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Logistics and
Warehousing
Global Logistics and Warehousing Industry
Singapore 4.14
Hong Kong SAR,
China 4.07
Japan 3.97
Top 10 LPI economies in Asia 2016
United Arab
Emirates 3.94
South Korea 3.72
Taiwan 3.70
China 3.66
Israel 3.66
Qatar 3.60
Malaysia 3.43
Global Scenario- Logistics
3
Source: Connecting to Compete- Trade Logistics in the Global Economy 2014, World Bank
Third Party Logistics field is a multi-layer or
multi-tier integration of various players who
have the niche segment expertise to manage
any one or many functions of Logistics.
4.23
4.22
4.20
4.19
4.14
4.11
4.10
4.07
4.07
3.99
Top 10 LPI economies 2016
Source: Logistics Performance Index 2014 and
2016, World Bank
LPI Score 2016
2.35 4.23
(1 is the lowest score
5 is the highest score)
19%
18%
14%11%
8%
8%
5%
5%
2%10%
Manufacturing
Retail & Consumer Products
Health Care &PharmaceuticalsFood & Beverages
Telecommunications, Internet& ElectronicsUtilities, Energy & Extraction
Automotive
Construction & Machinery
Business Support & Logistics
Others
Source: 2016 Third-Party Logistics
Study- The State of Logistics
Outsourcing
Supply Chain Management encompasses, planning, design,
control and implementation of all
business processes related to
procurement, manufacturing,
distribution and sales order fulfillment
functions of a business.
Logistics therefore is an integral
component of Supply Chain
Management.
Source: Logistics Performance Index 2014 and 2016, World Bank
3PL Industry Representation
Value Chain- Logistics and Warehousing
01
02
03
0405
Seller
Product is kept available here. Consumer may connect virtually through e- retail or may physically select the product
Logistics teams
Multiple competency centres including inventory planners, freight managers responsible for transportation leg and warehousing operations experts. inventory and warehousing operations including documentation control and statutory process compliance
Distribution centers
Pull materials for forward stocking points
Order fulfillment teams
Responsible for sales order processing who place orders on the distribution centers
Customer
Product is kept available here. Consumer may connect virtually through e- retail or may physically select the product
RAIL
WATER
ROAD
Trucking and related services
like fleet management, network
optimisation, route planning, etc.
VALUE ADDED
SERVICESTRANSPORTATION WAREHOUSING
AIR
Railway Cargo Transportation
Shipping operations, port
development, breakwater
projects, dredging, pillotage and
towage, ship repair
Air cargo operations
Ownership and operation of
cargo aircraft
Warehousing related to inland
distribution whether inbound or
outbound LTL transhipment
centres
ICD/ CFS
Multimodal warehouses
ICD/ CFS
Port based warehousing tank
farms
Air cargo transhipment
warehouse
Services bundled around road
transportation and warehousing
like express, cold chain, track
and trace, packaging, consulting
Services bundled around rail
transportation and warehousing
like dedicated rail container
services, stuffing/ de-stuffing,
consolidation
Freight forwarding
Freight consolidation
Customs clearance
Express and Courier Services
Freight Forwarding
Customs Clearance
Source: IDD GoK, ILFS; Pre‐feasibility Study for Development of Logistics Park near Devanahalli, Bangalore on PPP Basis
VALUE CHAIN ACROSS MODES
UPCOMING TECH
INNOVATIONS IN
WAREHOUSING
Global Scenario- Warehousing
4
► EDI communication
► Drone usage
► RFID technology
► On- demand warehousing
► Cloud Storage
► Omni channel operations
► Automation
► Battery technology
► Construction design
advancements
Source: http://www.transport-exhibitions.com/Market-
Insights/Cold-Chain/Archive/10-warehousing-tech-
innovations-from-around-the-wo
Warehouse is a planned space for the storage and handling of goods and
material Source: Fritz Institute
Boeing Everett
Factory, Washington
4.3 mn sq. ft.
John Deere
Warehouse, Illinois
2.6 mn sq. ft.
Target Import
Warehouse,
Washington
2 mn sq. ft.
Jean-Luc Lagardere
Plant, France
1.32 mn sq. ft.
Amazon Fulfilment
Centre, Dunfermline,
Scotland
1 mn sq.ft.
Shaw National
Distribution Centre,
Lancashire, England
1 mn sq.ft
Morrisons Distribution
Centre, Sittingbourne,
England
919,443 sq. ft
Tesco Distribution
Centre, Ireland
863,000 square feet
Meyer Werft,
Germany
678,000 square feet
Tesla Warehouse,
California
500,000 sq.ft
COMMERCIAL
In rented building used for business
GOVERNMENT OR STATE
Ports, harbours, others in
common in emergency
situations
TRANSIT
For temporary storage
of goods destined for
different locations
BONDED
WAREHOUSES
Pre-positioned
stock is often
held in bonded
warehouses so
that export is
quick and can
sometimes be
stored for long
periods
OPEN STORAGE
Not ideal for
perishable products
but in emergencies,
sometimes the only
alternative
SPACE OWNED AND
MANAGED by the
organisation
PRE-FABRICATED
WAREHOUSES
No permanent structures available
and is common practice in
emergencies
Source:
http://dlca.logcluster.org/display/LOG/Warehousing+and+Inv
entory+Management#WarehousingandInventoryManagemen
t-Definition
Source: https://www.avantauk.com/top-14-largest-warehouses-in-the-world/
TY
PE
S O
F W
AR
EH
OU
SE
S
PA
CE
TOP 10 LARGEST WAREHOUSES IN THE WORLD
Logistics and Warehousing Industry in India
India Scenario- Logistics
Source: Colliers International, 2015; From First Mile to Last
Mile Global Industrial & Logistics Trends
LOGISTICS INDUSTRY
► USD 160 billion currently, likely to touch USD 215 billion in the next two years
► Provides employment to more than 22 million people
► CAGR of 7.8% during the last five years
► India jumped to 35th rank in 2016 from 54th rank in 2014 in Global Ranking of the World Bank's 2016 Logistics Performance Index
► Government has included the sector in the Harmonised Master List of Infrastructure Subsector, facilitating credit flow, simplifying the process of approval for construction of multi modal logistics (parks) facilities, and encouraging market accountability through regulatory authority
Source: https://www.ibef.org/news/indias-logistics-sector-to-reach-usd-215-
bn-by-2020-survey
Challenges• High cost of logistics impacting competitiveness in
domestic and global market
• underdeveloped material handling infrastructure
• fragmented warehousing
• lack of seamless movement of goods across modes
Major Ports
Cargo Handling Airports
Source: Colliers International, 2015; From First Mile to Last Mile Global Industrial & Logistics Trends
Chennai Bangalore
Industrial Corridor
• Corridor with a length
of 348 miles between
the state of
Karnataka, Tamil
Nadu and Andhra
Pradesh.
Dedicated Freight
Corridors (DFC)
• Plan to construct two
DFCs, with a total length
of about 2,050 miles of
railway network
• Eastern corridor: From
Ludhiana to West Bengal,
passing through six states
• Western corridor: Starting
at Dadri to Mumbai,
passing through four
states
Delhi Mumbai Industrial Corridor
(DMIC)
• 928 mile industrial corridor
between Delhi and Mumbai
• Aims to have 12 mega industrial
zones of around 77 to 97 sq miles.
• Amritsar - Delhi Kolkata Industrial
Corridor (ADKIC) - area of 93-122
miles either side of the Eastern
Dedicated Freight Corridor (EDFC)
comprising a total length of 1,142
miles.
Logistics Corridors In
India
Ports in India
India Scenario
Airways, 0.1
Inland Waterways
Transportation, 0.2
Rail, 32.1
Road, 60.2
Coastal Shiping,
7.4
0 300 600 900
DelhiMumbaiChennai
BangaloreKolkata
HyderabadCochin
AhmedabadPune
Thiruvananthapuram
https://www.statista.com/statistics/589187/indian-airports-freight-traffic/
Modal Share in Freight (%)
Warehousing under Food Corporation of India (FCI)- 1800 mn sq. ft.
Industrial WH 86%
Agricultural WH 14%
Source: Indian Logistics Industry: Gaining Momentum- A Report on the Performance
and Emerging Trends in the Indian Logistics Industry; IBEF November 2013
Government organisations for
warehousing and logistics
► Food Corporation of India
► Central Warehousing
Corporation
Warehousing and
cold-storage
Freight and
passenger
transportation via
road, rail, air and water
Source: Indian Logistics Industry: Gaining Momnetum- A Report on the
Performance and Emerging Trends in the Indian Logistics Industry; IBEF
November 2013
Freight Traffic in 2016-17 (in '000 MT)
Modes for Freight Movement
Upcoming Projects► Modernisation of 35 non-metro airports, of which, 20 are complete and 15
are ongoing.
► Development of air-freight stations (AFS)► Container Corporation of India and Cargo Service Centre India Private
Limited- Plans to set up an AFS at Mulund in Mumbai, Ahmedabad,
Pune and other major locations
AIR
FREIGHT
CAGR of 8.5%
International Traffic 64%
Air cargo and Domestic
Cargo 36%
5.91 6.2413.68 14.04
2014-15 2015-16
Domestic International
Source: Hand Book on Civil Aviation Statistics 2015-16
965.361065
FY 16 FY 17
Cargo Capacity at Major
Ports (MMT)
3.44
4.01
FY 15
FY 17
Average Turnaround Time
(Days)
12 major ports
14,400 km of inland waterways
3,600 km are navigable by large vessels
55% being used
Maritime Agenda 2010-20 target port
capacity of 3,130 MT
647.43 MT of
cargo, showing a
CAGR of 6.79% in
FY 17PORTS
Source: IBEF, 2018; Ports
Phase I: Golden Quadrilateral (GQ) - connecting New Delhi, Kolkata, Mumbai and Chennai
Phase II: North South East West (NSEW) corridor connecting Srinagar, Kanyakumari, Porbandar and Silchar
Phase III: Four laning of the two laned roads connecting state capitals and important tier-II and tier-III cities to
the Golden Quadrilateral and NSEW corridor
Phase IV: Improvement of certain national highways
Phase V: Six laning of existing four-laned national highways
Phase VI: Development of expressways
Phase VII: Ring roads, by-passes and flyoversSource: NHAI
9
Modes for Freight Movement
Targets• 2,165 MT expected in FY20
• Eastern and Western freight corridors to be operational by FY20
• Target of freight market share of 50% by 2020 from 35% in FY09
0
10
20
Earnings from railway freight (in
US$ billion)
Highest CAGR of 4.4% from 1951 to
2011 registered by rural roads
Important projects of National
Highways Development
Programme
RAIL FREIGHT
1,107.1 MT freight transported
847.22 MT freight traffic
Major commodities: coal, iron,
steel, iron ore, food grains,
fertilizers, petroleum products
etc.
FY17
Source: Ministry of Railways, Vision
2020, Press Information Bureau,
Aranca Research
Source: IBEF, 2018; Railways
5.47 million kms of total road length
District and Rural Roads
95%Source: India Transport Report- Moving India to 2032; Planning
Commission, GoI, National Transport Development Policy Committee
Source: Ministry of Road Transport and Highways
(MoRTH) Annual Report 2016-17
National Highways
2% State Highways
3%
Road Network in India
Source: IBEF, 2018; Roads
ROADS
Government of India Initiatives
► 20 lakh silos to be built in the coming years
under the following processes: PPP with VGF
funding, non VGF model, State Governments
(MP and Punjab), CWCs, PFTs. States included
Punjab, Haryana, Rajasthan, AP, Telangana,
UP, Delhi, Maharashtra, Bihar, MP, Gujarat,
West Bengal, Odisha, Assam and Karnataka
► 33 silo contracts into FCI under PPP mode
► Operational since Nov
1989
► Operates the existing
network of 7 ICDs from
the Indian Railways
► Currently has a network
of 76 ICDs/CFSs in
India (69 terminals and 7
strategic tie-ups)
0
20,00,000
40,00,000
Total
International
Total International Domestic
Central Warehousing
CorporationCold Storages• 7645 cold storages with a
capacity of 34.95 million MT in the
country
• UP, Gujarat, Punjab, Maharashtra, AP
and Telangana have the largest
number of cold storages
• Karnataka has 198 cold storages
with a capacity of 5.68 lakh MTSource: Directorate of Marketing and Inspection (DMI) upto 2009,
National Horticulture Board (NHB), National Horticulture Mission
(NHM) & Ministry of Food Processing Industries (MoFPI
Food Corporation of IndiaStorage depots and silos, both owned and hired from Central
Warehousing Corporation, State Warehousing Corporations, State
Agencies and Private Parties for short term as well as for guaranteed
period under Private Entrepreneurs Guarantee Scheme
360.68 lakh tonne
capacity
61% utilized
Storage Capacity for
Central Pool Stocks
Other Agencies
56%
FCI
44%
Source: Website; Food Corporation of India
Physical Performance (TEUs) Container
Corporation of
India
Owned/ constructed
capacity- 77.59 lakh MT
► One of the biggest
public warehouse
operators
► Operating 432
Warehouses
across the country
► Storage capacity
of 9.96 MT
Source: CONCOR; Annual Report 2016-17
2016-17
Yearly average- 99.65 lakh MT
Capacity utilization- 74.53%
Source: Website; Central Warehousing Corporation
National Integrated Logistics Policy (proposed)
National Integrated Logistics Policy (proposed)Toreduce recurring losses by the government and improve capital efficiency by
► Implementing a balanced modal mix by increasing the share of rail in freight carriage to more than 45%
► Limiting of economic losses attributed to logistics to less than 4% GDP (USD 100 billion)
► Reducing energy consumption by 10 MTOE in 2020 and hence freight related greenhouse gas
emissions by around 20% from expected levels under current trajectory
► Achieving on time and in budget delivery of infrastructure projects, which requires an improvement
in project implementation relative to current performance.
Source: McKinsey & Company- Transforming the nation’s logistics infrastructure
Ways t
o T
ran
sfo
rm t
he S
ecto
r
Building the right network and ensuring flows on the right mode. An integrated mesh of 7
high density long distance corridors (rail and coastal waterways), 150 medium distance rail and
road connectors and about 700 last mile links
Creating enablers to maximize the efficient use of this network, which includes developing
15 to 20 logistics parks, providing standards for pallets and upgrading the skilled workforce
Extracting more from existing assets, e.g., by increasing the share of toll plazas with
electronic tolling, using stainless steel wagons with higher load carrying capacity, and increased
spend on maintenance of roads
Allocating more investment to rail and reallocating with roads and rail, with 50% more
allocation on rail transport, with increased spending on building high density traffic corridors,
connectors and last mile links
Coastal Freight Corridor
Rail Dedicated Freight Corridor
National Expressways
Last- mile Roads and Rail
Multi- modal logistics parks
Road Maintenance
Technology adoption
Logistics Skill Development
OBJECTIVES 2020
► Increase share of rail >45%
► Limit annual economic losses
to USD 100 billion (4% of 2020
GDP)
► Reduce emissions by 20%
from current trajectory
► Achieve on- time, on- budget
delivery of projects
PR
OG
RA
MM
ES
Karnataka’s Logistics and Warehousing Industry
12
Karnataka Scenario
Karnataka Warehousing Corporation
• Capacity is 16.32 lakh MTs
• Utilisation is 82.87%
• 133 Warehouse Centres
• 200 State Godowns
• 50 Central Godowns
• 54 Private Godowns
• 90 Rural Godowns
Food Corporation of India
Karnataka has 6.80 lakh tonnes of
storage capacity under FCI
warehouses and a utilization
percentage of 83%
Only State to have 2 industrial
corridors
► CBIC (Chennai-Bengaluru Industrial
Corridor)
► BMEC (Bengaluru- Mumbai
Economic Corridor)
Logistics and Warehousing
Infrastructure in Karnataka► Airports at Bengaluru & Mangaluru,
Mysore, Belagavi & Hubballi
► Minor Ports proposed at Shivamogga,
Kalburgi, Hassan & Ballari
► Regional Connectivity Scheme
► 19 Airports identified, MOU signed with
MOCA and AAI
► Mysore- Chennai and Vidyanagar and
Hyderabad started
► Bengaluru Signature Business Park &
Bengaluru International Convention Centers
► ICDs at Whitefield, Bengaluru in South and
Desur Belagavi in North; ICD at Belagola
under implementation
► FTWZ for Shipco Infrasructure over an area
of 120 acres
► CWCs at Belagavi and Dakshina Kannada
BENGALURU Chennai347 kms away
Mumbai980 kms
away
13
Karnataka Scenario
Imports from New Mangalore Port
Trust
Exports from New Mangalore Port
Trust
Year TEU Tonnage TEU Tonnage
2016-17 (Apr. to Nov.) 29,695 5,11,428 59,722 8,64,598
2017-18 (Apr. to Nov.) 35,413 6,15,297 70,590 1,07,569
Major Imports: Crude oil, LPG, Coal, Lime stone, timber, Fertilizer, phosphoric acid and liquid chemicals
Major Exports: Petroleum products, iron ore, Granite slabs, coffee, Cashew, Marine products and lead
products
Details Financial Year 2016 - 2017 Financial Year 2015 -
2016Growth
Cargo (MT) 319,344 291,920 9.4%
New Mangalore Port Trust
Bengaluru International Airport Limited
Upcoming Initiatives
The State Warehouse Corporation is creating 32,000 MT of planned scientific cold storage facilities in Bengaluru Urban, Bengaluru Rural, Mysuru, Kalaburagi, Vijayapura, Bagalkote and Bidar. O&M will be outsourced in PPP Basis
Karnataka provides Viability Gap Funding (VGF) for projects on PPP Mode
Separate Head of Account in State Budget “ Trade & Export Promotion” with annual spending of more than INR 100 Crores
Financial support for ICDs, CFSs, Logistic Parks, Pre & Post Harvest Tech Centers, Testing Facilities, Ware Housing, Airports & Sea Ports, Air Cargo Complex, Rail Network and Road Network
Feasibility Report underway for Model Logistic Park at Dabuspet, Bengaluru
ICD planned at Nanjangud, Mysuru district. Possession certificate acquired from KIADB
Flipkart to set up an integrated logistics park on the outskirts of Bengaluru of 1.5 million sq. feet, and shall employ 5000 people directly
Projects to promote Exports
Agency Capacity (MT)
Central Warehousing Corporation in Karnataka 5,78,436
Karnataka State Warehousing Corporation (KSWC) 15,19,380
KAPPEC 8,400
Food Corporation of India in Karnataka 2,36,000
Additional Warehousing Capacity &
Cold Storage (by end of March 2018)
25,00,000
40,000
Establishment of Modern Abattoirs in Urban Local
Bodies
Location Project Cost
(INR Crore)
Haveri 7
Davangere 4
Madikeri 9
Udupi 3
Koppal 6
Gadag 6
Ranebennur 5
Hubballi-
Dharwad
5
Ballari 10
Existing Abattoirs for Sheep and Goat
►Project cost- INR 2,655.86 Lakh
►Land- 20 acres
►Location- Cheelanahalli, Tumakuru District
Two major Cold Chain Facility for Export of Mango and other Horticulture Products,
Storage and Packing Facilities are completed in APMC Yard, Hubbali and KIADB,
Bagalkote by KAPPEC
COOLPORT at Bengaluru under ASIDE scheme
International Flower Auction Centre has been established with coordination from
Horticulture Department in Bengaluru
Cashew Technology Development Centre at Kumta in Uttara Kannada District
Upgradation / Modernization of infrastructure facility for Marine products in Tadadi
port, Kumta Taluk, Karwar District
Source: KSWC Bengaluru
Karnataka Scenario- Agri and Food Processing
Objectives
► To create sufficient infrastructure
facilities by both Government and
Private efforts to handle 5 - 10% of
India’s total cargo in Karnataka
Maritime waters in the days to come.
► To provide port facilities to promote
export oriented industries and port
based industries in the coastal
districts and hinterland
► To promote port based thermal power
plants by providing exclusive port
facilities to import different kinds of
fuels
► To decongest highways by providing
facilities for coastal shipping of
passengers and cargo traffic along the
West Coast of nearly 300 kms
► To promote tourism by providing
facilities for leisure and water sports
activities along the coast line
► To provide facilities to encourage ship
building, repairing, breaking and
manufacture of cranes and floating
crafts
► To facilitate optimum utilization of
the port infrastructure
► To enhance the potential of ports,
with Public and Private Participation.
Policy
Karnataka Minor Ports Development Policy 2014
Aim► To increase the share of state in the
Export and Import sector, both
nationally and internationally
► To increase business traffic by
providing efficient facilities and
services
Policy And Operational Strategy
► Private Participation
► Flexible Approach
► Institutional Coordination
Captive Ports
► Licensing of Captive Ports
► Procedure of Licensing
Commercial Ports
► Licensing of Commercial Ports
With the development of new ports with
modern handling facilities, many of these
minor ports are expected to emerge as
transshipment ports for Karnataka and
adjoining states for the rest of the country,
especially in building up international
trade
Policy- Karnataka Warehousing Act
Licensing of Warehouses
Methods for granting of licences, renewal, refusal and cancellation of licences
01
Duties of a Warehouseman
Details of the responsibilities for the maintenance of goods in the warehouse by the staff
02
Inspection and grading of goods
Guidelines for the measurement for the provision of licences, facilities given for weighing goods
03Warehouse Receipts
Guidelines for issuing and duplicating receipts
04
Miscellaneous
For other functions at a warehouse
05
Contact Details
20
Commissioner for Industrial
Development and
Directorate of Industries &
Commerce2nd Floor, Khanija Bhavan, No.49,Race
Course Road,
Bengaluru 560 001
Phone : 91-80-2238 6796,
Email:
Additional Chief Secretary to
Government
Commerce & Industries
Department106, 1st Floor, Vikasa Soudha,
Bengaluru - 560 001
Email: [email protected]
Managing Director
Karnataka Udyog Mitra3rd Floor, East Wing, Khanija Bhavan,
Race Course Road,
Bengaluru – 560 001
Phone : 91-80-2228 2392
Email: [email protected]
Chief Executive Officer
Invest Karnataka Forum3rd Floor, East Wing, Khanija Bhavan,
Race Course Road,
Bengaluru – 560 001
Phone : 91-80-2228 2392
Email: [email protected]
14
Funding Opportunities
Karnataka was a pioneer in funding the growth of IT industry through its KITVEN-1 and 2 funds.
Under its Innovate Karnataka initiative, the State Government would be providing financial support
equivalent to Rs 300 crore (46,153,846 USD) in the form of grant/equity through its various funds to
startups; micro and small enterprises in IT,BT, and other manufacturing sectors in the next four years
AGRI SECTOR
► Karnataka State Warehousing Corporation has taken about 663 Acres of
land on lease basis from Agriculture, Horticulture and Sericulture
Departments at 72 places. At these centres, about 12.50 Lakh MT capacity
scientific warehouses at a cost of Rs.650 crore will be constructed with
RKVY grants and loan from NABARD. Operations & maintenance of KSWC
warehouses will be taken up under PPP model for providing value added
services and better prices to farmers facilitating on-line warehouse based
sales of agricultural commodities
CC
► cc
CC
► cc
INDUSTRIAL POLICY
► Financial Assistance shall be provided to exporters whose annual turnover
is less than Rs. 5.00 crore for setting up of showrooms, warehouse,
displays in international department stores, publicity campaign, testing
charges, registration charges, brand promotion and assistance for
contesting antidumping litigations. The expenditure towards the above shall
be reimbursed to the extent of 50% of the cost subject to a maximum of
Rs.5.00 lakh.
CC
► cc
1
2
3
4
5
cc
► cc6* 1 USD = 65 INR
