Global players in Express Logistics will touch the Indian ground soon due to GST implementation: Actual Market Research
Jul, 01

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Global players in Express Logistics will touch the Indian ground soon due to GST implementation: Actual Market Research


Express logistics industry has huge potential in Logistics industry due to globalization as more and more MNC are sourcing, manufacturing and distributing on a global scale, making their supply chains very complex to manage time bounded shipments. Several global players view the Indian logistics market favourably and have announced intentions to increase their capacity of transporting goods from/ to Indian markets. In last few years, several large global logistics companies have entered by the way of mergers or acquisitions of Indian Logistics companies and joint venture agreement. After implementation of GST, global players in Express logistics have eyes on Indian market for more expansion of their express logistics business. According to the recent published report of Actual Market Research: "India Express Logistics market Outlook, 2016-2022" India express logistics market is gaining traction, with e-commerce penetration, economy revival, and proposed GST implementation and government initiative of "Make in India". The India express logistics sector is primarily categorized into four segments comprising transportation (Surface, Air, Rail Parcel, Indian postal services), Surface express Logistics contributes the maximum close to 42% market share followed by air and rail Express. Government of India has been taking various initiatives in order to develop road, rail, and air infrastructure. Government major projects like Sagar Mala and Bharat Mala will reduce the time duration of shipments in coming years due to better connectivity across country. There is an unfavourable model mix in express logistics that is skewed towards roads as a major mode of transportation, along with underutilization of other modes- rail, air, and coastal shipping. Despite being insufficient mode, Surface express has the highest time bounded shipments traffic share in India. Whereas railways being economic mode of time bounded shipments transport has lost the market share in India due to under investments leading to capacity constraints. Air express is most emerging category in express logistics dominant by Major Players like Blue Dart and FedEx. Air express is the quickest possible way for time bound shipments it holds close to 28% market share in Express Logistics. Blue Dart is leading players in express logistics followed by FedEx, Gati and Safexpress. GST Implementation has change the scenario in express logistics industries by replacing multiple taxes levied by central and state governments. The planned dual GST model (CGST+SGST) proposes has replace around 29 states and federal taxes and tariffs for a single tax at the point of sale. The taxation in express logistics was reduced from 26.5% to 18-21% in GST taxes regime. Global players like UPS, XPO Logistics, J.B hunt, C.H Robinson etc have eyes on Indian express logistics market for investment and expansion of business. GST implementation will beneficial for organised players in terms of consolidation and merging of small players with larger organized players to leverage the mutual benefits. Furthermore, Current taxation structure of India has opened the gate for new entrant in Express Logistics Market. The sector will also attract interest from global players through FDI, JVs or acquisitions. Major Indian Companies operating in the Express Logistics market of India are Gati Limited, Blue Dart Express limited, FedEx express transportation and supply chain (India) Private Limited, Transportation corporation of India, Safexpress private limited, SpotOn Logistics Private Limited, DTDC express limited, First Flight Courier limited, TVS logistics services Limited, Mahindra Logistics Limited, Future Supply chain solutions limited, Overnite Express Limited