Business Logistics & SCM

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Fast growth expected in India’s third-party logistics market… March 26, 2007

Filed under: Business Logistics — TSBL @ 11:54 am

Article Dated: 1 March 2007

India’s third-party logistics market is forecast to experience explosive growth, reaching a market size of $125 billion in 2010, market analyst Datamonitor said in a report published Thursday.

The prediction comes on the back of India’s gross domestic product – growing at more than 9 percent a year and the manufacturing sector enjoying double-digit growth rates.

Third-party logistics, or 3PL, is the outsourcing of a company’s logistics operations to a specialized firm that provides multiple services for customers as opposed to having the respective company having an in-house unit to oversee its supply chain and transportation of goods.

‘With increased geographical distribution of incomes in India, the consumer markets are extending beyond the five metros of Mumbai, Delhi, Bangalore, Chennai and Hyderabad,’ said Datamonitor’s report published in The Business Times.

‘Strong foreign direct investment in automotive, capital goods, electronics, retail and telecom will lead to increased market opportunities for providers of 3PL in India,’ it noted.

Outsourced logistics, at one-quarter of the $90 billion Indian market, is set to increase at a compound annual growth rate of more than 16 percent from 2007 to 2010, said Datamonitor.

Recognising the potential in the contract logistics market, 3PL service providers are expanding as companies looking for more than just transportation of their products and raw materials, the report added.



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