3PLs spread their wings in India
Despite sector's infancy, major players see more opportunity than in developed markets
The third party logistics (3PL) market in India has been growing at a rapid rate over the past few years and is expected to harvest total revenue of nearly US$4 billion by 2012, a year-on-year growth of over 30%.
According to RNCOS Industry Research Solutions’3rd Party Logistics Market in India report, multinational companies have played an important role in the development of 3PL services in the country.
Meanwhile, domestic companies are concentrating on better managing their supply chain mechanisms and expanding their services to include other industry areas – for example, trucking companies are providing express and warehousing services.
“Unfortunately, India’s 3PL services market is nowhere in comparison with the developed markets of the US and Japan, where use of 3PLs accounts for over 50% of the total logistics cost,” says the report.
Despite this, the market in India has more opportunities than these developed markets, it adds.
This because of infrastructural development of ports, highways and bridges, as well as increasing connectivity and the rising significance of logistic services.
It adds: “In line with this, we expect improving infrastructure and a focus on core business operations will lead the future growth of the Indian 3PL market.”
Anshuman Singh, MD and CEO of Future Supply Chain Solutions, said the past few years had been a great learning curve.
“We have utilised the downturn phase to put systems and processes in place and have invested heavily in setting up an automated warehousing business, thereby enhancing efficiency,” he said.
“We have now also started offering our services to non-Future group companies, which will contribute to business growth. Going by our understanding of the market situation, we should, very comfortably, see 100% growth this year,” Singh added.
According to RNCOS Industry Research Solutions’3rd Party Logistics Market in India report, multinational companies have played an important role in the development of 3PL services in the country.
Meanwhile, domestic companies are concentrating on better managing their supply chain mechanisms and expanding their services to include other industry areas – for example, trucking companies are providing express and warehousing services.
“Unfortunately, India’s 3PL services market is nowhere in comparison with the developed markets of the US and Japan, where use of 3PLs accounts for over 50% of the total logistics cost,” says the report.
Despite this, the market in India has more opportunities than these developed markets, it adds.
This because of infrastructural development of ports, highways and bridges, as well as increasing connectivity and the rising significance of logistic services.
It adds: “In line with this, we expect improving infrastructure and a focus on core business operations will lead the future growth of the Indian 3PL market.”
Anshuman Singh, MD and CEO of Future Supply Chain Solutions, said the past few years had been a great learning curve.
“We have utilised the downturn phase to put systems and processes in place and have invested heavily in setting up an automated warehousing business, thereby enhancing efficiency,” he said.
“We have now also started offering our services to non-Future group companies, which will contribute to business growth. Going by our understanding of the market situation, we should, very comfortably, see 100% growth this year,” Singh added.
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