November 2009
Executive Summary
Total market for Third Party Logistics (3PL) in India is valued at INR XX bn in 20- -; Estimated to reach INR YY bn in 20- Third party logistics (3PL) market in India is at a nascent stage Market comprises of two major segments:
Asset-based 3PLs Non-asset based 3PLs
Market
a% of companies are outsourcing services like supply chain management and warehousing
Drivers:
Economic Growth High Cost of Logistics in India Phased Implementation of VAT Government Infrastructure Initiatives Growth in Auto Sector Growth in Retail Sector
LE P M A S
Challenges:
Infrastructure Congestion Lack of Trust and Awareness
Competition
Market comprises of public sector, private sector and foreign companies Majority of 3PL Players are currently providing disintegrated services Many 3PL players are investing to become end-to-end integrated players Express cargo and courier companies like Compan1, Company 2 and Company 3 also offer 3PL services
Introduction Market Overview Drivers & Challenges Competition PE Investments Key Developments
3PL firm acts as a third party facilitators between manufacturers and the buyers
Transaction Transaction
Supplier
Manufacturer
Retailer/ Buyers
Logistics is a three-way relationship between a buyer, the supplier of goods and a logistics service provider
Logistics
First Party
Shipper or Supplier
Second Party
Buyer
Third Party
Firm acting as a Middleman
Third-party Logistics is the use of an outside company to perform all or part of the firms materials management and product distribution function
Third party logistics is fast gaining popularity in the Indian logistics market
Overview
Third party logistics (3PL) market in India is at a nascent stage Companies in textile, automotive, pharmaceutical, manufacturing, retail and FMCG sectors are increasingly opting to outsource their logistics requirements to specialized service providers
Engineering, automotive & retail sectors were top revenue earners
LE P M A S
% Non-Asset Based
20 15 10 5 0
Z b% Y X
2005
2008
2012e
3PL Market comprises of two segments Asset Based Own some of the assets used in supply chain management which often include trucks, distribution centres and warehouses
2005
2008
2012e
Drivers
Economic growth High cost of Logistics in India Phased implementation of VAT Government Infrastructure Initiatives Growth in Auto Sector Growth in Retail Sector
Challenges
Infrastructure Congestion Lack of Trust and Awareness
There are few 3PL players with nationwide presence with majority of players providing disintegrated services
Competition Overview
Currently, there are only a few 3PL players with a national network Majority of 3PL Players are currently providing disintegrated services
3PL service providers are expanding their basket of services as companies are now looking beyond transportation of their products and raw materials Many 3PL players are investing to become end-toend integrated players
Indian corporates like Company 4 and Company 5 have entered the 3PL business
LE P M A S
1998
2008
Market Structure
3PL Market
Large express cargo and courier companies like Company 1, Company 2 and Company 3 have also started offering 3PL services
Foreign Companies
Company 1
Company 2
LE P M A S
Company 3