Tag: India

Indian logistics market to touch euro 90b by 2015

Posted by | Apr 17, 2007 | |

At a time when the logistics industry in India is at a major inflexion point and international majors like United Parcel Services (UPS) and FedEx have started making their presence felt, DHL could not have waited any longer. DHL Exel Supply Chain & Global Forwarding CEO John Allan came calling last week. Attracted, no doubt, by the booming logistics market in India.

Riding on the increased investments in infrastructure, proposed phase out of Central Sales Tax (CST) and boom in the manufacturing sector, the organised Indian logistics industry is growing larger by the day. “We estimate the Indian logistics market to be around euro 33 billion. By 2015, we expect it to reach almost euro 90 billion at a compounded annual growth rate (CAGR) of over 11%, which is higher than the rate of growth of the Indian economy,” says Mr Allan.

He adds that in the next decade, there will be a substantial growth in the manufacturing segment, which will trickle down as opportunity for logistics companies. “There are two reasons why we see a major opportunity here. Firstly, India serves as a good base for manufacturing for exports like automobile components and pharmaceuticals so most of them are moving to India. Secondly, the size of the domestic market is itself getting larger.”

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Researchers see India's express industry growing by 20% a year

Posted by | Apr 16, 2007 | |

India’s express and courier industry, now valued at Rs71bn (USD1.63bn), is forecast to reveal a compound annual growth rate of 20% over the next five years and more than double its size by 2012.

According to a study by rating agency Credit Analysis’ research the main growth driver for the express industry will be the opening up of the banking, insurance, retail, aviation and telecommunications sectors.

Several executives recently interviewed for UPS indicated that a key segment of Asia’s business leaders were more excited about the growth of India than they were of China’s.

While there was optimism over the growth of the Chinese consumer market, small and medium sized enterprise leaders across Asia expressed a desire to capitalise on India’s rapid growth by leveraging its continued rise as a manufacturing base.

Leaders of such enterprises also expressed a desire to become an outsourcing destination for India and an exporter of raw materials to India for manufacturing.

The UPS Asia Business Monitor, a survey designed to gauge the competitiveness of small and medium sized enterprises in Asia, also found that, of 1,200 decision-makers interviewed across 12 different markets in the region 85% said India had the potential to be a regional economic leader and 81% said the country’s economy was certain to grow this year.

The express industry in India, which ranks among the fastest growing sectors in the Indian economy, has been growing at an annual rate of 33% over the past decade.

At its present estimated size, the industry is almost as large as the shipping and paper industries in the country. However, it is highly fragmented, with more than 2,500 express operators, although about 20 of them make up more than 50% of the industry’s revenues.

According to another study the organised portion of the industry comprises 65% of the total market.

The semi-organised and unorganised segments, which consist largely of regional and intra-city service providers and the government-run EMS Speedpost, between them account for the rest.

Among domestic operators, Blue Dart, DTDC, First Flight and Overnite Express are leading express service companies while FedEx, UPS, DHL and TNT are the top international operators.

‘Document parcels that weigh less than 300 gm account for about 70% of the total volume of document parcels and intra-city deliveries account for nearly 37% of their turnover,’ the CARE report says.

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Deutsche Post's DHL to restructure India jv to hold majority stake

Posted by | Apr 13, 2007 | |

Deutsche Post AG’s DHL plans to restructure its joint venture with Lemuir Group in India, paving the way for it to hold the majority stake in the venture, the Economic Times reported.

After the restructuring, DHL will hold a 76 pct stake in the new company, DHL Lemuir Logistics Private Ltd, while Lemuir will hold the balance 24 pct stake.

Lemuir’s new promoters have agreed for a cash exit option for their reduced stake. In the previous joint venture, DHL Danzas & Lemuir, DHL and Lemuir had a 49 pct and 51 pct stake respectively, the paper said.

According to the paper, though negotiations have successfully concluded, certain legal formalities have to be completed and an announcement is expected in the coming few weeks.

The global logistics major also plans to enter the container freight station business, the report added.

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TNT to connect Europe with own freighter aircraft

Posted by | Apr 11, 2007 | |

TNT India Private Limited, a wholly-owned subsidiary of Netherlands based Euro 12.6 billion TNT NV, is planning to connect India with the European Union and expand domestically this year. The company is looking at either buying or leasing freighter aircraft to launch its international operations out of India.

He said the company, which recently acquired the Hyderabad-based Speedage Express Cargo Services, is also exploring opportunities to extend its domestic air express service to various cities in the country. The company is looking at forming alliances with existing airlines to carry cargo for it.

Currently, TNT is connecting 110 cities on its own and reaching other important centres through its agents and partners. The major verticals for TNT in India are banking and financial services, automobile and auto components, pharmaceuticals, ICT sectors and computing. The company with its newly-launched domestic air express business aims to service these sectors intensively.

“The acquisition of Speedage yielding results very rapidly and we have almost transformed their processes within TNT’s processes. After the acquisition we are growing rapidly. Recently we have added several new clients including Pantaloon and ABB,” Mitra added.

The company had earmarked an investment of Euro 100 million in early 2006. However, with its plans to launch express service to Europe, the investments may be doubled over the next few years. The remaining funds will be used to augment the express delivery infrastructure in the next two years in the country.

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