The growth of the Indian economy in recent years has led to a huge market for logistics services. The logistics sector employs over 50 million people in India. An efficient logistics partner can help improve operational efficiency for any business, cutting costs and delivery times. This results in the final analysis, the market share and profits for the company.
There are various types of logistics activities that you can start. These include third party logistics (3PL), courier and cargo freight, air freight transport services and storage services. Every logistics company needs to consider the following aspects to be successful.
Financing and Investment
The first step that every logistics company would need to take is to seek investment. investment amount will depend on the logistics services that you want to start. A simple brokerage and freight management services will require less capital than a 3PL service. For example, to set a forwarding service in India, you need a capital investment of about $ 1- $ 2 million dollars. A pure 3PL service will require investments ranging from $ 10 to 18,000,000 dollars. Starting an Inland Container Depot (ICD) or the container freight station (CFS) requires investments running into several hundred million dollars (USD).
It 'important to identify the niche services that you want to target and prepare an investment plan based on it. Find investments in the logistics industry in India is relatively simple due to liberal FDI policies and active interest shown by major private equity players.
The respect and recording
The second step is to obtain the necessary certifications of registration and compliance. As with any business, logistics services require some adjustments and the government's compliance. In India, register with International Air Transport Association (IATA), Air Cargo Agent Association of India (ACAAI) are very useful for shippers. You may also need to be part of industry forums such as CII Institute of Logistics to lift its logistics industry issues. Other important recordings in India include DGFT registration, tax Dept income, the Business Register and related government departments.
Business Risk
third aspect that we must look at is the business risk. In an economy in developing countries like India, risk management plays a crucial role, even more so for logistics companies. Since the logistics business is very dynamic with multiple partners / suppliers involved in the entire operation, the risk of a loan is very high. It 'important to cover liability taking adequate amount of business insurance. Many large insurance companies in India offer such insurance plans. Serious liability issues resulting from cargo damage, theft, injury, environmental damage, etc. While business insurance helps to address some of the concerns of responsibility, are not always very effective. For example, most of the load and of property insurance in India will not cover the shortage of inventory as this is considered normal risk during the execution of a business 3PL. So it's very important to understand the risks before any contract.
Acquisition of customers and competitors
customer acquisition is the key to running any successful business. If you want to start a 3PL service, it would be useful to study various industries / products and understand the logistical needs in such industries. Since India is primarily an export economy, there are many booming sectors like Auto, infrastructure, manufacturing and services. All these sectors require logistics services. Identify weak areas and provide operationally efficient solutions is the key to winning new customers in 3PL services. Once a regular clientele is established, you can start investing in infrastructure and creating solutions to address the broader market.
It 'also important to understand the competition. Liberal FDI (foreign direct investment) regulations have made it easier for multinational companies to enter the industry of the Indian logistics. These big players can invest heavily in infrastructure and marketing. So before you enter into any particular service, it is important to do a thorough research on your competition and focus on positioning differently.
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