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Indian Third Party Logistics (3PL) Market: Trends & Opportunities [2013-18]

Third party Logistics Market - IndiaScope of the Report The report titled Indian Third Party logistics (3PL) Market: Trends & Opportunities (2013-18) analyzes the sizing and growth of the 3PL market and also presents the market size and projects its future growth rate. The major trends observed in the Indian 3PL market have been assessed in this report. The growth of the Indian logistics sector, the spread of cold chain storages across India and PE investments in the logistics sector have also been analyzed in the report. The report further discusses various factors driving the Indian 3PL market in addition to profiling the major companies operating in this market along with their business strategies and expansion plans.

Company CoverageGati LogisticsTransport Corporation of India Limited (TCI)Container Corporation of India Limited (CONCOR)Allcargo Logistics LimitedAegis Logistics Limited

Executive Summary

With the consistent growth of the automotive, consumer retail, healthcare and other major industries, which depend on the services of third-party logistics (3PLs) to source and distribute their products and raw materials, the Indian 3PL market holds immense potential in the overall logistics industry. There have been some positive improvements in the logistics infrastructure in the recent past enabling the 3PL providers to offer integrated transportation and warehousing services and have better control and deliver better services.

The key trigger for the growth of 3PL market in India could be the introduction of Goods and Service Tax (GST). Currently the tax structure in India is very complex which requires manufacturers to pay a number of taxes; however, the introduction of GST is likely to reduce this tax burden. A number of factors that contribute to the market growth include rapid globalization, 100% FDI in cold chain segment and private equity investment. With the advent of foreign direct investment (FDI) in the retail sector in India, the logistics market is projected to register its positive effects in the long run. However, this market is faced with a number of challenges in the form of lack of transparency between 3PL providers and customers, and the different business processes followed by different industries.Third party Logistics Market - IndiaIndian Third Party Logistics Market size: overview

Indian Third party logistics market has been consistent over the past few years, but it is expected to show a tremendous change in the next few years. Growth of the sector is backed by investment in infrastructure, globalization of manufacturing systems.

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Indian 3PL Market, 2008-12E (US$ Billion)Indian 3PL Market Forecast, 2013-18 (US$ Billion) Market size of Indian third party logistics industry in 2018 is expected to reach to US$..billion from US$ billion in 2012 by growing at a CAGR of%. Growth in the industry is due to trade growth, investment.

Indian Third Party logistics Market Share

Current Share of organized logistics player in the market is. and it is expected to reach. With a CAGR of.

Market size of Indian logistics industry in 2018 is expected to reach to US$..billion from US$ billion in 2012 by growing at a CAGR of%.Share of organized logistics players in 2013 vs 2020MIndian Logistics Market Size Forecast, 2013-18 (US$ Billion)

Indian 3PL Market, 2008-12E (US$ Billion)Market TrendsTechnological advancement.

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Warehouses- adding value to the system

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PE investment in logistics segment.

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6Table of Contents1. Executive Summary

2. 3PL Market: An Overview2.1 Segments of 3PL2.1.1 Transportation2.1.2 Warehousing2.1.3 Cross docking2.1.4 Inventory management2.1.5 Packaging2.1.6 Freight forward2.2 Classification of 3PL2.2.1 Standard 3PL Provider2.2.2 Service Developer2.2.3 The Customer Adapter2.2.4 The Customer Developer2.3 Advantages of using Third Party Logistics

3. Indian 3PL Market: Sizing and Growth3.1 3PL Usage in India3.2 Indian Logistics Market Size3.2.1 Expenditure on Logistics3.3Indian 3PL Market Size3.3.1 Penetration of 3PL in key countries3.4 Cold Chain Storage Market of India3.5 Market Share Analysis: Indian 3PL market3.5.1 By Competitors3.6 Market Share of Logistics Market3.6.1 Logistics spending structure3.6.2 Structure of Outsourced Logistics3.6.3 Share of organized logistics players3.6.4 Elements of Logistics cost3.6.5 Share of Logistics cost (as percentage) in GDP of different economies3.6.6 By share of logistics cost in total sale of different Industries

4. Market Dynamics4.1 Growth drivers4.1.1 Increase in Demand for Cold chain storage4.1.2 Investment in the Infrastructure Sector4.1.3 Robust trade Growth4.1.4 Globalization of Manufacturing Systems4.1.5 Entry of Indian blue chip companies in Retail4.1.6 Streamlining of Tax Structure4.1.7 FDI in RetailTable of Contents4.2 Challenges of 3PL4.2.1 Inadequate infrastructure4.2.2 Lack of Openness between 3PL Providers and Customers4.2.3 Multiplicity of Manufacturing Location4.2.4 Providing Services in Varied Business Verticals4.3 Trends in 3PL4.3.1 PE investment in logistics segment4.3.2 Other Companies Entering in the Logistics Market4.3.3 Technological Advancement4.3.4 Warehouses- adding value to the system

5. Competitive Landscape6. Company Profiles

6.1 GATI Limited6.1.1 Business overview6.1.2 Financial overview6.1.3Business Strategy

6.2 Transport Corporation of India Limited (TCI)6.2.1 Business overview6.2.2 Financial overview6.2.3Business strategy

6.3 Container Corporation of India Limited (CONCOR)6.3.1 Business overview 6.3.2 Financial overview6.3.3 Business strategies

6.4 Allcargo Logistics Limited6.4.1 Business overview6.4.2 Financial overview6.4.3 Business strategies

6.5 Aegis Logistics Ltd6.5.1Business overview6.5.2 Financial overview6.5.3 Business strategiesList of ChartsFigure 1: Relationship of 3PL provider with Manufacturer, Supplier and BuyerFigure 2: Segments of 3PL MarketFigure 3: Users of 3PL in IndiaFigure 4: Market Size of Indian Logistics Market, FY10- FY13E (US$ Billions)Figure 5: Indian Logistics Market Size Forecast, FY14-FY18 (US$ Billions)Figure 6: Forecasted Expenditure on Logistics Cost in India, 2013-18 (US$ Billions)Figure 7: Market Size of Indian 3PL Market, 2008-12E (US$ Billions)Figure 8: Indian 3PL Market Size Forecast, 2013-18 (US$ Billions)Figure 9: Penetration of 3PL Market in Key Countries, 2012-13Figure 10: Market Size of Indian Cold Chain Storage Market, 2009-12 (US$ Billions)Figure 11: Indian Cold Chain Storage Market Size Forecast, 2013-18 (US$ Billions)Figure 12: Revenue of different 3PL Provider Companies in India, FY 2012-13 (US$ Billions)Figure 13: Logistics Spending Structure of India; In-house and Outsourced Logistics, 2012-13Figure 14: Structure (Percentage share) of Outsourced Logistics in India, 2012-13Figure 15: Market Share of Organized Logistics Players in India, FY 13E and FY 20EFigure 16: Percentage Share of Elements of Logistics Cost in India, 2012-13Figure 17: Percentage Share of Logistics cost in Total Sales of Different Industries, 2012-13Figure 18: Distribution of Cold Chain Capacity by Commodity, 2011Figure 19: Share of PE Investment in Logistics Segment in India, FY 2011-FY 2013YTD (US$ Million)Table 1: Share of Logistics Cost Globally and the Share of 3PL, (2012-13)Table 2: Logistics Cost of Different CountriesTable 3: Indian PE Investments in Logistics MarketTable 4: Companies under Organized Logistics SegmentTable 5: Major Companies Operating across the Market SegmentList of figuresFigure 20: Technological Advancement in Indian 3PL MarketFigure 21: Revenue of Gati Limited, FY 2010 - FY 2013E (US$ Billions)Figure 22: Revenue of TCI, FY 2010- FY 13 (US$ Billions)Figure 23: Revenue of CONCOR, FY 2010- FY 13 (US$ Billions)Figure 24: Revenue of Allcargo Logistics Limited, FY 2011- FY 13 (US$ Billions)Figure 25: Revenue of Aegis Logistics Limited, FY 2011- FY 13 (US$ Billions)Chart4

Sheet1Advantages of using 3PLcost reduction78reduction in capital investment70enhance operational flexbility66access to new technology54access to upto date techniques & expertise 52access to new market48focus on core business46Indian 3PL Market Size ForecastUS$ billion2252013258.75258.752014297.56297.56252015342.20342.1968752016393.53393.526406252017452.56452.55536718752018520.44520.4386722656Organised retail US $ billion2007-085602008-098402009-1011762010-1116462011-12214020092.272010320113.5620124.0920134.90820145.889620157.06752Levels of Improvement desiredTransportation infrastructure78Access to funding75Regulatory Framework70Innovation50Quality of manpower35IT Adoption30US$ Billion2013E3.002014E3.692015E4.612016E5.772017E7.212018E9.01Transportation35%Inventory25%Losses14%packaging11%warehousing9%Customer's shopping6%Penetration of 3PL in key countriesJapan80%US57%Europe40%India9%3PL market size in India2009201060,000,000,00020112012201380,000,000,0002014150,000,000,0002015190,000,000,000201620172018US$ billion20092.2720102.8420113.5520124.43Cold chain storage market EstimatedUS$ billionUS$ billion2013E5.542014E6.932015E8.662016E10.822017E13.532018E16.910.01842spending on logistics4000000000000.00US$ Billion201273680000000.00US$ BillionUS$ Billion2013E92100000000.009.212014E115125000000.0011.512015E143906250000.0014.392016E179882812500.0017.982017E224853515625.0022.482018E281066894531.2528.11US$ Billion2013E9.212014E11.512015E14.392016E17.982017E22.482018E28.11value of 3Pl marketUS$ Billion20101.220110.7920121.812103 E2.2444US$ Billion2.242014E2.242016E2.7102017E3.392018E4.13Size of 3PL market:US$ Billion2010602011902012E92US$ Billion2013E802014E1502015E1902016E2222017E2622018E312

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Sheet1Advantages of using 3PLcost reduction78reduction in capital investment70enhance operational flexbility66access to new technology54access to upto date techniques & expertise 52access to new market48focus on core business46Indian 3PL Market Size ForecastUS$ billion2252013258.75258.752014297.56297.56252015342.20342.1968752016393.53393.526406252017452.56452.55536718752018520.44520.4386722656Organised retail US $ billion2007-085602008-098402009-1011762010-1116462011-12214020092.272010320113.5620124.0920134.90820145.889620157.06752Levels of Improvement desiredTransportation infrastructure78Access to funding75Regulatory Framework70Innovation50Quality of manpower35IT Adoption30US$ Billion2013E3.002014E3.692015E4.612016E5.772017E7.212018E9.01Transportation35%Inventory25%Losses14%packaging11%warehousing9%Customer's shopping6%Penetration of 3PL in key countriesJapan80%US57%Europe40%India9%3PL market size in India2009201060,000,000,00020112012201380,000,000,0002014150,000,000,0002015190,000,000,000201620172018US$ billion20092.2720102.8420113.5520124.43Cold chain storage market EstimatedUS$ billionUS$ billion2013E5.542014E6.932015E8.662016E10.822017E13.532018E16.910.01842spending on logistics4000000000000.00US$ Billion201273680000000.00US$ BillionUS$ Billion2013E92100000000.009.212014E115125000000.0011.512015E143906250000.0014.392016E179882812500.0017.982017E224853515625.0022.482018E281066894531.2528.11US$ Billion2013E9.212014E11.512015E14.392016E17.982017E22.482018E28.11value of 3Pl marketUS$ Billion20101.220110.7920121.812103 E2.2444US$ Billion2.242014E2.242016E2.7102017E3.392018E4.13Size of 3PL market:US$ Billion200890200995201060201190201292US$ Billion2013E802014E1502015E1902016E2222017E2622018E312

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Sheet1Advantages of using 3PLcost reduction78reduction in capital investment70enhance operational flexbility66access to new technology54access to upto date techniques & expertise 52access to new market48focus on core business46Indian 3PL Market Size ForecastUS$ billion2252013258.75258.752014297.56297.56252015342.20342.1968752016393.53393.526406252017452.56452.55536718752018520.44520.4386722656Organised retail US $ billion2007-085602008-098402009-1011762010-1116462011-12214020092.272010320113.5620124.0920134.90820145.889620157.06752Levels of Improvement desiredTransportation infrastructure78Access to funding75Regulatory Framework70Innovation50Quality of manpower35IT Adoption30US$ Billion2013E3.002014E3.692015E4.612016E5.772017E7.212018E9.01Transportation35%Inventory25%Losses14%packaging11%warehousing9%Customer's shopping6%Penetration of 3PL in key countriesJapan80%US57%Europe40%India9%3PL market size in India2009201060,000,000,00020112012201380,000,000,0002014150,000,000,0002015190,000,000,000201620172018US$ billion20092.2720102.8420113.5520124.43Cold chain storage market EstimatedUS$ billionUS$ billion2013E5.542014E6.932015E8.662016E10.822017E13.532018E16.910.01842spending on logistics4000000000000.00US$ Billion201273680000000.00US$ BillionUS$ Billion2013E92100000000.009.212014E115125000000.0011.512015E143906250000.0014.392016E179882812500.0017.982017E224853515625.0022.482018E281066894531.2528.11US$ Billion2013E9.212014E11.512015E14.392016E17.982017E22.482018E28.11value of 3Pl marketUS$ Billion20101.220110.7920121.812103 E2.2444US$ Billion2.242014E2.242016E2.7102017E3.392018E4.13Size of 3PL market:US$ Billion200890200995201060201190201292US$ Billion2013E802014E1502015E1902016E2222017E2622018E31236000000000750960000870000000001602540000800000000001473600000value of 3PL marketUS$ Billion20101.220111.52012E1.81US$ Billion2013E4.62014e5.522015E5.5662016E5.6122017E5.6582018E5.842indian logisticsUS$ Billion201012520112252012E258.75US$ Billion2013E297.562014E342.202015E393.532016E452.562017E520.442018E598.50PE investment in logisticsUS$ million2011195.262012280.872013 YTD58.01share of logistics cost in total sales for various industrieshttp://www.indiabiznews.com/?q=node/2283Name of industry% share of logistics cost in total share for various industriesCement15%Steel6%F&B5%FMCG4%Durables4%Apparel3%Auto3%600000000001315800000logistics spending structureIn-house logistics46%outsourced54%outsourced logisticsorganised10%unorganised44%elements of logistics costTransportation35%Inventories25%Losses14%Packaging11%Handling & warehousing9%growth of organised logistics2013E6%0.068.74440175752014E0.0660.079.61884193322015E0.07260.072016E0.079860.082017E0.0878460.092018E0.09663060.102019E0.106293660.112020E0.1169230260.120.69share of organised logistics players2013E6%2020E12%

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Sheet1Advantages of using 3PLcost reduction78reduction in capital investment70enhance operational flexbility66access to new technology54access to upto date techniques & expertise 52access to new market48focus on core business46Indian 3PL Market Size ForecastUS$ billion2252013258.75258.752014297.56297.56252015342.20342.1968752016393.53393.526406252017452.56452.55536718752018520.44520.4386722656Organised retail US $ billion2007-085602008-098402009-1011762010-1116462011-12214020092.272010320113.5620124.0920134.90820145.889620157.06752Levels of Improvement desiredTransportation infrastructure78Access to funding75Regulatory Framework70Innovation50Quality of manpower35IT Adoption30US$ Billion2013E3.002014E3.692015E4.612016E5.772017E7.212018E9.01Transportation35%Inventory25%Losses14%packaging11%warehousing9%Customer's shopping6%Penetration of 3PL in key countriesJapan80%US57%Europe40%India9%3PL market size in India2009201060,000,000,00020112012201380,000,000,0002014150,000,000,0002015190,000,000,000201620172018US$ billion20092.2720102.8420113.5520124.43Cold chain storage market EstimatedUS$ billionUS$ billion2013E5.542014E6.932015E8.662016E10.822017E13.532018E16.910.01842spending on logistics4000000000000.00US$ Billion201273680000000.00US$ BillionUS$ Billion2013E92100000000.009.212014E115125000000.0011.512015E143906250000.0014.392016E179882812500.0017.982017E224853515625.0022.482018E281066894531.2528.11US$ Billion2013E9.212014E11.512015E14.392016E17.982017E22.482018E28.11value of 3Pl marketUS$ Billion20101.220110.7920121.812103 E2.2444US$ Billion2.242014E2.242016E2.7102017E3.392018E4.13Size of 3PL market:US$ Billion200890200995201060201190201292US$ Billion2013E802014E1502015E1902016E2222017E2622018E31236000000000750960000870000000001602540000800000000001473600000value of 3PL marketUS$ Billion20101.220111.52012E1.81US$ Billion2013E4.62014e5.522015E5.5662016E5.6122017E5.6582018E5.842indian logisticsUS$ Billion201012520112252012E258.75US$ BillionFY14E270FY15E324FY16E389FY17E467FY18E560

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