry

• Size of the Global Logistics Industry

 Annual logistics cost of the world is USD 3.5 trillion


 The annual logistics cost in any country varies in between 9%
to 20% of their GDP
 Logistics market in US is 10% of its annual logistics cost
 Global Logistics industry is estimated to be worth USD 300
billion
 Largest service providers are located in Europe
 Biggest market - US
Current Status and Dynamics of the Industry

• Issues – Pricing pressures, high cost of operations, low returns


on investment, hiring and retaining talent and pressure from
the client

• Role of service providers have become very important to


complete supply chain integration

• Demand for third party logistics providers is increasing

• Growing at a very fast rate in South-East Asian countries


Technology used in Global Logistics Industry

• Warehouse Management System


• Material Flow Control System
• Portal Application
• Automated Storage and Retrieval Systems
• Mini Trolley System
• Lean lift Systems
• Sorter Systems
• Light to Pick
• RFID
• Global Positioning Systems
MERGERS AND ACQUISITIONS
• Tibbett & Britten Group acquired by Excel logistics
• Deutsche Post World Net took over Excel Logistics
• Bax Global was taken over by Deutsche Bahn
• A.P. Moller acquired P&O Nedlloyd
• Apollo Management took over TNT Logistics

 Pros of Mergers and Acquisitions


• Growth and Coverage

 Cons of Mergers and Acquisitions


• Integration of two different cultures
Top 10 Logistics Companies In The World
• UPS
• FedEx
• DHL
• A.P. Moeller
• Nippon Express
• Ryder
• TNT Post Group
• Expeditors
• Panalpina
• Exel
Indian Scenario of Logistics Industry

 Size of Indian Logistics Industry

• Annual logistics cost is estimated to be 14% of GDP


• Out of the total cost 99% is accounted by the unorganized
sector
• Is growing at a very fast pace of 12% per annum
• The market is estimated to be around USD 100 billion
• Has generated employment for 43 million people in the
industry
• Third Party Logistics Solutions is expected to grow at 16% in
2011
Indian Logistics Industry
Pie Chart showing the total logistics
market of India
Current Status and Problems in the Industry
• Is in nascent stage
• Is considered to be a weak link of Indian Economy
• Is a high cost, low margin business
• Economies of scale is absent
• High tax
• Lack of trust and awareness among the Indian shippers
• Poor physical and communication infrastructure
• Stiff competition from international firms
• Lack of skilled labor
• Lack of technology being used
Positive Trends Seen In Indian Logistics Industry

• The industry has got the desired momentum


• Logistics has become a strategic source of competitive
advantage
• Huge investments are made by foreign investors
• High investments are made by government to improve the
infrastructure
• Companies are re-engineeering their supply chain to make it
more responsive
• India is becoming the auto hub of the world
Technology Used By Indian Logistics Industry

• Online Tracking
• E-pod
• E-mail Updates
• Toll Free Number with 24 x 7 service
• SMS Updates
• Enterprise Management System
• Business Accounting Software
• Customer Relationship Management Software
Top Logistics Companies In India
• TNT Express
• AFL
• DHL
• Blue Dart
• Gati
• Safexpress
• Ashok Leyland
• Agarwal Packers & Movers
• DTDC
• First Flight
Corporate Social Responsibility

• Green Mission
• Reduction in Greenhouse gas emission
• Carbon Tax
• Fun Bus
• Driver Training Centre
• AIDS Awareness
Market Analysis
• Pricing Strategy

 Driver of the performance of the Logistics Industry


 Is decided on the basis of the competitive strategy
 Overall Trade off: Increase firm profits
 Everyday low pricing versus high low pricing
 Fixed prices versus menu pricing

• Nature of the Market

 Industry is homogenous
 It is a oligopoly Industry
 HH Index is 1004 (UPS, FedEx, DHL, A.P. Moeller)
 Concentration Ratio of the first four companies in India is around 65% (TNT Express,
AFL, DHL and Blue Dart)
Advertising Strategies
• Press
• Media
• Print Ads
• Interviews
• Internet

Promotion
• Efficient Distribution Network
• Provides Supply Chain Solutions
Comparison of Logistics Industry of the
Developed Countries and the Developing
Countries
Graph showing the LPI of India and its
Neighborhood Countries
Diagram showing the LPI of the different countries and is ranked
accordingly. India is ranked at the 47th position
Company overview of DHL

• DHL is the global market leader in international


express, overland transport and air freight,
• It is also the world's No.1 in ocean freight and contract
logistics,
• DHL's international network links almost 220 countries
and territories worldwide,
• Around 285,000 employees are dedicated to providing
fast and reliable services that exceed customer’s
expectations in 120,000 destinations in all continents
Overview of Gati
• Gati Limited is a pioneer and leader in the Express
Distribution and Supply Chain Solutions in India
• It has grown into an organization with more than 3500
employees and a turnover of Rs 630 crore
• 19 Million Packages Handled Annually
• 1 Million Sft Warehouse Space
• Capabilities to Deliver at 622 out of 626 districts of India
• Best of the IT in Logistics Industry
PESTL Analysis

 P – Political and L - Legal

 Legal permit to cross the national and state borders


 Excise duties and tariffs are charged
 Regulations for transporting dangerous goods by
Road – ADR
Air- ICAO
Sea – MCA
 Motor Vehicle Act
E - Economic
• The annual logistics cost in any country varies in between 9%
to 20% of their GDP (US being 9% and India being 14%)
• In India, logistics industry has created employment for more
than 43 million people
• Exchange Rate and Demand Risk

S – Social
• E-Business
• Switch to alternative fuels to reduce emission of green house
gases

T – Technology
• Logistics Industry has become technology driven industry
Porter’s Five Force Model
 Threat of Entry – High

 Intensity of rivalry – High

 Substitutes – Medium

 Bargaining Power of Buyers – High

 Bargaining Power of Suppliers - High


Future Prospects of Indian Logistics
Industry
• Many large Indian corporate are been attracted by the
potential of this sector
• Large express cargo and courier companies such as Transport
Corporation of India (TCI) have started logistics operations
• Growing interest among entrepreneurs to venture into this
business
• Indian shippers are gradually becoming more aware of the
benefits of logistics outsourcing
• Faster growth rate of Indian GDP
• The Indian government has focused on infrastructure
development
• In India, 100% FDI is allowed in logistics
“ Let’s Do A Business To Make A
Difference”

THANK YOU

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