For the complete report, get in touch with us at : info@netscribes.com Logistics services marketIndiais on a growth trajectory owing to rapid globalization and 100% FDI allowance. Logistics services broadly encompass courier services, freight forwarding, third party logistics and reverse logistics. Growth in international trade is providing huge impetus to the demand for the logistics services. Growing competition in retail sector transcends need of reverse logistics to handle returns and store upgradation. Third party logistics providers need to customize their services and charge competitive rates to benefit from retail boom inIndia. E-tailing has revamped shopping experience by transforming it from a weekend to anytime activity that is having a favorable impact on courier and reverse logistics sectors. The report begins with an introduction section, classifying the logistics sector into transportation, storage and logistics services. The logistics services being the focus of the report are then segmented into four parts including Courier Services, Freight Forwarding, 3PL and Reverse Logistics. These four segments are then briefly introduced. The next section briefly illustrates the evolution of the four segments of logistics services that are considered in the report. Market overview section provides a brief snapshot of the logistics services market inIndia. To begin with, the share of logistics services in overall logistics market is shown, followed by the market size and growth in logistics services market inIndia. A brief snapshot of the overall market attractiveness of each of the segments has also been incorporated. The share and growth of the four segments in logistics services is also shown. Subsequently a brief overview followed by its market size & growth of the four segments are demonstrated. Advantages of Services section deals with the beneficial features of the four segments considered in the logistics services.

1. Insert Cover Image using Slide Master View
Do not distort
Logistics Services Market – India
February 2013

2. Executive Summary
• Share of Logistics Services in Total Logistics Market in India was estimated to be c1% in 2011 and is expected to
Market reach c6% in 2016
• Logistics services accounts for around c% of the total logistics market
Drivers
LE
• Courier, Freight Forwarding, 3PL and Reverse Logistics exhibits significant market potential in India
Challenges
Drivers &
Challenges
– Global Trade Boom
MP
– Rapid Economic Growth & FDI in Logistics
– Growth in Retail Sector
– Poor Infrastructure
– Lack of Skilled Manpower
SA
– Warehouse Space Deficit
– Rise in e‐Tailing
– Increased demand for Consumer Electronics and Durables
– Expansion of Auto & Auto Components Sector
 Enterprise Application – ERP, eBizNET –  Identification Technology – Barcode, RFID
SC suite, Vin eRetail  Material Handling Technology ‐ Automated
Technology  Communication Technology ‐ Global Guided Vehicle System (AGVS) , Information
Adoption Positioning System (GPS) Tracking
directed System
 Software Solution Providing Companies
 Technology Adoption by Leading Players
Major Players
Player A Player B Player C
Competition
Player D Player E Player F
Player G Player H Player I
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 2

3. •Introduction
•Evolution
•Market Overview
LE
MP
•Advantages of Services
•Segments & Features
SA
•Distribution Channel
•Role of Regulatory Bodies
•Drivers & Challenges
•Key Issues
•Technology Adoption
•Competitive Landscape
•Transactions
•Strategic Recommendations
•Appendix
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 3

4. Logistics sector primarily deals in transportation and storage
operations and is significantly aided by logistics services
LOGISTICS
SECTOR
TRANSPORTATION STORAGE LOGISTIC SERVICES
Container Rail Transport
Road Transport
Warehousing
Logistics Park
LE Courier Service
Express Logistics
MPInland Container Depot Freight Forwarding
Coastal Shipping
Air Cargo S A Container Freight Station
Cold Chain
3PL/ 4PL
Reverse Logistics
Project Logistics Port
Logistics services also include import/export management, customs clearance, clearance, freight forwarding, customer
service, rate negotiation, order processing, assembly/installation, distribution, order fulfillment, reverse logistics,
consulting services that include distribution network planning, site selection for facility location, fleet management,
freight consolidation and logistics audit amongst others
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 4

5. Logistics Services ‐ Segmentation
Logistics services has significant business earning potential in business services that require courier; movement of heavy
commodities that require freight forwarding, outsourcing of logistics activities by business houses as well as logistics companies
that boosts 3PL and returns processing that involve key sectors that has built a favorable position for reverse logistics
Courier Service Freight Forwarding
Services of any kind relating to the carriage,
consolidation, storage, handling, packing or
A Courier is a person or company that is engaged in distribution of the goods with ancillary and advisory
E
transporting, dispatching and delivering messages, services in connection therewith, including but not
L
packages and mail at some extra cost limited to customs and fiscal matters, declaring the
P
goods for official purposes, procuring insurance of
the goods and collecting or procuring payment or
M
documents relating to the goods
Third Party Logistics (3PL)
Third Party Logistics (3PL) involves outsourcing
activities related to logistics and distribution
S A Reverse Logistics
Process of planning, implementing, and controlling
efficient and cost effective flow of raw materials, in‐
process inventory, finished goods and related
3PL industry includes Logistics Solution Providers information, from point of consumption to point of
(LSPs) and shippers whose business processes they origin, for purpose of recapturing value of proper
support. disposal
Key Courier Service Freight Forwarding 3PL Reverse Logistics
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 5

6. Evolution of Courier Services
LE 1980s
P
1977
SAM 1837
Organized Courier Courier industry
came into existence started gaining
momentum
Introduction of
1774 India Post Office
Act
Indian Postal System
came into existence
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 6

7. The logistics market is growing at a CAGR of X% of which c%
is comprised by Services segment
Logistics Market Size and Growth Logistics Market – Segmentation
INR units
c%
25 X6
X%
X5
20
X4 a%
E
15 X3
X2
L
X1
10
b%
P
5
0
20‐‐ 20‐‐ 20‐‐e 20‐‐e 20‐‐e
SAM20‐‐e
Share of Logistics Services in Total Logistics Market in India
A B C
20‐‐ 20‐‐ 20‐‐e 20‐‐e 20‐‐e 20‐‐e
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 7

8. Growing business opportunities in India is driving the need
for time bound service
Market Overview – India Courier Market Size and Growth – India
• The courier/ express courier market is highly fragmented INR units
with numerous small unorganized players
400 f
LE
• The market was valued at INR a units in 20‐‐ and is A% e
expected to reach ~INR f units in FY 20‐‐ 300 d
P
c
• The market is estimated to maintain a steady growth 200 b
a
rate of around A% between 20‐‐ to 20‐‐
• With over a lakh of pin codes in India, only around
10,000 are connected by courier service
SAM
 It thus makes the lesser known players very significant in the
market as they take upon the responsibility of providing last
mile service for large organized players
100
0
20‐‐ 20‐‐ 20‐‐e 20‐‐e 20‐‐e 20‐‐e
Revenue Split of Courier Sector
Express/ Courier Categories in India
Government o%
India Post
Administered
Global Integrators UPS, FedEx, TNT and DHL
n% m%
Large Indian
Companies Blue Dart, DTDC, First Flight etc.
Other Small Courier M N O
Regional Players
Companies
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 8

9. Freight forwarders’ exhaustive understanding of transport
business ensures cost effectiveness for its clients
Freight Forwarder
• Forwarders offer flexibility with customers
• Able to customize their services to specific requirements because they do not need to fill planes or ships each day
• Freight Forwarders have competitive advantage on the human resources front
LE
• Many forwarders reward employees based on area level profitability, attracting more quality people to freight forwarding
• Better understanding of cost and effectiveness of transportation business
P
• Forwarders are far less complex because they focus on the basic factors such as sales, terminal operations, procurement of transport
services etc
Factors Favoring Freight Forwarder
S AM
• Control of the end‐user customer as asset
• Flexibility of services across different carriers and
operating air and container carriers increasingly
modes of transportation
rely on forwarders wholesaling capacity
• Ability to provide better supply chain information • Ability to attract and retain high quality clients due
to customers to higher growth and profitability
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 9

10. SAMPLE
3PL Providers – Types Based on their Functions
Types of 3PL Providers
Based on Transportation Based on Warehouse/Distribution Based on Forwarder
• Services extend beyond transportation
to offer a comprehensive set of
• Very independent middlemen with
logistics offerings • Many have former warehouse and/or forwarder roles
• Leveraged 3PL service providers use distribution experience • Non‐asset owners that provide a wide
assets of other firms
• Examples: DSC Logistics, USCO, Exel, range of logistics services
• Non‐leveraged 3PLs use assets
Caterpillar Logistics, IBM • Examples: AEI, Kuehne & Nagle, Fritz,
belonging solely to the parent firm
Circle, C. H. Robinson, Hub Group
• Examples: Ryder, Schneider Logistics,
FedEx Logistics, UPS Logistics
Based on Financial Issues Based on Information
• Provide freight payment and auditing,
• Significant growth and development in
cost accounting and control, and tools
this category of Internet‐based,
for monitoring, booking, tracking,
business‐to‐business, electronic
tracing, and managing inventory
markets for transportation and logistics
• Examples: Cass Information Systems,
services
CTC, GE Information Services,
• Examples: Transplace, Nistevo
FleetBoston
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 10

11. 3PL – Distribution Channel
SAMPLE
Transaction Transaction
Third Third
Retailer/
Supplier Party Logistics Manufacturer Party Logistics
Buyers
Provider Provider
Logistics Services Logistics Services
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 11

12. Role of Government: Summary
Ensuring
Competitiveness
P LE
Laws
SAM Role
of
Infrastructure Development
Government
India Post Office Foreign Direct
Amendment Bill Investment
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 12

13. Drivers ‐ Summary
SAMPLE
Common Drivers Key Impact
Global Trade Boom
Rapid Economic Growth & FDI in Logistics
Growth in Retail Sector
Rise in e‐Tailing
Increased demand for Consumer Electronics and Durables
Expansion of Auto & Auto Components Sector
Freight Reverse
Courier 3PL
Forwarding Logistics
Government
Financial Diversification into High cost of Concern for
Institutions Logistics Business Logistics in India Sustainability
Dependence on
Courier Garnering Customer
Improved Satisfaction
Phased
Transportation
implementation of Growing
Growing Business Infrastructure
VAT Consumerism
of Private Telecom
Sector among Indians
Rising Economic Viability
Competitiveness Government
Seasonal Business of Reusing Goods
among Domestic Infrastructure
Upsurge Due to
Companies Initiatives Growth of Pharma
Occasions
Market
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 13

14. Reverse logistics is plagued by mismanaged returns, high
SAMPLE
distribution cost and retailer‐manufacturer conflicts
Mismanagement • Retail outlets and showrooms are often not systematic enough in smoothly
in Segregating segregating the articles to be sent to manufacturers that leads to loss of time for
Returns reverse logistics service providers
• Transportation, warehousing, distribution and inventory management are the
major cost components of reverse logistics
• If companies find that total costs associated with reclamation
High Distribution
efforts exceed total costs of new materials or products, firms would have no
Key Costs financial incentive for implementing a reverse logistics system
Issues • So it becomes very important for logistics service providers to provide services at
competitive rates
• Conflicts arise between retailers and manufacturers due to reasons involved in
product recall
Retailer‐ • Retailers perceive that every product damages happen in the process of logistics
or in the production process, so every product demands full compensation
Manufacturer • Manufacturers, on the other hand, perceive that recalled products may be
Conflict damaged by retailers, so every recalled product should not be given full
compensation
• The above factors result in confusion of reverse logistics process initiation
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 14

15. 3PL is witnessing better productivity with rising investments
in A, B, C & new supply chain tools
• IT implementation comprises
LE
P
mainly ZZ packages
• A is one of the most popular IT
M
tool being used across logistics
S A
Applications
Enterprise
• Communication plays a key
• Direct data entry into
role in logistics business
computer
• Ensures speed and
• Technologies x, Y, Z, Identification Communication
Competitive accuracy in customer
magnetic strip and A are Technology Technology
Advantage service
used
• Helps in bringing in
• Used for tracking rail cars
competitiveness among
and carton movement
Handling
Material service providers
• Loading, unloading and storage of
goods in warehouses
• Reduces need of labor force
• Automated material handling
becomes useful in areas of
hazardous goods
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 15

16. Public: Domestic Company – Player A (1/3)
Company Information Offices and Centres – India
Player A
Corporate Address 5th Road, 6th Street,
City A – 700 xxx
Tel No. 91 22 6679 xxxx
Fax No. 91 22 6679 xxxx
Website
Year of Incorporation
www.playera.com
19‐‐
LE
Ticker Symbol
Stock Exchange
53xxxx (BSE)
MP
Bombay Stock Exchange City X Head Office
Products and Services
Category S
Products/Services
A Key People
Name Designation
Person A MD
Person B CFO
Person C CEO
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 16

17. Financial Snapshot
SAMPLE
Public: Domestic Company ‐ Player A (2/3)
Key Ratios
y‐o‐y change
Total Income Net Profit/Loss INR mn Particulars 2012 2011 2010 2009
INR mn (2012‐11)
35,858.4 Profitability Ratios
40,000 34,381.0 3000
28,803.1 Operating Margin ‐0.19 8.78% 8.97% 7.61% 8.01%
30,000 Net Margin 0.06 6.54% 6.48% 5.76% 6.24%
20,836.4 2000
20,000 Profit Before Tax Margin ‐0.15 8.44% 8.58% 7.77% 8.13%
1000 Return on Equity 0.48 15.42% 14.94% 13.74% 13.07%
10,000
Return on Capital Employed 1.52 14.71% 13.18% 13.53% 13.95%
0 0 Return on Working Capital ‐11023.91
‐
50.35% 46.22% 36.95%
10973.56%
2009 2010 2011 2012 Return on Assets 0.32 8.27% 7.95% 8.07% 8.62%
Financial Summary Return on Fixed Assets 4.55 16.76% 12.20% 19.68% 23.75%
Cost Ratios
• The company earned a net profit of INR 2,345.9 mn in FY 2012, as
Operating costs (% of Sales) 0.19 91.11% 90.92% 92.34% 91.90%
compared to net profit of INR 2,228.7 mn in FY 2011
Administration costs (% of
17.24 17.24% 0.00% 6.07% 8.64%
• The company reported total income of INR 35,858.4 mn in FY 2012, Sales)
registering an increase of 4.3% over FY 2011 Interest costs (% of Sales) 0.03 1.65% 1.62% 0.68% 1.12%
• The company earned an operating margin of 8.78% in FY 2012, a Liquidity Ratios
decrease of 0.19 percentage points over FY 2011 Current Ratio ‐48.94% 1.00 1.95 1.82 2.13
Cash Ratio ‐43.37% 0.26 0.47 0.63 0.83
• The company reported debt to equity ratio of 0.86 in FY 2012, a
Leverage Ratios
decrease of 1.63% over FY 2011
Debt to Equity Ratio ‐1.63% 0.86 0.88 0.70 0.52
Key Financial Performance Indicators Debt to Capital Ratio ‐20.15% 0.27 0.34 0.24 0.17
Interest Coverage Ratio ‐3.90% 5.39 5.61 11.27 7.20
Indicators Value (09/01/2013) Efficiency Ratios
Market Capitalization (INR mn) xx Fixed Asset Turnover 35.97% 2.53 1.86 3.39 3.77
Total Enterprise Value (INR mn) xx Asset Turnover 3.01% 1.25 1.21 1.39 1.37
Current Asset Turnover 36.26% 5.10 3.74 3.59 3.11
EPS (INR) xx
Working Capital Turnover ‐21677.73% ‐1655.74 7.67 7.97 5.86
PE Ratio (Absolute) xx
Capital Employed Turnover 2.23% 2.33 2.28 2.37 2.07
Improved Decline
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 17

18. Public: Domestic Company – Player A (3/3)
Key Business Segments Key Geographic Segments
A B
100% 100%
X X
50% 50%
0%
20‐‐
P
0%
LE 20‐‐
Business Highlights
Description News
SAM
Overview
Recent Transactions
Reverse Logistics
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 18

19. Appendix
SAMPLE
Ratio Calculations Ratio Calculations
(Operating Current Assets / Current
Operating Margin Current Ratio
Income/Revenues)*100 Liabilities
Net Margin (Net Profit / Revenues) *100 {(Cash & Bank Balance +
Cash Ratio Marketable Securities) / Current
(Income Before Tax / Revenues Liabilities)}
Profit Before Tax Margin
*100
Total Liabilities / Shareholders
Debt to Equity
(Net Income / Shareholders Equity
Return on Equity (ROE)
Equity)*100
{Total Debt / (Shareholders
Debt to Capital Ratio
EBIT / (Total Assets – Current Equity + Total Debt)}
Return on Capital (ROCE)
Liabilities)*100
Interest Coverage Ratio EBIT / Interest Expense
Return on Working Capital (EBIT / Working Capital) *100
Fixed Asset Turnover Sales / Fixed Assets
Return on Assets (EBIT / Total Assets)*100
Asset Turnover Sales / Total Assets
Return on Fixed Assets (EBIT / Fixed Assets) *100
(Operating Expenses / Sales) Current Asset Turnover Sales / Current Assets
Operating Costs (% of Sales)
*100
Administration Costs (% of (Administrative Expenses / Sales) Working Capital Turnover Sales / Working Capital
Sales) *100
Sales / (Shareholders Equity +
Capital Employed Turnover
Interest Costs (% of Sales) (Interest Expenses / Sales) *100 Total Debt)
LOGISTICS SERVICES MARKET IN INDIA 2013.PPT 19

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