Transportation, Logistics, Warehousing and Packaging Sector

Transportation, Logistics,
Warehousing and
Packaging Sector (2022)
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Human Resource and Skill
Requirements in the
Transportation, Logistics,
Warehousing and
Packaging Sector
Study on mapping of human resource skill gaps in
India till 2022
Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Table of Contents
1. Environment Scanning and Competitiveness of the Transportation, Logistics, Warehousing
and Packaging Sector ........................................................................................................................... 5
1.1. Overview of the Transportation, Logistics, Warehousing and Packaging Sector ................... 5
1.2. Industry Size and Growth of the Transportation, Logistics, Warehousing and Packaging
Sector 7
1.3. Demand Drivers of the Transportation, Logistics, Warehousing and Packaging Sector ...... 20
1.4. Key Success Factors and Risk Factors for the Transportation, Logistics, Warehousing and
Packaging Sector ............................................................................................................................... 21
1.5. Drivers of competitiveness of the Transportation, Logistics, Warehousing and Packaging

Sector 23
2. Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing
and Packaging Sector ......................................................................................................................... 24
2.1. Current employment pattern ................................................................................................. 26
2.2. Skill Requirements and Skill Gaps in the Transportation Segment: Road Transport ........... 28
2.3. Skill Requirements and Skill Gaps in the Transportation Segment: Ship Transport ............ 32
2.4. Skill Requirements and Skill Gaps in the Transportation Segment: Railway Transport ...... 37
2.5. Skill Requirements and Skill Gaps in the Third Party Logistics Segment............................ 42
2.6. Skill Requirements and Skill Gaps in the Warehousing Segment ........................................ 49
2.7. Emerging trends .................................................................................................................... 54
2.8. Projected Industry Size and Human Resource Requirements ............................................... 59
2.9. Focus areas for skill building ................................................................................................ 64
Page 2 of 67
List of Figures
Figure 1: A Typical Supply Chain .......................................................................................................... 6

Figure 2: Value chain: Logistics ............................................................................................................. 6
Figure 3: Evolution of logistics services ................................................................................................. 8
Figure 4: Segments of the Transportation, Logistics, Warehousing and Packaging Sector ................... 9
Figure 5: Share of the Transport Segment in GDP ............................................................................... 10
Figure 6: Sub-Segment wise share in Transportation ........................................................................... 11
Figure 7: Growth in India’s Shipping Fleet .......................................................................................... 15
Figure 8: Major players in the Ship Transportation Segment (based on Turnover, 2008).................... 15
Figure 9: Logistics Service Providers ................................................................................................... 18
Figure 10: Types of packaging.............................................................................................................. 19
Figure 11: Demand drivers for the Transportation, Logistics, Warehousing and Packaging Sector .... 20
Figure 12: Broad overview of the Indian logistics space ...................................................................... 25
Figure 13: Value chain of the Road Transport Sub-segment ................................................................ 28
Figure 14: Value chain of the Ship Transport Sub-segment ................................................................. 32
Figure 15: Profile of people employed in the Ship Transport Sub-segment ......................................... 33
Figure 16: Profile of people employed in the Railway Transport Sub-segment ................................... 37
Figure 17: Popular services of 3PL providers ....................................................................................... 42
Figure 18: Value chain in 3PL (for import/export management, custom clearing and forwarding) ..... 43
Figure 19: Value chain in Multimodal Transport Operations ............................................................... 44
Figure 20: Profile of people employed in the Third Party Logistics Segment ...................................... 45
Figure 21: Value chain of the Warehousing Segment .......................................................................... 49
Figure 22: ICD and CFS: Import Cycle ................................................................................................ 50
Figure 23: ICD and CFS: Export Cycle ................................................................................................ 51
Figure 24: Profile of people employed in the Warehousing Segment .................................................. 52
Figure 25: Projected GDP growth in Transportation sector – 2008 to 2022 (Rs. billion, constant prices
1999-00) ................................................................................................................................................ 59
Page 3 of 67
List of Tables
Table 1: Growth rates of various segments of Transportation, Logistics, Warehousing and Packaging
Sector ...................................................................................................................................................... 9
Table 2: Trends in Rail-Road Modes in Passenger and Goods Traffic................................................. 13
Table 3: Warehouse capacity plans of major 3PL Companies ............................................................. 17
Table 4: Level-wise Distribution of Human Resources in the Road Transport Segment ..................... 26
Table 5: Functional Distribution of Human Resources in the Railway Transport Segment ................. 27
Table 6: Functional Distribution of Human Resources in the Ship Transport Segment / at Logistic
providers dealing in export-import, freight forwarding ........................................................................ 27
Table 7: Level-wise Distribution of Human Resources in the Warehousing Segment ......................... 27
Table 8: Distribution of human resources by education level............................................................... 28
Table 9: Skill requirements and skill gaps in the Road Transport Sub-segment ................................. 29
Table 10: Typical configurations of small, medium and large players in Ship-based Transport.......... 33
Table 11: Skill requirements and skill gaps in the Ship Transport Sub-segment ................................. 34
Table 12: Cadre-wise Staff Strength in Indian Railways ...................................................................... 38
Table 13: Strength and Profile of employees in Groups A, B, C and D ............................................... 38
Table 14: Skill requirements and skill gaps in the Rail Transport Sub-segment .................................. 39
Table 15: Skill requirements and skill gaps in the Third Party Logistics Segment (Specific to
Warehousing) ........................................................................................................................................ 45
Table 16: Skill requirements and skill gaps in the Third Party Logistics Segment (Specific to Export
and Import Transactions, Custom clearances and Freight forwarding) ................................................ 48
Table 17: Skill requirements and skill gaps in the Warehousing Segment ........................................... 52
Table 18: Projected on-road M&HCVs and human resource requirement in M&HCVs for drivers and
cleaners (in ‘000s) ................................................................................................................................. 60
Table 19: Incremental human resource requirement in the Road Sector till 2022 (in ‘000s) ............... 60
Table 20: Projected growth in the Airline Industry in India ................................................................. 61
Table 21: Projected Industry Size and Human Resource Requirement in the Airline Industry ............ 62
Table 22: Incremental human resource requirement till 2022 in Warehousing (organised sector) and
3PL (in ‘000s) ....................................................................................................................................... 63
Table 23: Incremental human resource requirement till 2022 in the Transportation, Logistics, and
Warehousing sector (in ‘000s) .............................................................................................................. 63
Table 24: Focus areas for skill building ................................................................................................ 64
Page 4 of 67
1. Environment Scanning and Competitiveness of the

Transportation, Logistics, Warehousing and Packaging Sector
1.1. Overview of the Transportation, Logistics, Warehousing and

Packaging Sector
Logistics is defined as a business planning framework for the management of material, service,
information and capital flows. It includes the increasingly complex information, communication and
control systems required in today's business environment. It is also defined as the procurement,
maintenance, distribution, and replacement of personnel and material. A typical logistics framework
consists of physical supply, internal operations and physical distribution of goods and services.
The global annual logistics spend is valued at about USD 3.5 trillion. The annual logistics cost for the
USA is about 9% of GDP and internationally it varies between 9% and 20% of the GDP. The US
logistics market is the largest in the world and accounts for one-third of the world logistics
market1.The global logistics industry has registered significant growth in the last decade wherein the
big driver has been the emergence on Third Party Logistics (3PL) and Fourth Party Logistics (4PL)
players in industry who are expected to play a much more important role in the years to come.
The global logistics industry is characterised by high costs of operations, low margins, shortage of
talent, infrastructural bottlenecks alongside increasing demand from clients for providing one-stop
solutions to all their needs and for investing in progressive technology . All these factors will further
decrease the margins involved in this industry and fasten the process of consolidation in industry
through acquisitions, mergers and alliances.
The entities in a typical supply chain are the supplier, the manufacturer, the distributor, the retailer
and the customer. Goods, information and finance move unidirectionally or bi-directionally between
these entities. A typical supply chain is as shown below:
1
Report on Logistics industry overview by Armstrong and associates
Page 5 of 67
Figure 1: A Typical Supply Chain
The terms Logistics and Supply Chain Management (SCM) are typically used interchangeably in
common parlance, though there is a subtle difference between the two. While SCM is more strategic
in nature, logistics is more operations-oriented. Logistics can be considered as a part of SCM which
encompasses planning activities, implementation, control of the efficient forward and reverse flow
and storage of goods, services and related information between the point of origin and the point of
consumption in order to meet customer and legal requirements. The activities involved in a typical
supply chain are typically inbound activities or outbound activities; inbound logistics refers to
activities relating to bringing goods into the organization, while outbound logistics deals with
activities relating to taking the goods out of the organization.
The value chain for logistics is as shown below
Figure 2: Value chain: Logistics
Goods that are received from the manufacturer are loaded and stuffed into containers of the right size.
The goods are then transported by any of the modes of transportation (rail, road, air, etc). The
Page 6 of 67
transported goods are brought to a warehouse and stored. The goods are then re-packed in the format
to be sent to the customer, and then finally delivered to the customer.
Logistics is a critical component relevant across agriculture, manufacturing and service sectors and
has to be optimally managed for smooth functioning of production and distribution operations.
Additionally, logistics cost accounts for a major component of the input costs in all sectors, more so in
the case of sectors such as cement, steel, automobiles, FMCG, retail, pharmaceuticals etc. With rising
competition in the sectors that use logistics services, it has become even more important to enhance
the efficiency of the system and use the cost-benefit in increasing the company’s competitiveness.
Besides, with increasing globalisation a larger number of multi-national companies (MNCs) are
sourcing, manufacturing and distributing goods on a global scale, and thus need more complex supply
chains to be managed. Given such developments, the Transportation, Logistics, Warehousing and
Packaging Sector is expected to become a more specialised and niche expertise area where high
premium will be charged for increased quality and quantity of service delivered by logistic service
provider.
1.2. Industry Size and Growth of the Transportation, Logistics,

Warehousing and Packaging Sector
The annual logistics cost in India is valued at Rs. 6,750 billion (US$ 135 billion) and it is growing at
8-10% annually2. Logistics cost3 by value accounts for around 13% of the GDP of India – this is much
higher than that in the US (9%), Europe (10%) and Japan (11%) but lower than that in countries such
as China (18%) and Thailand (16%). In particular, the percentage-wise share of transport cost (an
important constituent of total logistic cost incurred by a nation) by value of GDP has been steadily
increasing.
The high cost of logistics in India when compared to developed nations may be attributed to poor
quality of infrastructure and inadequate service quality vis-a-vis counterparts such as US and Europe.
The Transportation, Logistics, Warehousing and Packaging Sector in India is dominated by the
unorganised segment (small4 truck owning companies linked to intermediate brokers or transport
companies, small warehouse operators, custom brokers, freight forwarders, etc.); the organised
segment accounts for less than 10% of the total logistics market in India.
2
Cygnus research
3
Logistic cost is inclusive of transport cost, estimated inventory carrying cost and administration cost
4
Possessing less than 5 trucks
Page 7 of 67
As is the case with other industries, the employment is distributed across worker or supervisor or
management levels in all segments with some unique feature particular to specific segments such as
third party logistic providers, etc. Semi-skilled or minimally educated workers constitutes a large
portion of the employment. The details of persons employed in various segments are provided in
subsequent sections in this report.
The type of logistics services provided in India are yet evolving; the focus in India has been on
enabling ‘physical distribution’ as compared to developed nations where the focus has progressively
shifted to ‘integrated logistics management’.5
Figure 3: Evolution of logistics services
Global
logistics
External Management
Integrated • USA,UK
logistics-4PL
Internal • Hong Kong
Integrated • Korea
Logistics-3PL • Singapore
• China
• Philippines
Physical • Indonesia
Distribution
• India
• Vietnam
• Laos
Traditionally Indian logistic industry is made of core service providers and contracts are issued for
trucking, shipping, Inland Container Depot (ICD), Container Freight Station (CFS) etc. There is a
gradual shift towards 3PL (providers who bundle services such as transport, warehousing, freight
forwarding etc.) and 4PL (who work as business process providers; manage co-ordination with
various 3PL). This shift is driven by global customers’ demand for more control, higher technology
and one-stop solutions for all logistics needs. Global logistic management is new generation futuristic
concept where a single supplier will be able to meet customers’ logistic needs across geographies.
5
ENAM logistics research report
Page 8 of 67
1.2.1. Segments of the Transportation, Logistics, Warehousing and Packaging

Sector
The logistics value chain consists if three main segments, namely, Transportation, Warehousing and
Value Addition Services, as below:
Figure 4: Segments of the Transportation, Logistics, Warehousing and Packaging Sector
Logistics
Value‐added
Transportation Warehousing
services
•Packaging
•Labeling and
assembling
•Express Services
•Tracking and tracing
•Cold Chain
The transport service could be undertaken by different modes such as road and rail which are
primarily used for inland transport of goods or by water (ship) or air (express or courier), which are
used mainly for inter-country exchange of material. The warehousing services are by large
fragmented in India; individual set ups are controlled by local clearing and forwarding (C & F) agents
while there are some special multi modal warehouses such as ICD or CFS centres often used by rail,
ship, road modes of transport. There are various kind of value adding services such as packaging,
labelling, cross bundling, track and trace which are common irrespective of modes of transport and
some special services such as express, cold chain etc.
The growth rates of the various segments of the Transportation, Logistics, Warehousing and
Packaging Sector are as below:
Table 1: Growth rates of various segments of Transportation, Logistics, Warehousing and

Packaging Sector
Segment Mode of transport Growth rate (CAGR%)

between 2003-2008
Road 5.50%
Airline Passenger Services 14%
Airline freight services 11%

Transportation Shipping 13%
Page 9 of 67
Segment Mode of transport Growth rate (CAGR%)

between 2003-2008
Rail Services6 8.30%
Warehousing Organised Warehousing 20%
Value Added Services Packaging 14-15%
Source: CII study on Skill gaps in the Indian Logistics Sector, CMIE, Indo-Italian Chamber of Commerce,
IMaCS analysis
Transportation
During FY2008, the share of Indian transport sector in GDP aggregated 6.38% at current prices and
6.36% at constant prices. This segment recorded a turnover of Rs. 57,530 crore in this year7. The
segment has grown at a CAGR of 10.8% during 2003 to 2008. Historically, the share of transport
sector in GDP increased from 3% in the 1950s to 4% by the late-1960s, 5% by 1980, and over 6% for
the current decade
Figure 5: Share of the Transport Segment in GDP

7.0% Constant Prices

Current Prices
6.5%
6.0%
5.5%
5.0%
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
1951 1954 1957 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008
Source: Government of India (GoI), IMaCS Analysis
The transportation segment includes the sub-segments of road, rail, water, air (the major segments)
and pipeline transportation (minor segment). The sub-segment-wise share is as below:
6
Growth rate for the period 2002-2008
7
CMIE, Excluding Railways
Page 10 of 67
Figure 6: Sub-Segment wise share in Transportation

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1971-80 1981-90 1991-99 2000-03 2004-08
Railways Road Water Air Others
Source: Government of India (GoI), IMaCS Analysis

Road Transportation Sub-Segment
India has the world’s second-largest network of roads (3.83 million km after US’s 6.43 million km)8;
national highways form only 2% of the total roads by length and carry about 40% of the traffic. About
80% of the roads in India are village roads. The road sector is significant to India’s Transportation
Segment as it accounts for nearly 65% of the freight and 85% of the passenger traffic in the country.
This sub-segment is highly fragmented, with the truck operators owning less than five trucks
estimated to account for over 75% of the truck fleet. It is estimated that 10% of the market belongs to
those with 6-10 trucks; 4% to those with 11-15 trucks; 3% belongs to those with 16-20 trucks; and
only 4% of fleet belongs to those with more than 20 trucks. This industry is also characterised by
intense competition which is the result of relatively lower capital requirement, ease of obtaining
driving licenses and permits.
The small operators are involved mainly in the physical movement of goods and depend on brokers
and other fleet operators who in turn depend on the booking agents for obtaining business. The small
operators are not in a position to perform functions of aggregating, handling, delivering of cargo and
marketing. Besides, they do not have the geographical reach and necessary infrastructure to tap
business on a continuous basis, and thus rely on brokers.
8
CII Institute of Logistics
Page 11 of 67
The large fleet operators are small in number, and generally operate throughout the country. These
fleet operators primarily work on a hub and spoke model. The hub and spoke distribution system
enables optimisation of costs and higher revenues for the transport companies and fleet operators.
These transport companies generally have formal contracts with the users, which is very rare in the
case of small operators. Large operators can also bid for the contracts with customers. They utilise the
services of the smaller operators when additional vehicles are required.
Over the period FY2001-07, for which detailed data is available from the Government of India (GoI),
the average annual growth in the road sector was around 14.3% at current prices and 9.6% at constant
prices, which was much higher than the overall GDP growth during the period.
Railway Transportation Sub-Segment
India has the second largest rail network (63,000 km) in the world9. The Indian Railways have grown
into a vast network of over 7,500 railway stations, a fleet of about 8,600 locomotives, 41,000 coaches
& over 2,40,000 wagons10. Railways serve as a major mode of transportation for freight and
passengers and provide low cost effective options for long distance transportation. Rails are operated
by the Indian Railways, which records about 70% of its revenues and most of its profits from the
freight sector.
Railway freight loading has increased at a CAGR of 8.3% during the period 2002 to 200811. About
90% of rail freight traffic is contributed by eight major commodities - coal, fertilisers, cement,
petroleum products, food grains, finished steel, iron ore, and raw materials to steel plants.
A privatisation scheme was introduced recently to improve the performance of freight trains and
companies are now being allowed to run their own container trains. The wagon industry certainly
stands to reap a rich harvest from the large investment in the rail sector of the order of US$ 46 billion
in the 11th Plan. The Ministry of Railways has also planned to construct a new Dedicated Freight
Corridor (DFC) covering about 2,762 route km on two corridors, Eastern Corridor from Ludhiana to
Sone Nagar and Western Corridor from Jawahar Lal Nehru Port Mumbai to Tughlakabad or Dadri
along with interlinking of two corridors at Khurja. Upgrading of transportation technology, increase in
productivity and reduction in unit transportation cost are the focus areas for the project.
The Indian Railways employs about 1.4 million people12. Recruitment in the Indian Railways is
formalised through the Railway Recruitment Board, with the Government being the only employer.
9
Economic Survey 2007-08
10
IRFC
11
Centrum
Page 12 of 67
The comparison between road and rail transport in terms of the goods traffic handled is as below:
Table 2: Trends in Rail-Road Modes in Passenger and Goods Traffic

Figures in brackets indicate % of total
Goods Traffic
(billion tonnes km)
FY Road Railways
1951 23.0 (15.4) 66.5 (84.6)
1961 80.9 (51.0) 77.7 (49.0)
1971 210.0 (64.0) 118.1 (36.0)
1981 541.8 (72.2) 208.6 (27.8)
1991 767.7 (72.2) 295.6 (27.8)
2000 1,831.6 (81.0) 430.7 (19.0)
2001 2,075.5 (82.0) 457.0 (18.0)
2002 2,413.1 (83.1) 490.9 (16.9)
2003 2,814.7 (84.5) 515.0 (15.5)
2004 3,070.2 (85.0) 541.2 (15.0)
2005 3,469.3 (87.1) 515.7 (12.9)
Source: GoI, IMaCS Analysis
Air Transportation or Aviation Sub-Segment
The air freight segment presently accounts for a small pie of India’s freight market but it is growing at
a fast pace. Liberalisation and globalisation has given a fillip to the growth of this segment. For
example, about 740 thousand tonnes of cargo was handled at airports during 2007-08 as against about
655 thousand tonnes during the previous year13. Sophisticated machinery components, pharmaceutical
dyes, fruits, vegetables, flowers, fish and meat form part of air cargo.
An investment of about Rs. 400 billion (US $ 8 billion) is projected for the development of airports
during the 11th Five Year Plan. Airports Authority of India (AAI) has taken action for the
development of infrastructure in the country through the PPP model and joint ventures for the
modernisation of Delhi and Mumbai airports and development of Greenfield airports at Bangalore and
Hyderabad. The level of formalisation and standardisation of operations in the air freight segment is
greater than in other sub-segments such as in roads transportation. This sector has traditionally been
12
Economic Survey 2007-08
13
Airports Authority of India
Page 13 of 67
relatively more organised leading to greater regard for manpower development. The aviation
companies typically have established internal structured training practices to train the staff employed
at this level (which is typically 10th pass or sometimes 10+2).
Indian aviation provides direct employment to over 1 lakh persons. Employment in aviation is further
expected to increase to a large extent.
Sea Transportation Sub-Segment
Approximately 95% of India’s international trade by volume and 70% by value are seaborne. India
has 12 major ports, 1 corporate port, and 187 minor ports along 7,517 km long Indian coastline14. It is
strategically located as a major maritime nation due to its long coastline that flanks important global
shipping routes.
The Indian shipping tonnage increased from 0.19 million GRT15 in 1947 to 867 ships of 8.99 million
GRT at end-March 2008. The strongest growth was witnessed during the 1960-80 period (the GRT
increased from 0.48 million GRT at end-FY1961 to 5.54 million GRT at end-FY1980), when factors
such as expanding foreign trade, availability of finance on easy terms and major support by the
government encouraged the expansion of the Indian shipping industry. However, after this period the
growth slowed and even declined for some part of the 1990s.
14
15
Gross Tons (GT) or Gross Registered Tons (GRT): GT/GRT is the fundamental measurement of the physical
size of a ship. It refers to the volume enclosed by the ship’s hull and superstructures in hundreds of cubic feet.
All registered ships will be assessed for their GT and this is the parameter normally referred to when the size of
a merchant ship is quoted in tons.
Page 14 of 67
Human Resource
R and Skill Requirem
ments in the Transportation
T n, Logistics, Warehousing
W aand Packaging
g Sector
Figgure 7: Grow
wth in India’ss Shipping Fleet
F
10,000 900
GRT (thousaand tonnes) No. off ships
9,06
60
9,000 8,4664 8,595 800
8,013
8,000 700
7,100
0 6,916 7,066 6,9444
6,8433 6,868 6,817 6,8221
7,000 6,555 600
6,178
6,000 500
5,000 400
4,000 300
3,000 200
1995 1996
6 1997 19988 1999 20000 2001 20022 2003 20004 2005 20006 2007 Sep
p-
07
7
From 20002-07, the GRT
G of Indiaan fleet increeased significcantly in respponse to firm
m trends in th
he freight
market and introduuction of toonnage tax scheme by the Indiann governmennt with effeect from
FY2005.Both tonnagge and fleet size
s have groown significaantly over the last few yeears.
The major players inn the ship transportation segment

s are as below:
Fiigure 8: Majjor players in

n the Ship Transportatio
T on Segment (based on Tu
Turnover, 200
08)
Shipping
Coorporation of
India
25%
Others
38%
Great Easternn
Mercator Lines
L
Shipping
5%
Company
Varun Shippping Reliaance Ports 18%
Companny and Terminals
T
6% 8%
Source: CMIE,
C IMaCS
S Analysis
About 80%
8 of total volume of ports traffic handled is in the form of dry and liquid bulk, with the
residual consisting of
o general cargo, includding containeerised cargo.. Oil and prroducts’ trafffic is the
major foorm of liquidd bulk trafficc, accountingg for around 33% of total major portss traffic. Oth
her major
Page 15 of 67
traffic comprises iron ore (18%), and coal (13%). Container traffic of various items constitutes around
16% of traffic handled at major ports.
There are around 128 institutes approved by the Director General of Shipping, offering various pre-
sea and post-sea training courses in various disciplines, and about 6,500 candidates pass out in a year.
The Government is responsible for creation of the trained manpower required for the country's
merchant navy fleet and also facilitation of training and employment of seafarers for possible
employment in foreign flag vessels. This is being met through the Government training institutes and
number of other approved training institutes in the private sector; trained maritime personnel from
India are much sought after by other nations.
Pipeline Transportation Sub-Segment
This is used by oil sector companies for mass movement of petroleum products including gases. It is
one of the preferred modes of transportation due to significantly low operating cost.
Warehousing
Warehousing refers to the storage of product and goods to be transported, whether inbound or
outbound. A warehouse is often used as a stock piling location to manage demand-supply gaps over a
longer term. The Warehousing segment is expected to grow from Rs. 1,000 billion (US$ 20 billion) to
Rs. 2,750 billion (US$ 55 billion) by 2011, constituting about 35% of the total logistics industry in
India16. Major players in the warehousing segment are Central Warehousing Corporation, State
Warehousing Corporation, and Food Corporation of India, and other private players.
Various material handling equipments or systems are used in warehouses for loading and unloading
operations and movement of goods over short distances. Components of material handling systems
include lifting and storage equipment (fork lift trucks, order picking trucks, overhead cranes, tower
cranes and belt, chain and overhead conveyors), storage equipment (racks, mobile shelf units, and
plastic, wood and steel containers), automated handling equipment (automated guide vehicles, storage
and retrieval equipment, conveying systems and product sorting equipment). Robots may be used for
repetitive, monotonous, mundane tasks that need precision.
Warehouses also make use of Warehouse Management Systems (WMS) whose basic objective is to
help manage warehouse resources. WMS are generally associated with larger, more complex
distribution operations. However, even smaller and mid-size companies are increasingly recognising
the significance of WMS in today's environment of integrated logistics, JIT delivery, and e-commerce
16
Page 16 of 67
fulfilment. WMS uses advanced technology and operating processes for optimising all warehousing
functions, beginning from receipts from suppliers and ending with shipments to customers; it includes
all inventory movements and information flows in between.
Table 3: Warehouse capacity plans of major 3PL Companies
Company Current capacity Planned capacity Expected by year

(million sq. ft.) (million sq. ft.)
TCI 7.5 10 2010
Safexpress 3 10 2010
DRS Logistics 1.5 5 2010
Indo Arya 2 3.5 2010
Blue Dart 1 2 2010
Gati 1 2 2009
TNT 0.5 2 2010
ProLogistics 7.5 2011
TranSmart 10.5 2013
Total 16.5 52.5
Source: Centrum
3PL and 4PL
3PL services are a combination of all logistics activities - 3PL providers manage all the logistics
functions of a company. 3PL could imply the use of a transportation carrier, a warehouse, or a third
party freight manager to perform all or part of a company’s production distribution functions.
Demand for integrated 3PL solution providers has grown dramatically over the last several years and
they are increasingly becoming an effective way to reduce costs and spread risks for traditional,
vertically integrated firms. 3PL is estimated to grow at about 30% annually and become a Rs. 1,500
billion (US$ 30 billion) industry by 201017.
The various kinds of logistics service providers are as below:
17
Cygnus
Page 17 of 67
ValueAdded Services
Packaging
Packaging is a coordinated system of preparing goods for transport, warehousing, sale, and end use.
Packaging mainly protects the goods from damage and spoilage.
The various types of packaging are as below:
Figure 10: Types of packaging
Packaging
Semi Rigid Flexible

Rigid packaging
Packaging Packaging
Bottle, Metal Can Carton Box Paper, Plastic
Wooden Box Plastic Bottle Film, Alu- Foil
Metal Box, etc Cellophane
The Indian packaging industry was valued at Rs. 700 billion (US$ 14 billion) in 2007. It is growing at
the rate of 14-15% annually and is expected that this rate would double over the next two years18.
Indian packaging industry is highly fragmented and unorganised, dominated by small players.
The growth of the packaging industry is closely linked to the growth of its major user industries. The
major user industries such as retail industry including food and beverages, pharma and auto
components industries are expected to play a major catalyst role in driving the packaging industry
growth. Indian packaging industry is expected to reach Rs. 3,000 billion (US$ 60 billion) by 2014
from the current US$14 billion19.
18
Centrum and CII Institute of Logistics
19
Centrum and CII Institute of Logistics
Page 19 of 67
Cold Chain logistics
Cold chain logistics system may be defined as a series of inter-related facilities for maintaining ideal
storage conditions for perishables from the point of origin to the point of consumption in the food
supply chain. The chain starts at the farm level (e.g. harvest methods, post-harvest and pre-cooling)
and continues till the consumer level or the retail level. A well organised cold chain reduces spoilage,
retains the quality of the harvested products and guarantees a cost efficient delivery to the consumer.
Emerging sub-sectors
Express services by both road and air modes are fast growing. While the Air Express and Courier
segment is reasonably organised, the Road Express segment is relatively less developed. Track and
trace as a technology is inevitably going to become a dependable part of transportation. Human
Resource capable of operating and maintaining the systems would be increasingly in demand. Cold
chain services are likely to gain significance with the growth organized food retail. This would
particularly give rise to the need for technically competent manpower capable of understanding the
temperature and humidity control requirements of various perishables and operating sophisticated
controlled atmosphere equipment.
1.3. Demand Drivers of the Transportation, Logistics, Warehousing and

Packaging Sector
Figure 11: Demand drivers for the Transportation, Logistics, Warehousing and Packaging Sector
Robust Trade
Growth
Globalisation
Emergence and
of
growth of 3PL
manufacturing
& 4PL
systems
Growth of Streamling of
Demand
MNCs and indirect tax
Drivers
organised retail structure
• Growth fuelled by emergence of MNCs and organised retail: The key driver of demand for
world-class logistics services is the growth of MNCs whose bottom line success requires low-
cost manufacturing locations, connected to consuming markets through highly efficient
Page 20 of 67
supply lines. A comprehensive supply chain strategy is one that achieves flexibility,
responsiveness and reliability with cost savings. Thus the growth in these MNCs increases the
demand for efficient logistics services. Also the rapid growth of organised retail in India is
increasing the demand for logistics services to support the industry.
• Emergence and growth of 3PL & 4PL: Third party logistics or 3PL is a concept where a
single logistics service provider manages the entire logistics function for a company. While
the Indian 3PL market is still very much in its infancy compared to other countries, it is
experiencing healthy growth and attracting new companies eager to capitalise on the plentiful
opportunities it offers.
• Robust Trade Growth: Strong economic growth and liberalisation have led to considerable
increase in domestic and international trade volumes over the past five years. Consequently,
the requirement for transportation, handling and warehousing is growing at a robust pace and
is driving the demand for integrated logistics solutions.
• Globalisation of manufacturing systems: Globalisation of manufacturing systems along with
advancements in technology is increasingly compelling companies across verticals to
concentrate on their core competencies and avail the cost saving potential of outsourcing
logistics function. This is expected to contribute to an increase in the need for integrated
logistics solutions.
• Streamlining of the indirect tax structure: The standardisation of tax regimes across states is
a welcome step for Indian logistics firms. Logistics firms have been facing difficulties
because of several policies regarding local taxes and central sales tax. With the
standardisation of tax structure, 3PL logistics is expected to gain more market share.
1.4. Key Success Factors and Risk Factors for the Transportation,
Logistics, Warehousing and Packaging Sector
1.4.1. Key Success Factors
• Quality manpower: With the growth of 3PL and 4PL services in India, many trucking and
warehousing companies that are competent only in a particular sub-segment are quickly re-
branding themselves as overall logistics service providers. The present manpower available
with these companies does not have the requisite skills to handle the entire supply chain, and
training of personnel will be key to the success of these players.
• Keeping pace with technology: Information Technology (IT) plays a key role in supporting
the Transportation, Logistics, Warehousing and Packaging Sector. Some of the areas of
logistics industry where IT plays an important role include WMS, Transportation
Page 21 of 67
Management System, Track and Trace, Enterprise Resource Planning, etc. Technology has
crept into all areas of logistics such as product movement (RFID tags for tracking, GPS),
warehousing (WMS), etc. Technology helps organised logistics companies score over the
unorganised ones, and will be key to their operations going ahead given the competition.
• Enhanced operational efficiency: With industry margins under constant pressure and the
growing competition, improving operational efficiency will be critical to the success of
logistics firms.
1.4.2. Key Risk Factors
• Highly unorganised and fragmented market: A large part of the Transportation, Logistics,
Warehousing and Packaging Sector in India is unorganised. A fragmented market increases
costs and the efforts required for efficient resource utilisation.
• Infrastructure issues: The inadequate infrastructure and poor condition of roads in India
translates directly into higher vehicle turnover. This in turn increases operating costs and
reduces efficiency.
• Lack of standards and processes within the sector: The highly unorganised nature of the
sector and the prevalence of ownership-based firms make it difficult for implementation of
standard operating procedures in this sector.
• Regulatory restrictions: Container transportation charges through railways in India are
among the highest in the world and can have an unfavourable impact on the growth of the
container business20. Besides this, in road transportation, whenever there is a sudden rise in
demand of a certain product, transporters make alliances and overcharge customers due to
lack of suitable regulations. This increases the overall logistics costs.
• Lack of skilled manpower: The Transportation, Logistics, Warehousing and Packaging
Sector is considered an unattractive career option and fails to attract skilled manpower – this
is especially critical in the case of integrated logistics providers.
20
ET Intelligence Report
Page 22 of 67
1.5. Drivers of competitiveness of the Transportation, Logistics,

Warehousing and Packaging Sector
To obtain leadership in the industry, companies will need to focus on the following drivers of
competitiveness that will generate increasing shareholder and customer value:
• Efficiency in operations: Logistics companies need to be efficient in their operations and

mechanise operations to the extent possible so as to achieve cost saving and reduce losses.
Benchmarking processes and systems and formulating metrics so as to meet world class
efficiency and productivity levels is a necessity when dealing with international customers.
Companies need to use metrics to measure on-time delivery, order fulfilment, fill rate etc.
• Trained human resources: There is a shortage of expertise in Transportation, Logistics,
Warehousing and Packaging Sector in India, due to the lack of institutions providing training
in logistics. Training of human resources in the Transportation, Logistics, Warehousing and
Packaging Sector is critical to bridging the current gap. Resources need to be trained in
different systems and components used by companies dealing in logistics, to provide branded
customer service.
• Addressing the geographical diversity of India: Varied and comprehensive logistics expertise
is required for each region and state to address the geographical diversity of India. Logistics
providers need to address this factor to remain competitive.
• Investment in infrastructure and technology and capacity increases: Investment in
infrastructure and mechatronic warehouses with sophisticated material handling equipment,
racking and security systems are required to remain competitive. Investments in technology to
provide real time, online connectivity by offering intelligent tracking of packages, pallets and
vehicles are also required to achieve competitiveness. The capacity of Indian ports and
airports also needs to be increased - cargo traffic at ports is estimated to reach 1,011 million
tonnes by the year 2011-12 and will need doubling of capacity of ports21; also Indian airports
are not yet prepared to handle the 20% annual growth in cargo traffic in future.
21
Cygnus
Page 23 of 67
2. Human Resource and Skill Requirements in the

Transportation, Logistics, Warehousing and Packaging Sector
Varied skill requirements in Indian logistics emerge due to the different modes, i.e. the road, rail, sea,
air available for transport, the range of service providers operating in the industry and the
corresponding activities performed. The movement of the Indian Transportation, Logistics,
Warehousing and Packaging Sector from in-house staff, who simply manage inventory to complex
third party supply chain management has intensified the skill gap situation. This is emphasised by the
fact that apart from domain training and expertise, supply chain managers are required to be
analytical, capable of multi-tasking, delegation, and able to handle stressful situations.
Specialised managerial, interpersonal and analytical skills are a must for the Indian Logistics industry
today, particularly in its nascent stages when it struggles to overcome critical infrastructure and
organisational challenges. At management and mid-tier levels, the unorganised structure of the
Transportation, Logistics, Warehousing and Packaging Sector in India has lead to problems of poor
organisation, lack of leadership, disjointed skills and positions, and a lack of process-driven systems
which needs to be tackled for achieving targets set for sectoral growth and support to overall
development.
A broad overview of the Indian Transportation, Logistics, Warehousing and Packaging Sector is as
below:
Page 24 of 67
Figure 12: Broad overview of the Indian logistics space
Service providers:
* Broker/ agent
*Trucking company
*Multi mode operator
*3PL/4PL
Customer Loading of Transportation Intermediate storage

seeks goods Rail/road (Warehouse/ ICD, CFS)
logistics
services
No
Is it International Inland
Transport? Distribution
Yes
Customs origin, port
services
International transport
(Usually Sea/ air; may
Service providers: be land)
*Freight forwarders
*Express Cargo
*3PL/4PL
*Multi mode operator Received at port
(customs, services)
Container de-stuffing
and storage in
warehouse
Final delivery
Inland transport
Source: Primary Research and IMaCS Analysis
Page 25 of 67
2.1. Current employment pattern
The Transportation, Logistics, Warehousing and Packaging Sector in India currently employs around
7.3 million persons22. Of these, the maximum proportion is employed in the Road Transport Segment
and personnel employed in the Road Transport and Rail Transport Segments constitute over 90% of
the total employment in this sector in India.
Established logistics hubs in India include Mumbai, Kolkata and Chennai while the emerging hubs
are Gurgaon, Vizag, Nagpur and Indore. Emerging hubs such as Jamshedpur, Alwar, Ahmedabad,
Bangalore and Ambala, and nascent hubs such as Kochi will further help fuel the growth of the
Transportation, Logistics, Warehousing and Packaging Sector in India.
2.1.1. Functional / hierarchical distribution of human resource
During our interaction with the industry as part of our Primary Research, we analysed the proportion
of workforce at various functional levels across different segments. As seen in the following tables, a
significant proportion of the workforce is involved in operations at the worker level, followed by
supervisory and other top level management personnel across functions. While in road transport,
warehousing the majority of employment is across core operations; in ship and rail a considerable
percentage is also involved in support activities such as communication with customer, sales and
marketing functions.
The functional distribution across various segments / sub-segments is as follows:
Table 4: Level-wise Distribution of Human Resources in the Road Transport Segment23
Functions Distribution
Senior management 1-2%
Middle management 3-5%
Supervisory staff 10-13%
Worker level (truck drivers, loaders, 70-80%

goods handlers)
Source: Primary Research and IMaCS analysis
22
IMaCS analysis, will be elaborated in the later sections
23
Level-wise distribution is considered since most Road Transport companies are small scale, and do not have
human resources divided into different functions
Page 26 of 67
Table 5: Functional Distribution of Human Resources in the Railway Transport Segment
Functions Distribution
Operations and Maintenance 60-70%
Health and Safety 3-5%
Corporate Management 3-5%
Support Functions 10-20%
Table 6: Functional Distribution of Human Resources in the Ship Transport Segment / at Logistic
providers dealing in export-import, freight forwarding
Function Distribution
Sales and marketing 20-25%
Customer service 15-20%
Operations 30-35%
HR, admin, finance 10-15%
Table 7: Level-wise Distribution of Human Resources in the Warehousing Segment
Function Distribution
Middle management 5-8%
Operational-front line staff 85-90%
2.1.2. Distribution of human resource by education level
The following table represents the education-wise break-up of people across various segments of the
transportation, logistics, warehousing sector in India. As seen, most of the persons employed in the
transport sector in India are minimally educated and most have studied till 10th standard or below.
Page 27 of 67
Table 8: Distribution of human resources by education level
Educational Road Warehousing 3 PL Rail Ship

Qualification Transport Providers Transport Transport
Graduate 0-5% 5-10% 50-60% 20-30% 40-50%
Matriculate 10-15% 35-40% 20-25% 50-60% 30-35%

(including
diploma
holders)
Literate but 50-55% 25-30% 10-15% 10-15%
non
matriculate
10-15%
Very 20-25% 15-20%
minimally
educated
2.2. Skill Requirements and Skill Gaps in the Transportation Segment:

Road Transport
2.2.1. Value chain of the Road Transport Sub-segment
The following figure illustrates the composition of the value chain in the Road Transport Sub-
segment:
Figure 13: Value chain of the Road Transport Sub-segment
Pick up from customer’s end
Delivery for further shipping

Warehousing Transport or railattransport
Delivery
customer’s end
Value addition
Pre- Loading Inland
transport Trucking Consulting
Consulting Packaging
Receiving Storing Pick up
goods Express/cold Track
chain and trace
Page 28 of 67
The Road freight transport sub-segment in India is unorganised and fragmented, and the majority is
composed of small-time entrepreneurs owning one to ten trucks and this segment constitutes around
93% of the total players24. These entrepreneurs have limited resources and capital investment
capabilities, and their focus on investing in the future by improving the technology or by training their
manpower is limited.
2.2.2. Skill requirements and skill gaps in the Road Transport Sub-segment
The following table presents the skill requirements and gaps across various functions and
hierarchical/reporting ‘levels’ in the Road Transport Sub-segment.
Table 9: Skill requirements and skill gaps in the Road Transport Sub-segment 25
Function Level Skills required Skill gaps
Operations Manager / Sound knowledge of taxation policies Inadequate knowledge of

Owner and inter state laws to train and procedures, paper-work for
educate supervisors and drivers for inter-state movement,
applicable laws and policies taxation related aspects
Ability to undertake activities such as Inadequate understanding of
fleet management, network the importance of long term
optimisation, etc. investments in capacity
Ability to take decisions on long term building, manpower
and short term investments or spends, development, etc.
new equipment etc. Inadequate ability to ensure
Ability to be conversant with new training of personnel
technologies such as the use of GPS in employed with them,
road transportation so as to upgrade leading to no incremental
systems appropriately and ensure skill improvement and thus
efficient usage – this helps keep pace no motivation to perform
with emerging needs of clients better at the existing profile
Excellent spoken and written
language skills to be able to
correspond with customers on a daily
basis
24
CII study on skill gaps in the Indian Logistics Sector
25
This is elaborated on at different levels for employment intensive functions such as driving, supervisory staff
Page 29 of 67
Ability to be responsible for forward

looking initiatives for increasing
revenues as well as increasing profits
while running the business efficiently
Supervisor Ability to ensure efficient route Lack of knowledge of best
planning, so that it is cost effective warehousing practices
way, entails less turnaround and Inadequate knowledge of
ensures the highest safety levels new technologies such as IT
Practical knowledge of equipment in the transportation sector,
usage used in loading or unloading SCM techniques such as
goods in trucks - such as the optimum LIFO, FIFO, inventory
or efficient use of truck loading racks, management etc.
lorry loaders, etc. Insufficient knowledge of
Ability to optimise the time spent in taxation policies
loading or unloading trucks Experienced drivers or
Adequate spoken and written helpers move up the ladder
language skills for efficient record to become supervisors and
keeping and effective communication this set of personnel is still
with team characterised to a large
Knowledge of the local language to be extent by the skill issues
able to effectively communicate with seen in drivers
diverse agencies such as client, the
driver, truck owners
Knowledge of inter-state transport
laws applicable
Ability to ensure that goods are
loaded properly into trucks
Ability to record and track
transactions
Drivers, Basic reading and writing skills to be This set of persons is
Helpers able to read signage, proper characterised by a largely
documentation of tax levied, octroi illiterate workforce that has
paid etc. inadequate formal training
Ability to understand routes and the in driving leading to
Page 30 of 67
geographical profile of the route being inadequate availability of

traversed trained drivers
Ability to handle increasing tonnage Inadequate exposure to
and heavier trucks handle increasing tonnage
Excellent driving skills - Apart from and higher capacity trucks
the basic driving skills, knowledge of Inadequate knowledge of
precautions in case of transporting is safety and first-aid
critical Inadequate knowledge of
Knowledge of road safety practices, Octroi, VAT applicable
basic knowledge of the tax regime Ignorance towards safe
(region wise), traffic permit rules, etc. driving practices and special
Ability to handle dangerous and precautionary measures in
sensitive cargo case of handling sensitive
Basic spoken language skills for materials such as chemicals,
communication with supervisors and petroleum tankers, etc
fellow drivers or unloaders and Poor working conditions,
supervisors at the customers end combined with inadequate
Ability to understand basic sanitation manpower development
and hygiene requirements the and initiatives by owners or
importance of parameters such as non- managers, leads to low
usage of drugs or not being drunk motivational levels
while driving (this is critical to help
avoid accidents)
Page 31 of 67
Human Resource
W aand Packaging
g Sector
2.3. Skill Req

quiremen
nts and Skill Gapss in the Transport
T tation Seg
gment:
Ship Traansport
2.3.1. Vallue chain off the Ship Transport

T Sub-segmen
S nt
The following figuree illustrates the composition of the vaalue chain in the Ship Traansport Sub-ssegment:
Figure 14: Value chain

n of the Ship Transport Sub-segment
S t
Souurce: Primaryy Research and

d IMaCS anallysis
The twoo entities innvolved in ship based logistics arre logistic providers w
who provide for the
warehouusing, transpoortation and shipping neeeds of the cu
ustomer, and the companiies that own ships. In
some caases the logisstic providerss don’t own the ship and
d containers (Non-Vessell Operating Common
C
Carrier). They arrannge for the caargo shippinng by buying
g space in thee ships throuugh their nettwork. In
these cases they couuld provide foor FTL (Fulll truck load) consignmennts or Less Thhan Truckloaad (LTL)
consignm
ments (wherre one comppany doesn’’t buy the full
f containeer space). Inn other casees where
companyy own the shhips they mayy run in the FTL
F or LTL mode depennding on requuirements.
Typical configuratioons of small, medium andd large playerrs in this seggment are:
Page 32 of 67
Table 10: Typical configurations of small, medium and large players in Ship-based Transport
Operation in few Operation in

locations multiple locations Average number
Size of
of containers Remarks
players (No. of people (No. of people handled per month
employed) employed)
1-2 people
Small 10-15 30-50 100-200 employed in each
location
3-5 people
Medium 30-40 100-150 200-600 employed in each
location
>40 (Normally 125- Turnover (> Rs. 200

Large 400-500 >600
150) crore)
2.3.2. Profile of people employed
The following figure illustrates the profile of people employed in the Ship Transport Sub-segment.
Figure 15: Profile of people employed in the Ship Transport Sub-segment
Graduates with 7-8 years

Managers
of experience
Graduates with 4-5 years Assistant Assistant

of experience Managers Managers
Graduates (freshers + with Assistants / Assistants /

1-2 years experience are Supervisors
Executives Executives
preferred)
Workers - school
educated/minimally educated Workers Workers
2.3.3. Skill requirements and skill gaps in the Ship Transport Sub-segment
hierarchical/reporting ‘levels’ in the Ship Transport Sub-segment.
Page 33 of 67
Table 11: Skill requirements and skill gaps in the Ship Transport Sub-segment
Operations Supervisor (as Ability to assist customer service Inadequate ability to

these staff in tracking the vehicle at verbally communicate and
companies may different points in time timely co-ordinate with the
also be Ability to undertake insurance customer service staff
engaged in payments to customer in case of Inadequate knowledge of
warehouse loss according to terms and Bill of Lading and Letter of
management) conditions agreed upon Credit (LCs)
Understanding of Bill of Lading Inadequate knowledge of
and Letter of Credit (LCs) procedures related to CFS
Ability to understand and use and ICDs
basic and advanced features of Inadequate ability or level
Warehouse Management Systems of comfort with using WMS
(WMS) In case the customer is
Ability to ensure pick up of the internally using an
cargo by customer or delivery at advanced inventory
customer’s doorstep according to management system, the
the consignments’ terms and ability to facilitate
conditions information in a compliant
Advanced computer usage skills, format is inadequate
including the use of tools such as
MS Excel and ERP software such
as SAP
Ability to minimise turnaround
time in operations
Worker Ability to execute consolidation at Inadequate ability to
the sender’s end and execute specific instructions
deconsolidation at receiver’s end according to customer
in the case of LTL shipments and requirement – this leads to
depending on requirements mix up in goods and thus
Ability to undertake loading or time lags and value losses
unloading of cargo and manage
all activities related to load
handling
Page 34 of 67
Ability to understand and use

basic features of WMS
Sales and Manager Ability to maintain good working Inadequate ability in using
marketing relationships with old customers tools/spreadsheets for
while scouting for new customers tracking customer
for consignment filling from time behaviour, identifying old
to time customers from whom there
Ability to undertake negotiations is currently no business or
with concerned parties, finalise reduced business, etc.
the quotation for the service and Inadequate verbal
close the deal communication skills for
Ability to coordinate with agents influencing new customers
for customs clearances in the about the services offered
absence of an in-house officer at Inadequate ability to lead
the receiving end sales team
Executive Ability to prepare appropriate Inadequate ability to devise

quotes for the customers and issue plans to incentivise
feasible rebates depending on the customers for more
customer’s requirements of transactions and thus more
volume transfer and time business
constraints Inadequate ability to
Ability to streamline the flow of negotiate effectively on
cargo by road or rail from the quotes, specifically at the
warehousing stop to the port entry level
Ability to coordinate and
consolidate consignments in the
case of LTL operations
Customer Manager Excellent communication skills to Inadequate management
service be able to interact with the skills to resolve
customer while solving their coordination problems with
queries about the consignment operations team – this leads
and assist them in keeping track to delay in resolving
of the same customers problems
Page 35 of 67
Ability to assist in relationship

management with the client and
complement the sales and
marketing team in their operations
Ability to track the cargo for the
customer during inland transport
also
Executive Ability to undertake timely data Inadequate verbal
entry for different consignment communication skills for
issued by different customers at coordinating with
the concerned locations operations personnel
Ability to maintain data of Insufficient domain
different activities which are expertise (operational or
undertaken – for example, technical) and domain
clearance by customs, delivery of knowledge to be able to
cargo at customer point and address customer problems
various intermediate points instantly
Ability to coordinate with the
operations personnel for
receiving information about on
field activities and update them in
system
Document Executive Ability to maintain receipts, Inadequate knowledge of
ation which are a confirmation of goods Bill of Lading and Letter of
delivery at the consumers end Credit (LCs)
Ability to maintain various Inadequate knowledge of
documents depending on procedures related to CFS
customer requirements of door to and ICDs
door delivery, warehousing, Inadequate technical
transport etc. knowledge of using tools
Ability to use computers and such as MS Excel,
available tools for effective advanced MS Excel,
documentation especially at entry level
Page 36 of 67
2.4. Skill Requirements and Skill Gaps in the Transportation Segment:

Railway Transport
The Indian Railways, under the aegis of the Ministry of Railways of the Government of India,
operates most of India’s rail transport. About 70% of its revenues and a substantial profit is received
from the freight sector and most of its freight earnings come from transporting bulk goods such as
coal, cement, food grains and iron ore. Ports and major urban areas might have their own dedicated
freight lines and yards, and many important freight stops have dedicated platforms and independent
lines. The railways carry a large variety of goods ranging from mineral ores, fertilisers and
petrochemicals, agricultural produce, iron & steel, and others. In case of multi-modal transport rail is
one of the modes used most often. The rail freight segment faces competition from trucks which offer
cheaper rates and this may lead to resultant decrease in freight traffic.
2.4.1. Profile of people employed in Indian Railways
The following figure illustrates the profile of people employed in the Railway Transport Sub-segment.
Figure 16: Profile of people employed in the Railway Transport Sub-segment
Graduate engineers /
diploma engineers with 5- Group A
6 years experience
Graduate engineers /
diploma engineers with 2- Group B Group B
3 years experience
Diploma
holders/matriculation Group C / D Group C / D Group C / D
(given training)
Page 37 of 67
Table 12: Cadre-wise Staff Strength in Indian Railways
Cadre FY 06-07 FY 05-06 FY 04-05
Group A & B 15,800 15,400 14,300
Group C 906,600 883,900 873,700
Group D 484,000 513,000 535,700
Total 1,406,400 1,412,300 1,423,700
Source: Indian Railways website
The recruitment in railways at all levels is directly controlled by the Government of India; the
infrastructure available for training and development is also in place in the Indian Railways. There is a
keen focus on manpower development in this segment – for example, the non-salary expenditure on
manpower is about 36% of the total expenditure on manpower, which is much higher than the overall
sector average of 13-14%26. However, this segment would require skill building given that Container
Operations has been opened to private participation.
Table 13: Strength and Profile of employees in Groups A, B, C and D
% of Total strength Profile
Group A
1-2% Management personnel
Group B
Group C 60-70% Workshop employees, Engineers in mechanical, civil,
Group D 30-40% electrical trades, signaling, telecommunication staff
Source: Indian Railways website, Primary Research and IMaCS analysis
As regards training needs of railway officers, there are seven Centralised Training Institutes (CTI)
which cater to this. These are the Railway Staff College (Vadodara), Indian Railways Institute of Civil
Engineering (Pune), Indian Railways Institute of Signal Engineering & Telecommunications
(Secunderabad), Indian Railways Institute of Mechanical & Electrical Engineering (Jamalpur), Indian
Railways Institute of Electrical Engineering (Nasik), Indian Railways Institute of Transport
Management (Lucknow), and, Jagjivan Ram Railway Protection Force Academy (Lucknow). The
CTI’s apart from probationary training cater to the various specialized training needs of Indian
Railway officers – for example, the Railway Staff College provides inputs in general
management, strategic management and function-related areas for serving railway officers. Other
CTIs conduct specialized technical training courses in respective functional areas. Training
Programmes on Information Technology are also being conducted by the CTIs to provide
26
CII study on skill gaps in the Indian Logistics Sector
Page 38 of 67
solutions for information management and decision support requirements. Training needs of non-
gazetted staff are being taken care of by over 200 training centres located over IR. Training regarding
safety has been made mandatory at different stages for staff.
2.4.2. Skill requirements and skill gaps in the Railway Transport Sub-segment
hierarchical/reporting ‘levels’ in the Railway Transport Sub-segment.
Table 14: Skill requirements and skill gaps in the Rail Transport Sub-segment
Level Function Skills required Skill gaps
Grade Applicable Supervising the operations on a regular basis for Inadequate

A to all detecting non-compliance and the ability to communication skills
functions address the issues depending on the scale and to deal with key
the impact in least time possible customers
Verbal Communication skills for interacting Inadequate ability to
with other departments while addressing inter convey targets or
disciplinary issues plans, etc. to personnel
Managerial skills - Ability to manage the working with them
productivity of operations and constantly Inadequate ability to
improve the quality for ensuring more value (in coordinate among
profit terms) on the same input diverse agencies or
Ability to evaluate and suggest new investments directorates
in areas such as introducing better technology,
incremental skill improvement, infrastructural
investments, etc.
Dealing with personnel issues: Ability to handle
recruitment, training, disciplinary issues, kind
of training for different levels
Grade Supervisor Administrative skills: Ability to manage the day Inadequate ability to
B to day activities and manage and supervise the upgrade to new
targets set technologies
Ability to report issues to be addressed by other Inadequate ability to
departments or directorates undertake initiatives
Verbal and written communication skills for for productivity
Page 39 of 67
interacting with Grade C employees for improvement

communicating the daily schedule, targets, and Inadequate supervisory
record output and team management
Verbal and written communication skills for skills
interacting with Grade A employees and for
communicating issues being faced, issues to be
handled by other departments, etc.
Grade Mechanical Ability to check the working of machines, such Inadequate ability to
C and engineers as, the status of fuel, oil pressure for the pump check all parameters
D etc., check against specified norms, identify for smooth operations
discrepancies, and in case of faults which cannot which may lead to
be addressed make a report for further follow up problems being left
at higher levels unattended to
Ability to identify breakages such as wearing off Inadequate written
of tyres and replacement needs if any communication skills
Ability to conduct necessary checks such as for documentation of
alignment before making fittings faults etc. in the
Electrical Ability to maintain the efficient working of detailed format (at
engineers electrical equipment and timely checking the entry level)
same for defects such as wiring faults etc. if any.
Ability to prepare reports detailing technical
faults (technical details, machine failure, etc.)
Civil Ability to conduct timely checks for finding
engineers faults such as breakage in track
Ability to address faults in a timely manner
Ability to undertake and track maintenance
activities
Ability to maintain the properties of railways
such as buildings, stations for civil breakdowns
such as leakages in buildings, breakages in
pipes.
Signalling In large stations with electric signalling systems, Inadequate attention to
staff the ability to check the lights indicating signals timely check signals
at crossings constantly in control rooms and for any defects and
Page 40 of 67
finding rail defects, if any, is critical take action accordingly

Ability to report faults for instant correction to
supervisors
Manual signal: In cases, where manual signals
are operated, ability to timely keep track of
incoming or outgoing trains and pull levers
accordingly is critical
Communic Ability to record fault and communicate the Inadequate verbal
ation staff same to respective departments in the stipulated communication skills
time. and inadequate ability
Adequate verbal and written communication to articulate ideas
skills for effectively interacting with the people while interacting with
from other departments and reporting the other departments
problems to them as they arise
The skill requirements and gaps with respect to warehousing, ICD/CFS is covered in the following
sections separately.
Page 41 of 67
2.5. Skill Requirements and Skill Gaps in the Third Party Logistics
Segment
Third Party Logistics companies act as a third party or facilitator between the first party or supplier
and the second party or customer (Buyer or User). This concept is still at a nascent stage in India
(55% of large corporate use this service as compared to international benchmark of 75%) but with the
advent of multinationals in India and trends such as more companies wanting to outsource non-core
activities while concentrating on the core business activity, the requirement for 3PL is set to increase.
It is most commonly used for import or export management and customer clearing & forwarding
aspects of outbound transportation and inbound transportation in India. Over 30% of the 3PL users,
use the services for transportation, custom clearing & forwarding. Of the rest about 75% don’t use
these services because of doubtful quality of delivery of services.
The popular services of 3PL providers are as below:
Figure 17: Popular services of 3PL providers
Inventory
management
Labelling & Information
Packaging technology
Fleet Popular Order

management services of processing
& 3PL
Providers • Order picking
Consolidation • Distribution
Outbound transportation
Inbound
• Outbound warehousing warehousing
• Import/ Export management
• Customer clearing &
forwarding
Source: Primary Research and IMaCS Analysis
The major use of third party logistic provider is for reducing costs incurred in transactions by using
expertise of these providers and making the operations flexible. The existing network reach of these
service providers is usually higher than the in-house reach of the company which gives a much wider
net for the customers to tap in less time and more efficiently. With more Indian companies going
Page 42 of 67
Human Resource
W aand Packaging
g Sector
global thhis trend is slated

s mand for all services provided by
to inccrease manifoold - this wiill boost dem
3PL providers.
2.5.1. Vallue chain in

n the Third Party Logisstics Segmeent
The following figuree illustrates the

t composittion of the vaalue chain in 3PL, specifiic to import or
o export
ment, custom
managem m clearing annd forwardingg:
Figuree 18: Value chain

c in 3PL
L (for importt/export man
nagement, cu
ustom clearin
ng and forw
warding)

d IMaCS anallysis
When a customer seeks

s servicee, a query is
i generated
d specifying the demandd, an accoun
nt of the
facilitiess required. This
T is sent to
t the respecctive (importt/export) team
m. A budgett is then pressented to
the custoomer and a transportatio
t n plan involving a comb
bination of rooad/air/sea iss prepared deepending
on the location.
l Cleear detailingg of the typee of containeer (full loadd or consoliddated) is und
dertaken.
Containeer specificattions also consider
c thee transport requirementts for special material such as
controlleed temperatuure, restricteed humidity for food iteems etc. Thee specificatioons for transsport are
detailed (including tying
t up withh trucking coompanies or rail service providers) aand commun
nicated to
the custoomer. Once approved,
a thhe order is piccked and tran
nsported. In case of doorr-to-door dellivery the
consignm
ment is takeen to the reccipient by thhe 3PL proviider. Deliverry status is ccommunicateed to the
customeer who initiatted the requeest for servicee and approp
priate payments are madee.
Various segments opperational in 3PL are:
• nt: In the exxpress service segment inn India both documents and non-
Express Serrvice Segmen
document caargo is handled by logisttics providerrs, with docuuments cargoo constituting
g 52% of
the cargo handled.
h Exxamples of players
p opeerating in thhis space arre Blue Darrt, AFL,
Continental air express, DTDC, Gatii, TNT India,, etc.
• Multi-modaal Transport Operations (MTO): MT
TO Providerss are integraated service providers
p
who acts ass a link betw
ween differennt modes off transport (aair, sea, landd) in order to
t ensure
efficient andd cost effectiive door to door
d movemeent of goods. They proviide safe transsit at low
Page 43 of 67
Human Resource
W aand Packaging
g Sector
costs due to their wide presence,

p effiicient inland and ship traansport and ddelivery systeems. The
two cargo sub
s divisionns are: FCL (Full Contaainer Load) i.e. cargo eenough to fill
fi a full
container annd LCL (Lesss than Contaainer Load) i.e. consoliddation of variious small sh
hipments
to fill a conttainer – LCL
L operations are high maargin business while FCL operationss are low
margin. Thee benefit to the client is that theree is a singlee point of ccontact and a single
f all modess of transporrt, thus leadiing to reducttion in time and cost
document caan be used for
when multipple modes off transport seervice are req
quired. The main
m custom
mers of the seervice are
Customs Hoouse Agents (CHA)
( and freight
f forwaarders. The seet of activitiees are as belo
ow:
F
Figure 19: Value
V chain in Multimod
dal Transporrt Operation
ns

d IMaCS anallysis
2.5.2. Prof
ofile of peopple employeed
The following figuree illustrates the profile off people emp

ployed in the 3PL Segmennt.
Page 44 of 67
Figure 20: Profile of people employed in the Third Party Logistics Segment
Graduate with 5-6 years

Managers
experience
Graduate with 3-4years Assistant Assistant

experience Managers Managers
Graduates with no
experience or with 1-2 Executives / Executives /
years experience (these
account for ~60% of the Sr. Executives Sr. Executives
workforce)
2.5.3. Skill requirements and skill gaps in the Third Party Logistics Segment
hierarchical/reporting ‘levels’ in warehousing of 3PL operations:
Warehousing)
Level /
Function Skills required Skill gaps
Description
Operations Import and Domain knowledge of logistics as well Inadequate practical

export as knowledge of the laws governing knowledge of the
manager inter country export-import deals for logistics sector,
dealing with agents especially at the
Ability to interact with customers and entry level
showcase the company’s competitive Inadequate ability to
edge of services provided as compared coordinate among
to other providers diverse agencies,
Key networking skills, since multi-level leading to inadequate
and multi-organisation contact has to be knowledge of the
established status of goods – this
Ability to negotiate – clients are leads to inadequate
Page 45 of 67
Level /
Description
typically well networked and well ability to indicate the

versed with the operations and thus the transaction status to
ability to negotiate and finalise terms customers
and conditions of the deal is critical
Ability to coordinate between
department and ensure that there is
seamless data and information flow
within department members and
between departments
Documentati- Adequate ability to use computers and Inadequate technical
on staff the required software – many air and knowledge of
road express-courier service providers specialised software
now give online track and trace facilities Inadequate ability to
and all documentation is computer apply theoretical
based, thus making this ability critical knowledge in
practical situations
Executives and Senior Technical knowledge - day to day Inadequate

Executives operations of the warehouse need to be communication skills
performed at client site, and thus these (written/spoken),
personnel need to be conversant with leading to
the SCM techniques applicable such as information loss and
Warehouse Management System operational issues
(WMS), Transportation Management such as inability to
Systems (TMS), Warehouse Control provide correct
System (WCS) in future. information of
Ability to coordinate with diverse consignment status
agencies – these personnel need to
maintain contact with diverse agencies,
such as transportation (internal or
external) facility vendors (internal or
external) and the ability to handle such
coordination, delivery and recording
simultaneously is critical
Page 46 of 67
Level /
Description
Ability to manage workmen or labour

for operations such as loading and
unloading which are manually handled
Managers Ability to undertake client co-ordination Inadequate
and interact with clients to finalise the understanding of the
terms and conditions of the operation, industry, leading to
regularly monitor the operation and inadequate
report progress to the client monitoring
Ability to ensure client satisfaction – Inadequate ability to
this is critical since most customers provide support in
provide repeat orders case of crisis such as
Ability to manage the team and ensure loss of goods
that storing and handling, transportation Inadequate ability to
requirements are met and proper face customers
documentation is done in this regard
Sub Loaders Basic reading and writing skills so as to Inadequate ability to
contracted (supervisor understand basic scales, measurements, upgrade
services level) check packages for number of items, technological skills
consolidate or deconsolidate and according to
number consignments as required before changing
dispatch. requirements
Knowledge of good handling practices At supervisory level,
especially in case of sensitive goods the language
Ability to pick, pack, load and unpack ignorance is very
after unloading at the two ends of persistent
process
Basic monitoring skills, labour handling
skills and ability to ensure appropriate
documentation
Page 47 of 67
hierarchical/reporting ‘levels’ in export and import transactions, custom clearances and freight
forwarding of 3PL operations:
Export and Import Transactions, Custom clearances and Freight forwarding)
Sales and Experienced Ability to maintain good working Inadequate spoken

marketing personnel relationships with old customers language skills, especially
while scouting for new customers in the local language
Entry level • Domain knowledge so as to Inadequate ability to

personnel understanding the functioning for negotiate, leading to
efficient co-ordination and unfavourable terms and
execution of the order conditions or terms and
• Ability to assert appropriate terms conditions which are more
and conditions beneficial to the customer
and lesser to the company
Customer Operator Ability to interact with customers Inadequate

service team from varied organisations and communication skills for
various hierarchical levels dealing with client
Ability to articulate thoughts well personnel across
and give precise and correct hierarchical levels and
information to clients diverse organizations
Adequate spoken language skills to
be able to directly interact and solve
questions about the delivery in
question
Page 48 of 67
Human Resource
W aand Packaging
g Sector
2.6. Skill Req

quiremen
nts and Sk
kill Gaps in
i the Waarehousin
ng Segmen
nt
2.6.1. Vallue chain off the Wareh

housing Seg
gment
The following figuree illustrates the composition of the vaalue chain in the Warehouusing segmen
nt:
Figure 21: Value chain

c of thee Warehousing Segmeent
Warehouusing activitty commencees when gooods are receiived from thhe supplier or factory or port. An
acknowlledgement foor receipt off goods is geenerated at the
t warehouuse. Further tto this, inspeection of
quantityy of goods recceived, and inspection
i off the conditio
on of packagging are condducted. The goods
g are
then placed in the waarehouse deppending on thhe plan of diispatch an apppropriate loccation. The processes
p
of packaaging, re-pacckaging, bunndling with promotion items
i (in som
me cases waarehouses bu
undle the
promotioonal items with
w main good at their ennd for cuttin
ng costs) mayy be carried out as value addition
steps onn a case to caase basis. Proocessing (whhich includes prioritisingg orders, schheduling disp
patch etc)
is underttaken as andd when orders are receiveed from custo
omers. Valuee addition maay also be caarried out
at the warehouse,
w a includess packaging activities su
and uch as MRP
P tagging, rrepackaging,, product
mixing before
b actuall distributionn, assembly, etc. After co
onfirmation of
o the order, goods are picked
p up
using FIIFO methodoology and shhipped or traansported to the
t customerr location. T
The delivery of goods
is ascerttained by a suupporting recceipt issued by
b the custom
mer at the tim
me of deliverry.
The reggional tax reegime which existed inn India has led to fraggmented waarehouses which
w are
commonnly owned byy C&F agentts rather thann centralised set ups undeer direct supeervision of co
ompany.
2.6.2. ICD
D and CFS
ICD andd CFS as perr definition are

a “commonn user facilitty with publlic authority status equip
pped with
fixed insstallations annd offering services
s for handling
h and
d temporary storage of im
mport or export laden
and emppty containerrs carried unnder customss control and
d with custom
ms and otherr agencies co
ompetent
to clear goods for home
h use, warehousing,
w temporary admissions,
a re-export, teemporary sto
orage for
onward transit and outright
o expoort. Trans-shiipment of carrgo can also take place frrom such stattions”27.
27
Sourcee: Ministry of Commerce annd Industry, Government
G off India
Page 49 of 67
These providers facilitate the country’s export, import, domestic trade and commerce by providing the
requisite logistic support. ICDs and CFSs act as concentration points for long distance cargoes and
their unitisation. They also service as a transit facilities and enable customs clearance facility
available near the centres of production and consumption. Some other features include reduced level
of demurrage and pilferage, no customs required at gateway ports, issuance of through bill of lading
by shipping lines hereby resuming full liability of shipments, reduced overall level of empty container
movement, competitive transport cost and reduced inventory cost. Key industry users of ICDs and
CFSs include exporters and importers across industries such as steel, agri-products, auto-components,
telecom equipments, retail, consumer durables, etc.
The import and export cycles with respect to ICD and CFS are as below:
Figure 22: ICD and CFS: Import Cycle
Job order from shipping line/importer
LCL Cargo FCL Cargo Seal Cutting

Custom examination
De-stuff and tally
Loaded for delivery - If not loaded or
Storage in warehouse followed by found cargo is de-stuffed and tallied
custom examination
Exit from CFS
Source: ENAM Logistics Report
Page 50 of 67
Figure 23: ICD and CFS: Export Cycle
Cargo moved from manufacturer
Stored at open yards/ sheds at CFS
Exporter / CHA / Consolidator give

requisition for container
Custom examination/Stuffing
Exit from CFS to yard to vessel
Source: ENAM Logistics Report
ICDs and CFSs follow the hub-spoke model for operation, whereby the cargo is picked from the
customer’s door-step; after stuffing the container with cargo it is transported to the nearest ICD and
CFS. Functionally there is no distinction between an ICD and CFS. Both act as transit facilities that
offer services for containerisation of break bulk cargo and vice-versa. These could be served by rail
and/or road transport. The difference lies in the location of the ICD and CFS – an ICD is generally
located in the interiors (outside the port towns) of the country and away from the servicing ports while
a CFS is an off dock facility which is located near the servicing ports. It helps in decongesting the port
by shifting cargo and customs related activities outside the port area. CFS are largely expected to deal
with break-bulk cargo originating or terminating in the immediate hinterland of a port and may also
deal with rail borne traffic to and from inland locations.
Operations or functions at ICD and CFS include Receipt and dispatch or delivery of cargo, Stuffing
and stripping of containers, transit operations by rail or road to and from serving ports, Customs
clearance, consolidation and de-segregation of LCL cargo, temporary storage of cargo and containers,
reworking of containers, maintenance and repair of container units.
2.6.3. Profile of people employed
The following figure illustrates the profile of people employed in the Warehousing Segment.
Page 51 of 67
Figure 24: Profile of people employed in the Warehousing Segment
Graduates with 5-7 years

Managers
of industry experience
Diploma holders/
graduates with 4-5 years Supervisors Supervisors
of experience
10th /12 th pass with /

without experience Operators Operators Operators
2.6.4. Skill requirements and skill gaps in Warehousing
hierarchical/reporting ‘levels’ in the Warehousing Segment.
Table 17: Skill requirements and skill gaps in the Warehousing Segment
Level Skills required Skill gaps
Manager Excellent spoken and written language skills Limited knowledge of the latest
for meaningful interaction with customers and & innovative warehousing
(C & F
proper documentation technologies / formats available
agents)
Knowledge of local language for interacting Inadequate exposure /
with in house-workers knowledge of IT systems in
Team skills to be able to motivate the team of warehousing
workers for improving efficiency in day to day Inadequate ability to invest in
operations human resource development of
Awareness of the new warehousing personnel working with them
technologies so as to be able to take decisions Inadequate knowledge of
regarding capital investment in appropriate measures of safety and security
technologies of stock
Knowledge of inventory, order management Inadequate knowledge of
Ability to maintain specific standards and industry specific stocking and
Page 52 of 67
Level Skills required Skill gaps
requirements such temperature conditions in handling practices (FMCG,

case of perishable goods, safety of goods, etc. perishables, textiles etc.)
Ability to ensure training of personnel in core
warehousing operations as well as non-core or
support or other value added services
Supervisors Ability to monitor the day to day operations of Inadequate ability to maintain
the warehouse appropriate inventory levels,
Ability to maintain records of the incoming or leading to typically high
outgoing goods inventory levels at warehouses
Ability to maintain records of wastages such as Inadequate verbal and written
goods spill over during packaging, damages, communication skills to
and report the same to the managers manage flow of information
Ability to undertake invoicing and order between workmen and
processing managers
Inadequate team management
skills, leading to the inadequate
ability to motivate workmen for
better and efficient delivery
Inadequate knowledge of global
best practices in warehousing
Operators / Knowledge of stocking, packing and handling Inadequate knowledge about

Workmen / practices, including loading and offloading material handling equipment
Front line goods at different locations in the warehouse such as stackers, hydraulic or
staff Ability to place goods in appropriate racks hand pallet trucks, forklift
Ability to manually mark or pack goods, as trucks, jib cranes, etc.
required Inadequate formal training
Basic reading skills for understanding the leading to learning on-the-job
written or visual imagery communication about Inadequate ability to maintain
standard operating procedures service standards, leading to
Ability to undertake value added services such damages
as MRP tagging, repacking, quality checks, etc.
Page 53 of 67
2.7. Emerging trends
2.7.1. Emerging Trends in the Sector
• Growth in Consumption: The proportion of containerised cargo handled at Indian ports has
been showing a constant increase driven by various trade liberalisation policies, increasing
containerisation in general cargo commodities such as durables, engineering components,
machinery, auto components, food products and apparels. Further, value added goods are
expected to increase which will further increase the need for more secure containerized
transport. Containerised transportation will also be driven by rising international trade,
increasing investments in port infrastructure by the government and through public-private
partnerships (PPPs). The cold chain industry is also expected to grow at a double digit growth
rate. The growth will be driven by organised retail, shift towards horticultural crops, growth
in processed food sector which be boosted by government initiatives and demand from the
pharmaceutical sector.28 Consumer segments such as FMCG, organised retail are poised for
growth in India driven by favourable shift of population towards middle income group and
expanding disposable incomes. New customer segments are emerging for 3PL services;
presently, auto and IT hardware industry as the largest end-user industry for 3PL services,
with multinational companies being the predominant users of these services. Other sectors
that have shown substantial contribution to 3PL market and significant growth potential
include FMCG, pharmaceutical and retail sectors. As the consumption in these sectors will
grow in volumes, the corresponding logistics support needs are also slated to grow
proportionately. As more and more controls are applied on stocking levels at the point of sale,
the demand for time bound deliveries will increase, because unavailability at selling point will
translate in significant losses.
New areas of operation by diversification in forward-backward integration: More service

providers are diversifying in new allied services for providing multiple services to customers
under one roof. This is expected to be supported mostly by acquisitions, alliances with
national and international players going forward. For example, for servicing domestic demand
in a better way, TNT India entered in the realm of air cargo movement of moderate tonnage
and is complementing it with its already strong presence in the express courier market. The
company had also acquired a leading road transportation company, in order to provide
integrated express services through its air and road network in past.
28
Primary Research
Page 54 of 67
• Consolidation in the market: There are expected to be larger distribution centres to handle
higher volumes as compared with the current small size. To benefit from pan-India coverage,
an increasing number of larger warehouse facilities operated by transport companies or
clearing and forwarding agents are expected with the consolidation of smaller warehouses -
this will be driven by mergers and acquisitions in this area. In the future, it is expected that
suppliers and manufacturers will pick out the most central and convenient warehouse or DC
for their needs, as opposed to having one in each state or location thereby driving economics
of scale.
• Foreign investments: In India, 100% FDI is allowed in logistics. Almost all large global
logistics companies have their presence in India. However it is presently restricted to freight
forwarding. For domestic transportation and warehousing these companies have tie-ups with
Indian companies. As the Indian logistics scenario looks promising, these MNCs are expected
to play a bigger role, probably by forming wholly-owned subsidiaries or taking the
acquisition route. Going forward, the latter may be the preferred route of investment since the
asset base and distribution network would already be in place. For example, DHL Express is
the majority stakeholder in Blue Dart Express and holds over 80% equity in the firm. Blue
Dart, however, continues to operate as an independent brand and provides a complete
spectrum of domestic and international express services through synergies with DHL.
• Product innovation- Market view: With customers becoming more selective about services
on cost and quality basis, the operations of companies going global and more track-trace
sought today by customers, the new internationally popular services in warehousing, freight
forwarding are becoming popular in India as well. For example, TCI Supply Chain Solutions
is offering some unique value added services such as Reverse Logistics, PDI or COD
Services, Kitting Services, Customs Clearance, E-logistics, Facilitating Risk and Tax
Management29. Indian players entering new markets – for example, after acquisition of Air
Deccan (Low-frill Indian airline carrying a 60:40 mix of passenger to cargo weight) by
Kingfisher airlines, Deccan Cargo and Express Logistics Pvt. Ltd have been started which
links Indian customers with international locations. Deccan 360 is the only Indian cargo
airline that is operating on both domestic and international routes.
• Infrastructure: India’s soon-to-be-expanded national highway network, improved

efficiencies in rail cargo network schemes such as airport terminal expansion , Golden
29
www.tcil.com
Page 55 of 67
Quadrilateral will ensure improved efficiencies in road or rail transport and reduce delays,
losses due to accidents to a considerable extent. The national tax regime will bring changes in
terms of network designs for companies distributing in India. There will be a sea change in
the domestic distribution landscape resulting from a normalisation of inter-state taxes.
Schemes have been launched by GOI to increase private participation in containerised cargo
market. It has given out new licenses for private players to generate a competition for
CONCOR and consequently improve efficiency in segment. This complemented with lower
cost of ownership for reach stackers many more companies will enter this business. Presently,
container train operation is restricted on account of non-availability of train engines or driver
from CONCOR. With improved servicing, long distance road cargo is expected to decline and
boost container rail transportation for domestic movement, which at present takes about one
week time to deliver.
• Information technology: The present IT requirements in the Indian logistics and shipping
industry are Track and Trace, Warehouse Management System (WMS), Transportation
Management System (TMS), ERP and Scanner Implementation, Automatic Conveyor Belt
system, Scan based Auto Sorting tables and process, etc. For example, WMS is used for
stacking and retrieval. WMS is used only by logistics companies which have a large
warehouse at multiple sites and carry a large number of SKUs. The TMS gives an idea about
the pickup point and delivery.
• New technologies: The technologies which are not widely used as of now but are becoming
popular in India are Warehouse Control System (WCS), Standard Interfaces (EDI standards)
for B2B transactions, Web Services, RFID technology to track shipments and Telematics,
GPS use for tracking for the fleet, Telemetric: It is similar to GPS but also provides
information about the expected time of arrival, and monitoring and analysing the vehicle and
route usage, Advanced track and trace (SMS-based or e-mail-based tracking), RFID: It is a
mobile technology, wherein customers can keep tabs on a particular shipment. Besides time,
position or destination of the shipment some specialties include ability to track configurations
and temperature etc. The e-commerce segment is set to be a significant contributor to top line
of companies such as Blue Dart and it is expected to be one of the fastest growing segment, so
more companies are expected to enter this market in future as all the B2B or B2C consumers
want to do online transactions.
Page 56 of 67
2.7.2. Emerging Skill Requirements in the Sector
• Technological skills: The rapid advancements in technology deployed in the Transportation,

Logistics, Warehousing and Packaging Sector have necessitated training in handling
technology across levels and upgradation of skills with advancing technology is required. For
example, the efficient use of ICT reduces operating costs, thereby increasing margins. Drivers
will be expected to know skills about using GPRS effectively. Emerging fields of information
technology applied in logistics will also bring about the need for specialised skills. For
example, with ERP, CRM, WCS and internet based or mobile based track and trace services
becoming more popular in India, people specialised in these systems will be in high demand.
E-commerce is a service which will increasingly used by players across segments and this
will create demand for IT developers, testers and business analysts etc who will service these
needs.
• Driving Skills: Driving skills in road transport are expected to undergo a change. Drivers are
currently not formally in handling heavy weight vehicles and safety procedures. They also
need to be aware of compliance to road rules, procedures for inter-state movement, etc. This
problem is further compounded by the fact that they are generally minimally educated.. They
are also not aware of the specifics of handling complex materials, hazardous
substances/chemicals or newer trucks with complex controls or working, and need to be
formally trained in these areas. With the growing impetus of government in improving the
situation on national level more government supported IDTRs, private institutes such as
Maruti Driving Schools, etc. are emerging.. The focus of these training would also include
behavioural or attitudinal training regarding issues such as lane discipline, no usage of drugs
while driving, apart from technical aspects such as maintenance activities for vehicle, etc.
Going forward, the drivers will also be trained in segments such as route planning based on
peak hours or normal hours basis, map reading which will help them in increasing efficient
fuel usage.
• Better overall understanding of industry by Agents: Logistics organisations consist of

analysts who design and engineer the optimised supply chain. The customer agents implement
these solutions, speak to shippers, receivers, and book loads. A customer service agent who
understands all the workings of the supply chain and the transported commodity will be able
to optimise delivery and lead times, saving on costs. Sound analytical skills need to be
developed so that they can create efficient systems, and provide customers with information
which might add value to their business. Most employees at worker level have experience
based skills and no formal training in skill which impedes the personal growth of a worker in
Page 57 of 67
this industry. Areas such as good handling practices, supervisory skills have not been focused
on in formal training organised at national level. Warehouse handlers have to acquire skills in
using equipments such as printing devices, scanning devices, basic computing devices, etc.
They are also expected to become conversant with more popular value addition services such
as labelling, handling requirements specific to heavy or fragile material, special consolidation
or bundling requirements etc.
• Multi-operations skills: Multi-skilling will be required in the Transportation, Logistics,

Warehousing and Packaging Sector going ahead. In case of providers dealing with multiple
areas such as freight forwarding, warehousing, road transport etc, people with skills across
areas will be required. For example, in case of 3PL or 4PL providers, people with skills across
IT systems (specific to logistics) integrated with supply chain practices and basic cargo
handling practices will be required. Also, with increasing track and trace service requirements
by customers from service providers, people who can fulfil system requirements and
simultaneously coordinate with customers will be further needed.
Apart from these, the service providers need to be skilled in aspects related to state-specific
rules, procedures, compliances to required paper-work, excise, etc.
Page 58 of 67
2.8. Projected Industry Size and Human Resource Requirements
2.8.1. Projected Industry Size in GDP terms
The GDP of the Transport sector30, in real terms at 1999-00 constant prices, increased from Rs.1,107
billion in 2001 to Rs. 1,991 in 2008, recording a Compounded Annual Growth Rate (CAGR) of 8.7%.
In the same period, the GDP of the Indian economy grew by about 8%.
For the period 2008 to 2022, we expect the GDP to grow between 7.5% and 8%31. Accordingly, we
project that the Transportation sector would record a growth of 8.5% to 9% over the same period.
Figure 25: Projected GDP growth in Transportation sector – 2008 to 2022 (Rs. billion, constant
prices 1999-00)
7,000
6,000
5,000
4,000 8.6%
3,000
2,000
1,000
-
2008 2012 2018 2022
Source: IMaCS analysis
2.8.2. Projected Industry Size and Human Resource Requirements in the Road
Transport Sector
The requirement for human resource in the Road Transport sector will be driven by the production of
Commercial Vehicles, Cars, and Three Wheelers (3Ws). A major portion of this requirement will
arise from Medium and Heavy Commercial Vehicles (M&HCVs).
The following projection takes into account the current M&HCVs in India, expected projection,
number of drivers and cleaners required, keeping in mind the retirement of a portion of the fleet of on-
road vehicles32.
30
classified as ‘Railways’, and ‘Transport by other means’
31
Page 59 of 67
Table 18: Projected on-road M&HCVs and human resource requirement in M&HCVs for drivers
and cleaners (in ‘000s)
Number of Number of Number of No. of

M&HCV M&HCV drivers for cleaners
sales (units) on-road M&HCV and
helpers
2008 271 1,989 1,989 2,983
2012 231 2,088 2,088 3,132
2018 367 2,828 2,828 4,242
2022 499 3,885 3,885 5,828
On similar lines, keeping in mind the expected growth in the Auto Sector, we estimate the following
current and incremental human resource requirement for drivers, cleaners, and loading supervisors33
in Road Transport sector34.
Table 19: Incremental human resource requirement in the Road Sector till 2022 (in ‘000s)
2008 2022 Incremental

Drivers
1,872 6,942 5,070
Helpers
2,113 7,833 5,720
No. of loading
supervisors 281 1,041 761
2.8.3. Projected Industry Size and Human Resource Requirements in the Port
Sector
According to the report titled ‘Coordinated Port Development Plan’ of the Indian Ports Association,
the projected revenue of major ports in India is expected to grow at a CAGR of 9.5% from Rs. 5,446
crore in 2008 to Rs. 9,375 crore by 2014. Keeping in mind the overall GDP growth, we project that
32
Source: IMaCS analysis; assumes a retirement of about 10% - 12% of older M&HCVs every year from the
previous year’s total.
33
Every M&HCV would require 1 to 2 cleaners/helpers; the number of loading supervisors is assumed to be
15% of M&HCVs on-road
34
Refer IMaCS report for NSDC on Human Resource and Skill Requirement in the Auto and Auto Components
sector for details.
Page 60 of 67
the revenue of all ports would grow from Rs. 7,000 crore in 2008 to over Rs. 25,150 crore in 2022, at
about at a CAGR of 9.5%35.
The employment in the port sector would increase from the current levels of over 93,000 persons to
about 2.2 lakh persons by 2022.
2.8.4. Projected Size and Human Resource Requirement of the Airline Industry
Air Transport in India has been growing at a CAGR of 18% to 20% between 2005 and 2008. Usually,
the Airline sector grows at twice the GDP growth. Accordingly, we expect the airline sector 15% to
16% between 2008 and 2022.
The following details the expected growth in the Airline sector as per projections of Airports
Authority of India36.
Table 20: Projected growth in the Airline Industry in India
Air Traffic Movements Passenger (in million) Cargo (in '000 tonnes)
(in '000s)
Traffic International Domestic International Domestic International Domestic

2005-06 191 647 22 51 920 484
2006-07 216 738 26 61 1,029 532
2007-08 244 843 30 73 1,151 585
2008-09 276 966 35 87 1,289 643
2009-10 312 1,108 40 105 1,446 708
2010-11 353 1,275 46 126 1,622 781
2011-12 400 1,471 54 151 1,823 861
2012-13 442 1,654 61 176 1,998 932
2013-14 487 1,862 69 204 2,192 1,009
2014-15 538 2,100 78 237 2,407 1,094
2015-16 595 2,373 89 276 2,644 1,186
2016-17 659 2,686 101 321 2,906 1,287
2017-18 736 3,055 116 379 3,221 1,405
2018-19 822 3,475 132 447 3,570 1,534
2019-20 918 3,952 151 527 3,957 1,675
2020-21 1,025 4,495 173 621 4,385 1,828
35
Including minor ports
36
AAI, FICCI report on ‘Indian Aviation: Scaling New Heights’ - 2008
Page 61 of 67
Air Traffic Movements Passenger (in million) Cargo (in '000 tonnes)
(in '000s)
2021-22 1,144 5,113 199 733 4,861 1,996

Source: AAI
The projected human resource requirement in the Airline sector is detailed below.
Table 21: Projected Industry Size and Human Resource Requirement in the Airline Industry
Year No. of aircrafts Pilots/Co- Aircraft Cabin Other Airport Total

Pilots Engineers Crew Airline Staff
Staff
2005 184 1,900 11,174 5,907 29,279 20,969 69,413
2006 221 2,280 13,409 7,088 35,135 20,969 79,102
2007 265 2,736 16,091 8,506 42,162 15,941 85,701
2008 318 3,283 19,309 10,207 50,594 17,272 100,983
2009 382 3,940 23,170 12,249 60,713 18,737 119,191
2010 458 4,728 27,804 14,699 72,856 22,353 142,898
2011 549 5,673 33,365 17,638 87,427 24,120 168,772
2012 632 6,524 38,370 20,284 100,541 26,061 192,412
2013 747 7,718 45,396 23,998 118,950 29,091 225,900
2014 884 9,131 53,708 28,392 140,729 32,473 265,316
2015 1,046 10,803 63,542 33,590 166,496 36,248 311,724
2016 1,237 12,780 75,176 39,740 196,981 40,462 366,376
2017 1,463 15,120 88,941 47,016 233,048 45,166 430,753
2018 1,730 17,887 105,226 55,624 275,719 50,417 506,602
2019 2,046 21,162 124,493 65,808 326,202 56,278 595,989
2020 2,420 25,036 147,288 77,856 385,929 62,820 701,349
2021 2,862 29,619 174,257 92,111 456,591 70,124 825,564
2022 3,385 35,041 206,163 108,976 540,192 78,276 972,033
Source: AAI, FICCI report on ‘Indian Aviation: Scaling New Heights’ – 2008 – projections till 2012, and
IMaCS analysis
2.8.5. Projected Industry Size and Human Resource Requirement in Warehousing

and 3PL
India has about 1,800 to 1,900 million sq. ft. of warehouse space of which only about 8% is in the
organised sector. The organised sector, which includes warehouses of companies and 3PL providers,
is growing at over 10%37.
37
CII Report on Skill Gaps in the Indian Logistics sector - 2007
Page 62 of 67
Based on the GDP growth of the Transportation sector, we estimate that the warehousing space would
continue to record a CAGR of over 10% till 2022.
Accordingly, the warehouse space in the organised sector would increase from about 150 million sq.
ft. in 2008 to about 450 million sq. ft. of space in 2022. This would drive the requirement for human
resource in this sector.
Accordingly, we project the human resource requirement for the Warehousing and Transportation
sector in the organised and 3PL space38.
Table 22: Incremental human resource requirement till 2022 in Warehousing (organised sector)
and 3PL (in ‘000s)

(in ‘000s)
No. of warehouse
managers 15 60 44
No. of warehouse
workers 1,520 5,952 4,432
Source: CII Report on Skill Gaps in the Indian Logistics sector – 2007 and IMaCS analysis
2.8.6. Projected Human Resource Requirement in the Transportation, Logistics,

and Packaging sector
The overall projected human resource requirement in the Transportation, Logistics, and Packaging
sector is shown in the following table.
Table 23: Incremental human resource requirement till 2022 in the Transportation, Logistics, and
Warehousing sector (in ‘000s)

(in ‘000s)
Road
Drivers 1,872 6,942 5,070
Helpers 2,113 7,833 5,720
38
Assumption: A warehouse of 10,000 sq. ft. of space requires about 1 warehouse manager and about 100
workers
Page 63 of 67

(in ‘000s)
No. of loading 281 1,041 761
supervisors
Sea
Ports 94 220 126
Railways
Railways staff 1,378 2,085 707
Air
Pilots and Co-Pilots 3 35 32
Aircraft Engineers 19 206 187
Cabin Crew 10 109 99
Other airline staff 51 540 490
Airport Staff 17 78 61
Warehousing and 3PL (organised)
No. of warehouse 15 60 44
managers
No. of warehouse 1,520 5,952 4,432
workers
Total 7,374 25,101 17,727

The demand for human resource in the Transportation, Logistics, and Warehousing sector is thus
expected to increase from about 7.3 million to about 25 million, leading to an incremental human
resource requirement for about 17.7 million persons.
2.9. Focus areas for skill building
The possible focus areas for skill building through short-term (3 to 6 months) and medium-term
(under a year) skill building initiatives are mentioned in the following table.
Table 24: Focus areas for skill building
Sector Personnel for skill building Indicative coverage areas
Road transport Truck drivers Core driving skills

Road safety
Basic knowledge of documentation
Page 64 of 67
Sector Personnel for skill building Indicative coverage areas
related to octroi, VAT, excise

Sanitation and hygiene
Ability to handle complex trucks of
higher tonnage
Basic knowledge when handling
hazardous chemicals
Good driving practices.
Warehouse Loading supervisors Goods arrangement
Ensuring quick Turn Around Time
(TAT)
Safety and compliance
People management skills
Ability to train and supervise operators
of equipment
Warehouse Managers Recording of goods movement
Safety related aspects
Ability to supervise training in
picking, packing, distribution
Knowledge of IT systems, WMS,
RFID, etc.
General warehousing skills, Stock keeping
especially Supervisors Loading and unloading
Picking and handling
Equipment usage – stackers, pallet
trucks
IT systems, labelling
Supervisory skills
Air Transport Pilots
Aircraft Maintenance
Air Traffic Control
Instructors
Safety and security
Source: Primary Research, FICCI Report on Aviation, and IMaCS analysis; Indicative and not exhaustive
Page 65 of 67
The above are areas indicative of skills which are in demand to a great extent and the possible areas of
training content for the same.
Addressing these requirements is critical for the competitiveness of the Transportation, Logistics,
Warehousing and Packaging sector in the long run.
Page 66 of 67
This report has been prepared by ICRA Management Consulting Services Limited (IMaCS).
IMaCS is a multi-line management and development consulting firm headquartered in India. It has an
established track record of over 15 years in consulting across various sectors and countries. IMaCS
has completed over 950 consulting assignments and has worked in over 30 countries across the globe.
Through the process of carrying out several assignments over the last decade and half, IMaCS has
accumulated considerable analytical and consulting expertise, backed by the following capabilities:
• Deep understanding of policy formulation.

• Extensive and organised database on several sectors.
• Knowledge of key factors of success in different projects and programmes.
• Ability to research emerging trends in the economy, as well as in specific sectors.
• Insight into different programmes and organisational processes.
• Ability to carry out economic analysis, build quantitative and financial models to project future
performance and identify imperatives.
• Ability to identify the various types of risks and suggest appropriate strategies to mitigate the
same.
The Education and Skills practice at IMaCS focuses on identifying skill gaps, mapping future skill
requirements, and formulating strategies to address them. Our service offerings encompass diagnosis,
design and implementation of education and skill development interventions for government and
private sector.
R. Raghuttama Rao M. Sairam

Managing Director Head – Process Consulting
IMaCS IMaCS
4th floor, Electric Mansion 5th floor, Karumuttu Centre
Appasaheb Marathe Marg, Prabhadevi 634, Anna Salai, Nandanam,
Mumbai – 400 025 Chennai – 600 035
Tel: 91 22 3047 0047, Fax: 91 22 3047 0081 Tel: 91 44 2434 0043, Fax: 91 44 2434 3663
Email: raghuttama.rao@imacs.in Email: sairam.m@imacs.in
Page 67 of 67
National Skill Development Corporation
D-4, Clarion Collection, (Qutab Hotel)
Shaheed Jeet Singh Marg
New Delhi 11 0 016
Tel : 011 46 56 0414
Fax : 011 4656 0417
Email : nsdc@nsdcindia.org
www.nsdcindia.org

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Transportation, Logistics,

1.5. Drivers of competitiveness of the Transportation, Logistics, Warehousing and Packaging

2.1. Current employment pattern ................................................................................................. 26

2.7. Emerging trends .................................................................................................................... 54

2.9. Focus areas for skill building ................................................................................................ 64

Figure 1: A Typical Supply Chain .......................................................................................................... 6

1. Environment Scanning and Competitiveness of the

1.1. Overview of the Transportation, Logistics, Warehousing and

Figure 1: A Typical Supply Chain

The value chain for logistics is as shown below

Figure 2: Value chain: Logistics

1.2. Industry Size and Growth of the Transportation, Logistics,

Figure 3: Evolution of logistics services

1.2.1. Segments of the Transportation, Logistics, Warehousing and Packaging

Figure 4: Segments of the Transportation, Logistics, Warehousing and Packaging Sector

Table 1: Growth rates of various segments of Transportation, Logistics, Warehousing and

Segment Mode of transport Growth rate (CAGR%)

Airline freight services 11%

Segment Mode of transport Growth rate (CAGR%)

Figure 5: Share of the Transport Segment in GDP

7.0% Constant Prices

Source: Government of India (GoI), IMaCS Analysis

Figure 6: Sub-Segment wise share in Transportation

Road Transportation Sub-Segment

Railway Transportation Sub-Segment

Table 2: Trends in Rail-Road Modes in Passenger and Goods Traffic

1961 80.9 (51.0) 77.7 (49.0)

1971 210.0 (64.0) 118.1 (36.0)

1981 541.8 (72.2) 208.6 (27.8)

1991 767.7 (72.2) 295.6 (27.8)

2000 1,831.6 (81.0) 430.7 (19.0)

2001 2,075.5 (82.0) 457.0 (18.0)

2002 2,413.1 (83.1) 490.9 (16.9)

2003 2,814.7 (84.5) 515.0 (15.5)

2004 3,070.2 (85.0) 541.2 (15.0)

2005 3,469.3 (87.1) 515.7 (12.9)

Source: GoI, IMaCS Analysis

Air Transportation or Aviation Sub-Segment

Sea Transportation Sub-Segment

The major players inn the ship transportation segment

Fiigure 8: Majjor players in

Pipeline Transportation Sub-Segment

Table 3: Warehouse capacity plans of major 3PL Companies

Company Current capacity Planned capacity Expected by year

TCI 7.5 10 2010

DRS Logistics 1.5 5 2010

Indo Arya 2 3.5 2010

Blue Dart 1 2 2010

TNT 0.5 2 2010

ProLogistics 7.5 2011

TranSmart 10.5 2013

Total 16.5 52.5

The various kinds of logistics service providers are as below:

The various types of packaging are as below:

Figure 10: Types of packaging

Semi Rigid Flexible

Bottle, Metal Can Carton Box Paper, Plastic

Wooden Box Plastic Bottle Film, Alu- Foil

Metal Box, etc Cellophane

Cold Chain logistics

1.3. Demand Drivers of the Transportation, Logistics, Warehousing and

1.4.1. Key Success Factors

1.4.2. Key Risk Factors

Operations Manager / Sound knowledge of taxation policies Inadequate knowledge of

Ability to be responsible for forward

Operations Supervisor (as Ability to assist customer service Inadequate ability to

Ability to understand and use

Executive Ability to prepare appropriate Inadequate ability to devise

Ability to assist in relationship