Emerging Demand for Warehouses

Warehousing and logistics sector is estimated to attract nearly $10 billion investments over the next 4-5 years. With the addition of around 200 million sq ft warehousing space across India, total supply is expected to nearly double by 2022, estimated JLL India.

With the expansion of e-commerce operations across the country, there has been a corresponding rise in demand for space from these companies in both tier I and II markets and this is supposed to add to robust growth in Delhi NCR, Mumbai, Pune, Bengaluru and Chennai. Warehousing and logistics sector has been growing steadily since 2017 when it was granted infrastructure status. The introduction of Goods and Services Act, the formation of a Logistics Department under the ministry of commerce and industry and various other policy changes have directly or indirectly resulted in the growth of the logistics sector.

There is an emerging demand for warehousing and logistics space from tier II cities like Coimbatore, Guwahati, Lucknow, Jaipur & Ludhiana.

The year 2018 witnessed a 22% growth in total stock in Grade A & B warehousing space in top eight cities at 169 million sq ft compared to 138 million sq ft year ago, absorption clocked an unprecedented growth of 60% year-on-year growth to nearly 32 million sq ft latest year from around 20 million sq ft in 2017. The robust growth in absorption reflects demand outstripping supply significantly and vacancies dropping below 10% level for the first time ever, showed data from JLL India.

With 24% investment in India in 2018, warehousing and industrial segment is expected to retain strong momentum over the next few years.

A number of private Indian developers are already considering investments into the investable grade real estate. These include Musaddilal, Panchshil, GWC, FWS, Hiranandani, Lodha Group, Jalan Group, Srijan, Apeejay, AllCargo among others.

Established and newer foreign funds-managed developers are considering different entry strategy. These include joint ventures, joint developments and acquisition of existing portfolio. Some of these names include Altico Capital, Ascendas FirstSpace, ESR, Hindustan Infralog (DP World + NIIF), IndoSpace, Embassy, LOGOS India, Morgan Stanley and Proprium.

Among sectors, third-party logistics (3PL) companies, e-commerce, auto & ancillary, retail and fast moving consumer goods (FMCG) companies accounted for around 60% of the absorption during the year.

Delhi NCR, Mumbai, Pune, Bengaluru and Chennai continued to be the top five markets in terms of demand & absorption. While Chennai, Pune and Ahmedabad registered significant demand from the manufacturing sector, Kolkata emerged as a major logistics hub due to its consumption and district and distribution advantage.

“A dearth of good quality and ready supply in the market has forced occupiers to go for Built-to-Suit (BTS) developments that accounted for almost 26% of total absorption in 2018. However, in line with the demand and requirements, the developers are also aligning themselves to focus on creating quality spaces


MODERN INFORMATION TECHNOLOGY IN LOGISTICS MANAGEMENT

A characteristic feature of information systems in logistics is the presence of feedback. The totality of the value system of logistics management and system of collection, transfer, storage and processing of information form a “closed loop”. For example, information about the current number of sales and clientele is used to make logistical decisions about changing the volume, range and quality of manufactured and supplied products, which leads to the expansion and in general to change the terms of clientele and sales levels. In logistics, adjustable parameters are certain characteristics of different material streams: input, midway and output Information gathering can be performed at different points in the overall material flow and logistics control solutions may affect its various points. Thus, there may be local data paths, and all the logistics information system is generally a multi-loop. 46 Organization of the entire production and sales activities determines the point of gathering information and applications developed based on this information, logistics control actions. This determines the structure of the information system and its decomposition into subsystems forming local data paths. Information systems in logistics, like any feedback system, characterized by quantitative indicators such as the magnitude of the delay and the degree of enhancement. Delay in the adoption of logistics solutions in comparison with the receipt of the information that led to these decisions may be different in scope and occur in different places of material flow. Typically, the delay in the production and sales activities constitute week. Per unit of measurement take a week. Thus, average transport time is one week, the delay accounting operations – three weeks post lag – half a week, the delay from wholesalers and various distribution points – an average of one week. Finally, the time between the decision to change in the production and the achievement of the respective values of the material flow at the outlet of the production unit is an average of six weeks. Making decisions determining the information provided may submit a simple reaction to fluctuations in material flow with respect to one or between two levels. The length may determine it and detail developed and formalized chain of calculations. In all cases, a role-played by intuition, personal qualities and talent of the person or persons making decisions Based on the information received, the person, decision-makers should provide quality logistics management. Under the influence of logistics management of the supply, the system should move from one steady state to determine the conditions surrounding the economic environment in the new state corresponding occurred in this environment changes. Such a transition should occur in compliance with the required 47 quality. Centralized information system makes it possible to control the various reserves and operational management of relationships and interchangeable units engaged in mutual deliveries. Others by providing logistical management of prompt and adequate information are widely used and the use of computer technology, the devices of the primary data collection and data entry, local area networks, visualization and documentation of information and Internet networks. For building integrated computerized information systems requires appropriate hardware, software and linguistic support. Typically, modern computer means forming an integral information system are combined using the hierarchical principle in LANs. These networks can be combined in a multi-level complex network structure.


Courier services

Courier services have a very specific place in the delivery marketplace. It’s all about to pick up, shifting and delivering parcels as quickly and as efficiently as possible to keep the amount it costs to send a parcel down. The parcel delivery network works in a way to know that the parcel will reach its a destination on time and at a reasonable price. Companies are providing reliable delivery for domestic requirements by designing specifically to meet the needs of the Indian domestic market, the air and ground services have been in operation presently to address non-commercial and commercial shipping requirements. Companies have made its domestic services available for everyone from corporate sectors to Individuals, Businessmen, traders, exporters and importers. Services can be used for sending shipments like parcels, commercial shipments, samples, air freight, air cargo and for individuals, household and corporate sectors etc who get transferred to different cities to carry households, personal effects, Project equipment, Machines, Automobiles and Ancillaries Spares and Exhibits, food items, Drugs, Pharmaceuticals and Intermediates, excess baggage, unaccompanied baggage and relocation services etc. India is noted as one of the fastest developing nations in the world. There has been an immense growth during the past few years and there are several types of industries presenting a broad variety of products and services for domestic and international clients; including courier services in India. Exchange of goods and services within like small businesses and large corporations, across all types of industries, in all regions of the world, is called the global business. Companies are very active in retail and national distribution, working 24 hours a day, with appointments, pre-advice, JIT and precise reports and providing high-quality services to demanding customers, optimizing the fleet availability according to production and market needs like order-taking, preparation of complex value-added orders, follow-up of orders, re-packing, labelling, marking, advertising, folding of documents and staking under films, individual or mass repackaging, assembling of items, specific conditioning, modification of units, packaging, Cross-docking, customs and documentation handling, backhauling, collection of goods, market chain distribution, door to door delivery. The companies are engaged in the Third Party Logistics, it is a function by which the owner of goods outsources various elements of the supply chain to one Third Party Logistics company that can perform the management function of the client’s inbound freight, customs, warehousing, order fulfilment, distribution, and outbound freight to the clients’ customers. In present days, companies are focusing on strategic renewal, searching for creative solutions to reduce costs, raise the bar on customer service, manage risk and increase efficiency. Most of the non-core activities like logistics are outsourced. The outsourcing of supply chain services can help improve process efficiencies and serve customers more effectively.


Ports – an Overview

The efficiency of port operations is a major driver of trade competitiveness and the ability of ports to compete in a complex and evolving market structure. Steps must be taken to support the adoption of relevant technologies and solutions in ports, including for customs automation and port community systems. Port performance helps determine the standing of ports. Understanding the performance of ports helps inform relevant port-related planning and decision-making processes. Efforts must be taken to refine port performance measurements, by investing in data collection capabilities and supporting information and communications technology platforms that lower data collection and analysis costs. Though it is difficult to make effective international comparisons of port performance.


standardization of port performance measures and metrics will support meaningful benchmarking and reliable comparisons and rankings. It is essential to examine the perceptions of users and stakeholders regarding port performance or user or stakeholder satisfaction measurement. Government has a role to play by supporting small to medium-sized ports in adapting to the new situation, including through policy work and other facilitative arrangements that would support the improvement of the services in the respective hinterlands, rather than competing for international trans-shipment hub. In order to help the secondary and smaller ports maintain their market position, it is necessary to identify which strategy to follow to attract mainline or feeder service providers. It is very important to improve the understanding of the determinants of cargo dwell time. Governments can address inefficiencies and unlock the capacity constraints related to the ports through regulations, incentives, policy measures and investments, including to ensure efficient operations by border management and clearing agencies. Furthermore, the participation of private terminal operators through public-private partnerships is evolving as an important mechanism to leverage greater private investment participation in port development and to access specialized skills, innovations, and new technologies that are associated with infrastructure development, operation and maintenance. Governments can build on the extensive public-private partnership models to define a suitable public-private partnership strategy that would ensure successful collaboration and generate sustainable development outcomes. The important requirements for a successful public-private partnership are: well-designed public-private partnership agreements that ensure appropriate risk sharing and flexibility, a clear policy framework that addresses and mitigates risks, a legal and regulatory system that makes sure that agreements are effective and enforceable, and an institutional framework within government including technical and managerial capacities, to properly manage the process. It is a fact that the private operators are the key partners in the development and competitiveness of the ports. Not only does it help improve the movement of goods efficiently and cost-effectively through enhanced infrastructure and services, but also contribute to better port sustainability and competitiveness through new technologies, improved supply chain management, hinterland connectivity and door-to-door delivery. Ports should formulate policies and devise plans on how best to adapt to the requirements of the changing liner shipping market environment. Terminal operators, ports and shipping lines should engage in closer cooperation to mitigate the negative impact of growing cost pressures. The cost pressures may lead to increasing port charges, although this may prove difficult, due to the current market conditions. If the terminal operators are forced to leave the market because of lower margins or refrain from investing in new capacity because of uncertain returns, then it will be difficult for the container port industry to service the liner shipping sector, in particular, larger ships.


Air Cargo -an overview

The Air Transport industry is undoubtedly an important element of national and global economies. Air cargo industry in India has an important role in the nation’s trade and economy because of its significant contribution to the economic prosperity and well-being of the country. Transporting goods via air except perishable or sensitive products was once costly affair for the businesses to afford infrequent basis but due to the recent forces of globalization, liberalisation, privatisation and cut-throat competition among the companies have changed the face of global logistics and supply chain management throughout the world.


In today’s competitive environment, efficient logistics planning and managing supply chain in a most cost-efficient manner such as initiating JIT (just-in-time) production and distribution approach that enables companies to reduce inventory carrying cost, are among the key factors for company’s success and existence in local and international market and which in turn have made air cargo the most lucrative option than other mode of cargo transportation . India is the the largest submarket in Southwest Asia, comprising about 63% of international flows in the region, and it possesses a vibrant domestic market as well. India‘s air cargo business is having muchmore potential in revenue generation than passenger business butstill, the air cargo market is untapped. Statistics indicate thatairlines spend more than 75% on transporting passengers, while only25% is spent on cargo. According to the Airport Authority of India, the total cargo volume is expected to increase by 11.5% from 2007-08to 2011-12, international cargo traffic expected to increase 12.1% of car and domestic cargo by 10.1% during the same period.

However, the rising fuel cost is one of the major concerns which can dampen the growth as fuel accounts for 20-30% of the operating cost. To handle the variety and complexity of managerial forecasting problems multiple forecasting techniques have been developed. These econometric modelling, judgmental analysis, trend analysis and potential analysis are considered useful to provide a forecast. Econometric modelling helps to determine the overall importance of the economic factors like GDP, trade, fuel price etc. and enables forecasts to be linked to expectations for those factors. TheJudgmental modifications often account for expected changes in non-econometric growth factors like trade quotas, services agreement sets etc. A simple trend analysis is used to evaluate changesin economic factors. This is useful in evaluating general changes inthe marketplace that can be attributed to the combined effects of anumber of factors. The potential analysis is useful, particularly forforecasting markets in their early stages of development. Air cargofacilitates transporting goods much faster from one multiple linearregression analysis has shown GDP and trades are having a positiveimpact on the growth of air cargo whereas fuel price is havingsignificant negative relation. As per the calculations, the cargogrowth will be more than that of GDP growth. Several forecastingmethods are applied along with the proposed econometric model withmultiple variables and single variable with time to compare theirpredictive ability and fitting effect with respect to actual valuepart of the world to another and consequently initiates internationalbusiness to grow and expand quickly than another mode of transportation. The simple generalized forecasting methods help topredict air cargo demand of any country and eventually helps inmaking strategies to boost the predicted growth.


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