Release Date: 17 March 2008
Release ID: 62
With a total trade value of USD 126 Billion in 2007, India, the second largest economy in Asia is enjoying unprecedented manufacturing growth.
The manufacturing market accomplishments of India however are matched by domestic infrastructure and logistics problems. Upwards of 14% of India GDP (gross domestic product) is spent developing its Supply Chain & Logistics infrastructure and systems compared to the 8% that most development nations invest annually.
The highly fragmented supply chain & logistics sector is undergoing a state of consolidation, transforming the way supply chain and logistics processes will be carried out in India.
Against this backdrop, the 2nd Annual SCMLogistics India 2008 conference sponsored by Freightnet, gets underway in New Delhi on Tuesday morning, and is expect to serve as the definitive platform for best practices and knowledge exchange on world class supply chain and logistics solutions and case studies.
It under this guise that leading India corporation have come together to tackle pertinent issues on how leading manufacturers and solution providers can grow their strength and consolidate their position by enforcing new supply chain and logistics strategies to stay relevant and manage these challenges.
SCMLogistics India 2008 is the first all-encompassing conference that gathers leading manufacturers and service providers from 7 vertical industries (Retail, CPG & FMCG, Pharmaceutical, Automobile, Electronics, Chemical and Oil & Gas) to discuss practical supply chain and logistics issues across all functional groups and leverage on cross-industry learning opportunities, held at a time when India’s manufacturing industry is at its peak.
The event has attracted a broad range of business leaders from throughout Asia, including representatives from TATA Motors, Unilever, Reliance Industries, Nestle, Colgate Palmolive, Acer, IBM and LG Electronics.
Indian Government who investment is driving the development of logistics infrastructure will be represented by Mr Anwarul Hoda, (Member, Planning Commission). Mr Hoda is expected to outline the India Government’s plan to overcome logistics and infrastructure constraints within the Indian market and highlight the strategies being employed in minimising supply chain costs associated with regulatory policies.
The challenges facing India could be seen by some as overwhelming. According to Datamonitor, outsourced logistics, at just above one-quarter of the entire $90 billion Indian logistics market, is slated to grow at a compound annual growth rate (CAGR) of over 16% from 2007-10.
"Strong growth enablers exist in India today in the form of over $300 billion worth of infrastructure investments, phased introduction of value-added-tax (VAT), and development of organized retail and agri-processing industries", say Praveen Ojha, Logistics analyst, Datamonitor.
"In addition, strong foreign direct investment inflows (FDI) in automotive, capital goods, electronics, retail, and telecom is leading to increased market growth for providers of 3PL in India."
The Indian logistics industry is characterized by dominance of a disorganized market. Transporters with fleets smaller than five trucks account for over two-thirds of the total trucks owned and operated in India and make up 80% of revenues. The freight forwarding segment is also represented by thousands of small customs brokers and clearing & forwarding agents, who cater to local cargo requirements.
According to Datamonitor, the logistics industry in India is currently hampered due to poor infrastructure such as roads (over 70 % of freight transportation in India is via roads), communication, ports and complex regulatory structures.
The National Highways (NH) form only 2% of the entire road network in India, but handle over 40% of the national road freight traffic, putting enormous pressure on the highway infrastructure. Also, on an average a commercial vehicle in India runs at a speed of 20 miles per hour (mph) compared to over 60 mph in the mature logistics markets of Western Europe and the USA.
In addition, the twelve major ports of India handle volumes higher than their full capacity, resulting in pre-berthing delays and longer ship turn-around time compared to even the East Asian counterparts like China and South Korea.
SCMLogistics India with it’s appropriate theme “Strengthen” ensure that the conference focus will be on priority issues on how leading manufacturers and solution providers can strengthen their position in India’s dynamic competitive landscape that is evolving rapidly.
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