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OVERVIEW ON LOGISITCS INDUSTRY
LOGISTICS – GLOBAL VIEW

Global Logistics Industry includes all activities of the supply chain such as transportation, customer service, inventory management, flow of information and order processing. Other activities of the supply chain are warehousing, material handling, purchasing, packaging, information dissemination and maintenance among others. The Logistics market in terms of  revenue was valued at US$ 8185.46 billion in 2015 and is expected to reach US$15522.02 billion by 2023, growing at a CAGR of 7.5% from 2015 to 2024.The market in terms of volume was valued at 54.69 billion tons in 2015 and is expected to reach 92.10 billion tons by 2024 growing at a CAGR of 6% from 2016 to 2024.1
1Transparency Market Research "Logistics Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2016 – 2024’

The Global Logistics Industry in 2017 is equally subject to global geo political machinations but that apart countless disruptions threaten to tip the balance of global trade as we knew it. These could be stated as follows: -
  • Robotics, automation, 3 D /4 D printing will offset low cost manufacturing advantages.
  • Rampant protectionism favours localisation and also sustainability.
  • Digitisation and demand driven logistics are pushing supply chains closer to demand.
  • Middle class growth in developing markets is altering supply demand dynamics.
  • Global E Commerce will challenge traditional borders and boundaries.
Thus there are countless locations with compelling value propositions. Whether it is pureplay distribution facility, manufacturing center of excellence, transhipment port, regional E Commerce hub or new market to sell in/ source from, retailers and manufacturers have no shortage of options. On top of that if we consider global volatility and hypersensitivity to supply chain exceptions then what emerges is that supply chain modelling, simulation and optimisation are fast becoming core competencies.

LOGISTICS – INDIAN PERSPECTIVE

The Indian logistics sector is valued at USD$ 150 billion, contributing 14.4 % of country’s GDP. With the easing of FDI norms, proposed implementation of GST, increasing globalization, growth of ecommerce, positive changes in the regulatory policies, and government initiatives such as “Sagarmala”, “Make in India”, the sector is expected to touch $200 billion by 2020. In the World Bank’s Logistics performance ranking 2016, India’s ranks has improved from 54 in 2014 to 35 in 2016, jumping 19 places.

Out of this USD 150 billion logistics cost, almost 99% is accounted for by the unorganized sector (such as owners of less than 5 trucks, affiliated to a broker or a transport company, small warehouse operators, customs brokers, freight forwarders, etc.), and slightly more than 1%, i.e. approximately USD 1.5 billion, is contributed by the organized sector. However, the industry is growing at a fast pace and if India can bring down its logistics cost from 14% to 9% of the GDP (level in the US), savings to the tune of USD 50 billion will be realized at the current GDP level, making Indian goods more competitive in the global market. Moreover, growth in the logistics sector would imply improved service delivery and customer satisfaction leading to growth of export of Indian goods and potential for creation of job opportunities.

PROCESS FLOW OF LOGISTICS / SUPPLYCHAIN

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DEMAND-SUPPLY GAP OF SKILLED MANPOWER IN LOGISTICS SECTOR
Current Concentration Growth Corridors Potential Geographies
Tamil Nadu, Telangana, Andhra Pradesh, Karnataka, Maharashtra, Delhi NCR Uttar Pradesh, Gujarat, Bihar, Orissa, West Bengal, North-Eastern States, Punjab, Haryana Himachal Pradesh, Goa, Rajasthan

  • Logistics Sector employs about 21.24 million as of 2016. Of 21.24 million 54% are employed in passenger roadways segment, 35% in road fright while remaining are in passenger railways, freight forwarding, warehousing, packaging and other services.
  • As per the National Sample Survey the distribution of employees is mainly in Mumbai, Kolkata, Hyderabad and Ahmedabad Districts whereas emerging clusters includes Bangalore, Surat and Indore.
  • There has been no formal training in the country to address the skill gap in the logistics sector.
  • Thrust on infrastructure projects such as the dedicated Freight & Industrial Corridors like DMIC, expansion of Port Terminals and construction of greenfield Port projects under Sagarmala project and Bharatmala project will create fresh employment opportunities.
  • Increasing income levels and rapid growth in organised retail, e-commerce, QSR etc. will create new opportunities for the youth.
  • With 100 percent FDI through automatic route permitted, and the implementation of GST FMCG is expected to grow at over 12 percent CAGR during 2010- 2020, and
SCOPE FOR SKILL DEVELOPMENT IN LOGISTICS SECTOR
It is estimated that the total workforce will increase from current 21 million to over 31 million by year 2022. Thatmeans, this sector alone will generate additional requirement of over 9 million people across all the modals-roads,railway, ports and aviation. Government and associated stakeholders including sector skill council, training institutions and logistic firms will need to ramp up their training capacityto cater to the growing training needs of the sector. It will also involve various efforts such as:-
  • Creation of Kaushal Kendras for every sub sector addressing the demand
  • Engage with the Logistic Companies to invest in skill development as their CSR activity
  • Review and update the existing QP/NOS as per the sector requirement.
  • Synthesise the various training programs and educational courses and align them to the job roles in the logistics sector that would allow for career progression and lateral mobility
  • Bring in transnational equivalence of the QP/NOS which would permit placement of LSC certified candidates abroad,