Report Overview

India Freight and Logistics Market - Industry Trends & Forecast Report, 2030

India Freight and Logistics Market size was estimated at USD 288.18 billion in 2023. During the forecast period between 2024 and 2030, the size of India Freight and Logistics Market is projected to grow at a CAGR of 9.24% reaching a value of USD 489.64 billion by 2030. Major growth drivers for the India Freight and Logistics Market include growing popularity of e-commerce industry and the rising retail sales market. The freight and logistics sector in India is undergoing transformation, aligning with technological advancements and infrastructural progress. The government has implemented several policy reforms, such as the introduction of e-way bills, fast-tags, e-invoicing, and GPS-based toll collection, contributing to this evolution. In response to the COVID-19 pandemic, the traditional logistics industry in India is undergoing a substantial transformation, shifting towards digitization and contactless operations. The envisioned growth in manufacturing under the "Make in India" initiative necessitates heightened logistical efficiency for cost-effective production and transportation of goods to markets. A pivotal policy, the Multi-Modal Logistics Parks (MMLPs), introduced by the Indian government, aims to enhance the nation's logistics sector by reducing freight costs, minimizing vehicular pollution and congestion, and lowering warehouse expenses to boost both domestic and global trade. Emphasizing competition, reduced freight rates, and technological advancements, the government is actively fortifying the market, focusing on key sectors like agriculture, retail, and manufacturing, thereby propelling the country's freight and logistics industry. Also, the robust growth of this sector is apparent through its significant influence in the freight forwarding market, succeeded by warehousing, courier parcel, express, and value-added services markets. Simultaneously, the e-commerce sector is experiencing a surge in popularity facilitated by platforms such as Amazon Pay, Paytm, GPay, and innovative delivery applications. As a result, such aspects are expected to boost the expansion of the India Freight and Logistics Market during the period in analysis.

India Freight and Logistics Market – Overview

The India Freight and Logistics Market refers to the comprehensive network and industry encompassing the transportation, storage, and management of goods and commodities within the country. The market involves various modes of transportation, including road, rail, air, and sea, to facilitate the movement of goods from manufacturers to distributors, retailers, and end consumers. Also, it includes logistics services such as warehousing, distribution, freight forwarding, and supply chain management. The market is influenced by factors such as economic developments, government policies, technological advancements, and the demand for efficient and cost-effective transportation solutions. Notable initiatives, like the introduction of policies such as Multi-Modal Logistics Parks (MMLPs), contribute to the growth and optimization of India's freight and logistics sector.

India Freight and Logistics Market

Growth Drivers

Government’s Supportive Initiatives

The Government of India’s initiatives, such as Bharatmala Pariyojana and Sagarmala projects, are major drivers of India Freight and Logistics Market. Regulatory changes in the road freight transport sector, like restricting trucks over 15 years old, aim to phase out older, polluting vehicles. The GST implementation shifted transactions to digital platforms, incorporating e-way bills and Fastags for enhanced transparency. Revised axle norms, while increasing load capacity, have adversely affected small fleet operators, comprising 70% of the industry, with an 8-12% margin and an average of 12-15 transaction days monthly. The Indian road freight market, recorded growth at a significant CAGR during 2014-2019, credits this growth to BF VI norm revisions, scrappage policy, GST, and new axle norms. The Bharatmala Pariyojana, Sagarmala projects, and Dedicated Freight Corridors, coupled with port developments, have fueled market expansion. Seasonal fluctuations in demand result in higher freight rates during the festive season, reflecting a USD 0.036/tons/km WAFC in 2019.

Booming E-Commerce Sector

The logistics industry in India is poised for growth, driven by the expanding e-commerce market. The surge is attributed to increased internet and smartphone penetration, with 784.59 million internet connections recorded by July 2021, largely influenced by the 'Digital India' initiative. Urban areas account for 61% of connections, with 97% being wireless. E-commerce witnessed a 36% increase in order volume in Q4 2020, notably in the personal care, beauty, and wellness segment. The Government e-Marketplace (GeM) portal, as of October 2021, facilitated 7.78 million orders valued at USD 19.29 billion. The Department for Promotion of Industry and Internal Trade (DPIIT) plans to leverage the Open Network for Digital Commerce (ONDC) to streamline retailer onboarding. E-commerce's impact extends to micro, small, and medium-sized enterprises (MSMEs), offering financing, technology, and training, while technological innovations like digital payments, hyper-local logistics, analytics-driven customer engagement, and digital advertisements contribute to market growth.

Restraints

High Operational Costs

The India Freight and Logistics Market faces significant challenges due to high operational costs, acting as a restraint on its growth. These elevated operational expenses encompass various aspects, such as transportation, warehousing, and supply chain management. The burden of these costs negatively impacts the overall efficiency and competitiveness of the industry, posing a challenge for businesses operating within the sector. This constraint requires strategic measures and innovations to streamline operations and mitigate cost pressures for sustained and optimal development in the Indian freight and logistics market.

India Freight and Logistics Market

Segmental Coverage

India Freight and Logistics Market – By Function

By function, the India Freight and Logistics Market is divided into Freight Transport, Freight Forwarding, CEP services, and Warehousing segments. The CEP services (Courier, Express & Parcel) segment holds the highest share in the India Freight and Logistics India Freight and Logistics Market by function. It can be primarily due to its critical role in providing swift and time-sensitive transportation solutions. With a focus on rapid delivery, parcel tracking, and guaranteed timelines, CEP services cater to the increasing demand for quick and efficient logistics. The growth of e-commerce and the need for timely deliveries in various sectors contribute to the prominence of CEP services, making it a pivotal function in the overall logistics landscape in India.

India Freight and Logistics Market – By End User Industry

Based on end user industry, the India Freight and Logistics Market is divided into Agriculture, Fishing & Forestry, Construction, Manufacturing, Oil & Gas, Mining & Quarrying, and Wholesale & Retail Trade segments.

India Freight and Logistics Market – By Mode of Transport

Based on mode of transport, the India Freight and Logistics Market is divided into Road, Rail, Air, and Sea segments. The road segment is expected to hold the highest share in the India Freight and Logistics Market during the forecast period by mode of transport. India's transportation landscape is predominantly influenced by the road sector, contributing 3.75% to the GDP. In 2021, the road transportation services took the lead, contributing over INR 3 trillion (USD 36.3 billion) in gross value added (GVA), marking a decrease from the previous fiscal year. Communication and broadcast services followed, with a GVA of approximately INR 2.2 trillion (USD 26.62 billion). The logistics sector plays a pivotal role in facilitating seamless domestic and international goods and services flow, involving established domestic entities, global industry leaders, postal service express divisions, and emerging startups focused on e-commerce deliveries. Over 50% of freight and 90% of passenger traffic in India are handled by the dominant road sector, driven by government and private investments, rising exports, growing FMCG sector, and increased disposable incomes. The transportation industry's growth, constituting 3.75% of the GDP, is further supported by infrastructure advancements, allowing India to emerge as a major manufacturing hub in Asia in 2022. Improved rail transportation with faster transit times has influenced inventory models positively. The road transport sector experienced price improvements in December 2021, despite a decline in demand from the consumer goods sector, showcasing resilience and adaptability within the industry.

India Freight and Logistics Market – By Region

Regionally, the India Freight and Logistics Market is segmented as North India, South India, East India, and West India

Competitive Landscape

Major players operating in the India Freight and Logistics Market include AllCargo Logistics Limited, Blue Dart Express Ltd, DB Schenker, Delhivery, Deutsche Post DHL Group, FedEx, Kuehne + Nagel, Mahindra Logistics, Safexpress Pvt Ltd, and VRL Logistics. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In August 2023 - HDFC Asset Management, the investment manager for HDFC Mutual Fund, launched the HDFC Transportation and Logistics Fund, targeting investments in the dynamic transportation and logistics sector in India. The fund aims to capitalize on opportunities in automotive, shipping, ports, railways, airports, airlines, e-commerce, and supply chain/warehousing.

Scope of the Report

By Function

• Freight Transport

• Freight Forwarding

• CEP (Courier, Express, and Parcel) services

• Warehousing

By End User Industry

• Agriculture, Fishing and Forestry

• Construction

• Manufacturing

• Oil and Gas, Mining and Quarrying

• Wholesale and Retail Trade

By Mode of Transport

• Road

• Rail

• Air

• Sea

By Region

• North India

• South India

• East India

• West India

1. Research Framework
   1. Research Objective
   2. Product Overview
   3. Market Segmentation
2. Executive Summary
3. India Freight and Logistics Market Insights
   1. Industry Value Chain Analysis
   2. DROC Analysis
      1. Growth Drivers
         1. Flourishing e-commerce
         2. Government initiatives
         3. New-age startups
      2. Restraints
         1. Infrastructure gaps
         2. Regulatory challenges
         3. High operational costs
      3. Opportunities
         1. Global manufacturing shift
         2. Technology advancement
      4. Challenges
         1. High levels of fragmentation within the logistics industry
         2. Inter-state regulatory variation
   3. Technological Advancements/Recent Developments
   4. Regulatory Framework
   5. Porter’s Five Forces Analysis
      1. Bargaining Power of Suppliers
      2. Bargaining Power of Buyers
      3. Threat of New Entrants
      4. Threat of Substitutes
      5. Intensity of Rivalry
4. India Freight and Logistics Market Overview
   1. Market Function & Forecast, 2019–2030
      1. By Value (USD Billion)
   2. Market Share and Forecast
      1. By Function
         1. Freight Transport
         2. Freight Forwarding
         3. CEP (Courier, Express, and Parcel) services
         4. Warehousing
         5. Others
      2. By End User Industry
         1. Agriculture, Fishing and Forestry  
         2. Construction  
         3. Manufacturing  
         4. Oil and Gas, Mining and Quarrying  
         5. Wholesale and Retail Trade  
         6. Others  
      3. By Mode of Transport
         1. Road
         2. Rail
         3. Air
         4. Sea
      4. By Region
         1. North India
         2. South India
         3. East India
         4. West India
5. Competitive Landscape
   1. List of Key Players and Their Offerings
   2. India Freight and Logistics Market Share Analysis, 2023
   3. Competitive Benchmarking, By Operating Parameters
   4. Key Strategic Developments (Mergers, Acquisitions, Partnerships, etc.)
6. Impact of Covid-19 on India Freight and Logistics Market
7. Company Profile (Company Overview, Financial Matrix, Competitive Landscape, Key Personnel, Key Competitors, Contact Address, Strategic Outlook, SWOT Analysis)
   1. AllCargo Logistics Limited
   2. Blue Dart Express Ltd
   3. DB Schenker
   4. Delhivery
   5. Deutsche Post DHL Group
   6. FedEx
   7. Kuehne + Nagel
   8. Mahindra Logistics
   9. Safexpress Pvt Ltd
   10. VRL Logistics
   11. Other Prominent Players
8. Key Strategic Recommendations
9. Research Methodology
   1.    Qualitative Research
      1.  Primary & Secondary Research
   2.    Quantitative Research
   3.    Market Breakdown & Data Triangulation
      1.  Secondary Research
      2.  Primary Research
   4.    Breakdown of Primary Research Respondents, By Price Range
   5.    Assumptions & Limitations

*Financial information of non-listed companies can be provided as per availability.

**The segmentation and the companies are subject to modifications based on in-depth secondary research for the final deliverable

List of Figures

Figure 1       India Freight and Logistics Segmentation

Figure 2       India Freight and Logistics Market Value Chain Analysis

Figure 3       Company Market Share Analysis, 2022

Figure 4       India Freight and Logistics Market Function, By Value (USD Billion), 2019–2030

Figure 5       India Freight and Logistics Market Share, By Function, By Value, 2019–2030

Figure 6       India Freight and Logistics Market Share, By End User Industry, By Value, 2019–2030

Figure 7       India Freight and Logistics Market Share, By Mode of Transport, By Value, 2019–2030

Figure 8       India Freight and Logistics Market Share, By Region, By Value, 2019–2030

List of Tables

Table 1        India Freight and Logistics Market Function, By Value (USD Billion), 2019–2030

Table 2        India Freight and Logistics Market Share, By Function, By Value, 2019–2030

Table 3        India Freight and Logistics Market Share, By End User Industry, By Value, 2019–2030

Table 4        India Freight and Logistics Market Share, By Mode of Transport, By Value, 2019–2030

Table 5        India Freight and Logistics Market Size, By Region, By Value, 2019–2030

Table 6        AllCargo Logistics Limited Company Overview

Table 7        AllCargo Logistics Limited Financial Overview

Table 8        Blue Dart Express Ltd Company Overview

Table 9        Blue Dart Express Ltd Financial Overview

Table 10      DB Schenker Company Overview

Table 11      DB Schenker Financial Overview

Table 12      Delhivery Company Overview

Table 13      Delhivery Financial Overview

Table 14      Deutsche Post DHL Group Company Overview

Table 15      Deutsche Post DHL Group Financial Overview

Table 16      FedEx Company Overview

Table 17      FedEx Financial Overview

Table 18      Kuehne + Nagel Company Overview

Table 19      Kuehne + Nagel Financial Overview

Table 20      Mahindra Logistics Company Overview

Table 21      Mahindra Logistics Financial Overview

Table 22      Safexpress Pvt Ltd Company Overview

Table 23      Safexpress Pvt Ltd Financial Overview

Table 24      VRL Logistics Company Overview

Table 25      VRL Logistics Financial Overview