TRANSPORTATION INDUSTRY SECTOR OVERVIEW-2020

Statistics, news & updates: everything you need to know about the Transportation Industry in India

Snapshot

  • Summary
  • COVID-19 Impact
  • Industry Clusters
  • Growth Drivers
  • Key Players
  • Market Stats
INDUSTRIAL EQUIPMENT SECTOR

Sub-Industries

  • Air Equipment & Components
  • Cargo
  • Marine Equipment & Components
  • MRO for Airlines
  • Railway Equipment & Components
  • Railways
  • Road
  • Ship and Boat building

Summary

India’s natural coastline and vast river network give it a competitive edge in providing transportation and logistics services, both domestically and internationally. Transportation industry can be classified into ports and ports services, warehousing, transport – shipment services, e – logistics, inland waterways for freight and passengers, expressways and dedicated freight corridors. As a matter of fact, India’s logistics service sector itself is expected to grow from $ 115 billion to $ 360 billion by 2032.

Nevertheless, India should closely look into the development of the transportation industry. As we all know the potential and need for sustained large scale investment. Even though investments typically have a long gestation period. However, once the infrastructure is created, linkages to the rest of the economy provide significant multiplier effects.

Covid Impact

Going ahead, the slowdown will affect the container traffic in the automotive transportation industry and other container cargoes (imports of white goods and granite exports) for FY21 due to weak demand. India boasts of having the largest and most diverse transport sectors in the world, which caters to the needs of nearly 1.3 billion people. Public transportation services are one of the worst-affected economic sectors by the coronavirus disease 2019 or COVID-19. The sector has experienced a demand-cum-supply shock. There is an unprecedented reduction in travel and commercial activities. Consequently, the impacts have surged over transport activities more severely. In India, the Gross Value Addition (GVA) from the transport sector accounts for 4.8%, where a significant proportion is covered by road transportation (3.1%) followed by the railways (0.8%), airways (0.2%), and waterways (0.1%).

Map – Industry Clusters

Growth Drivers

  • Although, the Indian Government keeps reaffirming its aim to improve the transportation industry and logistics in India. Its efforts to modernize the functionality begins with infrastructure development. The administration introduces key infrastructural development projects to increase access to the untapped rural markets in the country.
  • Not to mention these projects focuses on bringing more efficiency to the supply chain. This will improve connectivity issues faced due to the geographical vastness of the country and the different terrains present.
  • As a matter of fact, revolutionary policies and reforms are rolled out by the Indian government. Goods and Services Tax (GST), granting of the infra status, and relaxing the FDI policies will play a major role in 2020. It will boost the Indian transportation industry . GST changed the face of the way Indian logistics works.
  • Since then, the logistics industry shifted towards creating logistics with multi-modals and large formats. Industrial centers act as goods distribution and aggregation hubs. Consequently all of this was encouraged to expand because of introduction of GST.
  • Additionally with the advent of technology in the transportation industry we can see a lot of progress in the operations and various systems. Technology such as artificial intelligence, machine learning and the internet of things are moving the foundations of traditional and old-school logistics operations in the country.
  • Though it may take some time, it shows promising results to make better improvements in productivity than any other means while streamlining the operations systems of the Indian logistics sector. When such modern technology can replace a system that is prone to error, we expect great things to happen.

Key Players in India

 National

  • Mahindra Logistics
  • TCI Express
  • Container Corporation (Concor)
  • VRL Logistics
  • Blue Dart Express

International

  • Fed Ex
  • Gateway logistics
  • XPO Logistics
  • DHL
  • H. Robinson
  • Expeditors International

Market Stats

  • India’s transportation industry consist majorly– the road segment (~75%) which has huge infrastructure investments over the past decade. On the other hand, there has been under-investment in rail, leading to it losing share within transportation. Although, in the past 12-18months, we are seeing a transformation trend of FTL moving to LTL or express rapidly as customers demands smaller and quicker deliveries directly to distributors rather than multiple warehouses in every state.
  • As a matter of fact, the value of the Indian transportation Industry in 2019 is let alone to be around $160 Billion and the world anticipates this to grow to at least $250 Billion in the year 2020.
  • Moreover, this growth can be attributed to the increasing number of e-commerce retailers and their stellar services to the citizens of the country.
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