INDUSTRY ANALYSIS ON TRASWORLD

GLS INDIA Pvt. Ltd.

SUBMITTED TO
P.K.MISHRA


SUBMITTED BY
V.DEVI SARANYA
(1226113160)


INTRODUCTION:
Logistics is the management of the flow of goods between the point of origin and the
point of consumption in order to meet some requirements, for example, of customers or
corporations. The resources managed in logistics can include physical items, such as food,
materials, animals, equipment and liquids, as well as abstract items, such as time, information,
particles, and energy. The logistics of physical items usually involves the integration of
information flow, material handling, production, packaging, inventory, transportation,
warehousing, and often security. The complexity of logistics can be modeled, analyzed,
visualized, and optimized by dedicated simulation software. The minimization of the use of
resources is a common motivation in logistics for import and export.
Transworld GLS (India) Private Limited:
Transworld GLS (India) Private Limited is a unit under Transworld Group of Companies and
shares the same mission, vision and value statement of the Group. Incorporated in the year
2007 to represent BLPL Logistics Pte Ltd in India, with Head Office in Mumbai and having its
offices in Ahmadabad, Bangalore, Chennai, Kolkata, Ludhiana and New Delhi covering North
Central regions (NCR). The Transworld group has now diversified into a multi-faceted
Shipping and Logistics Company. The activities of the group include: Ship Owning (Container
& Bulk Carriers), Feedering, NVOCC, Logistics, Freight Forwarding and Supply Chain
Management, CFS's, Ship Management and Shipping Agencies.
Transworld GLS today represents BLPL Logistics and also acts as subagents for Orient
Overseas Container Line (OOCL) and subagents for United Arab Shipping Company (UASC)
in Chennai.
Today, the Group is expanding its business through innovations stemming from a global
perspective. The Group's determination to have a global presence is supported by a
fundamental philosophy - to explore and discover new business horizons. Transworld Group's
scale of operations is expanding limitlessly on land and sea. Besides Ship Owning, Shipping
Agencies, Ship Management, Marine & Container Repairs, Container Storage, Inland
Transportation, the Group also has interests in Freight Forwarding and Logistics.
BLPL Logistics was established with the aim of combining the group strengths and years of
experience in the shipping field to provide a single platform to cater to all customers needs. It
initially started off in the year 2007 as a NVOCC operation between Singapore, Malaysia and
Bangladesh, has grown steadily to encompass South East Asia and is expanding further to the
Far East and the entire Indian Sub Continent.
BLPL Logistics current inventory pool stands at around 2500 TEUs and their current scope
of operations extend to the countries of India, China, Vietnam, Thailand, Singapore,
Malaysia, Indonesia, Myanmar, Bangladesh, Sri Lanka, Pakistan, U.A.E., Oman, Bahrain,
Kuwait & Qatar
INDIAN OPERATIONS:
Ship Owning:
Shreyas Shipping & Logistics Ltd: Shreyas Shipping & Logistics is India's first and
only container feeder owning and operating company. Shreyas started its operations in
1993, and began primarily to fill the gap for feedering of containers between Indian
ports and internationally renowned transshipment ports such as Dubai, Khorfakkan,
Jebel Ali, Colombo and Singapore.
Transworld Bulk Carriers (India) Pvt Ltd: TBC's heritage has been successfully built
on the Values of Trust and Openness, Mutual Respect, Quality, Excellence and
Customer Orientation. TBC's activities include ship management, charters and
operations of ships that cater to transportation needs of customers worldwide.
Historically seen as the most versatile and flexible given their size, draft and cargo gear,
TBC operates ships in the handy-size to supra-max segment. TBC is keen to build
strategic and long-term rewarding relationships with customers desirous of availing dry
bulk shipping transportation solutions by providing first class quality and reliable
service. To this end, TBC seeks to build on existing long-term relationships with
strategic partners and extensive presence in the Arabian Gulf, Indian Sub-Continent and
South East Asia region as also to attract new customers with growing requirements in
dry bulk shipping. TBC currently manages and operates modern and efficient Handy-
size dry bulk vessels that cater to the transportation needs of the customers across
the globe and is poised for further growth in the Handy-size to Supra-max ship
segments.
Feeder:
Shreyas Shipping & Logistics Ltd: Shreyas used its accumulated experience in operating
feeder services to pioneer coastal transshipment services within India thereby connecting
Indian ports to each other for the purposes of relaying containerized cargo. This service
provided crucial links between Indian ports and assisted transshipment of cargo over
Indian ports. Shreyas is always looking for new areas of business and is now looking at
Greenfield ventures in the areas of Mid-size parcel and domestic logistics.
Logistics:
Shreyas Relay Systems Ltd: Shreyas Relay Systems Ltd. Provides seamless, door-to-
door, multi-modal transportation solutions incorporating the Road-rail-sea-road route.
They operate scheduled services, with Indian flag ships, over 4000 varied types and
sizes of ISO containers and over 50 customised trailers to meet customers
requirement.
Albatross Shipping Ltd: Albatross Shipping is the Indian representative of Balaji
Shipping Lines FZCO on Liner Activity and Balaji Shipping (UK) Ltd & Transworld
FZE for the Forwarding activity, which is the part of the Transworld Group of
Companies. Balaji Shipping is a name to reckon with in the global maritime business
with an extensive service from the Indian Sub-continent to the Middle East, South
East Asia, Persian Gulf, CIS countries and South Africa. Balaji Shipping has the
flexibility of providing both Full Container Load (FCL) and Less than a Container Load
(LCL) services & Freight Forwarding activities. Other value added services such as
fully equipped warehouses in key ports make it a market leader and the customer's first
choice.
ADMEC Logistics Ltd: Admec Logistics Ltd. is engaged in the business of Container
Park Management, Transportation, Ship Repair and Ship Chandelling. Admec Logistics
is ISO 9001:2000 certified company and undertakes import-export cycle business to
main sea ports and dry ports. Admec Logistics Ltd is the leading transporter in JNPT.
Admec Logistics Ltd also undertakes evacuation of empty containers of major lines.
SRS Freight Management Ltd: SRS Freight Management Ltd (Formerly known as
Haytrans) is a Transworld Group Company, an internationally recognized business
house of repute established in 1977, enjoying a thriving presence in each of the
following areas of business:
Ai r Cargo Movement
Ship Owners and Service Operators
Shipping agencies
Landside infrastructure
International Freight Forwarding
Logistics and Supply Chain Management
Road Transportation
other specialized business activities
Agency:
Albatross Shipping Ltd: Albatross Shipping is the Indian representative of
Balaji Shipping Lines FZCO on Liner Activity and Balaji Shipping (UK) Ltd &
Transworld FZE for the Forwarding activity, which is the part of the Transworld
Group of Companies. Balaji Shipping is a name to reckon with in the global
maritime business with an extensive service from the Indian Sub-continent to the
Middle East, South East Asia, Persian Gulf, CIS countries and South Africa. Balaji
Shipping has the flexibility of providing both Full Container Load (FCL) and Less
than a Container Load (LCL) services & Freight Forwarding activities. Other value
added services such as fully equipped warehouses in key ports make it a market leader
and the customer's first choice.
Crescent Shipping Agency (I) Pvt. Ltd: The search for an agent to handle tramp
vessels anywhere in India for any type of cargo ends here. It provides a dedicated
network of offices at all major and non-major ports in India as well as at all major ICDs.
With the experience of handling vessels for more than three decades and with a work
force of qualified professionals including master mariners they can able to meet
customer requirements.
Transworld GLS (Singapore) Pte Ltd: Transworld Group Singapore is one of East
Asias fastest growing shipping companies. The Group operates five subsidiaries that
provide a comprehensive network of services including Ship owning, Feeder services,
Liner Shipping, Logistics and Agency Representation of major shipping lines. Key
business strength is the Groups ownership of its vessel fleet and cargo containers that
ensures stability of operations. Strategically headquartered in Singapore- the worlds
busiest port, Transworld Group Singapore has rapidly expanded its suite of solutions. It
now provides complete end-to-end shipping logistics expertise in this premier maritime
hub which is connected to more than 600 ports in 120 countries around the world. At the
heart of Transworld Group Singapore, is a dynamic team of committed and
experienced professionals that provide customized solutions for an industry that carries
over 90% of the worlds trade. The GROUPs high level of productivity is supported by
fast, efficient and responsive IT systems.
Transworld Shipping and Logistics Ltd: Transworld Shipping and Logistics Limited
is the General Agent in India of Ignazio Messina & C, a privately owned Italian
shipping company. It sources cargo to destinations served by the Messina Line.
Incorporated in the year 1977 to exclusively represent Ignazio Messina & C in India,
Transworld Shipping and Logistics Limited has its Head Office in Mumbai and offices
in Ahmadabad, Kandla, Ludhiana and New Delhi covering North Central Regions
(NCR). Messina offers regular container service from Mundra and Nhava Sheva on
weekly basis with remarkable transit to following direct ports of Djibouti (10 days),
Jeddah (15 days), Genoa (28 days) and Naples (30 days) by using weekly feeder
services from Mundra & Nhava Sheva and deploying 3 main line vessels from Abu
Dhabi/Jebel Ali, which are multipurpose vessels which can load both containers and
vehicles.
Relay Shipping Agency Pvt Ltd: Relay Shipping Agency is established in 1983, which
is the part of Transworld Group of Companies. To be a premier organization, this offers
total shipping solutions by providing high quality innovative services to its customers.
Relay Shipping is one of the leading agency for Orient Express Lines (OEL) and
Shreyas Shipping and Logistics Limited.
One of the well established Agency House in India
Dedicated and Well Experienced Professionals
Excellent Relations with Port / Customs Authorities
CFS:
Albatross Inland Ports Pvt Ltd: Albatross Inland Ports Pvt Ltd defined new rules of
service orientation in the field of Container Freight Stations. Albatross CFS is new
face of a modern era CFS. Located in the hub of import and export cargo clearance i.e.
ICD Dadri. It is efficiently catering to the current needs of modern day logistics solution
through state of the art infrastructure with high end focus on service quality. Albatross
Inland Ports Pvt Ltd is a joint venture between Transworld Group of Companies and
Container Corporation of India (CONCOR). Albatross commenced operations on 24
April 2006 and has already touched new heights and handling highest number of
EXIM Cargo Ex. Dadri. It's CFS facility strategically located in ICD Dadri in an area
of 91000 sq. mt. It is equipped with all modern day amenities.
Transworld Terminals Private Limited: Transworld Terminals aims at defining new
rules of service orientation in the field of Container Freight Stations. Transworld
Terminals is new face of the modern era CFS. Located at Mundra and Tuticorin Port, the
gateway for import and export cargo from the vast hinterland of India. It is efficiently
catering to the current needs of modern day logistics solution through its state of the art
infrastructure w i t h h i g h e n d f o c u s o n service quality. It's Mundra CFS facility
established in September, 2007, around 7KMs away from the container terminals
(MICT/AMCT) and is easily accessible from Ahmadabad, Rajasthan and other North
Indian Locations through NH-8 and NH-8A. The Strategic Objective of Transworld
Terminals Private Limited, is to provide state-of-the-art facilities in the most cost
effective way by giving utmost priority to safety and security, in terms of container
handling, storage, customs bonding, warehousing and other value added services.
Ship Management:
Orient Express Ship Management Ltd: OESM, as a part of Transworld Group, operates
with total commitment to integrity while providing high quality innovative services to
its customers. Our team of dedicated, experienced and qualified professionals is
committed to provide a comprehensive range of services in ship management and is
determined to exceed our client's expectations.
Management Consultancy:
Transworld Management Consultancy Pvt Ltd: Transworld Management Consultancy
(TMC) acts as an in-house consultancy firm offering professional services to the various
companies under the Transworld Group.
Service Tax issues and Assessments, Income Tax Assessments and Investments
Consolidation of the Management Information System (MIS) reports
Corporate level Human Resources team carrying out Manpower Management
Banking and Finance arrangements and facilities for the Transworld Group
coordinated by Group CFO
Secretarial cell handling Group legal requirements
Corporate level Payroll Management team
NVOCC:
NVOCC stands for Non Vessel Owning Common Carrier. NVOCC operation comprises
of sales, stuffing and transport of the containers to gateway ports. The bill of lading issue and
overseas distribution is taken care by the agents of NVOCC. An NVOCC signs contracts with
shipping lines to guarantee the shipment of certain number of units each year. In return the
shipping line offers favorable rates to the NVOCC. Thus, NVOCC ends to be the largest trade
maker for the container shipment.
Non-vessel operating common carriers (NVOCCs) are similar to traditional freight
forwarders, but with some important differences, mostly in terms of taking more
responsibility than a traditional freight forwarder can.
Often referred to as "shipless shipping lines", an NVOCC acts almost like a
common carrier, with the exception that an NVOCC does not actually operate the vessel it uses
to move the container. Instead, the NVOCC brokers space on existing container ships
and, using the aggregate volume from all its clients, negotiates discount rates that in many
cases will allow the NVOCC to offer lower rates to shippers than those offered by the vessel
operator themselves.
In addition, an NVOCC can and sometimes does own and operate its own or leased
containers (a pure forwarder usually does not), and in certain areas is accorded the status of a
"virtual carrier." In other cases, an NVOCC also accepts all liabilities of a carrier, depending on
jurisdiction.
Shippers might use an NVOCC due to damage liability, for lower rates, ease of doing
business in some cases versus the ocean carriers, and more. The NVOCC will generally also
provide the functions of a freight forwarder as well in terms of managing end-to-end logistics
and customs clearance.
There are literally hundreds of NVOCCs, and recent analysis shows the market has a lot
of dynamics amongst the players. The world's 100 highest-volume NVOCCs has seen an
increase of 3.2% in their aggregate TEUs, closing out 2012 with about 4.8 million in TEU-
equivalent shipments, or about 151,000 more TEUs than in 2011.

Above table represents the top 25 NVOCCs, led by number 1 Expeditors International,
at 387,500 TEUs for the year which is ahead of number 2 Blue Anchor Line at 333,000, before a
big drop off to number 3 Apex Shipping at 211,000 TEU equivalents.
MAJOR PLAYERS & COMPETITORS:
1. Caravel shipping
2. Maxicon shipping
3. RCL shipping
4. NYK shipping
5. Wannhai shipping
6. Perma shipping India Pvt. Ltd.
7. Trans-Asia shipping



VALUE CHAIN OF THE INDUSTRY:
Logistics value chain (LVC), refers to the chain with a series of intrinsic logistics value.
Logistics value chain exists in the relationship of logistics process, from upstream to
downstream. Logistics value chain reflects the nature of supply chain, and shows the origin
driving force to form the supply chain. In the traditional structure of value chain, the logistics
activities were shown in internal logistics (i.e., industrial logistics) and external logistics (i.e.,
business logistics), but all of them are parts of logistics value chain.
In fact, logistics value chain is one part of the enterprises value chain, which includes
such external logistics activities as delivery of raw materials and finished goods, and also
involves such internal logistics activities as production and selling. In the supply chain, logistics
is used to optimize and integrate the logistics resources, while logistics value chain is used to
design and plan the value-added activities in the logistics process. Therefore, all those activities
constitute a new chain, that is logistics value chain.

Source: (Research on Logistics Value Chain Analysis and Competitiveness Construction for
Express Enterprises)
INDUSTRY ANALYSIS PORTERS FIVE FORCES


The five competitive forces threat of entry, threat of substitution, bargaining power of buyers,
bargaining power of suppliers and industry rivalry jointly determine the industry competition and
profitability. The framework is a useful tool for analyzing the structure of an industry and predicting the
industrys future evolution.
1) Threat of entry High.
Threat of new entry can be characterized as high for several reasons:
a) Pressure from adjacent industries
Pressure by intense competition and inadequate profitability in their own industries,
carriers freight forwarders, wholesale distributors, and warehousing firms try to broaden their
service offerings in order to differentiate and offer more value added services. These companies
start providing services that 3pls are offering and some of them eventually become 3PL
companies. In fact, most of the existing 3PLs followed the same path earlier in 1980s and
1990s. But this dynamic still exists and puts pressure on the existing 3PLs reducing the
profitability of the industry as more players come into 3PL market. In addition, many foreign
competitors entered or plan to enter Indian market with full service offerings.
b) Economies of scale :
In many cases, 3PL companies have difficulties exploiting the economies of scale
assumed by their business model. Most of the customers require tailored logistics
solution and often position themselves as a special case , So contracts end up very
detailed specification that do not allow 3PLs to scale up their operations. They might
require dedicated distribution facilities, while in contrast sharing facilities with other
companies or with competitors might lead to better utilization of capacity, balance of
routes, etc. In addition, large carriers to whom 3PLs usually outsource shipment often are
not motivated to agree to long term worldwide contracts if routes are fragmented and do
not offer improvements of utilization of their systems. Therefore, difficulties in achieving
economies of scale for existing players in the industry lowers barriers of entry for new
players.
c) Capital Requirements
Potential entrants, such as carriers, freight forwarders, warehousing firms have required
capabilities and have invested in infrastructure that enables them to do part of the activities 3PLs
perform. They might need to invest more in technology and other areas, but capital is not
significant barrier as in other fields like mineral extraction or integrated circuit production.
d) Experience
The main component of 3PLs is human capital. Experience in the 3PL industry and in the
industry verticals they are serving is one of the main factors that might act as a barrier to entry.
But high turnover of the employees in the 3PL industry allows competitors and new entrants to
overcome this barrier.
2) Intensity of rivalry High
Many large 3PLs strategically target industries like automotive, electronics, computers,
and retail. Those market segments are intensely competitive and margins are very low. There are
many 3PL companies in this space. The 3PL industry is also very fragmented as it is represented
by more than 1000 companies, and the four largest companies represent around seven percent of
the total 3PL market. Competition is mainly based on price and service, because customers see
costs reduction as the main reason for logistics outsourcing and perceive fragmented 3pl services
as commodities or near commodities. There is lack of differentiation among 3PL providers, and
switching service providers is not really a serious problem according to responses of 3PL users.
The co-existence of two 3PL business models mainly asset based and non asset based,
plus some overlap in coverage from other adjacent asset based industries create strong pressures
on pricing and profits. High fixed costs for asset based players exert enormous pressure to fill
their capacity, which often leads to price cutting when there is excess capacity.
3) Substitutes Medium
There can be several substitutes for 3pl. Doing logistics and supply chain management in-
house can be a substitute for 3PL. the other substitute are the broad range of firms that specialize
in service specific areas ex: motor carrier, warehousing, forwarder, etc. The reason they can be
considered as substitutes as the real one stop shopping the main objective of the 3PL model is
not achieved in many cases. Companies tend to have strong capabilities in one area but are weak
in others, and are seldom strong in all areas. Once some of them achieved a complete range of
services and had all pieces for doing logistics along whole supply chain (inbound, outbound, data
management, etc) there are difficulties in providing integrated solution, and a lack of capabilities
to perform total supply chain management. Hence potential customers pick either 3PLs strong
in specific area or specialized firms for service and maintain logistics planning and supply chain
management in house.
4) Bargaining power of the buyers- Medium/High
Customers especially big ones are continually exerting downward pressure on prices and
the bargaining for higher quality and more services which leads to decrease of industry
profitability. In general, buyers have bargaining power over 3PLs for the following reasons:
In many cases, especially for smaller 3PLs, sales are connected in few accounts.
Secondly, customers feel confident that they can always find an alternative service provider,
many play companies against each other. Thirdly, they have the ability to switch providers.
Finally, buyers pose some degree the threat of backward integration, bringing logistics back in
house.
Buyers undergo a learning process through repeat purchasing and accumulate knowledge
about 3PL services, their uses and characteristics of competing firms Over time, as buyers
become more sophisticated and purchasing tends to become based on better information, 3PL
services become more like commodities.
Especially big buyers may stop using 3PLs once they accumulate the necessary
experience and knowledge. Thus there is a natural force reducing differentiation of 3PL in the
industry.
5) Bargaining power of suppliers- Medium
Lets consider carriers (motor, air and ocean) physical asset providers (public
warehousing) and IT vendors as suppliers for 3PLs. Although most of these industries experience
intensive competition and over- capacity, bargaining power of suppliers, in our opinion, is
moderate. The industry is not a very important customer for the supplier. 3PLs do not represent a
major portion of their business. Major of these industries are more concentrated than 3PL
industry.
These five forces put strong pressure on the 3PLs and create a competitive environment
where commoditization is expected.
SWOT ANALYSIS:
Strengths:
Operational cost reduction.
Customer satisfaction.
Reduced cycle time of business.
Specialized logistics services.
Flexibility in operations.
Effective communication
Brand Name.
Weakness:
High cost low margin business
Non compatibility of IT systems.
Considerable amount of fragmentation.
Sales force.
Opportunities
Emerging markets and expansion abroad.
Product and services expansion
Air freight.
Brokerage.
Integrated solution.
Market Share increase
Threats
Growing competition.
Global solution
Low margin
External changes
o Government regulations.
o politics
o taxes
Exchange rate fluctuations
Increase in fuel costs.






REFERENCES
1. http://www.transworld.co/tgls/company_profile.html
2. http://www.transworld.co/group_companies.html
3. http://economictimes.indiatimes.com/definition/nvocc
4. http://www.scdigest.com/ontarget/13-03-05-1.php?cid=6798
5. http://www.scribd.com/doc/28073759/Analysis-of-Indian-Logistics-Sector