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$15522.02 billion by 2023, growing at a CAGR of 7.5% from 2015 to 2024.The market in terms of volume was valued at 54.69 billion tons in 2015 and is expected to reach 92.10 billion tons by 2024 growing at a CAGR of 6% from 2016 to 2024.1
1Transparency Market Research "Logistics Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2016 – 2024’
The Global Logistics Industry in 2017 is equally subject to global geo political machinations but that apart countless disruptions threaten to tip the balance of global trade as we knew it. These could be stated as follows: -
LOGISTICS – INDIAN PERSPECTIVE
The Indian logistics sector is valued at USD$ 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
DEMAND-SUPPLY GAP OF SKILLED MANPOWER 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:-