3PL Presenttion

8/2/2019 3PL Presenttion

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3PL Sector in India

Presentation on 3PL Sector 6th July


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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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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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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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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


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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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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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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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


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

3PL Presenttion

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