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India 3PL market expecting huge growth

According to a RNCOS research report “3rd Party Logistics Market in India,” the countrys fast-moving consumer goods (FMCG) sector has been ...

Freddie Pierce
|Jun 24|magazine6 min read

According to a RNCOS research report “3rd Party Logistics Market in India,” the country’s fast-moving consumer goods (FMCG) sector has been witnessing tremendous growth on the back of growing GDP, change in lifestyle, and established distribution system.

The sector is also growing with new market horizons, and is expected to seize sustained growth in coming years. Moreover, the sector is contributing to the rapid growth of 3PL market in the country, with increased usage of 3rd party logistics support. As a result, RNCOS expects that the market of 3PL services in FMCG sector will surge at a compound annual growth rate of around 38 percent during 2011-2013.

RNCOS analysis found that the 3PL usage level differs across the various logistics functions in the Indian FMCG sector. Of the four major logistics functions, usage of 3PL is negligible in transportation, while warehousing, freight forwarding, and MIS highly use 3PL services.

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With the implementation of total value-added tax system in India, this particular market is anticipated to further boost its share, thereby changing the FMCG companies’ warehousing model and driving them toward the 3PL adoption.

Further, other segments, such as retail, consumer electronics and durables and auto and auto components mentioned in the report, offer huge untapped opportunities for the industry players.

The ongoing research also provides details about the warehousing and cold storage industry in the country, and it has been found that these sectors are attracting the attention of both private players and the government. Additionally, state-wise warehousing and cold chains and upcoming infrastructural development at the regional front are covered in the report.

The report also covers mode wise freight movement in the logistics industry and found that railways and roads are the major contributors to the freight movement. The respective regulatory bodies for air and sea transport have taken some major steps to improve the supply chain management, which are also discussed in the report.

Edited by Kevin Scarpati