Growth opportunities to LSPs

An analysis by Frost & Sullivan found that the country’s trade value with countries it has trade grew by 12.2 per cent in 2013-14.

Frost & Sullivan recently conducted the fifth edition of its annual strategy workshop for the logistics sector under the theme ‘Supply Chain Transformations 2014’.

In this edition, Frost & Sullivan sought answers on logistics opportunities from India’s international trade and emerging industries, the diverse logistics challenges of rural vs. urban markets, etc.

However, an analysis of India’s trade statistics (by Frost & Sullivan) found that the country’s trade value (excluding petroleum and oil) with countries it has trade agreements with grew by 12.2 per cent in 201314. Similarly, it was identified that rural population income and consumer expenditure has grown faster than in urban areas. In addition, while overall consumer goods and retail industry witnessed sluggish growth, the organised retail segment witnessed a substantial growth enhancing its share from less than five per cent in 2009 to approximately seven per cent in 2013.

On the occasion, VG Ramakrishnan, Managing Director, South Asia, Frost & Sullivan said, “For logistics service providers (LSPs) to effectively tap opportunities in fulfilling varying logistics need of international trade, emerging industries, and rural markets, a suitable and specific set of capabilities for the respective segments must be possessed and a collaborative approach involving logistics end users must be adopted. Logistics end users are increasingly open about utilising shared resources of LSPs to gain efficiencies. But, lack of cooperation within the LSP fraternity is resulting in several inefficiencies affecting all the stakeholders of the logistics fraternity.”

During the session on logistics opportunities from emerging industries in India, the entire fraternity opined that online retail, healthcare, electronics and communications, and renewable energy industries offer highest potential. The combined size of these industries as of 2013 was about US$ 80 billion.

Speakers and panelists in this session also suggested that the online retail industry could disrupt conventional supply chain models of several industries, and implementation of the uniform Goods and Services Tax (GST) regime in the country by 2015, which could add more momentum for this industry. It was summarised that LSPs need to gain capabilities to support innovative supply chain and inventory management models, along with technology enabled visibility to fulfill the needs of these emerging industries.The workshop concluded with the session on addressing diverse logistics needs of urban and rural markets.