It’s a time for tough players
It is evident from the facts and present market trends that cargo and logistics companies have to face another year of sluggish growth owing to factors related to international economic scenario and financial and political turmoil in India. With unprecedented depreciation of Indian currency, cost and price escalation and impending Lok Sabha elections, it is logical that uncertainty to loom large over the overall market scenario. The latest exports figure for the month of May is an indicative of the fact that the global recovery is still weak. Exports during May, 2013 were valued at US $ 24,505.66 million which was 1.11 per cent lower in dollar terms than the level of May, 2012. Cumulative value of exports for the period April-May 2013-14 was US $ 48,670.03 million registering a growth of 0.21 per cent in dollar terms over the same period last year. Though there are some improvements in countries like USA and Japan but Eurozone continues to be a cause of concern. Even in some large emerging economies like China, Brazil, Russia and South Africa. China, which is world’s top exporter, has also showed a growth of 1 per cent in their exports for the month of May while their imports were down by 0.3 per cent. According to Indian exporters, sluggish external demand and lack of investment are not only hitting them severely, also pulling down the nation’s economy. According to a recent FICCI industry survey, the overall Business Confidence Index declined for the second consecutive quarter. What is even more worrisome is the fact that the participants did not seem too optimistic about the expectations over the next two quarters. The participants indicated weak demand to be a worrying factor hampering the overall business performance. Also there was a marginal increase in the proportion of respondents citing cost of credit to be a concern. The companies were not too upbeat about the sales prospects and profit margin performance over the next six months. As a result, there would be a huge impact on the cargo and logistics industry. Nevertheless, going is not tough for the innovative players. A large number of entrepreneurs from this sector performed remarkably better in 2012-13 and are expecting a spurt in the current financial year. Reasons: their risk taking mind set for venturing out to explore new markets and product range. In addition, prompt response to market trends by adopting contemporary technologies made them smart and strong enough to face the tough times. It is likely the strategy to be continued and followed by others in the months to come.