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IT spends in logistics to cross $200 Million
By siliconindia
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Tuesday, 23 December 2008, 16:43 IST |
1 Comments
Mumbai: The IT spends in the Indian logistics industry will grow to approximately 
1,000 crores ($200 Million) from the existing 400 crores in the next 5 years at a CAGR of 20 to 22 percent, reveals the 'Technology Survey for the Indian Logistics Industry - 2008.'
Conducted by Kale Consultants, a global airline solution provider, in partnership with Feedback Business Consulting Services, the survey says that the demand is expected from the Western part of India followed by the North and Southern regions. Forty-six percent of the IT investments are currently made towards capital expenditures and the remaining 54 percent towards operational costs.
India spends around 13 percent of its GDP on logistics, higher than U.S. (10 percent), Europe (11 percent) and Japan (10 percent). This translates to around INR 150,000 Crores in operating costs for the economy and therefore loss in capital formation. India risks missing out on one to two percent GDP unless significant strides are made to bridge this gap and improve supply chain efficiencies by effectively using technology.
The key objective of the study was to assess the market dynamics and highlight the technology adoption trends in the logistics industry. "There is a lot of activity happening in this highly fragmented market and the trends are quite revealing. 3PL players are growing at over 25 percent. Small and medium family owned enterprises are growing in stature in the integrated logistics space. Global majors have committed to huge investments for their Indian operations. PE funds are increasingly eyeing the sector. The sector has already attracted investments of over 20,000 crores in the first half of 2008," said Sumeet Nadkar, Head - Logistics SBU, Kale Consultants.
According to the survey, technology spends in freight forwarding is expected to grow by 160 percent. This industry presently constitutes 14 percent of the IT demand and is expected to rise to approximately 170 crore (17 percent of overall IT spend by FY 013). The market size is currently at 11,000 crores and is expected to reach 21, 180 crores by FY 013.
The survey estimates the current IT spends by Airports at approximately 1.1 percent of the overall revenues. New investments of 28,525 crores are expected in the next 4 years to boost the IT requirement. This is one of the segments where IT utilization is maximum compared to other segments in the logistics space.
In warehousing, says survey, the technology spends are expected to jump from the current INR 48 crore to about 120 crore by FY 013. This industry is fast emerging as a strategic function due to the rapid growth in retail and expansion by domestic and international players. This requires end-to-end solutions that improve efficiencies in supply chain management. The market size is currently at 3000 crores and is expected to reach 7,380 crores by FY 013.
1,000 crores ($200 Million) from the existing 400 crores in the next 5 years at a CAGR of 20 to 22 percent, reveals the 'Technology Survey for the Indian Logistics Industry - 2008.'
Conducted by Kale Consultants, a global airline solution provider, in partnership with Feedback Business Consulting Services, the survey says that the demand is expected from the Western part of India followed by the North and Southern regions. Forty-six percent of the IT investments are currently made towards capital expenditures and the remaining 54 percent towards operational costs.
India spends around 13 percent of its GDP on logistics, higher than U.S. (10 percent), Europe (11 percent) and Japan (10 percent). This translates to around INR 150,000 Crores in operating costs for the economy and therefore loss in capital formation. India risks missing out on one to two percent GDP unless significant strides are made to bridge this gap and improve supply chain efficiencies by effectively using technology.
The key objective of the study was to assess the market dynamics and highlight the technology adoption trends in the logistics industry. "There is a lot of activity happening in this highly fragmented market and the trends are quite revealing. 3PL players are growing at over 25 percent. Small and medium family owned enterprises are growing in stature in the integrated logistics space. Global majors have committed to huge investments for their Indian operations. PE funds are increasingly eyeing the sector. The sector has already attracted investments of over 20,000 crores in the first half of 2008," said Sumeet Nadkar, Head - Logistics SBU, Kale Consultants.
According to the survey, technology spends in freight forwarding is expected to grow by 160 percent. This industry presently constitutes 14 percent of the IT demand and is expected to rise to approximately 170 crore (17 percent of overall IT spend by FY 013). The market size is currently at 11,000 crores and is expected to reach 21, 180 crores by FY 013.
The survey estimates the current IT spends by Airports at approximately 1.1 percent of the overall revenues. New investments of 28,525 crores are expected in the next 4 years to boost the IT requirement. This is one of the segments where IT utilization is maximum compared to other segments in the logistics space.
In warehousing, says survey, the technology spends are expected to jump from the current INR 48 crore to about 120 crore by FY 013. This industry is fast emerging as a strategic function due to the rapid growth in retail and expansion by domestic and international players. This requires end-to-end solutions that improve efficiencies in supply chain management. The market size is currently at 3000 crores and is expected to reach 7,380 crores by FY 013.
