Indian Logistics Industry Insight

Surface Transport

May 2007

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contents
 SYNOPSIS

The global logistics industry was valued at US$3.5 trillion in 2005, whereas US logistics
industry size was around US$900 billion, 25% of the global logistics industry.

Logistics costs in India is estimated to be around 13% of the GDP, which comes to around
US$94 billion in 2005-06. However, India’s spending on logistics industry is much higher
than the developed economies like the US (9.5%) and Japan (10.5%).

Transport sector’s contribution to India’s GDP is estimated to be around 6.6% in 2005-06,

and road transport has a dominant role in this contribution with a share of 4.7% in India’s
GDP. India has the second largest road network in the world. The aggregate length of roads in
India increased from 0.4m km in 1950-51 to 3.34m km by the end of 2006. The road network
handles about 65% of the freight and 87% of the passenger traffic. National highways
constitute only about 2% of the road network but carry about 40% of the total road traffic.

Indian Railways network is one of the largest railway networks in the world with total 63,465
route kilometres at the end of 2005-06. Indian Railways has handled total 666.5m tonnes of
cargo and around 5,832m passenger traffic in 2005-06. Its revenue earnings grew by 15% in
the same year.
Indian Logistics Industry Insight – Surface Transport

According to the Planning Commission, the Indian economy is expected to grow at an

average 9% per annum during the 11th Five Year Plan (from 2007-08 to 2011-12).
Considering the GDP growth rate of 9%, it is expected that the road freight industry will be
growing at a CAGR of 9.9% from 2007-08 to 2011-12. Road freight volumes have been
targeted at 1,231 billion tonne kilometres (BTK) by 2011-12.

The report covers the overview of Indian logistics industry, market size, cost components,
overview of surface transport system (both road and railways) in India, road freight traffic
trends, growth drivers, demand-supply scenario, technology and innovation and future
outlook of Indian road and railways transport sector. In addition, the report also includes
profiles of five major players in the sector.

The report will be highly significant for industry analysts, road transport companies, banks
and financial institutions, investor consultants, logistics companies and custom house agents.

No of Pages: 90 No of Tables: 13

2 © Cygnus Business Consulting & Research 2007

 CONTENTS

1. EXECUTIVE SUMMARY
2. HIGHLIGHTS
3. LOGISTICS INDUSTRY STRUCTURE
3.1. Global Logistics Industry Overview
3.1.1. Component of Global Logistics Cost
3.1.2. Structure of Global Logistics Industry
3.2. Indian Logistics Industry Overview
3.2.1. Spending on Logistics in India
3.2.2. Cost Component of Indian Logistics Industry
3.2.3. Infrastructure Development – Boost to Logistics Industry
4. SURFACE TRANSPORT SYSTEM IN INDIA
4.1 Road Transport system in India
4.1.1 Road network in India
4.1.2 Road network characteristics
4.1.3 Trend of Road Freight in India
4.1.4 Road freight industry Structure
4.1.5 Road infrastructure and role of NHAI
4.1.6 Carriers
4.2. Railways
Indian Logistics Industry Insight – Surface Transport

4.2.1 Overview of Indian Railway

4.2.2 Management of Indian Railways
4.2.3 Rail network
4.2.4 Freight & Passenger Traffic
4.2.5. The Corporatisation of Indian Railways
4.2.6 Recent developments
5. INTERMEDIARIES AND SUPPORT SERVICE PROVIDERS
5. 1 Introduction
5. 2 Reasons to outsource logistics functions
5. 3 Market size
5. 4 Third Party Logistics (3PL) in India
5. 5 Fourth Party Logistics (4PL)
5. 6 Clearing & forwarding agents
5. 7 Warehousing
6. MARKET DYNAMICS
6.1 Market Size
6.1.1 Road Transport
6.1.2 Railways
6.2 Demand Supply Scenario

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 6.2.1 Road
6.2.2 Railway
6.3 Growth Drivers
6.3.1 Economic Growth
6.3.2 Global Trade
6.3.3 Infrastructure
6.3.4 Information Technology
6.3.5 Emergence of global manufacturing networks
6.3.6 Liberalisation and De-regulation
7. TECHNOLOGY & INNOVATION
8. MAJOR PLAYERS
8.1 Transport Corporation of India
8.1.1. Corporate Profile
8.1.2. Business Profile
8.1.3. Financial Performance
8.1.4. Recent Developments
8.1.5. Business Strategies
8.2. Patel Roadways
8.2.1. Corporate Profile
8.2.2. Business Profile
8.2.3. Financial Performance
8.2.4. Recent Developments
8.2.5. Business Strategies
8.3. Balmer Lawrie
8.3.1. Corporate Profile
Indian Logistics Industry Insight – Surface Transport

8.3.2. Business Profilez

8.3.3. Financial Performance
8.3.4. Recent Developments
8.3.5. Business Strategies
8.4 Gati
8.4.1. Corporate Profile
8.4.2. Business Profile
8.4.3. Financial Performance
8.4.4. Recent Developments
8.4.5. Business Strategies
8.5. Indian Railways
8.5.1. Corporate Profile
8.5.2. Financial Performance
8.5.3. Strategies
9. COST STRUCTURE
9.1. Road Transport
9.2. Railways
10. ISSUES AND CHALLENGES

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 10.1. Introduction
10.2. Road Transport
10.2.1. Infrastructural Bottlenecks
10.2.2. Nature of Road Transportation
10.2.3. Overloading
10.2.4. Taxation
10.2.5. Freequent Stopage of Vehicles
10.3. Railways
10.3.1. Infrastructural Bottlenecks
10.3.2. Losing Ground to Roadways
10.3.3. Safety, Modernisation and Upgradation
10.3.4. Human Resource Management & Development
11. GOVERNMENT INITIATIVES, SCHEMES & REGULATIONS
11.1. Introduction
11.2. Roads
11.2.1. NHDP
11.2.2. PPP on Road Infrastructure
11.2.3. Draft of National Road Safety Policy
11.2.4. Port Connectivity
11.3. Railways
11.3.1. Major Initiatives during 11th Plan
11.3.2. Dedicated Freight Corridor
11.3.3. Privatisation of Railway Container Movements
11.4. Regulations
11.4.1. Road Transport
Indian Logistics Industry Insight – Surface Transport

11.4.2. Railways
12. FUTURE OUTLOOK
12.1. Road Transport
12.2. Railways

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 LIST OF TABLES

Table 1: Spending on Infrastructure

Table 2: Indian Road Network
Table 3: Road Network as on December 2006
Table 4: Development of Roads in India
Table 5: NHDP Projects
Table 6: Indian Railway Zones
Table 7: Indian Railway Network
Table 8: Key Statistics of Indian Railways
Table 9: Commodity-wise cargo traffic of Indian Railways
Table 10: Trends in Rail-Road Freight Movements
Table 11: Compound Annual Growth Rate in Vehicles and Road Length
Table 12: Indian Road Network
Table 13: 11th Five Year Plans- Investment Details
Indian Logistics Industry Insight – Surface Transport

6 © Cygnus Business Consulting & Research 2007