Friday, May 14, 2010


What logistic means to the country

India’s rising prominence in the manufacturing sector over the last few years has given a fresh lease of life to the logistics market, and this trend is likely to gain pace with the wave of global economic slowdown gradually receding and India emerging as one of the earliest major economies to recover from downturn.India's logistics industry is forecast to become an over Rs 5.55 lakh crore ($120.42 billion) market by 2014 1, driven by growth in the manufacturing sector,This fast-paced growth of the industrial sector, coupled with the more sturdy progress of the agricultural sector, has necessitated extensive supply chains across the country to facilitate sourcing and distribution of production. Distribution networks of most industries in India involve numerous retailers across the country, and multiple levels of intermediaries. Since companies will be hard pressed to serve such an intricate network, logistics service providers will fancy their chances of finding a firm foothold in the Indian market. Apart from the steady expansion of operations by large domestic industrial groups, an increasing number of global majors in industries ranging from automotive and electronics to pharmaceuticals and cement have been targeting a spot in the highly lucrative Indian market. While foreign companies need to engage logistics service providers since they are not conversant with the culture, government policies, or distribution landscape of the country, domestic companies are outsourcing their logistic activities to organized third-party logistics to focus on their core competencies.

Most manufacturing industries such as automotive, cement, minerals, oil & gas, pharma, food processing, and fast moving consumer goods (FMCG) need multimodal transportation services as they have a widespread consumer base but limited production bases. Industries such as FMCG, pharma, and food processing also have considerable requirements for integrated logistics parks. Multimodal transportation solutions are becoming possible with the development of inter-connected transportation infrastructure facilities, especially dedicated freight corridors by the railways and improvements in coastal shipping facilities. Similarly, the construction of massive state-of-the-art logistics parks at key distribution hubs are helping to meet the specialized warehousing needs of industries. These developments are encouraging companies to outsource logistics functions.

The modes of transport employed in by the logistics industry are :

- Waterway transport
India’s coastline of about 6,000 km is dotted with 11 major, 11 intermediate and 168 minor ports. Nearly 95 per cent of the country’s foreign cargo (by volume) moves by sea

- Airways transport
Number of full-fledged Airports in India total up to nearly 92, out of which 12 are international airports. The recent phenomenon of introduction of low cost airlines in India created a stir in the travel scenario of India.

- Road transport
India has over 65,569 km of Highways

- Railways transport
Indian Railways has one of the largest and busiest rail networks in the world, transporting 20 million passengers and more than 2 million tonnes of freight daily.It traverses the length and breadth of the country, covering 6,909 stations over a total route length of more than 63,327 kilometres

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