Beruflich Dokumente
Kultur Dokumente
1
EXECUTIVE SUMMARY
The general purpose of this study is to understand the basic requirements of different
companies for domestic movement of cargo i.e. the mode of transport they use for
movement of cargo, the type of service they require, their major destination lanes and
the shipment volumes and the various problems they currently face to manage the
entire process of transportation. India is being touted as the land of opportunity for
logistics service providers all over the world. Logistics management in India has
become complex, with about ten million retail outlets to cater to the needs of one billion
people.
The study will also help us build a network of routes in and around Kolkata for
DOMESTIC CARGO SERVICES in Expeditors. Basically Covering seven sisters i.e. the
north eastern states. The study will help in approximation of cost and time of each
shipment and thus improving the services. A network would be developed and various
factors would be considered while selecting an office location for DCS in KOLKATA.
The sample size for this research is 90. A set of questions would be developed and
administered to the sample population. The question would be administered through
telephonic conversation.
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Sr.no Contents Pg.No.
1 Introduction 6
a. Logistics outlook in India 9
b. Investments in Logistics sector 9
c. Pitfalls and Challenges 10
d. Need for Integration 12
e. Outsourcing Logistics services-A growing Trend 13
3 Objectives 16
4 Research Methodology 18
5 Conceptual Framework 20
6 About Expeditors 23
7 SWOT Analysis of Expeditors 29
8 Kolkata Network 31
9 Data Analysis 37
10 Findings 53
11 Conclusion 61
12 Suggestion 64
13 Limitation 67
14 Bibliography 69
15 Annexure 71
3
INTRODUCTION
4
INTRODUCTION
5
required to maintain in different states, thereby resulting in a substantial
increase in demand for integrated logistics solutions.
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Logistics outlook in India
India spends about 13.0 percent of its total Gross Domestic Product (GDP) on logistics,
as per 2005 estimates. The major logistics functions for the Indian industries include
Transportation
Warehousing
Freight Forwarding, and other Value Added Operations including Management
of Information Systems (MIS).
Nevertheless, the logistics industry, providing services to fulfill these major logistics
needs of the Indian industries is highly fragmented. The transportation service provider
segment is completely dominated by small trucking companies and individual truckers.
The freight forwarding service provider segment is also represented by thousands of
small customs brokers and clearing & forwarding agents. Similarly, there are a huge
number of participants in the warehousing service segment and MIS service segment
also. Few service providers have the capability to provide more than one service and it
is very rare that a single service provider has the capability to provide all the logistics
services. Such fragmentation had lead Indian industries to outsource packets of
individual logistics functions to different service providers while retaining the overall
control of logistics in-house, despite incurring heavy administrative and infrastructural
costs.
• India’s logistics sector attracted investments worth Rs. 23,200 crore in first half of
2008.
• It outclassed some of the major sectors including aviation (Rs 20,890 crore),
metals and mining (Rs 8500 crore) and consumer durables (Rs 6000 crore) among
others.
• Delhi has emerged as the preferred location for the development of logistics
parks with an investment of approximately $ 200 million.
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• A large number of upcoming SEZs have necessitated the development of
logistics for the domestic market as well as for global trade.
• Indian logistics industry is expected to grow annually at the rate of 15- 20
percent, reaching revenues of approximately $ 385 bn by 2015.
• Market share of organized logistics players is also expected to double to
approximately 12 percent during the same period.
• About 110 logistics parks spread over approximately 3,500 acres at an estimated
cost of $1 bn are expected to be operational and an estimated 45 mn ft2 of warehousing
space with an investment of $ 500 mn is expected to be developed by various logistics
companies by 2012.
The Indian logistics industry suffers from inadequate infrastructure, complex tax laws
and insufficient technological aids.
In India, around 65% of goods are transported by road. In respect of the road transport
sector, vehicle ownership is firmly in the hands of individual truck owners, 67% of
whom have fleets of less than five vehicles.
A fragmented market increases paperwork costs and efforts required to channel
resources. The poor condition of roads translates directly to higher vehicle turnover,
which increases operating costs and reduces efficiency. These inefficiencies are passed
on to the logistics industry, with transportation costs accounting for nearly 40% of
logistics costs.
As the average fleet size is small, individual truck owners are unable to contract their
vehicles directly to companies, and thus freight consolidators and brokers take a
commission to provide truck owners with consignments. Truck owners lack the
bargaining power necessary for negotiating prices, and provide transportation services
at minimum profit. Increasing costs and dwindling profits affect truck owners’ ability to
upgrade and expand their fleets.
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In India, logistics costs are still higher than those in developed markets – it is estimated
to be around 13% of the GDP, compared with 8% in the US. Transportation costs
account for nearly 40% of production costs.
Inventory carrying costs account for approximately 24% of logistics costs, and order
processing and administrative costs account for a significant 10%. Stock filing and
warehouse management is, in many cases, done manually, which increases
administrative costs and adds an element of inefficiency.
The three major hurdles faced by India’s logistics industry are insufficient knowledge
and under-exposure of logistics solution providers, inadequate infrastructure, and
ineffective usage of information technology.
Lack of an integrated transport policy has hampered growth of the logistics sector in
India. The major problem is the road transport sector, which, despite being a major link
in the system, does not enjoy industry status. Consequently, road transport operators
do not have access to low-interest funds.
“India needs to invest in railways, which are environmentally friendly and the most
cost effective system. Inland waterways, neglected over the years, are to be developed
as well,” pointed out MP M Menon, former Indian ambassador to Brazil.
A characteristic feature of the industry structure in India, particularly in the express and
logistics segments, is the many players offering homogenous services. Consequently,
there is near-commoditization of services, especially in the express document business
where demand is price-sensitive. The top end of the market is controlled by a handful of
multi-nationals and large domestic players. Industry consolidation is, however, starting
to occur.
DHL has acquired local express major Blue Dart Express and, in the port terminal
business, Maersk and P&O Ports have consolidated their position by acquiring
controlling stakes in private container terminals in Gujarat. The pace of mergers and
acquisitions will most certainly develop in the years to come as the market is
progressively liberalized.
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Need for integration
There is a vital need for integration so that our customers can achieve their
transportation requirements while maximizing the value of money spent in getting their
goods to market. This requires better use of existing assets and industry cooperation,
and greater competition. Companies aiming to be an integrated solutions provider have
to tackle this by extending their supply chain capabilities.
Every point of service along the chain must have the capacity for cargoes to flow
through efficiently—at the lowest cost and greatest velocity—or it will become a
bottleneck and has a cost or time impact on customers. Having bigger ships may ease
the shortage of space at sea, but shift the pressure on to the next point in the chain.
The global transportation companies of tomorrow must be able to offer highly
integrated and flexible solutions that take into account the increasing cyclicality and
volatility in operations across industries. This is making companies vulnerable to
interruptions in their supply lines.
New technologies such as RFID, standardized data processing formats and new supply
chain tools and e-commerce capabilities will, undoubtedly, open up new ways to
mange movement and storage of goods
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The TCI-MDI survey showed that the benefits of outsourcing logistics activities range
from improved delivery schedules and reduced operating costs to expanded geographic
reach and improved operational flexibility. The study also showed that less than 55% of
Indian companies subscribe to 3PL services, compared to more than 75% globally,
which implies potentially brisk market growth.
Logistics service providers face the same set of external challenges as companies.
However, logistics service providers have an inherent flexibility to overcome external
challenges such as managing multi-modal transportation and compliance with
regulatory requirements and agencies. Internal factors that need to be addressed are
those likely to have a high impact on the level of outsourcing, such as the customer’s
costs in relation to the benefits, and the control that needs to be exercised on the
logistics service provider. With Indian companies’ increasing focus on exports, superior
logistics planning is crucial in order to remain competitive.
Overview
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Third Party Logistics (3PL), the concept of a single professional logistics service
provider managing the entire logistics functions of a company, had originated in the
developed economies of Europe and America, to relieve industries from huge logistics
costs apart from the hassles of dealing with multiple in-coherent logistics service
providers. It proved to be immensely successful in improving logistics efficiency of
majority of industries and quickly gained popularity, spreading across the globe.
In the initial stages, 3PL providers offered only basic logistics services such as
warehousing and transportation. But with growing logistics needs of organizations to
remain competitive in globalized economies, 3PL providers have evolved to offer
several other value added services ranging from packaging to supply chain planning.
The 3PL market in India is still in a relatively nascent stage, with multinational
companies in all industries being the predominant users of these services. However,
domestic major companies in leading industry sectors have also begun to follow the
footsteps of their multinational counterparts, starting with outsourcing their basic
logistics functions.
Nevertheless, considering that the most important logistics functions for Indian
industries still are transportation and warehousing, which are likely to be outsourced to
3PL in increasing share, a high level of growth is estimated for the Indian 3PL market in
the next 5-7 years. The Indian 3PL market, estimated at about US$890.3 billion in 2005,
is expected to grow at a compound annual growth rate of 21.9 percent to reach
US$3,556.7 million in 2012.
A Few Challenges to be addressed for maintaining the Momentum
Geographic diversity of India needing varied logistics expertise for each region is a
major challenge to be addressed by 3PL service providers. India has a diverse
geographic scenario coupled with a diverse consumer habit scenario in each of its 25
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states. Logistics operation in each state requires a suitable model that facilitates the
effective storage and transportation of goods mostly sold in that state, making it very
difficult for adopting a uniform logistics model. 3PL service companies interested in
serving a particular company would have to offer multiple solutions to fulfill the
nationwide logistics needs of that company.
Infrastructure limitations in India, which limit the scope of logistics services package
are another concern for 3PL service providers.
The complicated tax structure, deep-rooted corruption and high bureaucratic control
are some other hassles faced by 3PL service providers in providing the best of logistics
solutions for their clients. However, despite the existence of challenges, several factors
are driving the growth of Indian 3PL market.
Value Added Tax (VAT), the Indian Government’s proposed uniform tax regime, is
expected to drive Indian industries towards using more 3PL services. Introduced
partially in 2005, a full implementation of this regime is expected to necessitate having
centralized large warehouses in regional hub cities, to achieve best efficiency in
logistics.
The Indian 3PL market is set to grow tremendously in the next 5-7 years, spearheading
the growth of logistics market. Several factors including government’s support are
instrumental in this growth.
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OBJECTIVES
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I. Primary Objective:-
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RESEARCH
METHODOLOGY
Research Methodology
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Exploratory research is a type of research conducted for a problem that has not been
clearly defined. Exploratory research helps determine the best research design, data
collection method and selection of subjects. It should draw definitive conclusions only
with extreme caution. Given its fundamental nature, exploratory research often
concludes that a perceived problem does not actually exist.
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CONCEPTUAL
FRAMEWORK
International Logistics is the designing and managing of a system that controls the
flow of materials into, through, and out of the international corporation. Domestic
logistics is designing and managing of a system within a country for control of flow of
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materials. Globally, the logistics industry is valued at US$ 3.5 trillion. The Indian
Logistics Industry is presently estimated at US$ 90 billion (CII) which gives
employment to 45 million people.
Difference between Domestic & International Logistics can be said to arise mainly on
account of the three major factors:
Logistic costs is International Business is much more higher than the domestic
business,
The Logistic Mechanics are much more complex in the context of international
logistics than the domestic logistics,
The political, cultural and institutional factors connected with international
logistics are of considerable importance whereas these are usually not of much
consequence in the context of domestic logistics.
Whether your needs are urgent or specialized - Expeditors will provide a cost effective,
flexible set of logistics options to keep your cargo visible and moving in the supply
chain.
Shippers expect delivery methods that are flexible yet guaranteed. Our service options
are designed to give our customers earlier arrivals and later cut times to increase
velocity within your logistics network. Tap into our integrated network with state of art
technology and a highly trained and incentified work force.
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1. Strategy and Services
Our strategy is simple - by leveraging our global network, systems and established
portfolio of products, we can provide a seamless transition for customers within land
continent areas of their supply chain.
Expeditors has developed a powerful network of key cargo air and surface carriers that
offer the most consistent transit and largest lift options giving us flexibility in both
space allocation and pricing.
2. Shipment Visibility
Expeditors' proprietary track and trace tool available online to all customers. In
addition, customers can use edoc™ to convert hard copies of documents into digital
format, where they can be easily shared and archived for retrieval later. With these
applications, customers can analyze their supply chain with a host of reporting
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COMPANY
EXPEDITORS
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Expeditors International is an American global logistics and freight forwarding
company.
Expeditors has 255 locations worldwide as of November 11, 2008 providing staff
of over 12,000 who satisfy the needs of international trade using integrated
information systems.
Core Assets
1. People
By recruiting, motivating and retaining the best personnel in the business, we feel we
will keep our leadership position in the marketplace. Our business is quality customer
service and our people are what make that happen. We hire individuals based on
attitude, and we train the skills it takes to make a successful career here. Expeditors'
employees, as part of their overall job evaluation, are required to take a minimum of 52
hours per year, of in-house training. Multiple on-going training classes are available at
any one time within each Expeditors office location.
2. Systems
Expeditors takes control of our destiny by taking control of our systems direction.
Moving information in a timely and accurate method is just as important as moving the
goods and our systems support our operations teams and our customers in providing
them the data they need to successfully manage the movement of their goods. All of our
global offices are linked via high-speed lines using the same hardware and running off
of the same transportation software. This drives global standardization with timely and
accurate communication. We are the leader in the systems arena, and we are continuing
to invest in this critical area.
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3. Culture
We believe that successful companies have a unique culture, and they work hard to
protect that culture. At Expeditors our culture is about exceeding our customers
expectations and providing a place for our employees to make a career and do well for
themselves. Our environment breeds success, and you will notice that our people move
faster, work harder and are better rewarded than our competition. Our offices are neat,
organized and set up in accordance with our quality policies. We are a process driven
organization that focuses on continual improvement. It's a simple philosophy that
works. We will do all we can to protect our culture.
4. Customers
Our financial success is directly related to our client retention. We have the smallest
sales staff in the industry and put more emphasis on taking care of our existing clients
than going out and getting new business. We feel that if we partner with the right
clients our business will grow with these customers, and our reputation will support
our sales staff in obtainment of new partners. We have initiated some very successful
programs to support our existing clients including:
Services Offered
1. Air
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As a global leader in air consolidation and forwarding, Expeditors provide customer-specific
airfreight programs to shippers of all sizes.
As an IATA agent for all major airlines, Expeditors provide a complete package of air logistics
services through their global network of experienced professionals and state of the art tracking
technology.
2. Customs
With the current emphasis on free trade agreements and global sourcing, Customs
issues have assumed an increasingly important role in the supply chain. Expeditors’
global Customs services focus on the compliance, release, and reporting needs of the
marketplace, which they refer to as the "Customs value stream."
Supported by advanced technology, streamlined processes, and the best people in the
industry, they continue to introduce new services and products, assisting clients in
managing their global customs "value stream."
While many companies offer international customs services, Expeditors has a global
vision of our clients' logistics and customs needs. Whether your needs are transaction
clearance services or professional services, Expeditors and its subsidiary Tradewin, LLC
can deliver.
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They emphasize minimizing the time involved in the release process, so their
customer's overall supply chain processes are not obstructed. In a supply chain
process, any "waiting" time is a waste, and they are focused on eliminating
waste.
3. Distribution
Expeditors provide a comprehensive, flexible spectrum of distribution and
warehousing services that are available throughout their global network. Leading-edge
information technology and connectivity offers real-time visibility to inventory. This
combination of coverage and technology offers seamless control over a global supply
chain.
4. Insurance
Transportation Risk Analysis Center at Expeditors - TRACE
The Transportation Risk Analysis Center at Expeditors (TRACE) provides users
with tools to manage transit related risks.
Cargo Insurance is a critical part of the International transportation process. Most
insurance providers do not have access to logistics data and more importantly,
do not understand global transportation, which makes it difficult to assess the
risk and make accurate recommendations. Expeditors’ goal is to identify the
hidden risks in transportation, and to structure an insurance program addressing
those risks while providing financial security. Expeditors goes beyond basic
business insurance and treats cargo insurance as part of the complete logistics
process.
Expeditors employs a full staff of trained, professional claims adjustors who will
handle all claims anywhere in the world. The claims team is one of the largest
cargo only claims departments in North America, and is here specifically to
address our insured customers’ needs. They conduct comprehensive analysis
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and investigation, assemble all formal documentation and accurately process
claims at both origin and destination. Additionally, Expeditors handles all
recoveries from the responsible transportation carriers. More money recovered
means more bottom-line insurance savings for our customers.
When claims do arise, Expeditors has developed specific logistics claims software to
manage them. This allows them to use numerous measurement tools and reporting
mechanisms, designed to assist in efficient and accurate resolution for their customers.
5. Ocean
Expeditors is a licensed Ocean Transportation Intermediary (OTI) and NVOCC and is
uniquely positioned to handle all aspects of shipment from launch to catch. They offer a
full array of ocean related services including Ocean Forwarding, NVOCC Consolidation
or FCL container management as well as customer-in-house services.
Expeditors can offer a single-source solution to and from any point worldwide keeping
their customers informed of their shipment status at every step.
6. Order Management
Through Order Management exp.o®, Expeditors Web based tracking application, any
attribute of an order can be tracked, completely visible on the Web. Item quantities,
required ship dates, commodity description and estimated vs. actual ex-factory dates
along with the complete process are managed in e.tms, our operational system, and
made available via Order Management exp.o® from the time the order is placed.
SWOT Analysis of Expeditors
Strengths:
Good user-friendly systems that enables their employees to provide real
time information to the customers.
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Expertise in services like freight forwarding, order processing and other
related services.
Presence of SOP in the process that provides personalized service for
individual customers.
A large customer base that is already aware of the company’s image.
Well-informed and motivated employees.
Weaknesses:
Lack of experience in the domestic market.
Lack of knowledge about the wants of the companies in different
industries for domestic movement of cargo.
Opportunities:
3PL service in India is still at its nascent stage and there is a huge demand
for good 3PL service providers owing to remarkable growth of the Indian
economy especially in manufacturing and retail sector.
India is one of the country which has a huge domestic consumption owing
to the population of more than one billion people which further puts
pressure on logistics company to provide efficient service and wide
geographic reach.
Threats:
The Indian logistics industry suffers from inadequate infrastructure,
complex tax laws and insufficient technological aids.
Dominance of unorganized sector in domestic movement of cargo.
A fragmented market increases paperwork costs and efforts required to
channel resources.
The poor condition of roads translates directly to higher vehicle turnover,
which increases operating costs and reduces efficiency.
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KOLKATA NETWORK
WEST BENGAL
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PRIMARY TRANSIT
West
Bengal
Destination Destination Distance in Transit time Rail Air
S.No A B kms road Link link Remarks
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1 Kolkata Asansol 228 4hrs N\A N\A
2 Kolkata Jhargram 170 3hrs N\A N\A
3 Kolkata Durgapur 187 4hrs N\A N\A
4 Kolkata Purulia 250 5hrs Yes N\A
5 Kolkata Bankura 180 4hrs Yes N\A
6 Kolkata Hirapur 235 5hrs Yes N\A
7 Kolkata Nanoor 200 4hrs N\A N\A
8 Kolkata Siuri 230 4hrs N\A N\A
Rail link not
9 Kolkata Maldah 351 7hrs Yes Yes direct
English
10 Kolkata Bazaar 350 7hrs N\A N\A
11 Kolkata Balurghat 460 9hrs N\A Yes
Rail link not
12 Kolkata Raiganj 420 8hrs Yes N\A direct
Rail link not
13 Kolkata Jalpaiguri 700 12hrs Yes N\A direct
Rail link not
14 Kolkata Darjeeling 731 13hrs Yes N\A direct
15 Kolkata Bagdogra 670 11hrs N\A Yes
Cooch
16 Kolkata Behar 805 13hrs N\A Yes
17 Kolkata Panagarh 200 4hrs Yes Yes
18 Kolkata Siliguri 678 11hrs Yes N\A
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18 Kolkata Bantala 15 30 mins N\A N/A
19 Kolkata Raipur 37 1hr N\A N/A
20 Kolkata Kulgachia 50 1hr N\A N/A
21 Kolkata Magrahat 56 1hr N\A N/A
22 Kolkata Medni pur 126 2hrs N\A N/A
23 Kolkata Narajole 116 2hrs 14 mins N\A N/A
24 Kolkata Haldia 120 2hrs 14 mins N\A N/A
25 Kolkata Gaighata 120 2hrs 14 mins N\A N/A
26 Kolkata Jirat 71 1hr 30 mins N\A N/A
27 Kolkata Chakdaha 75 1hr 30 mins N\A N/A
28 Kolkata Chapra 128 2hrs 28 mins N\A N/A
29 Kolkata Nabadwip 118 2hrs 14 mins N\A N/A
30 Kolkata Debra 96 1hr 30 mins N\A N/A
31 Kolkata Kakdwip 88 1hr 40 mins N\A N/A
32 Kolkata Bardhaman 124 2hrs N\A N/A
33 Kolkata Chunchura 62 1hr 10 mins N\A N/A
KOLKATA TO JHARKHAND
JHARKHAND JHARKHAND
Destination Distance in Transit time Rail Air
S.No A Destination B kms road Link link Remarks
1 Kolkata Ranchi 420 7hrs Yes Yes
2 Kolkata Jamshedpur 300 5hrs Yes N\A
3 Kolkata Tamar 358 6hrs Yes N\A
4 Kolkata Lohardaga 480 8hrs Yes N\A
5 Kolkata Bokaro 300 6hrs N\A N\A
6 Kolkata Dhanbad 300 5hrs N\A N\A
7 Kolkata Hazaribagh 408 6hrs N\A N\A
8 Kolkata Dumka 300 5hrs N\A N\A
9 Kolkata Pakur 322 5hrs N\A N\A
10 Kolkata Godda 370 6hrs Yes N\A
11 Kolkata Sahibganj 420 7hrs Yes N\A
12 Kolkata Giridih 332 6hrs Yes N\A
13 Kolkata Koderma 440 7hrs N\A N\A
14 Kolkata Chatra 470 8hrs N\A N\A
15 Kolkata Garwah 622 10hrs Yes N\A
BIHAR
BIHAR BIHAR
Destination Destination Distance in Transit time Rail Air
S.No A B kms road Link link Remarks
1 Kolkata Patna 622 10hrs Yes Yes
2 Kolkata Banka 380 6hrs N\A N\A
3 Kolkata Bhagalpur 410 7hrs N\A N\A
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4 Kolkata Jamui 475 8hrs Yes N\A
5 Kolkata Katihar 453 8hrs Yes N\A
6 Kolkata Purnia 500 8hrs Yes N\A
7 Kolkata Luckeesarai 500 8hrs N\A N\A
8 Kolkata Begusarai 536 9hrs N\A N\A
9 Kolkata Sheikhpura 524 9hrs N\A N\A
10 Kolkata Nawada 478 8hrs N\A N\A
11 Kolkata Gaya 528 8hrs Yes Yes
12 Kolkata Aurangabad 580 9hrs Yes N\A
13 Kolkata Sasaram 620 9hrs Yes N\A
14 Kolkata Bihar Sharif 514 8hrs Yes N\A
15 Kolkata Jahanabad 580 9hrs Yes N\A
16 Kolkata Madhepura 510 8hrs N\A N\A
17 Kolkata Saharsa 544 9hrs Yes N\A
18 Kolkata Samastipur 610 10hrs N\A N\A
19 Kolkata Hajipur 600 10hrs Yes N\A
20 Kolkata Chhapra 658 11hrs Yes N\A
21 Kolkata Buxar 711 11hrs Yes N\A
22 Kolkata Madhubani 662 11hrs Yes N\A
23 Kolkata Darbhanga 652 10hrs Yes N\A
24 Kolkata Muzaffarpur 652 10hrs Yes N\A
25 Kolkata Siwan 722 12hrs N\A N\A
26 Kolkata Shivhar 715 11hrs N\A N\A
27 Kolkata Sitamarhi 724 12hrs Yes N\A
28 Kolkata Gopalganj 740 12hrs N\A N\A
29 Kolkata Bettiah 763 12hrs N\A N\A
30 Kolkata Motihari 735 12hrs N\A N\A
SIKKIM
SIKKIM SIKKIM
Destination Destination Distance in Transit time Rail Air
S.No A B kms road Link link Remarks
1 Kolkata Gangtok 786 13hrs N\A N\A
2 Kolkata Namchi 761 13hrs N\A N\A
3 Kolkata Mangan 820 14hrs N\A N\A
ASSAM
ASSAM ASSAM
Destination Distance in Transit time Rail Air
S.No A Destination B kms road Link link Remarks
1 Kolkata Kokrajhar 900 15hrs Yes N\A
2 Kolkata Goalpara 978 16hrs Yes N\A
3 Kolkata Bongaigaon 922 15hrs Yes N\A
4 Kolkata Barpeta 985 16hrs N\A N\A
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5 Kolkata Nalbari 1030 17hrs Yes N\A
6 Kolkata Dispur 1110 18hrs Yes N\A
7 Kolkata Guwahati 1110 18hrs Yes Yes
8 Kolkata Tezpur 1200 20hrs Yes Yes
9 Kolkata Silchar N\A 22hrs N\A N\A
10 Kolkata Dimapur 1400 23hrs Yes Yes
11 Kolkata Jorhat 1400 22hrs Yes N\A
North
12 Kolkata Lakhimpur 1400 22hrs Yes Yes
13 Kolkata Dibrugarh 1400 24hrs Yes Yes
14 Kolkata Tinsukia 1527 24hrs Yes N\A
ARUNACHAL PRADESH
Arunachal Arunachal
Pradesh Pradesh
Destination Distance in Transit time Rail Air
S.No A Destination B kms road Link link Remarks
1 Kolkata Itanagar 1400 14hrs N\A N\A
2 Kolkata Tawang 1433 24hrs N\A N\A
3 Kolkata Bomdila 1264 21hrs N\A N\A
4 Kolkata Seppa 1355 23hrs N\A N\A
5 Kolkata Pasighat 1828 29hrs N\A Yes
6 Kolkata Roing 1753 27hrs N\A N\A
7 Kolkata Tezu 1685 26hrs N\A Yes
NAGALAND
Nagaland Nagaland
Destination Destination Distance in Transit time Rail Air
S.No A B kms road Link link Remarks
1 Kolkata Tuensang 1724 29hrs N\A N\A
2 Kolkata Mokochung 1475 24hrs N\A N\A
3 Kolkata Dimapur 1383 23hrs Yes N\A
4 Kolkata Kohima 1445 24hrs N\A N\A
5 Kolkata Phek 1509 26hrs N\A N\A
MANIPUR
Manipur Manipur
Destination Destination Distance in Transit time Rail Air
S.No A B kms road Link link Remarks
1 Kolkata Imphal 1580 26hrs N\A Yes
MIZORAM
Mizoram Mizoram
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Destination Destination Distance in Transit time Rail Air
S.No A B kms road Link link Remarks
Distances are
1 Kolkata Aizwal 1800 29hrs N\A Yes approximates
Distances are
2 Kolkata Lunglei 1800 29hrs N\A N\A approximates
TRIPURA
Tripura Tripura
Destination Destination Distance in Transit time Rail Air
S.No A B kms road Link link Remarks
1 Kolkata Agartala 1674 27hrs Yes Yes
2 Kolkata Kailashahar 1600 27hrs N\A N\A
MEGHALAYA
Meghalaya Meghalaya
Destination Destination Distance in Transit time Rail Air
S.No A B kms road Link link Remarks
1 Kolkata Shillong 1196 20hrs N\A Yes
2 Kolkata Tura 1077 18hrs N\A N\A
3 Kolkata Jowai 1258 21hrs N\A N\A
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DATA ANALYSIS
SURVEY
Before doing the sector-wise analysis of the survey, we will study the major findings of
the overall survey in brief.
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Monthly Expenses of all Companies Surveyed :
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The major destination lanes from Delhi are as follows:
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Major problems faced by the companies with their current set of transporters are as
follows:
In case of imports, almost 80% of the time the decision on transportation is taken
by CHA.
About 75% of the companies go for mutual consent while dealing with the
change in fuel prices.
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The major locations for warehousing service other than Delhi are Hyderabad,
Mumbai and Bangalore.
SECTOR-WISE ANALYSIS
1. Engineering Goods
Total number of companies surveyed – 22
The break-up of the size of the companies visited based on their monthly
expenditure on transportation can be shown as follows:
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Salient Features of the companies in this Industry are as follows:
Dominance of Local Transporters for bulk cargo.
For low weight consignments i.e. less than 100 Kgs, express cargo services are
prominent.
Shipment Tracking is one of the major problems faced by them. However, most
of the companies are satisfied without proper co-ordination and tracking as they
do not wish to pay a premium amount for the extra service.
In case of heavy machinery that are used in industries, production is mostly
based on orders; therefore they do not require warehousing services.
The major destination lanes from Delhi are as follows:
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Type of services required are as follows:
Conclusion
The industry looks moderately well in terms of volume. However, the major
challenge would come from the low cost Local Transporters who are dominant
from several years and have also started improving their service and offering
certain added services like providing warehousing service for few days without
extra cost after sensing competition from the organized players. But,
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manufacturer of spare parts that are used in various industries for e.g.
manufacturer of fasteners used in automotive industry can be targeted.
2. Retail
Total number of companies visited – 15
The break-up of the size of the companies visited based on their monthly
expenditure on transportation can be shown as follows:
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Salient Features of the companies in this Industry are as follows:
Transportation requirements are complex, as they require wide geographic reach
and other value-added services.
Dominance of organized players as they require integrated and customized
services like order processing, proper tracking, proper packaging, specific work
schedules for loading/unloading, etc.
Most of the shipments are time-bound, therefore on-time delivery is very
important.
Shipment Tracking and proper co-ordination are the areas of concern for most of
the companies.
Conclusion
The industry looks very attractive in terms of volume. Also, the companies are
ready to pay a premium as their needs are complex and require customized and
integrated service.
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3. Garments
Total number of companies visited – 17
The break-up of the size of the companies visited based on their monthly
expenditure on transportation can be shown as follows:
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Salient Features of the companies in this Industry are as follows:
Dominance of Local Transporters.
In some areas loading and unloading may result in extra cost if the carrier is not
the member of truckers association.
In most of the cases the shipment is not time-bound and also the danger of
damage is minimal. Due to this, companies go for cost-effective transportation.
Almost 80% of the companies in this industry go for spot rates while deciding on
the rates.
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Conclusion
The industry looks unattractive in terms of volume and also because of dominance of
local transporters who are serving the industry for several years. Also, the companies
are not ready to pay any premium as their requirements are well served by local
transporters.
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Total number of companies visited – 15
The break-up of the size of the companies visited based on their monthly
expenditure on transportation can be shown as follows:
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Transportation requirements are complex as proper handling of the materials is
very important.
Major problem faced by the companies in this sector is of damage/loss due to
Improper Loading/Unloading and bad vehicle condition. Shipment tracking is
another area of concern.
Companies in this sector have different requirements owing to the volume, form
and fragility of different chemicals and pharmaceutical products. So it is
important to offer personalized services to individual customers.
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Conclusion
The industry looks very attractive in terms of volume. Also, because of its
complex transportation needs, they require customized solutions. Companies are
ready to pay a premium of 2-5% if the service levels are met as it increases their
efficiency to serve their customers better.
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FINDINGS
Findings
1. What are your organization’s Monthly expenses on transportation?
The comparitive data suggests that irrespective of sectors monthly expenses are
greater than 1lakh which means that Expeditors has great opportunities in these
sectors and it must tap the market potential.
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2. What type of Modes of Transport does your organization prefer?
Road being one of the cheapest modes of transportation is preferred the most.
Roads are best suited for short distance transportation needs.
Engineering being one of the capital intensive industries having bulk and
volume transportation needs. Roads and Rails are preferred.
Air mode is preferred for quick and safe delivery, particularly for areas which
cannot be catered through other modes of transport. High Quality Garment
producers and retailer prefer air.
Rail is preferred for bulk and distant transportation. As in the case of Retail and
Engineering.
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Major destinations include all the major states in India.
Sectors like Garments are concentrated more in the southern parts of India which
is a major producer of garments.
Sectors like engineering are concentrated in industrial areas like Andhra and
Maharashtra.
4. Which types of services are required by your organization?
Sectors like engineering and retail need Full truck loads services because of their
nature of their products.
Part loads are preferred in case of low volumes of business which generally
happens in case of pharmaceuticals and garments.
5. What are the major problems faced by your organization with your current set of
transporters?
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Irrespective of sectors companies find shipment delivery, damage\loss, and
proof of delivery confirmation as majors problems which they face with their
current transporters.
Others include problems like that of insurance claims, speed of delivery etc.
In case of imports, almost 80% of the time the decision on transportation is taken
by CHA.
In other cases the Product Manager takes the final call on transportation
decisions.
7. Is there mutual consent while dealing with price changes in fuel prices?
About 75% of the companies go for mutual consent while dealing with the
change in fuel prices.
The major locations for warehousing service other than Delhi are Hyderabad,
Mumbai and Bangalore.
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IV. Expeditors Performance
On a year-over-year basis, revenues in the United States, Other North America, Latin
America, Europe and Africa, Middle East, and India increased 16.7%, 14.9%, 15.3%,
31.5% and 0.3%, respectively. Revenue from Asia Pacific declined 6.5%.
Gross profit (net revenue) climbed 13% year over year to $472.6 million. Operating
income rose 10% year over year to $152.3 million and operating expenses grew 3.7%
year over year to $1,429.1 million in the reported quarter. The whopping growth in the
operating income signifies operating efficiency and strict cost control measures
undertaken by the company.
Revenue Segments
Airfreight Services revenue grew 2.3% year over year to $749.1 million in the second
quarter.
Ocean Freight and Ocean Services revenue inched up 1.4% year over year to $486.8
million.
Customs Brokerage and Other Services revenues increased 18.7% year over year to
$344.7 million.
Liquidity
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Expeditors’ balance sheet remained solid with no debt and $1.2 billion in cash and cash
equivalents at the end of the second quarter, reflecting an increase from $0.96 billion in
the year-ago quarter.
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consumer goods industrial, retail
Expeditors is a very Logistics activities UPS SCS has become FedEx Supply Chain
profitable freight account for 15% of the largest North Services follows its
forwarder with a the revenues of American-based 3PL. parent’s emphasis
strong base in China Deutsche Post World It had its first on transportation
and Asia. The Net. DHL does two profitable year in and supply-chain
Expeditors billion dollars in 2003 and is now an solutions.
Evaluation management is candid revenue from integral part of the Preference in
and satirical. The contract logistics, total UPS global transportation is
management never primarily in Europe. offering. Having a given to other
lost sight as a freight Operations in the financial and FedEx companies
forwarder on turning U.S. are mainly in operational (FedEx Express,
good margins on freight forwarding powerhouse as a Ground, Custom
purchased but are expanding parent is a Critical and LTL
transportation. with the acquisition tremendous plus. UPS carriers). Sister
Operational quality is of Airborne Logistics. has generated over company FedEx
highly valued and Asian presence is the $2 billion in free cash Trade Networks is a
company has result of decades of flow each of the last quality international
surrounded itself with experience and two years. UPS SCS is transportation
a good team. positioning by DHL, likely to make a manager. The 3PL
Expeditors is tied into Danzas and AEI significant purchase if revenue shown
an organic growth before acquisition. it can make the right above is for FedEx
strategy that may not DHL Danzas is a deal. UPS SCS, like its SCS and related
be sustainable over strong brand in Asia parent, has important non-expenses, non-
the long haul, but and number one in mid-market strength. package businesses.
works well now. several markets.
Our Analysis
Expeditors is focused on gaining market share, expanding gross profits, easing capacity
constraints as well as increasing operational efficiency. Expeditors’ debt-free balance
sheet, superior execution, and ability to return cash to shareholders in the form of
dividends make it attractive for investment.
However, competitive threats from companies like United Parcel Service Inc. (UPS -
Analyst Report), as well as the company’s dependence on asset-based transportation
providers to move its shipments make us cautious on the stock for the long term.
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The company currently maintains our long-term Neutral recommendation on
Expeditors International.
Total revenue upped 4% year over year to $1.58 billion but this was below the estimate.
CONCLUSION
CONCLUSION
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International Logistics is the designing and managing of a system that controls the
flow of materials into, through, and out of the international corporation. Domestic
logistics is designing and managing of a system within a country for control of flow of
materials. Globally, the logistics industry is valued at US$ 3.5 trillion. The Indian
Logistics Industry is presently estimated at US$ 90 billion (CII) which gives
employment to 45 million people.
Difference between Domestic & International Logistics can be said to arise mainly on
account of the three major factors:
Logistic costs is International Business is much more higher than the domestic
business,
The Logistic Mechanics are much more complex in the context of international
logistics than the domestic logistics,
The political, cultural and institutional factors connected with international
logistics are of considerable importance whereas these are usually not of much
consequence in the context of domestic logistics.
India is being touted as the land of opportunity for logistics service providers all over
the world. Expeditors can use its greater flexibility in services to its advantage to
counter its major competitors through the following differentiated services which are as
follows:-
Expeditors' proprietary track and trace tool available online to all customers. In
addition, customers can use edoc™ to convert hard copies of documents into
digital format, where they can be easily shared and archived for retrieval later.
With these applications, customers can analyze their supply chain with a host of
reporting.
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Depending on needs urgent or specialized - Expeditors provides a cost effective,
flexible set of logistics options to keep the cargo visible and moving in the supply
chain.
Shippers expect delivery methods that are flexible yet guaranteed. The service
options are designed to give the customers earlier arrivals and later cut times to
increase velocity within the logistics network.
Sector-wise analysis of the survey and the company’s internal strengths and weaknesses
shows that Expeditors should target sectors like Retail, Pharmaceuticals and other
Hazardous and Non-Hazardous chemicals as the transportation needs of the
companies in these sectors are complex and their requirements of integrated and quality
service can be well met by Expeditors. The company must also keep on innovating so as
to remain ahead and to exceed customer’s expectations. Expeditors can leverage on
their strong and modern IT infrastructure and wide reach to cater to these sectors and
gain a strong foothold in domestic movement of cargo in India.
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SUGGESTIONS
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SUGGESTIONS
3. Since Expeditors main competitors are DHL, FedEx which have their services all
over India. Expeditors should leverage on their strong and modern IT
infrastructure and wide reach to cater to these sectors and gain a strong foothold
in domestic movement of cargo in India.
4. Companies like DHL own the fleet which they use for transportation. 3PL service
which Expeditors uses must be consistent and certain supervision mechanism
must be developed to maintain quality of the service.
5. Another problem area is proof of delivery (POD). Expeditors must use electronic
systems as POD instead of manual slips which it uses at present. It would help
monitor Proof of Delivery on real time basis.
6. While dealing with change in fuel prices. Expeditors must adequately sensitize
its clients about reasons for the change transportation costs.
7. The company could think of turning itself into asset based company from non
asset based company to thwart increasing competition from other asset based
companies like UPS, DHL, Fed Ex.
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8. India is one of the countries which have a huge domestic consumption owing to
the population of more than one billion people which further puts pressure on
Logistics Company to provide efficient service and wide geographic reach.
Expeditors must increase its presence in India.
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LIMITATIONS
LIMITATIONS
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1. Research work was carried in Delhi only. The findings may not be
applicable to other parts of the country.
2. Responses could be biased and may not give true picture of the
requirements of various companies for domestic movement of cargo.
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BIBLIOGRAPHY
BIBLIOGRAPHY
Googlemaps.com
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Indianrailways.com
Mapofindia.com
http://www.expeditors.com/
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ANNEXURE
Questionnaire
1. Type of sector?
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Less than and Greater than 10000 Greater than 25000
Equal to 10000 and less than equal to 25000 less than equal to 50000
4. What are the major destinations for movement of your cargo from Delhi?
6. What are the major problems faced by your organization with your current set
of transporters?
7. Is there mutual consent while dealing with the change in fuel prices?
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9. Who takes the decision on transportation for your organization?
_______________________________
_______________________________
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REGULARLY FOR DISCUSSION? : YES/NO (Please tick)
SIGNATURE OF EVALUATOR
NAME:
DATE:
*In case report is disapproved, student has to resubmit the report after
incorporating the suggestions given on the feedback form. Revised report should
be submitted along with the feedback form.
DELHI INSTITUTE OF ADVANCED STUDIES
ATTENDANCE FOR SUMMER TRAINING PROJECT REPORT
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4
10
Co-ordinator
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