Logistics outsourcing business to reach $90 mn by 2012

NEW DELHI - Third party logistics outsourcing business in India will grow to $90 million from the present $58 million by 2012, according to a study released Monday.

Presently around 55 percent of Indian companies are outsourcing logistic services like supply chain management and warehousing, said the study by the Associated Chamber of commerce and Industry (Assocham).

This was 10-15 percent 10 years ago.

The Indian logistics market size will zoom up to $125 billion by 2010 from the present $105 billion, ‘which means the business would grow at an average rate of 16-17 percent in the next two years’, the report, ‘Building Logistics for Competitive Business’, said.

‘One of the contributing factors for this is value added tax (VAT) which is expected to drive Indian industry towards using more third party logistics services,’ Assocham secretary general D.S. Rawat said.

He added that the logistics outsourcing services ’should be seen as a support to corporate growth’.

‘With the expansion of globalization, more companies are turning towards logistics outsourcing to help them in successful management of supply chain processes. The logistics outsourcing provides illustrate their ability to bring down conventional logistics costs and handle more complicated tasks,’ the paper said.