Emerging trends in auto industry on outsourcing logistics and the imperatives for 3 PL service providers

Abstract

Third Party Logistics (3PL), the concept of a single professional logistics service provider managing the entire logistics functions of a company, had originated in the developed economies of Europe and America, to relieve industries from huge logistics costs apart from the hassles of dealing with multiple in-coherent logistics service providers. The 3PL market in India is still in a relatively nascent stage, with multinational companies in all industries being the predominant users of these services. However, domestic major companies in leading industry sectors have also begun to follow the footsteps of their multinational counterparts, starting with outsourcing their basic logistics functions. Realizing the significant cost reductions and several other benefits gained by these companies, the large numbers of small to medium companies in all the industries are gearing up to use 3PL services in their logistic functions, resulting in a tremendous potential market for the 3PL market in India. The following report analyzes the following: Strategic analysis of 3PL market in India; Analysis ofAuto-3PL industry in India; Overview of 3PL needs and practices in India; Profiles of the 3PLproviders in Indian market; Recommendation and growth strategies for 3PL providers in India Based on our analysis, recommendations have been made to the auto logistics provider to Build and develop capabilities in international trade logistics, be selective about the customers and the range of services offered; Leverage low-cost Indian IT solutions providers to improve the IT infrastructure. We have also identified engineering, pharmaceutical and consumer durables as attractive industry sectors for the entry of an auto-logistics provider.