Modern warehousing and Transportation trends

Agenda
Environment

Warehousing
Transportation 3PL Market Range of Services & Attractiveness Key Growth Drivers New Business Model & Opportunities Areas of Improvement

Logistics Cost Global Trend

Country/Region

Logistics Cost as % of GDP 12-14% 18% 9.9% 7.1%

Share of Organized Logistics 3-4 % Less Than 10% 34% 54%

Size of Logistics Industry ($ Billions) 145-160 800-950 1200-1400 1100-1300

India China USA Europe

Constituents of logistics cost - India

Constituents of logistics cost Transportation Warehouse & Handling Inventory Packaging Customers & Shopping Transit Losses Technology Cost India 35% 9% 25% 11% 6% 14% <1%

Comparison of Key parameters India vs Global

India & World Comparison

Warehousing-Functions
Materials Handling Function Loading and unloading Materials Movement (to and from the Storage area) Order filling Breaking Bulk Cross Docking Mixing Packing Information Handling Function Goods Inwards Inspection and auditing Goods outwards Excess Stocks Invoicing Consignment Tracking Transit damage and breakage

Warehousing Basic Objectives

Maximum utilisation of storage space (floor and cubic space)

Higher labour productivity

Maximum Asset utilisation Reduction in Materials Handling Increased Inventory turnover Reduced order filling time

Reduction in operating cost

Types of Warehouses
Broad classification Private warehouses

Public warehouses
Types Bonded warehouses under customs / Excise Act Field warehouse Cold storage for perishable goods Agriculture warehouse used for storing Agriculture produce

Distribution warehouse located close to the manufacturing concerns

Buffer storage warehouse Government owned Export / Import warehouse located normally near ports

Warehouse Layout Designs

Basic considerations are Principle of Popularity Principle of Similarity Item Turnover Space utilisation Product configuration Product characteristics Good Housekeeping Safety and Security

Warehousing - A Role Beyond Storage

Modern warehousing is in the process of evolutionary change From an emphasis on storage to emphasis on flow through From Inventories at rest to Inventories in motion In logistical systems, warehouse are viewed as switching facilities rather than storage facilities

What is Happening in Warehousing Environment ?

Changing function of a warehouse

Warehousing function changes from storage to flow

Increase in value added services

Changing function of a warehouse

Lease provides adaptability

Emphasis on cost management

Initiatives to improve Transportation - Road

Deficit Targets FDI Envisaged Investment Size US$ 78.5bn

Roads / highways 65,590 km of existing national highways: Comprise only - 2% of network - Carry 40% of traffic - Of which 12% is 4-laned; 50% is 2- laned; and 38% is single laned

-6-lane 6,500 km in GQ - 4-lane 6,736 km NS-EW - 4-lane 20,000km -2-lane 20,000km - 1,000 km Expressway

100 % FDI under automatic route

Initiatives to improve Transportation - Rail

Deficit Targets FDI Envisaged Investment Size US$ 65.45 bn

-Old technology - Saturated routes - Slow speeds (freight: avg 22kmph; passengers: avg 50kmph) - Low payload to tare ratio (2.5)

-8132 km new rail -7148 km gauge conversion - Modernize 22 stations -Dedicated freight Corridors

100 % FDI under automatic route

Initiatives to improve Transportation - Ports

Deficit Targets FDI Envisaged Investment Size US$ 22 bn

Inadequacy of -Capacity - Rail / road Connectivity

New capacity: - 485 million MT in major ports - 345 million MT in minor ports

100 % FDI under automatic route

Initiatives to improve Transportation Airports

Deficit Targets FDI Envisaged Investment Size

Inadequacy of -Runways - Aircraft handling capacity - Parking space and terminal Buildings

-Modernize 4 metro and 35 non-metro airports - 3 Greenfield in North Eastern Region (NER) - 7 other Greenfield Airports

100% FDI under US$ 7.74bn automatic route for Greenfield airports

Share of 3 PL Market

Evolution of Indian 3 PL Market

Evolution of Logistics Model

Range of Services

Attractiveness of Sub-segments

Rising Outsourcing & Consolidation

Key Growth Drivers

Key Determinants of Selecting LSP

New Business Model

Opportunities for Foreign Investors

Areas of Improvement

Thank You