A

PROJECT REPORT

ON

“LOGISTIC NETWORK OF INDIA”

Submitted to :

AMITY DIRECTORATE OF DISTANCE AND

ONLINE EDUCATION

ADDOE

Submitted by :

SHIVAM NIZHAWAN

Roll No. A19201168268

Program : Master of Business Administration (Retail Management)

Semester - IV
 INTRODUCTION

LOGISTICS MANAGEMENT

STARTING WITH THE ‘LOGISTIC MANAGEMENT ‘ CONCEPT

Logistics Management is the part of the supply chain which plans,

implements and controls the efficient, effective, forward and backward

(reverse) flow and storage of goods, services and information between the

point of origin and the point of consumption in order to meet customers’

requirements rather to the customers’ delight. A professional working in

the field of logistics management is called a logistician.

Logistics, as a business concept, evolved only in the 1950s. This

was mainly due to the increasing complexity of supplying one’s business

with materials, and shipping out products in an increasingly globalized

supply chain, calling for experts in the field who are called Supply Chain

Logisticians. This can be defined as having the right item in the right

quantity at the right time at the right place for the right price and to the

right target customers (consumer); and it is the science of process having

its presence in all sectors of the industry.

The goal of logistics work is to manage the fruition of project life

cycles, supply chains and resultant efficiencies. Logistics is concerned with

getting (or transmitting) the products and services where they are needed

or when they are desired. It is difficult to accomplish any marketing or

manufacturing without logistical support. It involves the integration of

information, transportation, inventory, warehousing, material handling and

packaging. The operating responsibility of logistics is the geographical

repositioning of raw materials, work in process, and finished inventories

where required at the lowest cost possible.

Origin and Definition of Logistics

The term “logistics” originates from the ancient Greek “logos” -

“ratio, word, calculation, reason, speech, oration”). Logistics is considered

to have originated in the military’s need to supply themselves with arms,

ammunition and rations as they moved from their base to a forward

position.

RELEVANCE OF LOGISTICS INTERNATIONAL MARKETING

Marketing experts have recognized that for developing a position of

sustainable competitive advantages, a major source is superior logistics

performance. Thus, it can be argued that instead of viewing distribution,

marketing and manufacturing as largely separate activities within the

business, they need to be unified, particularly at the strategic level. One

might be tempted to describe such as integrated approach to strategy and

planning as “Marketing Logistics”. Business can only compete and

survive either by winning a cost advantage or by providing superior value

and benefit to the customer.

In recent years, numbers of companies have become aware that the

market place encompasses the world, not just the India. As a practical

matter, marketing manager are finding that they need to do much work in

terms of conceptualizing, designing, and implementing logistics initiatives

to market effective globally. Following are the reasons behind the

extension of logistics activities at global level to do business

internationally.

The magnitudes of global business are :-

 Increase in the magnitude global business.

 business is a relying on foreign countries to provide a source of raw

materials and markets for finished goods.

 Fall of global trade barriers.

 Increase in Global competition.

Prospects of Growth in the Industry

In years gone by, the traditional warehousing and logistics facility

was located by railroad tracks, a water port, and or freeways, usually in the

least desirable parts of cities or large towns. This stereotype then faded as

gigantic, state of the art facilities began to sprout in more rural areas on
the outskirts of transportation and population hubs. The World started

beginning to see such facilities showing up in even less “traditional” areas.

Modern warehouses now are being located in carefully manicured

industrial parks that are sprouting as fact as the corn and wheat once did in

these open spaces often in out-of-the-way places. Why the emphasis on

such locations for logistics companies ?

Much of it is due to the great flux that the logistics industry has been

undergoing in the first three years of the 21st century. Most of these

changes are being driven by a growing trend in the manufacturing and

retail sectors to form partnerships with companies to which they can

outsource non-core logistics competencies-3PL providers.

In term, 3PL providers are continually looking to provide innovative

supply chain solutions to customers by focusing on value added

capabilities, differentiating themselves from the competition. They focus

on key objectives, such as implementing information technologies,

instituting effective management processes, integrating services and

technologies globally, and delivering comprehensive solutions, that create

value for 3PL users and their supply chains. This need to partner with

customers and become more integrated into their supply chain processes

has created the ancillary need to locate close to these customers.

That isn’t to say the need for easy access to transportation hubs and

different modes of transportation won’t continue to be important. But the

above shift in business strategy, along with the advances in technology and

enhanced communication, has opened thee door for logistic facilities to

operate effortlessly in a myriad of locations.

To be a logistics winner in the coming years organizations need to

use the downturn to reshape for growth, propelled by an unshakeable

conviction that the mission is still important, that more prosperous times he

ahead, and that in some way the company infrastructure is helping to build

a better kind of world.

 OBJECTIVE OF STUDY

 To study the performance of Indian Logistics industry with other

countries and cost associated with it.

 To study the impact of Logistics industry on performance of other

industry.

 To study the Logistics cost associated in different industries.

 MODES OF TRANSPORTATION &

WAREHOUSING

1. ROAD

The road freight industry in India is in trillions and is growing at

great speed. Manpower spends amount to only about 4 percent of sales as

against the overall sector average of 8-10 percent. The industry has

traditionally been extremely fragmented - almost 75 percent of the trucking

‘companies’ are single truck operators and almost 90 percent of trucking

companies have a turnover of less than INR 10 million.

A majority of players in this industry have been small entrepreneurs

running family owned businesses. Given their small scale and limited

investment capability, most of their investments have been focused on

short term gains direct and immediate impact on the top line / bottom line

of the business being the key decision criterion. As a result, investments

that pay off in the longer term, such as those in manpower development,

have been minimal historically.

Advantages :

 Road network of 3.3 million km is the second largest globally

 55% of total freight movement is via roadways

 Roads offer wide reach and easy accessibility to even small markets.

Disadvantages :

 High cost of transportation

 National Highways account for only 2% of the total network but

carries 40% of total freight, though they are expanding gradually.

2. RAILWAY

Rail freight traffic revenues stood over 700 billion in 2014 having

grown at around 8 percent in the recent past with the growth in the last

couple of years being around 10 percent. It is the world’s second largest

rail network.

With the government being the only employer, recruitment systems

in the railway segment are formalized and there exists an institutionalized

training infrastructure and policy.

Advantages :

 Cheapest mode of transportation

Disadvantages :

 Poor state of inland waterways in the country

 High turnover time

3. AIR

Though the airfreight segment holds a small share of India’s freight

market, it is growing at a fast pace. While India accounts for me agre 3

percent of the global air cargo market, the Indian air cargo industry is

expected to double in size by the year 2020 , as per an expert estimate.

As in the case of sea freight, the level of formalization and

standardization of operations in the air freight segment is greater than in

the road sector. By virtue of the level of investments in assets network and

relationships required to be a player in this segment, it has traditionally

been relatively more organized leading to greaterregard for manpower

development.

Advantages :

 Fastest mode of transportation

Disadvantages :

 Low freight movement

 87% of total freight traffic being handled by airports in metro cities.

 LOGISTICS COMPANIES OF INDIA

The land which opens up wide array of opportunities for the

logistics service providers across the world is India. The high demand for

the logistics services is due to the significant growth of economy.

LIST OF TOP LOGISTICS COMPANIES OF INDIA

 TNT Express

 DHL

 Gati

 Safexpress
 SAFEXPRESS--- DISTRIBUTION REDEFINED; LET SEE IN

DETAIL

Safexpress-Indias leading logistic company is renowned for its domain

expertise and expereinced manpower in the lscm sector .Safexpeess can

best understand your logistic model and solution to you.

SAFEXPRES;has the largest network coverage across India covering over

700 plus locations operating 24 hours a day 365 days a year.

Safexpress have a integrated logistic management.It is our 3 pl product

that optimises you companies supply chain .Firstly,examines the

linkagess between your suppliers,producers,buyers,intermediaries and

end users in order to identidy time and cost inefficiencies.Next we deploy

our unique mix of local know how,global practices and cutting.

Safexpress started its business as a door to door service in 1995

with 4 routes, 9 offices, 12 container mounted vehicles and 20 employees.

Safexpress door to door services include niche products like DoD and To-

Pay freight.

After one year i.e. in 1996 Safexpress opens super hubs at Delhi,

Mumbai and Bangalore.

Safexpress launches Integrated Logistics Services. Our first ILS

client is the first international ILS account is signed with Hilti from
Europe. Spurred a surging domestic economy, Safexpress extends its

fleet to 250. Safexpress Private Limited emerges as an independent entity.

In the year 2002, 2003 Safexpress was declared India’s “Largest

Logistics Service Provider” by Limca Book of Records. In 2005

Safexpress bags the MICO: Power. We award for excellent service in

logistics. In the same year Safexpress fleet of 3000 mark.

Year 2001 - Safexpress upgrades and launches a whole lot of

features on www.safeexpress.com including ePod, Virtual Cargo and

Privileged Member.
 SAFEEXPRESS SERVICES

 EXPRESS

Safexpress service is an express service which involves movement

of cargo in all weather proof sealed containers on feeder and

express routes. The service is time definite with a published transit

schedule covering more than 550 destinations nation wide and

provides the flexibility for surface, air and multi modal connectivity

with a wide reach associated with Indian airlines and air taxi

operators such as jet airways, Sahara etc.

 DRAFT-ON-DELIVERY

Draft on delivery is an unparalleled value-added service wherein the

seller can dispatch goods through Safexpress to the buyer and be

assured that the delivery would take place only when the draft has

been collected.

In the Safexpress DOD system pre-alerts are sent to the

consignee to allow reasonable time for the draft to be made, thus

meeting the desired objective of express transit with the amount

ready for collection.

 SAFEBOX

The safebox comes in two convenient sizes of 17” x 17” x 12” and

16” x 12” x 9” easily accommodating upto 20 & 10 kgs respectively

of your cargo. the robust design is further reinforced with internal

insulation for safety of your cargo. So you save on packing cost and

for a nominal amount it is ready for delivery with an auto insurance

upto Rs. 5000 absolutely free of cost.

 SAFEAIR

To ensure that time sensitive of cargo reaches the destination

through a faster mode meeting all your requirements for the time

definite deliveries. Safeair connects your cargo through airlines, atos

and uses the services for morning and evening flights to provide a

wide variety of connectivity to suit different market cutoffs.

 ILM

Safexpress works on the value chain concept using a framework for

examining linkages between suppliers, producers, buyers,

intermediaries & end users.

Safexpress ensure the success of the entire chain, marrying

local knowhow with the best global practices, technology &

perspective.
 CONSULTING

Safexpress offers value added services beyond physical operations

in the form of logistics consultancy covering a wide spectrum of the

Indian economy.

ACHIEVEMENTS

Safexpress wins “International Business Excellence Award 2008.

Safeexpress CMD, Mr. Pawan Jain conferred with the “Bharat Gaurav

Puraskar’ by the Institute of Economic Studies.

Safexpress pvt.ltd. which has grown into one of the leading logistics and

supply chain management companies in India was also awarded the

‘International Business Excellence award for the BEST BUSINESS

ENTERPRISE at the same platform organised at Hotel grand sukhumvit

by Sofitel at Bangkok ,THAILAND.

 RESEARCH METHODOLOGY

The objective of the present study can be accomplished by

conducting a systematic market research. Market research is the systematic

design, collection, analysis and reporting of data and findings that are

relevant o different marketing situations facing the company. The

marketing research process that is adopted in the present study consists of

the following stages :-

a. Defining the problem and the research objective

The research objective states what information is needed to solve the

problem. The objective of the research is to study the Indian

Logistics industry growth drivers and its comparison with the other

countries.

b. Developing the research plan

Once the problem is identified, the next step is to prepare a plan for

getting the information needed for the research. The present study

adopted the descriptive approach wherein there was a need to gather

large amount of information before making a conclusion.

c. Collection and Sources of data

Market research requires two kinds of data, i.e., primary data and

secondary data. Secondary data was collected from various books

and web sites.

PRIMARY DATA: INSTRUMENTS USED ARE.

QUESTIONNAIRES

SAMPLE SIZE 10

HEAD OF VARIOUS DEPARTMENTS 5

USERS 5

INTERVIEWS

SAMPLE SIZE 10

AREA MANAGER 5

CUSTOMERS 5

SECONDARY DATA:

 TRADE LOGISTICS IN GLOBAL ECONOMY.

 INDIAN LOGISTIC INDUSTRY

 SOME PAST TRENDS ON THE INDUSTRY.

 I worked further on these world wide web’s to collect relevant

data

 Google, the hindu and the financial express.com.

THE INDIAN LOGITICS SECTOR

The World Bank, in a recent survey Connecting to Compete : Trade

Logistics in the Global Economy, has developed a Logistics Performance

Index (LPI) that can serve as a benchmarking tool for measuring

performance of businesses along a country’s logistics supply chain. The

Bank study assets that countries that are able to connect to the global

logistics web would not only have access to vast new markets but also

remain a part of the global trade growth. The report avers that it is not the

income of nations but their undergoing trade expansion that determines

their logistics efficiency, as the survey shows that nations with increasing

trade (imports and exports) to GDP emerged as the out performers on the

LPI scale relative to their income levels. It also warms that those countries

whose links with the globalogistics chain are weak are bound to face large

and growing costs of exclusion from international trade. India trails

behind China on important indices such as customs procedures, overall

infrastructure quality, international shipment, logistics competence and

tracking of shipments, but is ahead of the latter on the domestic logistics

efficiency front.

Healthy economic growth in India is increasingly supported by

robust industrial growth. One of the relatively lesser known but significant

sectors that support almost all industrial activity - the logistics sector - is

also witnessing this growth as a follow through. However, not

withstanding its importance and size (INR 4 trillion), it has traditionally

not been accorded the attention it deserves as a separate sector in itself.

Country LPI Score

USA 3.85

UK 3.84

Singapore 4.19

India 3.07

China 3.64

Mexico 2.64

These inefficiencies have arisen over the years from a combination

of a non conductive policy environment, extensive industry fragmentation

and lack of good basic infrastructure. India’s indirect tax regime

discouraged large centralized warehouses and led, over time, to

fragmentation in the warehousing sector. At the same time, the absence of

a single logistics ‘champion’ (whether in form of a ministry of otherwise)

in the government (or industry) led to a disintegrated approach to

development of the sector.

Country Logistics Cost/GDP

India 13%
U.S. 9.9%
Europe 10%
Japan 11.4%
 FINDING

1. The logistics performance index shows the performance of country

in the global logistics industry, customs, trade-related infrastructure,

inland transit, logistics services, information systems, and port

efficiency are all critical to whether countries can trade goods and

service on time and at low cost. Here India LPI score is 3.07 and

secure 39th position in the global logistics industry. As the share of

Indian Logistics Industry is more than the Mexico and less than the

USA, UK and Singapore witness that Indian Logistics industry is

one of the growth drivers for Indian economy.

2. In the global logistics sector India at the top position among the all

the low income group countries, that show that Indian Logistics

sectors perform better among all the low income countries or

developing countries.

3. Logistics cost contributionof India in GDP is 13% which shows the

high logistics cost of the Indian Logistics industry and also higher

than the developed countries. Due to the poor infrastructure and

other logistics service is not better than the developed countries like

USA and Japan.

4. 3PL service providers share is less in overall industry of India as

compare to Japan, USA and Europe. The third party logistics (3PL)

market in India is still in a relatively nascent stage. While

multinational companies in all industries have been predominant

users of these services but the Indian companies are not. Also

significant cost reduction and several other benefits provided by

these companies. This is also one of reason of high cost in India.

5. Organized sector include the cost of inventory holding,

transportation, warehousing, packaging, losses and related

administration which shows the high logistics cost in India due to

less organized sectors. But organized sectors are well established in

Japan, USA and Europe also one of the reasons to low logistic cost.

6. Major sector investment in Indian Logistics industries are Agriation,

Metal & Mining and consumer durable. Among these sectors share

of Awiation sector is higher due to increasing international

business in India also cost of transportation is higher, fast and safe

for overseas movement of goods.

7. Now 3PL service providers are starting investing in India to reduce

the logistic cost which include both domestic and international

companies. Shreyas Shipping and Logistics is investing high as

compare to the DHL, TNT and Gati. This shows that trend of 3PL

providers is increased in India.

8. Revenue generated from 3PL providers increase the Indian economy

and also the percentage growth the revenue increased continuously

from 2005 to 2008. According to planning compission India this is

growth continuous and it reached to $3556 million till 2012 is

estimated.

9. Logistics industry also improves the performance of other industries

in India as these are auto, IT and pharmaceutical industries that

shows high growth rate. Logistics grow with 8-10% rate between

2002-2007 implies that improvement in the supply chain of the other

industries in India.

10. Logistics cost play an important role for the growth of industry.

Logistics cost contribute to sale indicate importance of logistics in

different industries. As logistics cost share in sale of cement industry

higher than other industries shows it play an important role in sale.

RECOMMENDATIONS.

1.Scheduling of service time point of arrival and departure of rails,ships

and plane has great scope for improvement.They never run om time

and require national discipline.

2.Logistic development is absolutely necessary.In the absence of flow

less and latest logistics,the mnc-s shy away from doing business in

india.There is need to increase fdi in logistic sphere and relaxing of

 norms relating to entry taxation import if material handling and

movement of equipment etc.

3.Here though SAFEXPRESS is being discussed in detail so from here

we can say that there are certain departments where safexpress

lacks, and it needs to pay its attention not only in selling its services

but also looking forward to its after sales services which is must for

every courier and cargo movers to survive in this competetive world.

 CONCLUSION

Indian Logistics industry is continuously improving its

performance in the global logistidcs industry by improvement of customs,

trade-related infrastructure, inland transit, logistics service,s information

systems, and port efficiency help to provide trade goods and services on

time and at low cost. The World Bank’s 207 th Global Logistics Report

ranks India 39 amongst 150 countries in terms of logistics performance

during the year as well as its future potential.

Indian Logistics industry has low performance than developed

countries like USA, UK and Singapore in global logistics sectors due

inefficiency in logistics services and highest among the low income group

countries. India spend in Logistics activities equivalent to 13% of its GDP

is higher than tthat of developed countries. The key reason is the relatively

high level of inefficiency in the system with lower average trucking

speeds, higher turnaround time at ports and high cost of administrative

delays.
 ANNEXURES

RECENT TRENDS IN INDIAN LOGISTICS INDUSTRY

The global logistics industry was valued at US$3 trillion in 2007,

where as US logistics industry size was around US$ 900 billion, 25% of

the global logistics industry. Logistics costs in India are estimated to be

around 13% of the GdP, which comes to around US$ 94 billion in 2006-

07. However, India’s spending on logistics industry is much higher than

the developed economies like the US (9.5%) and Japan (10.5%).

AIR CARGO

Air transport sector contributes over 0.2% to the country’s GDP at

constant prices (1999-2000 prices). Transport sector’s contribution to the

GDP has been firming up over the last couple of years, mostly because of

the growing economic activities in the country.

FUTURE OF LOGISTICS - THE INDIAN SCENARIO

India’s logistics sector attracted investment worth Rs. 23,200 crore

in first half of 2008, according to a study by Assocham. It outclassed some

of the major sectors including aviation (Rs. 20,890 cr), metals and mining

(Rs. 8500 cr) and consumer durables (Rs. 6000 cr) among others. Among

the factors cited by analysts for the rapid growth of Indina logistics
include the growth of organized retail industry, commodity markets,

growth inmanufacturing and development of special economic zones

(SEZ).

According to a report by Cushman and Wakefild, real estate

consultants, Indian logistics industry is expected to grow annually at the

rate of 15 to 20%, reaching revenues of approximately $385 bn by 2015.

Market, share of organized logistics players is also expected to double to

approximately 12% during the same period. The report said about 10

logistics parks spread over approximately 3,500 acres at an estimated cost

of $1 bn are expected to be operational and an estimated 45 mm sq. ft of

warehousing space with an investment of $500 mn is expected to be

developed by various logistics companies by 2012.

A large number of upcoming SEZs have necessitated the

development of logistics for the domestic market as well as for global

trade. Mumbai, Kolkata, Chennai and Hyderabad have become preferred

locations for logistics parks. These locations are characterized by excellent

port, rail and road connectivity and are witnessing significant investment in

infrastructure. Eight logistics parks with an approximate investment of

$200 mn is 600 acres of land around Mumbai. According to industry

analysts, almost all logistics players are in the process of setting up

wearehouses, container freight stations, inland container depots, logistics

parks, distribution centres and other facilities to tap the trade opportunities

fuelled by revolution in the retail, ports etc.

 BIBLIOGRAPHY

1. Vinod V. Sople (2007) “Logistics Mangagement” Peesson

Publication.

2. Donald J. Bowess David Closss (2007) “Logistic Management” Tata

McGraw - Hill Publication.

3. Trade Logistics in Global Economy (2007) Report by World Bank.

4. Indian Logistic Industry (2008) Published by Cushman.