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Third Party Logistics is gaining popularity in India to cope up with the country’s logistics need

Third Party Logistics (3PL) concept is very popular in the developed countries like Europe and America. In 3PL service a solitary professional logistics service contributor handle the complete logistics functions of a company, to alleviate industries from vast logistics costs. At a primary level, a 3PL provider will guarantee the services of warehousing and distribution for you (evolved service providers now do much more - tracking, packing, sourcing etc).

Previously the issues like poor infrastructure, pitiable connectivity and complex tax regimes have created some obstacle for growth of 3PL business in India.

But the rapid economic development in India creates potential customers for Third Party Logistics (3 PLs) business in Indian. the growing dissemination of IT-hardware multinational companies like in the country, unparalleled expansion in sectors like Telecom, Banking, Financial Services and Insurance (BFSI), Power and manufacturing ongoing growth in logistics cost, trustworthiness on 3 PL services from automobiles and auto components industry, decline of cost together with high output by electronics manufacturers accelerate the high demand for 3 PL businesses in India.

 

Besides the logistics and transportation sectors in India is expecting an extensive growth by CAGR of 9.9% over the next 5 years and it also generates the big opportunities in 3PL business. Third party logistics business in India is expected to grow at US$90mn by 2012. 3PL will be mostly suitable for Automobile, IT-Hardware, FMCG, and Consumer Electronics market in India. PL market in India will experience a double-digit growth of near about 22% throughout the anticipated period (2012-2015).

3PL can provide an integrated logistics solutions and some value added services which may include supply chain consultation, cargo consolidation, route optimization, freight audit, freight forwarding etc . The supply chain professionals can get rid of inefficiencies and high cost and make a way into the market with savings in cost and time. 3PL can also provide some great benefits to the small and medium sized businesses (SMBs) by minimizing the capital investments and the risk & loss connected with delays in consignment.

The Indian government is also providing great support by making huge investment in logistics infrastructure. The government is setting up public-private partnership projects (PPPs) towards the expansion of highways, port connectivity, and dedicated freight corridors and development of free trade warehousing zones (FTWZ).

Indian Railways is going to arrange to multi-modal logistics parks in the state and is offering private equity firms for huge investment opportunities. Some days ago DHL invested USD 10 million to develop a warehousing facility in the forthcoming FTWZ in Chennai. These factors boost up the growth of 3PLs business in India.

So the logistics professionals in India can now taste the benefits of 3PL business as the country makes its position to the highest peak of the rising markets as an attractive destination for foreign investment, which has been attributed to its size and growth prospects. In short, the time is now ripe for Logistics 2.0 to take off in India.

Author by: Rajib Dey

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