Media Releases

North America and Southeast Asia Shines in Logistics Outsourcing

Posted on 16 August 2016 by KenResearch

Logistics refer to the commercial activity of transporting goods or proving required services to customers at their choice of place, at the right time and also in the right condition. Logistics have become a very vital part of the businesses around the world and hence, the global economic system which in turn is causing a significant growth in the global logistics industry. Logistic activities accelerate economic growth and productivity growth. Efficiency of the economy’s logistic sector is a major indicator of its level of competitiveness and is an important determinant of its source of employment. 

There are many factors on which companies base their decision of outsourcing logistics such as company size, complication of logistics and relative economic benefits of outsourcing. Particularly the e business web portals have to resort to outsourcing logistics due to their need for on- clock dispatch and delivery. Outsourcing of logistics enable companies to specialize in their areas of operation and focus on their competencies. However, there also some drawbacks associated with this market such as vendor reliability issues.

North America and Southeast Asia are the world’s most lucrative logistics outsourcing market while the rest of the world is showing growth in inter regional logistics. A large number of factors are contributing to the increasing popularity of logistics outsourcing such as globalization, time scarce economy, development of e commerce, improved customer awareness, strategic concerns to achieve more flexibility and better IT infrastructural support. At the same time loss of logistics, poor transportation, local protection regulations and lack of post-outsourcing measurements are some of the factors hampering growth of this market.

Fedex Corp and DHL International were the major two players in the logistics outsourcing market accounting for 50% of the business globally followed by XPO Logistics, Inc. and United Parcel Service, Inc. with a narrower reach as compared to the former two. The global ecommerce logistics market will witness the rise of many new companies. Gati Limited and Clipper Logistics are some other companies which are worth a watch. The global logistics market is expected to achieve a CAGR of 20.6% between 2016 and 2024.

Although the growing emergence of ecommerce in developing countries like that of India and Brazil is boosting the demand for e commerce logistics, there are problems associated with the same such as problems of reverse logistics and problems of infrastructure in developing economies. Reverse logistics refers to the problem of returning the ecommerce goods particularly in the case of free delivery which burdens the reverse logistics chain and cause a hike in the cost incurred by ecommerce logistics companies. These factors are expected to restrain the growth of the global ecommerce logistics market.

On the basis of the type of service, the logistics market is divided into warehousing, transportation, and others of which transportation segment is the largest, accounting for a dominant 51.6% of the market. The major reason for the dominance of this segment is the role of transportation in supply chain. The growing emphasis on last-mile connectivity will give this segment a further boost. The warehousing segment is further split into hubs/delivery centers, mega centers, and returns processing centers. Similarly, the transportation segment is divided into freight/rail, maritime, air/express delivery, and trucking/over road.

 

Source: https://www.kenresearch.com/tag/automotive-transportation-and-warehousing/warehousing/338.html

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HOW UAE LOGISTICS MARKET HAS PERFORMED IN THE RECENT PAST?

Posted on 11 August 2016 by KenResearch Automotive, Transportation and Warehousing ,

UAE has been able to establish itself as a top-notch logistics hub owing to its prime location on the global landscape over the period 2009-2014. Additionally it is the primary entry point for goods in the GCC market. It borders Oman to the East and Saudi Arabia to the South. UAE also shares sea borders with Qatar and Iran. It is the gateway that connects the western hemisphere with the eastern hemisphere.

 Trade activities in the UAE have amplified over the past five years owing to increasing globalization. Logistic services in the country have been successful in connecting different export and import markets of various countries across the world.

UAE has been taking advantage of economic activity among the world’s fastest growing and developing economies as part of the ‘South-South’ trade trajectory.

 

Furthermore, over the past five years, billions of dollars have been invested by UAE’s government towards development of logistics infrastructure. UAE has been the foremost nation in the Middle East to focus on logistics.

Foundation was laid with the establishment of Jebel Ali Harbor in 1979. Since then Jebel Ali has become the largest container harbor between Rotterdam and Singapore. Numerous new ports and free zones were built while further emphasis was put on construction of new airports and roads. In addition, Port Rashid, Khorfakkan and Al Hamriyah port have been economic powerhouses in the country during the review period.

UAE Logistics Market has amplified at a CAGR of ~%. This growth has registered the revenues of the logistics market at USD ~ Million in 2014.

 

Figure: UAE Logistics Market Segmentation by Service Mix on the Basis of contribution to the overall revenue in USD Million, 2009-2014

 

Particulars

2009

2010

2011

2012

2013

2014

Freight Forwarding

 

 

 

 

 

 

Warehousing

 

 

 

 

 

 

VALS

 

 

 

 

 

 

Total

 

 

 

 

 

 

The UAE logistics market can be segmented on the basis of services offered as part of the total logistics industry. There are 3 broad services conducted under the entire logistics package namely transportation, freight forwarding, warehousing and value added services (VALS) including 3PL. All the services conducted in the logistics industry right from sourcing of goods to final delivery come under these three broad services.

Freight has been the biggest segment among all the services in the UAE logistics sector over the past five years. Its share in the total service mix has enhanced from ~% in 2009 to ~% in 2014. Such dominance of freight forwarding market and its increase in share has mainly been attributed to country’s prime location on the global map. Sea has been the most dominant mode of transportation in the freight forwarding market over the past five years. The sea route has been connecting Asia-South East Asia to Europe and North America very efficiently for several years now. Further, low fuel charges in UAE have also been major growth driver of the freight forwarding market over the period 2009-2014.

Warehousing has been the second biggest segment in the services mix of UAE logistics market over the period 2009-2014. The share of warehousing in the overall service mix has increased from ~.0% in 2009 to ~% in 2014. Continual investment by the government in development of logistics infrastructure including completion of Dubai Maritime City in 2012 supported by entry of several global players in the market have been the main reasons behind the increase in the share of the warehousing segment over the past five years. Logistic hubs such as Kizad Logistics Park, Dubai Logistics City and others have attracted investments from several global and domestic players. Numerous companies including Aramex, Agility, Keuhne+Nagel and many others have opened their warehouses in these locations over the period 2009-2014. On the other hand, value added services such as packaging, sorting and others have accounted for a minute share of ~% of the UAE logistics market in 2014. Small and low cost nature of these services has justified its minimal share in the overall logistics market over the period 2009-2014.

 

 

 

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North America and Southeast Asia Shines in Logistics Outsourcing

Posted on 26 July 2016 by KenResearch

Logistics refer to the commercial activity of transporting goods or proving required services to customers at their choice of place, at the right time and also in the right condition. Logistics have become a very vital part of the businesses around the world and hence, the global economic system which in turn is causing a significant growth in the global logistics industry. Logistic activities accelerate economic growth and productivity growth. Efficiency of the economy’s logistic sector is a major indicator of its level of competitiveness and is an important determinant of its source of employment. 

There are many freight forwarding industry trends on which companies base their decision of outsourcing logistics such as company size, complication of logistics and relative economic benefits of outsourcing. Particularly the e business web portals have to resort to outsourcing logistics due to their need for on- clock dispatch and delivery. Outsourcing of logistics enable companies to specialize in their areas of operation and focus on their competencies. However, there also some drawbacks associated with this market such as vendor reliability issues. Third Party Logistics Market Reports help to understand market performance and future course of actions.

North America and Southeast Asia are the world’s most lucrative logistics outsourcing market while the rest of the world is showing growth in inter regional logistics. A large number of factors are contributing to the increasing popularity of logistics outsourcing such as globalization, time scarce economy, development of e commerce, improved customer awareness, strategic concerns to achieve more flexibility and better IT infrastructural support. At the same time loss of logistics, poor transportation, local protection regulations and lack of post-outsourcing measurements are some of the factors hampering growth of this market.

Fedex Corp and DHL International were the major two players in the logistics outsourcing market accounting for 50% of the business globally followed by XPO Logistics, Inc. and United Parcel Service, Inc. with a narrower reach as compared to the former two. The global ecommerce logistics market will witness the rise of many new companies. Gati Limited and Clipper Logistics are some other companies which are worth a watch. The global logistics market is expected to achieve a CAGR of 20.6% between 2016 and 2024.

Although the growing emergence of ecommerce in developing countries like that of India and Brazil is boosting the demand for e commerce logistics, there are problems associated with the same such as problems of reverse logistics and problems of infrastructure in developing economies. Reverse logistics refers to the problem of returning the ecommerce goods particularly in the case of free delivery which burdens the reverse logistics chain and cause a hike in the cost incurred by ecommerce logistics companies. These factors are expected to restrain the growth of the global ecommerce logistics market. Global Logistics Market Outlook is bright with fair participation of developing and developed economies and rising trade across countries.

On the basis of the type of service, the logistics market is divided into warehousing, transportation, and others of which transportation segment is the largest, accounting for a dominant 51.6% of the market. The major reason for the dominance of this segment is the role of transportation in supply chain. The growing emphasis on last-mile connectivity will give this segment a further boost. The warehousing segment is further split into hubs/delivery centers, mega centers, and returns processing centers. Similarly, the transportation segment is divided into freight/rail, maritime, air/express delivery, and trucking/over road.

 

Source: https://www.kenresearch.com/automotive-transportation-and-warehousing/logistics-and-shipping/SC-100-45.html

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Indian Logistics Industry- Launch of mShipper: Ken Research

Posted on 26 July 2016 by KenResearch

Logistics refers to the commercial activity of transporting goods or services to customers. Logistics has become a pivotal part of the business economic system as it accelerates economic growth. The logistics industry in India was estimated to be worth USD 130 billion in 2013 and has been growing rapidly. The logistics companies in India are rapidly evolving and providing a myriad of services such as transportation, warehousing, pool distribution, management consulting, logistics optimization and many more. The government has also taken a number of initiatives to ensure a favorable business climate in this industry.

The logistics sector in India is also experiencing a number of innovations in the recent times. One such case is the launch of “mShipper” by a group of youth which focuses on making delivery a dispute free experience for small businesses, e-tailers and retailers in Delhi-NCR. Capitalizing on the idea of a shared economy, the platform takes on board willing individuals ‑ the shippers ‑ to pick and deliver packages on the go, allowing them to either save on their commuting cost or earn some extra income. Apart from making delivery, they are also concerned with making delivery a more personalized way and at the same time faster than others.

The Indian Logistics industry is projected to grow at a CAGR of 15-20% between 2015 and 2020. However, the implementation of the long awaited one-nation-one-tax, GST in the country can change the scenario of this industry and the Indian economy as a whole. The GST rollout can help boost the GDP by 100-200 bps as this will help faster and cheaper movement of goods across the country with a uniform taxation structure. The faster movement of goods will result into the augmentation of the logistics industry. Not only this, GST can also bring down the logistic costs by up to 20 per cent from the present levels by reducing the long and winding queues at border check-points and other entry points within and between the states.

There are various other means by which the implementation of GST can provide a boost to the Indian Logistics Industry. Due to various kinds of taxes such as entry tax, local body tax, and many other hurdles, the trucks are idle for 30-40 % percent of the day leading to huge fuel and manpower losses. With the implementation of GST which will be levied on goods transportation, logistics cost is expected to come down by 1.5-2 per cent of sales due to warehouse optimization and lower inventory cost.

GST has the potential to accelerate growth in the logistics industry, however its complete impact at the moment is ambiguous. A large number of debatable issues, such as the clear definition of supply, supply chain management through warehouse engineering, credit allowance during the transition phase, classification of goods and services under GST, etc. still remains to be answered. With GST’s imminent implementation, the logistics industry should start exploring different supply chain models with their clients. However, despite of all these apprehensions, GST is the much required change in the logistics industry, as the positive impact of GST far outweighs the disadvantages for this industry.

 

Source: https://www.kenresearch.com/automotive-transportation-and-warehousing/logistics-and-shipping/SC-100-45.html

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