Logistics Indiagetting goods to the market
Bicci logistics seminar, May 12 2009
Our worldwide network
• Worldwide• 92 offices
• Neighbouring countries
• Southern Europe
• Northern Europe
• Eastern Europe
• NAFTA
• Central and South America
• China
• South East Asia
• Middle East/Africa
• Pacific
06-06 - 510108
Personnel
• Staff members– Flanders: 181 FTE– Foreign: 196 FTE– Total: 377 FTE
– Overseas network– FLERs: 72– Trade Commissioners: 15– Number of foreign offices: 75– Interregional co-operation agreement: 17 additional posts
06-06 - 510115
FIT team in India: 15
Marc Schiltz
Marc Schiltz
Ralph Moreau (tech
attaché)
Tom Vermeulen
Jayant Nadiger
India: The final frontier?
• A continent, not a country• Rapid growth• Large and young population• Consumer hungry
• Challenge: getting the goods to the consumer...
•
Fragmentation of retail
12m retailers (95%<50m2) 21.000.000 jobs
New players: Reliance, Bharti, Pantaloon, ...
Opportunities
• AT Kearney: India 2nd most attractive retail development market (2008 global retail dev. index)
1. Vietnam
2. India
3. Russia
4. China
5. Egypt
• Local retailers are realising the opportunity
• Foreign retailers setting up with innovative schemes: metro, wall mart...
• Result: sourcing by big new retailers ongoing
• Cold chain set up• Professional business models• Privatised airports
locations
•
Malls 2007
•Delhi 30%
•Mumbai 27%
•Hyderabad 7%
•Bangalore 5%
•Pune 5%
•Others 26%
Source: piramyd
Terrain and culture: diverse
• Great distances• 3rd largest mountain range in
the world• 7th largest desert range• Tough climate: extreme cold to
extreme heat, extreme dry to extreme wet.
• 22 different language groups• Multi culture/religious: over
100 regional and national holidays/year
• One market?
Logistics hampered by administrative divisions
• States: 28+7=35• Districts: 603• Municipalities: 5.000• Borders between states due to
different taxations• Result:
– no single market
– financial and administrative burden.
– cues at borders
– costly delays.
Why the fragmentation?
• Historic• Political• Fiscal
Infrastructure
• Roads: – 3.3m km. 70% of all cargo
– Issues: 2% network (NH’s) carries 40% of all cargo: congestion, quality trucks, quality roads
• Rail: – 82.000 km. 30% of all cargo
– Issues: congestion, high freight tarrifs, inconsistent transit times
• Air: – 450 airports of which 11
international. 5% overseas cargo
– Issues: congestion, deficiency in infrastructure
• Sea: – 12 major, 187 minor ports. 95%
overseas cargo
– Issues: capacity, productivity, efficiency
• Key issue: demand first, supply later...
Bottlenecks...
Cost of logistics Source: Reliance
Parameters US China India
Logistics Cost as % of final product 8% 10% 20%
Logistics Contribution as % of GDP 10% 21% 14%
Tips:
• Sell ex works, FOB? Let others worry!
• Work with logistics providers that have local presence
• Take timelags into account• Sturdy packaging• Reefers!• Constant follow-up• Pricing...