Post on 06-Apr-2018
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3PL Sector in India
Presentation on 3PL Sector 6th July
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Presentation on 3PL Sector 6th July
Definition of 3PL (Third Party Logistics)?
An arrangement in which a firm with long and varied supply chainsoutsources it logistical operations to one or more specialist firms, the 3PLprovider.
Why 3rd Party Logistics ?
1. Definition & reason for outsourcing
Cost Effectiveness / Reduced capital investment
Improve delivery performance
Higher customer satisfaction
Focus on core competency
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Presentation on 3PL Sector 6th July
2-1. 3PL Market in India
3 PL services in India is still at developing stage, due to lack ofproper of infrastructure, low capital investment, lack of operatingknowledge & unawareness of the benefits to the user.
Asset based : Trucks,warehouses, vessels, CFS, etc
Non asset based : No
infrastructure in place
Market Comprisesof 2 majorsegments
3PL market in India is expected to achieve exponentialgrowth in coming years due to investment/return &advantage it offers to the stakeholders.
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2-2. 3PL Market in India
Presentation on 3PL Sector 6th July
Logistics cost in India is around 13 % of the GDP, incomparison to developed countries where its around 6-8%,thus suggesting inefficiency in the sector in India.
4642
1850
1000
2000
3000
4000
5000
2014
Logistics
3PL
Market share of logistics inIndia is expected to be aroundRs. 4642 Bn by 2014 and 185Bn for 3PL services.
Logistics share is expected togrow by 8% Y-Y basis, whereas
3PL is expected to grow 3 timesfaster (i.e., @24 %)
Source : CII Press Release
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2-2. 3PL Market in India
Presentation on 3PL Sector 6th July
9
40
57
80
0 50 100
Japan
USA
Europe
India80%
60%
40%
20%
0%
Share of 3PL market
Low share of 3PL services in thetotal logistics market.
Complete supply chainsolution (domestic +
international)
Beginning of 3PL byproviding limited valueaddition
Basic logisticsfulfillment
Source KPMG Analysis 2010
Evolution of 3PL
Market
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3. Major 3PL Players in India
Presentation on 3PL Sector 6th July
Gati DRS Logistics
Balmer Lawrie
OM Logistics
SICAL Logistics
TCI Logistics
All Cargo Global Logistics
TVS Logistics
Domestic
DHL
Maersk
Panalpina
APL TNT
UPS
FedEx
DB Schenker
International
Source : General Trade Views; Not based onvolume or sales data.
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4-1. Future of 3PL in India
Cargo traffic trend to continue
& expected to grow at 8-10% at CAGR over the next 5 years
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4-2. Future of 3PL in India
Presentation on 3PL Sector 6th July
0 10000 20000 30000 40000 50000
XI th Five Year plan
XII th Five Year Plan
24540
48934
INR Bn.
Infrastructure spend of Govt. of India as per 5 yearsPlans.
Source : Planning Commission
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4-3. Future of 3PL in India
Presentation on 3PL Sector 6th July
Enhanced focus on logisticsparks & free trade zones
Growth In FMCG, Auto,Pharma & Retain sectors
Growth in Infrastructuresector
Investment by internationalplayers in the sector
Factors facilitating
growth in 3PLSector
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4-4. Future of 3PL in India
Presentation on 3PL Sector 6th July
Organic Growth
Companies expanding bysetting up newinfrastructure capabilitieslike warehousing, truckfleets, CFS. Example ofsuch Indian company isAll Cargo Global Logistics
InorganicGrowth
Companies acquiringother major logisticsplayers to expand in themarket. Examples are ofHitachi Transport Systemacquiring FlyjackLogistics in India.
Both Indian & Multinationorganization are adoptingthis strategy.
Private Equity
PE funds are investing inIndia due to theexponential returns thesectors offers . PE deals ofmore than $350 millionwere stuck during 2010,with major VC investingin India.
Indian companies are alsoacquiring other logisticsplayers abroad.
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5. Challenges
Presentation on 3PL Sector 6th July
2%
98%
Total Revenue
Revenue ofTop 10Players
Rest oftransport& logistics
Fragmented Sector
Lack ofexpertise &
poor
infrastructure
Higherlogistics cost
Unbalanced marketstructure
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I appreciate the role of 3PL logistics & the
benefits it has brought to our organization.That said, I believe we return to our corecompetency, which is beating people & takingtheir money.
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Thank You