Logistics in India
Case Abstract-
Logistics industry in India has seen a tremendous growth in the last decade. In 2010 it recorded revenues of about US$ 82 billion. It generates employment for 45 million people in the country. The industry is forecasted to grow at a CAGR of approximately 8-9% over the next few years. The primary growth drivers in the industry are:
Investments in the infrastructure sector
Streamlining of indirect tax structure with introduction of VAT and the proposed GST
Robust trade growth
Globalization of manufacturing systems and advancements in technology
Growth in various industries such as automotive, engineering, pharmaceuticals & textiles
The growth of Indian logistics industry in the last 2 decade is backed by policy changes and other factors that have contributed to the growth in the economy. Logistics cost at US $ 90Bn is ~ 13% of GDP and is the highest when compared to the developed nations like United States of America or Europe. The Logistics sector is undergoing a metamorphosis from an unorganized sector to a structured and technologically oriented industry. With the growing economy, government’s focus on manufacturing and agriculture, increased consumerism and rural development the need for stronger transportation, warehousing and value added services like packaging, track n trace, cold chain etc. is very essential. But, unlike other sectors that are trying to grow independently or in silos this sector depends heavily on infrastructural developments. The current rail /road / air /sea transportation infrastructure is far behind the acceptable levels. Apart from infrastructure even the service quality levels and unorganized sector forming cartels and increasing prices also hinder the growth of this industry. Refer Exhibit 1 for the comparisons of GDP spend by different countries and the constituent contribution by segments.
Cargo airlines(or also called as airfreight carriers) are basically used to transport items that had very high
Logistics industry in India has seen a tremendous growth in the last decade. In 2010 it recorded revenues of about US$ 82 billion. It generates employment for 45 million people in the country. The industry is forecasted to grow at a CAGR of approximately 8-9% over the next few years. The primary growth drivers in the industry are:
Investments in the infrastructure sector
Streamlining of indirect tax structure with introduction of VAT and the proposed GST
Robust trade growth
Globalization of manufacturing systems and advancements in technology
Growth in various industries such as automotive, engineering, pharmaceuticals & textiles
The growth of Indian logistics industry in the last 2 decade is backed by policy changes and other factors that have contributed to the growth in the economy. Logistics cost at US $ 90Bn is ~ 13% of GDP and is the highest when compared to the developed nations like United States of America or Europe. The Logistics sector is undergoing a metamorphosis from an unorganized sector to a structured and technologically oriented industry. With the growing economy, government’s focus on manufacturing and agriculture, increased consumerism and rural development the need for stronger transportation, warehousing and value added services like packaging, track n trace, cold chain etc. is very essential. But, unlike other sectors that are trying to grow independently or in silos this sector depends heavily on infrastructural developments. The current rail /road / air /sea transportation infrastructure is far behind the acceptable levels. Apart from infrastructure even the service quality levels and unorganized sector forming cartels and increasing prices also hinder the growth of this industry. Refer Exhibit 1 for the comparisons of GDP spend by different countries and the constituent contribution by segments.
Cargo airlines(or also called as airfreight carriers) are basically used to transport items that had very high