Industry Sheet - Indian Express Logistics Industry - As on 30 March 2021
Customer Segments for Express Logistics Industry can be divided as-
1. Type of Customer – B2B, B2C, C2C
2. Industry – Auto, Apparel, FMCG, Pharma etc.
3. Mode of Transport – Rail, Road, Air and Water
4. On the basis of location – Metro, Tier 1, Tier 2 and Rural
5. On the basis of Company Size – Corporate & SME
Customer Gains and Pains
Products and Services
Different Products and Services offered by the Industry are –
3. Express Logistics
5. Air Express
8. Value Added Services – Knitting, packing, Boxing
Activities and Participants
Key Activities to be performed –
1. First Mile Pick-Up
2. Local Collection Center
3. Aggregation and dispatch to Sorting Centers.
4. Warehousing and Value Added Services
6. Fleet Management
8. Last Mile Delivery
Demand- Supply Scenario
Demand for Express Logistics is directly related to the sectors that they are serving and the health of these sectors. So, demand is linked to –
1. Automobile and its parts
4. Apparel and Lifestyle
5. Industrial Equipment
On the supply side, the lead time for new supply in transportation is very low, however, in warehousing, it takes time.
Competitive Life Cycle
Porter's Profit Forces
Threat of Substitution
Threat of New Entrants
Threat of Competitive Rivalry
Financial Health of Companies in the Industry
ROE and DuPont Analysis
TCI Express Ltd (FY20) – 9% x 2.40x x 1.28 = 26%
Gati Ltd. (FY20) – (-5%) x 1.08x x 1.88 = (-10%)
BlueDart Ltd(FY20) – (-1%) x 1.20x x 5.38 = (-9%)
VRL Logistics(FY20) – 4% x 1.74x x 1.97 = 15%
Trends in Industry
Industry Specific Risks
Risks faced by the Industry are –
1. Limited Traffic on routes in Tier 2 and below.
2. Shortage of Vehicles and Drivers
3. Slowdown in Customer Sectors directly affects the industry
4. Change in Crude Oil prices.
5. Technological Risk.
6. Shortage of Quality warehouses.
7. Government Regulations Risk.
Major Growth Factors for the Industry are –
1. GST leading to shift to Organized Players.
2. Growth in E-commerce
3. Growth in particular sectors that are customers centric – FMCG, Auto, Apparel.
4. Investment in Infrastructure by Government.
5. Increase in Logistics Outsourcing.
6. Increase in Value Added Services.
Variables for success in Industry
Key Variables to Success in the Industry –
1. Volume on the routes (Fill ratio of Trucks)
2. Extensive Network of Branches and Sorting Centers
3. Industry (Customers) Served
4. Geographical Focus of companies
5. Cost Advantages
Cost Structure of Industry
Evolution of Industry
UG151, Marvella Corridor,
VIP Road, Surat – 395007