Logistics: In consolidation mode - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Logistics: In consolidation mode

Mar 8, 2002

Denying slowdown, domestic courier industry seems to be attracting global majors. After an initial round of consolidation, where organised players in the industry captured into the market share of unorganized sector, the industry seems to be in for another round of consolidation. DHL, the world’s largest express company today announced acquisition of majority control in DHL India from AFL express through which it had presence in the country. Recently, Blue Dart acquired two south based logistics company to consolidate its position in the South India.

Global Logistics Major- Sensing opportunity
International Majors Domestic Partner
DHL AFL Express
Fed EX Blue Dart Express
UPS/ TNT Elbee Services

Logistics management is emerging as the fastest growing segment in the express industry. The key to success for logistics companies is to provide complete logistics management instead of vanilla delivery services. The concept of ‘Just in time’ inventories is gaining importance in the supply chain system and thus regional presence is getting important for logistics companies.

On the other hand with corporates outsourcing complete supply chain management smaller players are facing entry barriers in terms of technology and requisite infrastructure, which includes multi modal transportation facilities and hubs. Leading courier companies in the industry now use a combination of transport networks comprising road, rail, sea and air for undertaking door-to-door delivery of documents and packages. The multi-faceted distribution system is supported by infrastructure comprising various offices across cities, hubs, warehouses, IT technology and human resources. However, as the industry is still at a nascent stage, new avenues of growth are abundant for specialised companies. Thus, one hand there is huge companies who are sensing opportunities, smaller players are on the winding mode.

To summarize, consolidation in the industry is bound to happen for traditional players with only serious players surviving and organised players entrenching into the market share of regional players. Though the courier industry as a whole is expected to grow at a compounded rate of 15-20% in the next few years, companies with an edge on technology and service are expected to far outperform the industry growth rates.

Equitymaster requests your view! Post a comment on "Logistics: In consolidation mode". Click here!


More Views on News

Sorry! There are no related views on news for this company/sector.

Most Popular

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

How to Hit Rs 100 Crore Wealth in Your Lifetime (Equitymaster Wealth)

Nov 15, 2021

This is how you can achieve the ambitious goal of a net worth of Rs 100 crore.

Don't Sell these Stocks if the Market Falls (Profit Hunter)

Nov 17, 2021

These are the 3 types of stocks that you should not sell in a market crash.

MobiKwik IPO Opens for Subscription Soon. Key Things to Know Before Subscribing. (Views On News)

Nov 20, 2021

The Rs 19 bn issue is set to hit the market soon.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms