Logistics & Warehousing Market in India Outlook Update- Q2 2020 June 2020 - Eninrac
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Quarterly Market Observatory Logistics & Warehousing Market in India Outlook Update – Q2 2020 June 2020
The Eighty – 20
of Industry:
What Matters?
Leading Impact of Covid-19 pandemic on the supply chain
disruptions in India
Edge
Logistics - transportation
Supply shock due to shut down of manufacturing
facilities disrupted the logistics and warehousing
segment in India; revival on cards in near future
Overall container The capping of Railways incur ₹450
As the imposition of the lockdowns and the spread of Covid- volume slowed airfares by the crore loss, around 7
19 disrupted the manufacturing facilities worldwide, the down to 3.5 per cent government may million cancelled tickets
supply shock triggered the ripple effect on logistics and in Feb-April as further hurt carriers due to COVID-19
warehousing segment across the globe. Moreover, India too against 11 per cent who are estimated to
has not escape the wrath of the virus and affected the growth in the be incurring daily More than 50% of the
logistics segment. Notably, overall container volume slowed corresponding losses of ₹70-90 50 lakh trucks are
down to 3.5 per cent in Feb-April as against 11 per cent period of FY19 crore already off the road due
growth in the corresponding period of FY19. In addition, to the unavailability of
Railways incur INR 450 crore loss as movement of drivers.
Level of High Medium
passengers has been suspended. Also, the freight corridors Impact
impacted due to shutting down of manufacturing industries.
Furthermore, the largest hit sector is aerospace sector as Source: eninrac consulting & Channel checks
Indian aviation industry could face INR 24,000 crore revenue
loss. On the other hand, the warehousing segment is likely Supply Chain has been disrupted all around the world due to
expected to grow quicker than other segments as investment pandemic Covid-19. India too has not escape the wrath of the virus
deals of almost USD 600 million are underway in the and supply chain disruptions have kicked-in during Q1 2020 and has
started moving towards the normal track in Q2 2020.
warehousing space owing to greater attention to local
sourcing in order to reduce the imports majorly from China.Numbers to Focus Key Features Deployment
Upon – Q1 2020 Expected Trends - Projects
China supplies 70% of active 01 Land acquisition to take off
pharmaceutical ingredients (API) for warehousing project at
requirement for the India Jewar Airport
As Covid-19 Disrupts
The severe disruptions in China were Global Supply Chains, Will The Zurich Airport International AG, on
having a ripple effect on global trade flows. Companies Turn to India? November 29, was selected as the
This has led to reduction of inventory concessionaire for developing the
buffers and left no room for adequate greenfield Jewar airport in the NCR
China is falling in attractiveness, region. Early stage activities such as
buffers or safeguards. The vulnerabilities of
what is filling its place? Given land acquisition may take off first,
this system has been brutally exposed by
Covid-19. This includes pharmaceuticals amount of dependence on China, particularly for the purpose of
(China supplies almost 70 per cent of the only alternative country that can warehousing and supply chain
active pharmaceutical ingredients (API) have the scale, the skills and the
requirement for the industry space to service American demand 02 Decline in Coal imports
effectively is India. as supply chain disrupted
Warehousing Demand In due to economic slowdown
8 Major Cities Drops 29% Traction of Organised warehousing (in %) in the Indian market
In Jan-Mar, New Supply The ongoing slowdown in coal imports
Down 14% The 3PL and e- is most likely attributable to the
12% economic slowdown in recent months
commerce 3 PL
which has brought down the overall
Warehousing space leasing 8% E-Commerce
players are the 40% Manufacturing demand. Power demand and
fell 29 per cent to 5.9 million
sq ft and new supply biggest 20%
FMCG consequently thermal power
Others generation has witnesses a decline in
declined 14 per cent to 9 adopters of 20% the last three to four months which
million sq ft in the first
quarter of this calendar year
organised along with the slowdown in other
warehousing consuming industries is resulting in the
across eight major cities in
fall in coal demand supply gap.
the country amid
coronavirus outbreak Source: eninrac consulting, Channel ChecksWarehousing Demand Shaken, but Recoveries Could be Quick
AbsorptionShare
Share
Quarterly Update
Absorption
Absorption Share
– Q2 CY 2020
Sectors Pre Post Sectors Pre Post
Corona Corona Corona Corona
Supply Chain has been disrupted
Ecomm- Non 14% all around the world due to
Retail 7% Essential pandemic Covid-19. India too has
Level of not escape the wrath of the virus.
FMCG Share Warehousing Demand Shaken,
8% 3PL-FMCG 12%
but Recoveries Could be Quick.
Decrease
3PL, e-commerce & FMCG for
Manufacturing 20% Pharma/Agri 5% Stable essential goods / services &
Pharma likely to recover the
Increase quickest.
Ecomm-
Essential
6% 3PL-Auto 12%
Source: eninrac reearch & Channel checks
Key Investments – Key Trends – Key Signpost – Industrial
Q2 2020 Logistics & Warehousing Market in Warehouse to see sunlight
India Q2 2020
The Government of India’s has decided to promote The warehousing and logistics asset class could • Many warehousing complexes are expected
domestic manufacturing of critical Key Starting be among the fastest to recover from the to come up across India, more so in the
coronavirus crisis. Warehousing and logistics post-covid world. Many e-commerce
Materials and Active Pharmaceutical Ingredients
industry will grow at 35% in 2021 compared with categories are expected to boom, as people
(APIs) in the country. The approved scheme will
make a behavioural shift from buying offline
promote Bulk Drug Parks with financial investment the earlier industry demand forecast of 25%.
to shopping online.
of ₹3,000 crore in the next five years.
Online grocery platform bigbasket is looking at • Over the next couple of years, industrial
India could witness deals of nearly $600 million in hiring 10,000 people for its warehouses and last- warehousing is expected to see a sunrise
warehousing if present-day negotiations go to plan. mile delivery to clear pending orders quickly and as (as some expect) manufacturing shifts
Manufacturing, third-party logistics and ecommerce meet the spike in orders on account of the out of China. India wants to be prepared—
companies have signed over 3 Mn sq. Feet of new nationwide lockdown. developers, particularly. They are building
warehousing contracts across six locations in the warehouses at a frantic pace, often with
private equity (PE) booty.
April, while land acquisition of 3,000 acres for
construction of new warehouses is currently under
various stages of closing.OBSERVATORY
QUARTERLY MARKET Logistics & Warehousing
Contents & Market in India Outlook
Update – Q2 2020
Coverage – Q2 2020
01 This Quarter 02 Key Features 03 Leading Edge
The section shall showcases the Key features shall cover the The current affairs leading business
major highlights for logistics and major strengths and impacts on logistics and warehouse
warehouse segment in India development map that the segment with insightful data analytics &
including investments, project industry has shown over the our exclusive ―Knowledge Grid‖ feeds
developments, policy & regulatory quarter covered in the section. Our analyst's
interface etc. viewpoints with sharp edged objectives
shall be central to the section
05 The Eighty - 20 of
04 Numbers to Learn 06 Key Signposts
Industry – What Matters?
The status of transportation segment (rail, In this section the major factors which The business factors which shall govern
road, air and ports) in India, number of are acting as the growth catalysts / the course of coming quarters of business
warehousing spaces available in India barriers in the logistics and and the industry response to the changes
Moreover, the numbers for deals secured warehousing segment are highlighted shall be the focus area of this segment
by logistics and warehouse companies in inclusive of policies, regulations etc.
India
08 Technology & 09 Industry Activities &
07 Deployment Trends Price Trends Corporate Strategies
The pace of deployment of projects at This section shall cover all the latest All the industry order track & merger’s and
warehousing space levels along with technology implementation and trends, acquisition activities shall be tracked.
logistics segment growth covering issues price benchmarks of logistics and Fresh investments in logistics and
like investments, tenders and capacity warehousing segment in India warehousing sector as per players profiles
additions shall form part of this section shall also be tracked in this sectionOBSERVATORY
QUARTERLY MARKET Logistics & Warehousing
Must Market in India Outlook
Update – Q2 2020
Buy For
EPC Players Companies
Logistics Service Providers
Third Party Logistics Providers Mentioned
Building Construction Material Providers
Pre-Engineered Building Manufacturing Companies
Financial Bodies Allcargo Logistics Ltd
E-Commerce Service Providers Agarwal Packers & Movers Ltd
Builders Blue Dart Express Ltd
Consultants Container Corporation Of India Ltd
Raw Material Suppliers DHL Express India Pvt Ltd
Real Estate Players FedEx Express TSCS India Pvt Ltd
Government Bodies First Flight Couriers Ltd
Transport Corporation Of India Ltd
Sical Logistics Ltd
For Central Warehousing Corporation
Queries Future Supply Chains
Ekart
Research : Write to: connect@eninrac.com National Bulk Handling Corporation
and alternatively you may reach our DTDC
consultant at sumit.sethi@eninrac.com Khimji Poonja Freight Forwarders
AWL India Pvt. Ltd.
Sales: Write to sales@eninrac.com and
alternatively you may reach our
OmTrans Logistics Ltd
representative at nivi.bakhru@eninrac.com Wheelindia SCM Solutions Pvt. Ltd.
Future Supply Chain Solutions
Please call at +91 120 – 4147 000 for any Mahindra Logistics
other queries JUSDA Supply Chain Management
TVS Supply Chain SolutionsThe life of a man consists not in
seeing visions and in dreaming
dreams, but in active charity and in
willing service
- Henry Wadsworth Longfellow
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