The 2008 Survey of Indian Third-Party Logistics (3PL) Service Providers: Comparisons with the 2004 Survey of Indian 3PLs

Abstract

Third-party logistics (3PL), which is growing around the world as shippers are more and more outsourcing logistical activities, is drawing the attention of both academicians and practitioners. This paper presents a survey of Indian 3PL providers and compares the state of the industry with that in 2004 based on an earlier survey. The 3PL industries of India and North America are also compared based on a previous survey of North American 3PL providers. The survey finds that the Indian 3PL industry is in its early stage of development, and lags far behind the North American 3PL industry in terms of global reach and breadth of service offerings. Indian 3PL providers are also underperforming with respect to some of the key variables that determine performance levels. Other problems identified by the survey are lack of awareness among Indian shippers, shortage of management talent, inadequate infrastructure, complex documentations and multiple tax systems. Despite all these, the Indian 3PL industry is growing at a healthy rate of 20%. Sensing the potential of the sector, many global players are entering the Indian market through direct investments, acquisitions and alliances. Steps are being taken by the Indian government to improve infrastructure, reduce paperwork, simplify taxation systems and implement conducive economic policies to facilitate the growth of 3PL. This paper reports the changes in the Indian 3PL industry since 2004 and benchmarks Indian 3PL against North American 3PL. Significant insights are provided for logistics managers, the government and other stakeholders. The paper is concluded with directions for future research.