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  Future of industries - Logistics & supply chain Industry  
     
     
 
Heavy indudtry
 
Shining Perspective
Cross industry knowledge is the prime factor to address this business
Different industries have different types of requirements to support their logistics and
supply chain service. Understanding this from a strategic level up to the activation level
forms the big science of B2B branding business
The uncertainty of India’s infrastructure is a major constraint to the logistics and supply
chain service providers
The low profile people in the frontline do not understand the value of their back end service even
though they handle the most crucial part of this business. Thus, activation is a big concern
Service should be aligned to the customers’ requirement right from product handling, warehousing, dispatching, reaching on time and to outstanding delivery. All these activities have to be very
meticulous. They are crucial concerns that need to be addressed
 
 
The industry will see collaboration among rivaling players to reduce operating costs as well as optimize asset usage.
 
At a different level, LSP’s will co-operate with end user industries to derive benefits from economies of scale.
 
The growth will be supported by government plans to outsource their transportation infrastructure to private
operators and private ownership.
 
The sector will see consolidation through mergers and acquisitions though will continue to largely remain
fragmented as regional players remain dominant in their limited territory.
 
While in emerging markets, it is the hub and spoke model which continue to prevail, in developed countries where connectivity is not issue, consolidation and co-operation will be forced by tight rope operating profits as fuel costs continue to increase.
 
 
  Industry Growth Drivers
  High growth in Asia Pacific
  Increased investment in transportation infrastructure
  Relaxation of trade policies, tariff reductions and multilateral trade agreements
  Easing trade regulations and providing tax benefits, sharing global trade to facilitate trade
  Introduction of new trade policies and the signing of multilateral trade agreements with other countries
  The third-party logistics (3PL) sector is rapidly growing
  Logistics outsourcing demand growth
  Increasing globalization
  De-regulation of the industry
 
  Industry Competitive Scenario
  High competition among global, national & regional players
  Market share held by major industry players continues to increase
  Increasing Mergers & Acquisitions, resulting in industry consolidation
  Many competitors are entering new markets, offering value-added services and diversifying
service offerings
  Increasing competition results in both large global players
  Because of increasing competition from large players smaller to mid-size companies are redefining
their strategy and differentiating their overall services
  Declining margin/ profitability
  Companies are moving up the value chain to provide high end logistics services
  Intense competition among and between the transportation sectors
  Increased outsourcing to reduce cost
  A market open to foreign competition would greatly reduce any possibility of monopoly or oligopoly
pricing power
  Consolidation – Mergers & Acquisitions
   
  Industry Complexity
  Government regulations
  Managing profitability
  Managing operational efficiences
  Managing & retaining skilled workforce
  Supply chain complexity
  Enforcing operational changes to reduce truck idling and improve efficiency
  Networks have become increasingly complex as the operating agreements between companies
sharing resources
  Stringent environmental norms
  Pressure from clients to broaden the range of service offerings and internationalize operations
  Managing economies of scale
  Governments need to enhance the capacity for advanced transport logistics to contribute to sustainable
transport development in the context of increasing globalization of economic activity
  Low operating margins and the opposing forces of fragmentation and consolidation in
certain industrial sectors
     
  Industry Pain Areas
  Volatility in Oil & Gas prices
  Logistics is a high-cost, low-margin business
  Poor infrastructure in emerging markets
  High maintenance cost in the developed markets
  High costs of employee training
  High investment in technology & technology up gradation
  Pricing pressures
  High costs of operations and low returns on investments
  Demand for customized solutions and more value-added services, besides
  Infrastructural bottlenecks
  Service commoditization
     
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