study of 3pl in granularity

7/30/2019 Study of 3PL in Granularity

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3PL activities which are currently being

done in US

• Raw material movement.

– For eg., Sugar in the US is moved in bulk and

directly loaded into silos. This saves bagging and

debagging cost and time. Also helps in reducingcontamination through handling.



• List of raw materials used in a beverages company are

– Sugar

– Citric acid

– Emulsions

– Additives

– Flavoring

– PET bottle preforms

– PVC crates

– Paper cartons

– Aluminum cans

– Etc.,

3PL activities which are currently being

done in US



• Other Activities covered under 3PL – Call center

– Warehousing and WMS

– Freight from plant to central WH and onto Distribution centers andfinal retail distribution. (Less Than Truck Load LTL and FTL)

– Shipping including cross docking, multimodal

– Load creation

–Route planning

– Demand planning

– E commerce

– Real time reporting system

– Fleet management and online tracking

–

Order management system – Up sell and cross sell capabilities to increase revenue streams

– Product Life management. (Case study copy this URL bit.ly/10XXMSx. )

– Big data handling – (See next slide for example)

– Reverse logistics

3PL activities which are currently being done in US



Big Data: What is it all About?

Downstream DataCold Chain

GeolocationRFID

Social

Ratings &

Reviews

T-Log DataTwitter

Facebook

Call

Center Logs

VideoPhotographs

Warranty

Information

ReturnsWeblogs

eCommerce

EDI

Data Mining

Forecasting

SentimentAnalysis

What-if Models Hadoop

Rules-Based

Ontology

Constraint-based

Planning

Data Visualization

Learning Systems

R

TextAnalytics

Scorecards

Sensors

Map Reduce

Digital Path ToPurchase

Mobile Applications



3PL companies

• Next slide we will see a list of top 3PL companiesin US and they are globally very big.

• Most of the 3PL companies revenues actually

flow from transportation. You will see this in thenext slide.

• Also from the following URL we can see top 1003PL companies in the F&B industry in US.

http://bit.ly/11VA4Fp.

• Most of the top 100 companies work regionallyin the US.

$

http://bit.ly/11VA4Fp

http://bit.ly/11VA4Fp



USA (In U$D Billion)

Top 3PL firms 3PL services Total Revenue 3PL Revenue Present in India

F&B Supply

chain Clients

1 UPS

Supply chain solutions,

Warehousing,

Distribution, Trucking etc 54.13 5.97 Yes Yes

2 CH Robinson

Truck Load, Less than

Truck Load, Ocean, air,

Intermodal, Warehousing

& Distribution 1.63 0.05 Yes Yes

PepsiCo, Subway, Frito-

Lay, Dole Food, Yakima,Coca-Cola Supply, Tetra

Pak, ConAgra Foods,

Continental Mills

3 DHL


Warehousing,


4

Penske

Logistics

Supply chain solutions,Warehousing,

Distribution, Trucking etc 3.2 No Yes

5 DB Schenker


Warehousing,


6 JB Hunt


Warehousing,

Distribution, Trucking etc

5 1 No Yes

7 Ryder


Warehousing,

Distribution, Trucking etc

6.26 2.28 No Yes

Ranked No "1" 3PL in

2010 by customers

Sara Lee, ConAgra

Foods, Kraft Foods,

General Mills,

Kellogg,Georgia Pacific,

Dean Foods,PepsiCo,

Bay Valley Foods, Mapleleaf Bakery



3PL companies in India

• TCI

• Safexpress

•

Gati• TVS Logistics

• and many other small companies



3PL activity in India• 3PL Services: Logistics services like transportation, warehousing,

crossdocking, inventory management, packing and freight

forwarding are all part of third party logistics services. Companies inIndia currently outsource an estimated 52% of logistics, and 3PL

represents only 1% of logistics cost. As of now, the 3PL activity is

limited to only few industries like automotive, IT hardware, telecom

and infrastructure equipment.

• Global Players: The industry is becoming more competent with

entry of global giants like Gazeley Broekman (Walmart’s Logistics

partner), CH Robinson and Kerry logistics and large Indian

Corporate houses like Tata, Reliance and Bharti group. A series of mergers and acquisitions like DHL acquiring Blue Dart, TNT

acquiring Speedage Express Cargo Service and Fedex buying over

Pafex, AFL Logistics are also leading to consolidation of the industry

at various levels and segments



3PL activity in India• Express Logistics: Organized players have a monopoly over the

express logistics industry. 65% of express business is in the hands of organized players, while semi-organized and unorganized playersaccount for 25% and then the remaining 10% of the market by EMSSpeed Post. On the domestic front, unorganized players hold 41% of the market share based on price advantage and organized playersaccount for 45% and EMS Speed Post the remaining 14%

• Warehouses: Warehouses have become key growth drivers in thelogistics industry. Warehousing does not only provide conventionalstoring services, but also provides value-added services likeconsolidation and breaking up of cargo, packaging, labeling, barcoding and reverse logistics etc. Warehousing and related activitiesaccount for approximately 20% of total logistics industry and as per

KPMG, an additional 120million square feet of warehousing spaceis needed in 2014 to meet demand gap in storage space. Our view isthat Warehousing will see a lot of investment in the coming years.Cost of construction for 1 ton is Rs.5000/- and the pay back is 10 to12 years.



• India is seeing large Private equity play in this

sector. To name a few

– India Equity Partners (IEP)

• Startrek Logistics formerly TNT India trucking logistics

• Fourcee Infrastructure - Fourcee is involved in

transportation of liquids in containers like edible oil

• Coldex --- Cold chain distribution in India

– Everstone Capital

• Transpole Logistics. Everstone has invested 200 crores.

3PL activity in India



Challenges & Opportunities in

India• India distribution is always led by C&F cum

distributors. Most of these C&F agents havehad business relationship with the companies

for close to 3 generations.• While this arrangement is working fine,

companies in India have not looked at 3PL as aprofit driver rather they remain as costcenters. This goes for large firms like Unileverand ITC to name a few.



• Due to the long relationship led business byC&F cum distributors, their reach is limited totheir small geography. On account of this

there is multiple warehouses and 1000’s of C&F cum distributors for a large company likeUnilever or ITC.

• When GST is rolled out this will become amajor hurdle for companies to maximize theirbenefit under GST.


India



• 3PL opportunity in India exists in a very bigway. In India companies are not evenscratching the tip on the activities which we

see in slide no 4.• We need a good tie up with a company which

is very good in systems and procedures.

•

Investments will be quantified once we startthe discussion with potential customers andthe partner whom we want to tie up.


India

study of 3pl in granularity

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