PROJECT REPORT ON

“UNDERSTAND THE BRAND RECALL OF

GATI
BRAND IN COURIER AND CARGO
NEEDS”

Submitted By:
Abhishek Pattanayak
PGP-IB
IB/06/001

Submitted To:
Asian School of Business
Management
Bhubaneswar
Under the esteem
guidance of

Mr. Mathew Joseph

Prof. C.K. Dash
Manager – All India Retail &
Prof. in marketing
Gati, Secunderabad
ASBM, Bhubaneswar

Project Report Submitted in Partial

Fulfillment for the award
 Of degree in Post Graduate Programme in
international Business

Asian School of Business Management

Bhubaneswar

CONTENTS
(2006-08)

DECLARATION

I Sri Abhishek Pattanayak bearing the roll number IB/06/001, a

student of Asian School Of Business Management, Bhubaneswar
here by declare that this project report entitled “Understand the
Brand Recall Of Gati Brand in Courier and Cargo Needs” is
bonafied work done by me at Gati Ltd, Secunderabad in partial
fulfillment for the award of degree in post graduate Programme in
international business. This report has not been subjected to any other
institution or university for award of any degree or diploma.
 (Abhishek Pattanayak)

CERTIFICATE BY THE GUIDE

This is to certify that the project entitled,

“UNDERSTAND THE BRAND RECALL OF GATI
BRAND IN COURIER AND CARGO NEEDS” is a
bonafied record of Interim report carried out by
Abhishek Pattanayak at Asian School Of
Business Management, Bhubaneswar, for the
partial fulfillment of Post Graduate Programme In
International Business2006-2008.
 Signature of Faculty
Guide
Date:

Acknowledgement

I express my deep sense of gratitude to GATI for providing me an

opportunity to undertake on-the-job training at the Head Office,
Secunderabad.

I have great Pleasure in offering out profound respect heartfelt to

Mr. Mathew Joseph, Manager- All India Retail, Gati for his kind consent
and co-operation in providing me the support and valuable information
regarding the topic.

I am very much grateful to Ms. Razia Sultana, Manager (HR) and

Mr. Madhu M, Executive (HR) for extending their heartily co-operation
and timely support.
 My special thanks to Mr. K. pradeesh. Executive (Retail), HO for his
guidance and co-operation in providing necessary information in the
area of my project study.

My regards to my faculty guide Prof. C.K. Dash for guiding me,

providing valuable information and clarifying the doubts in the area of
my project study.

I am also very much thankful to Mr. R.L. Dwibedi, Manager (Retail),

all the executives (Retail) of Gati HYDN, Bowenpally and all the faculty
members of Asian School Of Business management for their guidance
during the project work.

Last but not least, I am grateful to the people, the retailers, the
industrialists, the executives and managers of different corporate
houses which I have visited in Hyderabad city for their support during
survey.

Thanking you a lot

Abhishek
Pattanayak

PREFACE

“A wise man recognizes the convenience of a general

statement, but the bows
to the authority of a particular fact”.

With this brief, I had set out for on-job-training (OJT) in Gati Ltd,
Secunderabad. It turned out as expected the kind of organizational
exposure I am looking at the Gati Ltd. Realizing that more I imbibe in
theses few months, more confident and equipped me would be while
entering to the corporate world. I was giving the responsibility of
conducting a market research to find out market potential of Gati in
Hyderabad. It has been a learning experience in this sector while
conducting the market survey, but I was also enriched by their
experiences that they shared with me. Here I got the opportunity and
experience of preparing the questionnaire, collecting the primary and
secondary data and analysis of the data. Along with this I also gave
suggestions for restructuring the market potential of Gati in
Hyderabad.
Executive
summary
The birth of Gati practically represents the big change in Indian courier
& cargo industry. The name Gati creates an image, reliability, tradition
& faith. Except its express cargo division it started its courier division
under the brand name “Gati Zipp” in the year of 1998. Now Gati Ltd. is
a leader in Indian cargo service industry. The word “Gati” is derived
from Sanskrit language which means speed with direction.

Though Gati has proven its supremacy in Indian cargo sector, it is

facing a low brand awareness in Indian courier market. Since the
company is wanted to relaunch its courier service in tie up with Indian
cargo a detail story of brand awareness and brand recall is very much
needed. Keeping this thing in mind, we set out to find out the market
potential and brand recall of Gati products and services.

For our survey purpose we selected Hyderabad. Before doing the

survey we prepared a questionnaire of open ended questions for the
mass market. The industry customers were interviewed formally.
 Gati: An Introduction
 HR Initiatives at Gati
 Function of Different Department
 Services Offered By Gati
 Value added services from Gati
 Sales channel of Gati
 Gati Cargo & Gati Courier
 SWOT Analysis of Gati
 GATI: Journey started in 1989

“I took the road less traveled by and that has made all the
difference “

- Robert Frost -

Exactly the same has made all the difference when Gati rolled out the
express cargo concept in India. Gati, the pioneer in India in mastering
the idea of express cargo with a different feature of door to door and
desk to desk pick up and delivery which was conceptualized as a
premium transportation service with convenience and efficiency. It has
made all the difference where the conventional transportation was the
only way of delivering most of all corporate houses’ promise to their
customer.

In late 80’s India witnessed the liberalization policy that has

changed the face and pace of India which triggered high economic
growth in manufacturing and service sector. The competition among
corporate to serve its customers first and fast become the key word of
success in market place. Gati very proactively foreseen the vast
changes that are going to trigger Indian economic growth.

The realization of, importance of logistics in creating a country’s

wealth, Gati has taken a different route and that was resulted to the
launch of Gati Desk to Desk Cargo in 1989 offering door to door pick up
and delivery services.
1989 witnessed the introduction of a different product line in
transportation where time, technology, safety and customer service
play the vital role.
In 90’s, Consumer preference started changing as the information
technology has taken front seat in providing highly efficient service at
customer doorsteps. Time and speed became the essential ingredient
of success of any manufacturer who wants to deliver their products to
end user on time and intact. Snail paced infrastructure development in
India was the only road block to attain high speed in delivering our
customer needs.

In 1996, Gati has made history by getting into a strategic alliance with
Indian Airlines to leverage the highest network on air to provide the
widest reach in surface with high speed delivery process to attain great
customer satisfaction.

The industry growth and information tech boom has created high
customer expectation; the intangible service started playing the key
role in differentiating the tangibility of every product. It is like the
service starts matters the cost.
In 2000, a new millennium, Gati launched the first railway freight
service from Mumbai to Delhi called “ Gati Millennium Train “ eying the
optimum utilization of cost and grabbing all opportunities come across
as the market dynamic changes.
The new millennium witnessed the explosion of information
technology and expansion of Indian service industry. India started
acting global. The investment friendly business environment that has
made international corporate’s entry into Indian market. It triggered
stiff competition in market place and higher consumer expectations. All
the company’s started to think on “optimum utilization “of all
resources to meet customer expectation as well as the thinner bottom
line to a thicker one. The conventional wisdom of “Revenue generation
by sales and spent by distribution “has made a major shift to “effective
distribution and SCM make company’s bottom line brighter”. This
made – the back room logistic and distribution function to a strategic
board room function. The black sheep becomes a profit pulling bull.
In 2003, Gati introduced oracle based Gati Enterprise Management
Solution, nick named GEMS to give all competitive edge to our
customers in leveraging the market opportunities on time. Gati GEMS
is one of the most effective tool to track and trace the shipment and
enabling Gati in optimizing all resources.
India became the fastest growing economy in the world with an
aspiration to fetch a double digit growth in GDP. The pace that Indian
logistic scenario moves ahead, Indian infrastructure like road, rail,
ports Air ports development is not showing the speed that requires to
support the faster development in logistics.
Gati has already started investing heavily in improving the ware
housing, IT, Hubs, Aviation, Customer service etc to move ahead to
meet the market needs. Gati is going ahead in re-engineering of
network through central distribution centre and express distribution
centre. Now Gati offers distribution and warehousing solution in 592
out of 604 districts of India. Gati has expanded to Asia Pacific region by
offering India- centric distribution solutions.

Change is very constant in market place. Gati always choose a road

less traveled by and create a positive difference in market place.
Recently Gati has undergone a transformation process and displaced
the promise to “Ahead in Reach” from the statement of “We deliver
anything anywhere”. Gati now have a global outlook and its brand
design has changed to
Vibrant new look. Gati has restructured to meet all B2B and B2C
customer needs which enable to address the various requirement of
corporate and mass market differently.

Gati’s ambition is to become a truly Indian multinational company to

set a bench mark reference in customer sensitivity in express
distribution and SCM company.

Milestones:

From inception, Gati have been obsessed with providing the best
possible service. This obsession has resulted in setting the benchmarks
for the industry. Here are the some snap shots of the glorious story of
a leading logistic service provider of the country.

1989
Birth of cargo giant Gati as Gati cargo management services.

1989-1995
Gati offers a money back guarantee on cargo services.
Gati offers cash on delivery for convenience of customers.
A toll free number is introduced for customers for first time in India.

1996

A strategic alliance with Indian airlines, India’s largest air network for
faster delivery of shipments to its customers.

1997
Introducing the third party logistics system in India and offering the
complete logistics solution to its customers.

1998
Entering in to courier market under the brand name of Gati-Zipp.

1999
Expanding its services in to SAARC countries, ties-up with Bhutan and
Maldives Postal department.

2001
Introducing the first exclusive cargo train between Mumbai and Kolkata
in association with Indian Railway.

2003
Bags the best logistic company 2003 in a survey conducted by Frost &
Sullivan.
Setting up a base at Singapore in order to reach out world faster.

2004
Introducing mechanized racking system in the automated warehouse
at panvel, Maharastra.

2006
Awarded the “Best Logistics Partner” by HCL infosystems.
Awarded the consumer super brand status in the logistic category for
2006-07
Nominated for NDTV “business leadership awards” 2006 in logistics
category.

Vision & Mission

 Be a globally preferred provider of India-centric supply chain
services and solution, and a leader in the Asia Pacific Region.
 Delight Customers with quality service by setting new trends
through innovation and technology.
 Be the most preferred organization for all stake holders.
 Be a responsible corporate citizen with unwavering commitment
to environmental protection and conservation.

Board of directors:
  Mr. Mahendra Agarwal
 Mr. K.L. Chugh
 Dr. Ram S Taneja
 Mr. N. Srinivasan
 Mr. T.S. Rao
 Dr. P. Sudhakar Reddy
 Mr. Krishan Sehagal
 Mr. Sunil Kumar Alagh

HR initiatives at Gati

Gati believed in long tem employee relationship. Organizational

commitment, win-win situation, multiskilling of employees, long term
employeement is key ingredients of HR function. Attitude is given more
importance in employee recruitment than qualification and expertise.

 MD of Gati Mr. M.K. Agrawala on every possible occasion made it

explicit that Gati is caring organization. For example, wherever
possible, food was cooked and served to employees in all Gati
offices. While the formal set and atmosphere worked well for
quite some time major reforms were initiated during 2002-03, to
enhance competitiveness of Gati in the changing business
scenario.
 MD of Gati Mr. M.K. Agrawala personally met the family members
of an employee in the unfortunate event of loss of life of an
employee in a major accident. This is a tradition, which is being
systematically followed up. Of course today, wherever MD could
not visit the family of the victim, a senior employee of the
company is deputed for such a visit.
 Most of the Gati employee (until 1994) was inherited from TCI.
There was a need to enhance the competency level of
employees at Gati. Management graduates and engineers were
recruited across the campuses in the country and placed in
executive and managerial cadre. To keep a check on the number
of employees, a performance based separation scheme was
implemented. The separated employees were given an option,
opportunity and financial support to work for Gati as
entrepreneurs.
 The gender mix in Gati was skewed towards male. Very few
women worked for Gati. To bring an element of improvement in
social behavior within Gati women employees were inducted as
management and graduate trainees. The entry level qualification
was increased from school pass to graduation.
 Recruitment was need based. Advertisement, using manpower
consultants and visiting campuses were the modes of
recruitment. Understanding of service industry, ability to concept
sell a product, innovativeness, business knowledge and exposure
to functional areas of business, softer skills, sensitivity and ability
to work in a team is a range of skills sought in a fresh
recruitment.
 Every new employee in Gati went through a seven-day induction
course, at a place other than his/her place of posting. Standard
training modules on marketing, customer orientation and service
quality were routinely offered. Several executives were
nominated for management courses in reputed Indian
institutions.
 The performance appraisal system was changed from managing
director reviewing the performance with every regional manager
to a broad based open appraisal system. Two broad based
review committees did the appraisal. A centre review committee
and a regional reviewed the performance of every manager
along with the managing director in an open environment on a
one-to-one basis.
 The welfare measure included ad-hoc financial support on a need
basis to staff. All employees and family including parents were
covered on medical benefits and insurance policies. For staff all
statutory requirements like accident insurance etc. were
provided. The remuneration and perks for senior executives of
Gati is comparable with the best in the industry.
 Services offered by the Gati

• Gati Express
• Gati Zipp
• Gati Saver
• Gati Priority
• Gati coast-to-coast
• Gati Logistic solution

Value Added Services

 FOD – Option of paying at the time of delivery

 COD – Collection of cash against delivery from the customer
and remitting it to the supplier online through e-banking.
 DOD- collection of draft and cheque on behalf of customer at
the time of delivery.
 Holiday and sun day pick up
 Tamper proof packing
  Fragile goods packaging
 Safety Measures: special “suraksha” bags for safe handling of
high value of cargo.
 Octroi clearance facility

Gati Express

With the widest network, the best of cargo movement facilities and
several value added services to choose from, Gati express is the
preferred distribution solution provider today in India. Gati has a range
of express services to choose from:

Express City : Same day delivery

Express Zone : Ideal for secondary distribution needs
Express State : For regional distribution
Express national: Reaches the remotest corner of the country
Express Bulk : For high density cargo and bulk cargo

Features of the Gati express:

 On time departure of vehicles irrespective of capacity utilization

 Assured date of delivery
 Door pick-up and door delivery
 Weather proof containerized vehicles for safe movement
 One time lock for tamper proof transit
 Online track and trace facility
 Physical proof of delivery option
 E-billing

Gati Saver

An affordable surface product especially designed for non commercial

packages.
 Flat rate of Rs 89 per package ( up to 4kgs) ideal
for samples, gifts, study materials and printed
material.
 Gati Priority

Speed, reliability and reach: Every operation at Gati Priority follows this
principle. The large fleet of surface vehicles and a strategic alliance
with Indian airlines helps Gati to meet every possible business need.

Features of Gati Priority:

 Reserved space in 34 designated air movement
sectors.
 24*7 Service counters at major air transit centers.
 Multi modal connectivity for easy and quick transit
at non airport locations.
 Online track and trace facility
 Option of same day delivery
 Door pick up and door delivery

Gati Zipp

Zipp makes the difference:

Gati goes beyond the normal courier service with zipp and
provides its customers with unique price and transit time option.

Features of Gati Zipp:

 Express courier service

 48-96 hours delivery for most locations in India
 Holiday and Sunday pick up and delivery option
 A pre paid payment option the form of zipp envelopes and
boxes.
  Cash-on-delivery facility

Gati coast to coast

Gati coast to coast is Gati’s shipping division. Set up way back in 1986,
the CTC division was to become the preferred service provider for all
sea bound cargo in the bay of Bengal, Andaman Island and Malacca
strait. In the two decades of its existence, Gati CTC has followed this
vision with diligence and determination and has emerged as a
complete solution provider for Indian seas.

Features of Gati Coast to Coast:

 Sturdy and safe cellular container vessels

 mv Gati Suvidha
 mv Gati Zipp
 mv Gati-1
 mv clarissa

Regular liner services between Chennai-Andaman Island-Chennai &

Chennai-Yangon-Chennai.

Gati Logistics solution

Logistic and supply chain management are the integral part of Gati’s
business. A sharp and steady focus on these key functions has helped
Gati to gain a competitive edge over the rest of the market. Gati offers
its service as a third party logistics service provider. A 3pl service
allows a company to

 Concentrate on core competency

 Create greater competitive flexibility and release working capital.

Gati’s warehousing facilities consists of completely modern storage

system and material handling system. With it branches in all
metros, semi metros, cities, Gati has more than 200 storage
locations across the India. With over 6000 sq ft of warehousing
 space spread all over the country and serving the multiple clients,
Gati is able to offer many more customer friendly solution:
 Flexible hiring option
 Modern racking and handling system
 Reduction in material breakage and damage
 Ware house manage system

Sales Channels of Gati

Sales channel Of
Gati

CCC-F CCC-K GA Café

D’eliver

Gati started its debut journey to India’s cargo market in the year of
1989 as a division of Transport Corporation Of India (TCI), another
cargo giant of India. It became separated in the year of 1994 and by
the that time Gati’s revenue was only 18 crore. By the year 2007 Gati’s
sales turn over is 460 crore. Gati is targeting to become a 1000 crore
turn over company by the end of 2009. To achieve this target Gati has
its sales channel into four parts in order to get more revenue. Gati’s
sales chhanel is divided into four parts. They are as mentioned above.

CCC-F

CCC-F is a service chhanel of Gati which stands for customer convince

centre (Franchise). Gati is operating 594 districts out 602 in India. But
it is difficult for Gati to open its offices, hub and EDC in every corner of
India which is due to poor communication network and lack of modern
infrastructure. But to get good revenue from Indian cargo market it has
out sourced its business to local individual of a particular region who
will work on behalf of Gati to strengthen Gati’s customer list where
company employees and vehicles can not go due to poor
communication. The franchise person will collect or delivery material
from Gati’s customer and collect or delivery to nearest hub of the
company. The franchise person will work on behalf of Gati to provide
services to its customers in remote areas. There is a good incentive for
franchise people from company if the particular franchise person
generates a good business for Gati. Gati is the first company of India
which has launched such kind of program. Gati is also getting its major
revenue from CCC-F only.

26 38 North
30 West
South

41 East
Central
57

Gati’s CCC-F across the country

CCC-K

CCC-K is an another service channel of Gati which stands for

customer convince centre (Kiosk). This service channel is developed by
Gati to add new customer in its customer profile in semi metro and
urban cities. The major difference between CCC-F and CCC-K is that in
a CCC-F booking and delivery is done where as in CCC-K only booking
is done.
 11
34
30 North
West
South
East
42 Central
43

Gati’s CCC-K across the country

Café D’eliver

This is a new service channel added by Gati in year of 2007. The main
purpose of such chhanel is to branding and showcasing company’s
image to the public. Generally café D’eliver is established mainly in
metro and developed cities. Till now Gati has only three café D’elivers
across the company which are in Secunderabad, Pune and Indore. Gati
is planning to open six more café D’eliver in other major cities like
Kolkatta, Mumbai, Nagpur, Bangalore, Chennai and Delhi. Café D’eliver
is a unique service offered by Gati where its customers can book their
material 24*7 basis with other facilities like fax, internet browsing,
telephone and photo copy facilities. The prime objective of Café
D’eliver is to make aware the people about Gati’s product and attract
them towards it and keeping one step ahead always from its
competitors in market thus creating a good brand recall of Gati among
the people.
 (Café D’eliver of Gati at Secunderabad)

GA

The Gas are popularly known as Gati Associates (GA). Each GA is

assigned to a particular area where he will responsible for receiving
and delivering of customer’s material. Apart from their job they book
customer material on call basis on behalf of Gati for which they get
attractive incentives apart from their regular salary for their
contribution towards generating the revenue of Gati.

Gati Cargo

Gati, a leader in the express cargo distribution business, was started in

1989 as a division of TCI. It became a separate company after a period
of six years i.e. 1994. In the same year it entered to the Indian cargo
sector. Being a premiere logistics company of India Gati’s logistics
distribution consists of 98% cargo distribution and 2% documents
distribution. It is only India Company which provides cargo services in
three modes i.e. surface, air, water. Gati is providing its cargo services
in 594 districts out of 602 across the India. But Gati’s revenue mainly
dominated by its express distribution.

Gati Cargo

Gati Express Gati Priority Gati Coast-to-

Coast

Gati Express

With the widest network, the best of cargo movement facilities and
several value added services to choose from, Gati express is the
preferred distribution solution provider today in India. Gati has a range
of express services to choose from:

Express City : Same day delivery

Express Zone : Ideal for secondary distribution needs
Express State : For regional distribution
Express national: Reaches the remotest corner of the country
Express Bulk : For high density cargo and bulk cargo

Features of the Gati express:

 On time departure of vehicles irrespective of capacity utilization

 Assured date of delivery
 Door pick-up and door delivery
 Weather proof containerized vehicles for safe movement
 One time lock for tamper proof transit
 Online track and trace facility
 Physical proof of delivery option
 E-billing

Gati Saver
An affordable surface product especially designed for non commercial
packages.
 Flat rate of Rs 89 per package ( up to 4kgs) ideal
for samples, gifts, study materials and printed
material.

Gati Priority

Speed, reliability and reach: Every operation at Gati Priority follows this
principle. The large fleet of surface vehicles and a strategic alliance
with Indian airlines helps Gati to meet every possible business need.

Features of Gati Priority:

 Reserved space in 34 designated air movement
sectors.
 24*7 Service counters at major air transit centers.
 Multi modal connectivity for easy and quick transit
at non airport locations.
 Online track and trace facility
 Option of same day delivery
 Door pick up and door delivery

Gati coast to coast

Gati coast to coast is Gati’s shipping division. Set up way back in 1986,
the CTC division was to become the preferred service provider for all
sea bound cargo in the bay of Bengal, Andaman Island and Malacca
strait. In the two decades of its existence, Gati CTC has followed this
vision with diligence and determination and has emerged as a
complete solution provider for Indian seas.

Features of Gati Coast to Coast:

  Sturdy and safe cellular container vessels
 mv Gati Suvidha
 mv Gati Zipp
 mv Gati-1
 mv clarissa

Regular liner services between Chennai-Andaman Island-Chennai &

Chennai-Yangon-Chennai.

18%

Fuel Station
11%
Coast-to-Coast
Express Distribution

71%

Distribution
Business Dominates Gati’s revenue Express
(Source: - Financial Summary FY06)

Gati Courier

In 2000, Gati entered into courier sector of India by launching

“Suvidha” a premium cargo (courier) product to be managed and
operated by the same team which was in charge of cargo business.
Suvidha was started as an extension of business cargo which
essentially meant movement of documents. But the delivery team did
not pay equal attention to small cargo, small parcels and small
documents. Gati could not kept the delivery promises of Suvidha. For
Gati courier was an extension of cargo business. But for the customers,
it is a prime way of moving documents. Also, alternative vendors were
available to customers. Initially Suvidha was a reasonable success. It
provided operational excitement. Gati was one of the first company to
use 2kg and 5kg boxes to capture retail courier market. This product
was offered for a fixed price. This variation of Suvidha did not take off
and as the time passed by because of lack of focused attention on
Suvidha, the product was loosing market share. As Suvidha did not
have the good brand recall, Gati decided to revamp the courier
business and take it forward with strong brand image. In 2004 Suvidha
was reorganized on several dimensions and re launched in brand name
Gati Zipp. There was a separate team responsible for product
positioning, pricing and promotion. The Gati Zipp specifically targeted
three major segments viz. education (student), Pharma companies and
e-business community. These are expected to be a big business
opportunity in near future for Gati Zipp. Zipp business is expected to
generate about 15% of Gati business in next 2-3 years. Presently Gati
Zipp is giving only 1% of total revenue to Gati’s business. Even after
restructured and re launched Gati-Zipp is failed to capture the
leadership position in the courier market band still the Indian courier
market is dominated by the presence of the courier tycoon like Blue
dart, DTDC, XPS and First flight courier.

10% 3% 1% 1%
Express
9% Priority
Logistics
Gati International
TS
76%
Zipp

Product
Wise Income of Gati (Source-FS 06)

YEAR AMOUNT ( Rs/Lakh)

1998-99 16,245
1999-00 20,417
2000-01 24,952
2001-02 25,255
2002-03 27,514
2003-04 30,615
2004-05 35,919
2005-06 45,612
 50,000
45,000
1998-99
40,000
1999-00
35,000
2000-01
30,000
2001-02
25,000
45,612 2002-03
20,000
35,919 2003-04
15,000 30,615
24,95225,25527,514 2004-05
10,000 20,417
16,245 2005-06
5,000
0
1998- 1999- 2000- 2001- 2002- 2003- 2004- 2005-
99 00 01 02 03 04 05 06

Total Sales Turnover Of Gati

50,000 45,772
45,000
1998-99
40,000 36,127
1999-00
35,000 30,919
2000-01
30,000 27,634
25,023 25,305 2001-02
25,000 20,465 2002-03
20,000 16,290
2003-04
15,000
2004-05
10,000
2005-06
5,000
0
1998- 1999- 2000- 2001- 2002- 2003- 2004- 2005-
99 00 01 02 03 04 05 06

Total Income of Gati

2500

2007 1998-99
2000
1999-00
1449 2000-01
1500
2001-02
905 2002-03
1000 809
2003-04
555
375 430 410 2004-05
500
2005-06

0
1998- 1999- 2000- 2001- 2002- 2003- 2004- 2005-
99 00 01 02 03 04 05 06
 Profit After tax

Consumer Durables

Telecom

FMCG
3%
Textiles
3%
4% Electrical
5% appliances
7%
17% Engineering
7%

8% Other manufacturing
14%
13% 11% 8%
Computer
peripherals
Automotive
components
Electronics
components
Pharma&Chemicals

Others

Con
trib utio
n of
different products towards revenue of Gati
(Source: Gati)

SWOT Analysis Of Gati

Strength:

 Gati covers 594 districts out of 602 districts in India providing

excellent cargo services to various customers.
 Gati gives more priority to timely delivery than the cost of
delivery reflected by vehicle under utilization.
 Gati was the first company which offered value added services
with highest quality to transport business which was once
considered to be a routine business with no scope of value
addition.
 For the successful operation of its business it started a new
concept with a group of front-end entrepreneurial delivery set up
popularly known as Gati Associates (GA). This kind of concept
was new to the cargo & courier industries in India.
 Gati was giving assurance a net revenue of Rs 8000/- a month (in
1994) and a financial arrangement ensured over a period of time
to all its GAs for the smooth and successful running of business.
 In 2000, Gati launched the first railway freight service from
Mumbai to Delhi called “Gati Millennium Train “eying the
optimum utilization of cost and grabbing the major share in
Indian cargo market.
 Gati introduces oracle based GEMS package to give all
competitive edge to its customers in leveraging the market
opportunities on time.
 It offers cash on delivery for convenience of customers.
 It is the first company which offers money back guarantees
policy on cargo services if the cargos are failed to deliver on time
to customers.
 For first time in India, It is introduced a toll free number for the
benefits of customers regarding the queries on its products,
services and operation.
 Introduction of SMS based track system for convenience of its
customers to track their shipment of materials.
 It is introduced a special package named “ Gati Saver” in the
courier market of India which enables its customers to send
samples, gifts, study materials and printed material ( up to 4kg)
at a flat rate of Rs.89 with service tax to any where within the
country.
 In 2006 Gati has redefined its brand name from “we deliver
anything any where” to “ahead in reach” and changed its logo in
order to hold the market leadership in Indian cargo market.
  A leading logistics solution provider in third party logistics sector
of India.
 First company of India to introduce 7*24 hr booking system for
its customers under the brand name “Café D’eliver”.
 Provides opportunity to its customers for online track of their
shipment.
 Provides other additional services like door pick-up and delivery,
holiday and Sunday pick-up.
 Gati is handling 2.2 million of packages in a month across 29
states in India with assured delivery date on the docket.
 It has developed the excellent connectivity across the country
thus enabling it to provide unparalleled service to its customers.
 Gati is also investing substantial resources in customer
relationship marketing through regular customer meets and
customer carnivals which is a new strategy to this industry and
resulted in creating a unique market to Gati.
 Gati has done an alliance with Indian Airline in order to provide
services in 550 locations through 150 branches spread all over a
single waybill.
 Gati is operating a call centre on 24*7 basis to receive, respond
and monitor customer complaints.
 In the courier segment Gati was one of first companies to use
2kg and 5kg boxes to capture the retail courier market.
 Gati is only one Indian Cargo company which runs its business in
three modes i.e. surface, water & air.
 Gati is the only cargo company of India which has its own sea
cargo division named Gati coast-to-coast.
 Gati has opened its branches in foreign countries like China,
Hong Kong,
Thailand & in SAARC Countries to strengthen its business.

Weakness:

 Gati was a late entrant to generic cargo business.

 Gati took roughly four yearly to stabilize the differential
express cargo business from simple cargo business.
 Due to poor positioning Gati Suvidha was failed to attract the
customer thus getting low market share from courier business.
 Gati’s railway cargo project was failed as it was proved to be
highly expensive for Gati and did not fetch good revenue.
 Gati is still lagging in ware house management to its
competitors.
Opportunity:

 Gati’s strategic alliance with Indian air line has created a

huge amount of business in air cargo sector.
 In July 2007 Gati is going to start its own flight operation in
association with Indian for air cargo business.
 Automotive industry in India is growing at 18% per annum
creating a huge opportunity for Indian logistics companies
like Gati.
 Textile industry is growing 18-25% per annum in India.
 India’s auto export is growing 25% per annum.
 Indian retail sector is growing 25% annually creating US$
175-200 billion by 2016.
 Over 8.6 million productions of vehicles with a growth rate
over 35% per annum.
 The recent experiment on Alphonoso mango has created a
great business opportunity in packaging for Gati.

Threat:

 Gati’s business model was cloned by several retail courier

operators thus creating threat for Gati’s business.
 Gati’s employees were recruited by its competitors with high
salary and other perk and allowances.
 AFL has ventured in premium cargo (Courier) in the brand
name AFL “Wiz” thus creating threat for Gati’s courier arm
Gati-Zipp and Gati-Savor.
 Another major Indian logistics company Patel Road Ways has
also entered into retail courier market in the name of Patel
Retail Ltd.
 Global logistics major “DHL” has opened its office in
Gurugaon in order to start its business in north India.
 First Flight, one of the premiere courier company of India is
entered in to air cargo sector with its two own air craft
between Delhi and Chennai and very soon entering in
Hyderabad and Bangalore cargo market.

.
Review of Literature
* * * * * * *
* * * *
 Logistics : A Brief Review
 Logistics & SCM: Global & Indian Trend
 Indian Logistics Industry
 Indian Logistics Industries structure
 Opportunities and Challenges for Indian
Logistics Industries
 Courier Industry
 Classification of Courier Industry
 Cargo Industry
 Classification Of Indian Cargo Industry
 Opportunities and challenges for Indian cargo
Industry
 Indian Express Industry: An Over View
 Gati’s Brand Recall as a Courier & Cargo Service
Provider
 LOGISTICS ……A BRIEF REVIEW

Logistic is the art and science of strategically managing and controlling

the flow of goods, energy, information and other resources like
products, services and people, from source of production to the
marketplace. Logistic is one of the oldest and also the newest activities
of business management. It involves combining diverse functions and
service providers who may be culturally and objectively different.

Logistics is about moving materials, information and funds from one

business to another or from a business to the consumer. It is an
important part of the business economic system and is a major global
economic activity. In fact 10-15 per cent of product costs is logistics
related. Worldwide, logistics constitutes about $2 trillion a year. For
any country, the logistics cost is estimated between 9 and 20 per cent
of its GDP.

Logistics was defined by the Greeks as "the science of correct

reasoning by means of mathematics". The first modern use of the term
was in the military to identify the process of planning and co-ordinating
the movement of army and weapon support systems. Good logistics
brings out the ability to move faster and accurately to the battle front.
If one applies the same to the business organization, it is one's ability
to reach the product to the consumer at the right time, right place,
right quantity and at the lowest cost. On similar lines, supply chain
management will mean the network of organizations involved in the
process by which goods are moved from producer to consumer and the
counter flow of information, to manage the supply chain as a single
entity.

A prominent application of logistics was in World War II where weapon

movements were coordinated to ensure success. A recent instance of
massive logistics initiatives is in the Gulf war. With increasing
competition in the market place, managements started focusing on
customer services in the early 1950s in developed markets such as
Europe and the U.S. In late 1960s some of the logistics concepts were
tested. Following the oil crisis of the 1970s and the concept of just-in-
time in manufacturing customer servicing standards were given more
importance and new integrated logistics models and solutions were
born. The emergence of organized distribution system by department
stores and super fast courier service organisations gave a boost to
logistics concepts and strategies. Today all businesses are looking for
seamless transaction systems to co-ordinate their information and
material requirements along the value chain.

Manufactur
Supplier Distributor Customer
er

Schematic Representation of a
Logistic

Major Drivers of a Logistic

There are five major logistic drivers, They are as follows:

Production: This is typically related to issue on what to produce, how to

produce
and when to produce.
Location: A number of issues regarding location such as where to
locate a
Plant, where to locate a ware house in order to reduce the
cost of
 transport in logistics.
Inventory: Here the decision and issues are concerned with how much
to store,
how much to make and where to store.
Transportation: This involves how to move a product from one place to
another
place and by what mode of transportation. One needs to
evaluate economies of scale in one hand and better
customer
satisfaction in another hand.
Information: It is a very important for the logistics. It acts as a basis of
making
decision. It also act as a integrator. Unless information flow
is not
handled properly one may not get proper benefits from
logistic.

Logistics management process

Michael Porter in his famous book "Competitive Advantage'' has

spoken of the value chain approach and emphasized logistics as one of
the most important tools for competitive advantage.

The various processes and elements that are part of logistics as a

discipline are

Inbound logistics: Purchasing, Inbound transportation, Inventory

Management.

Manufacturing: Production planning systems, Machine scheduling

system.

Outbound logistics: Order booking process, Distribution management,

Outbound transportation, and Warehouse management systems.

As customers started demanding improved servicing standards, fast

cycle time has become the key factor for business success, whether it
is custom made tailoring service in Hong Kong or development of a
new car in Detroit.

A few industry applications

Until a decade ago, logistics was a word used only in commercial
organisations. Now one hears the word daily. Take the case of
conducting elections: What is logistics here? The ability of the Election
Commission to arrange for ballot papers, polling booths, collection of
votes, counting and other procedures in the shortest possible time.

Take the case of agriculture, in India there are seven layers between
the agricultural producer and the consumer, whereas in the U.S. it is
only two. Any good agricultural logistics system perhaps needs to have
only two or three layers like manufacturing and marketing companies
which have two or three layers. More layers means more delays, more
wastage of resources, more cost brokers. A good logistics can
eliminate all this. Milk distribution is a good example of efficient
logistics. Through the logistics tools and technology it is possible to do
the same in any other sectors such as foods and vegetables.

The successful cement companies have focused on logistics and supply

chain management to ensure higher margins and improve servicing
standards.

In fact, the total cost incurred by these companies up to the

manufacturing point is only a third of the selling price and the balance
consists of logistics, selling commission, receivables and related
aspects. One need not reiterate the importance of logistics and supply
chain management for industries such as cement
 A logistic process……

A
Logistics Pyramid
 Indian Logistics Market Projection

Logistics & SCM: Global and Indian trend

Logistics is the total course of activities involving moving goods from

the place of origin to the place of destination in the timely and cost-
efficient manner. The concept of logistics covers all activities relating
to the procurement, transport, trans-shipment and storage of goods.
Till a few years ago, the term Logistics simply meant movement of
goods from one place to another. However, since the early nineties,
there has been a sea change in the role of logistics solutions providers.
Recognizing the need and the requirement of businesses today,
logistics companies are now seeking to provide complete supply chain
solutions to their customers. Therefore, in addition to the basic
transportation, the companies are providing value-added services such
as warehousing, inventory management, freight forwarding, and
express services. The size of the logistic sector globally is $ 2 trillion,
while size of Indian logistics industry is around $ 89.8 bn. The total
revenue from logistics and supply chain management industry was
estimated at $13.5 bn (approximately Rs 600 bn) in 2003 and is
forecasted to reach $19.5 bn by 2009. Logistics cost as a percentage
of GDP is higher at 13% when compared to an average of 10% in other
developing countries and it is likely to come down to an average of
10% of GDP for India. This will be due to higher efficiencies and will not
have any adverse impact on companies under coverage. An efficient
logistics or transport system is a precondition for constant economic
development. It is not only the key infrastructural input for the growth
process but also plays a considerable role in promoting national
integration, which is important in a large country like India. Serving a
land area of 3.3 million square km and a population of one billion,
India’s transport system is one of the largest in the world. It consists
mainly of roads, railways, and air services. In a few states, inland water
transport plays a small supplementary role. And with its long coastline,
India has almost 200 seaports. The sector has expanded manifold in
the first fifty years of planned development, both in terms of spread
and capacity. Along with the increase in quantity, there have been
several developments of qualitative nature, such as emergence of a
multi-modal system
in the form of container transport, marked reduction in arrears of
obsolete assets, improvement in the self- financing capacity of the
sector and the establishment of new centers of excellence for
manpower development. Even after this impressive growth, the
country’s transport system is far from adequate both in terms of
spread and capacity and suffers from a large number of deficiencies
and bottlenecks. The quality and productivity of the transport network
and resources also needs improvement. Logistics is an important part
of every economy and every business entity. Logistics cost average
about 12% of the world’s GDP. The worldwide trend in globalization has
led many manufacturing firms to outsource their logistics function to
third party logistics (3PL) companies, so as to focus on their core
competencies.
 Evolution of Logistics industries

Third-party logistics
A third-party logistics provider (abbreviated 3PL) is a firm that provides
outsourced or "third party" logistics services to companies for part or
sometimes all of their supply chain management function. Third party
logistics providers typically specialize in integrated warehousing and
transportation services that can be scaled and customized to
customer’s needs based on market conditions and the demands and
delivery service requirements for their products and materials. More
and more organizations worldwide want to develop products for global
markets. At the same time, they need to source material globally to be
competitive. The solution for this is outsourcing logistics or using 3PL
to manage complex distribution requirements. Organizations have
developed strategic alliances with 3PL companies all over the world to
manage their logistics operations network. These alliances are also
known as logistics or supply chain outsourcing and contract logistics.

Benefits of 3PL:

To save time: Outsourcing the logistics function can free up

resources to focus on core competencies.

Because someone else can do it better: Even if you have

resources available, another organization within the supply chain may
be able to do it better, simply because of its relative position in the
supply chain, supply chain expertise and economies of scale.

To share responsibility: 3PL companies can share responsibility for

managing global supply chains, keeping customers and stores properly
stocked, and delivering the perfect order every time.
To re-engineer distribution networks: Logistics outsourcing can be
a quick way to reengineer distribution networks to meet global market
demands and gain a competitive edge.

Global market for 3PL

The global market of 3PL service providers is estimated at over $70bn.

North America – based service providers account for well over $50bn,
of this $70bn.

Global 3PL examples:

FedEx: FedEx Express was given the responsibility of transportation of

630 tons of 504,000 bottles of 2004 Beaujolais Nouveau wine to Japan.
It specially operated 7 FedEx charter flights to transport the famous
wine, making it the largest shipper of the distribution from Lyon,
France.

DHL: Talbots, a leading specialty retailer and e-tailer of women’s

classic apparel, shoes and accessories, chose DHL@home business-to-
consumer delivery service for a substantial portion of its US print and
online catalog sales. In choosing DHL, Talbots identified an opportunity
to reduce home delivery times on ground shipments from the
company’s distribution centre to west coast from six to four, while
safeguarding Talbots’ unconditional customer guarantee. With over
10,000 shipments a day, ensuring the excellent service for which
Talbots is renowned, is vital to the company‘s bottomline.

Exel: The British manufacturing sites of Bayer Diagnostics, part of the

worldwide Bayer AG group, required a logistics partner that could
provide time-defined transportation service for its temperature
controlled range of blood testing diagnostic equipments. Exel provides
a time-defined airfreight export service, from the UK to destinations
worldwide. Shipments that are temperature controlled are all shipped
on direct IATA flights due to their nature, whilst non-restrictive
products are moved on Exel’s airfreight consolidation service. Exel
collects all restricted cargo on its day of readiness and depending on
the destination and transit time involved, delivers between 24 and 48
hours later. Exel ships in excess of 1,500 shipments per annum for
Bayer Diagnostics, with consignments varying from 1 kg up to 2,000
kg.

Major 3PL Logistics Company in the world

UPS: Founded in 1907 as a messenger company in the United States,
UPS has grown into a $36bn corporation.

DHL: Founded in 1969, by three friends. Today, its revenues are

$30bn with over 170,000 employees servicing more than 220 countries
and territories and 4.2 mn customers.

TNT: Started in 1946 as Thomas Nationwide Transport in Australia,

revenues of $12.6bn today.

FedEx: Started in 1913, FedEx has revenues of $24.7bn and operates

in 215 countries handling 3.1 mn packages daily with 240,000
employees.

Major third-party logistics service provider in India

o AFL Logistics
o DHL
o Dynamic Logistics
o GATI Ltd
o Agility Logistics
o Om Logistics
o Patel Logistics
o Reliance Logistics
o Safexpress
o SembCorp Logistics
o Take Solutions
o TCI Supply Chain Solutions
o Total Logistics
o Transystem Logistics International
o TVS Logistics
o VRL logistics

Logistics evolving from 3 PL to 4PL (Lead Logistics Provide)

A 4PL is an integrator that assembles the resources, capabilities,
and technology of its own organization and other organizations to
design, build and run comprehensive supply chain solutions. The term
“4PL” was actually coined by the consulting group Accenture. In fact,
they also hold the trademark to the name 4PL.
 4PL organization would build a set of activities focused around a
specific set of
Supply chain initiatives and goals, generally with the following
characteristics.

 4PL Common Services (invoice management, call centers,

warehouse/distribution.
Implementation Center (the business process analysis/scoping, and
development of all activities into an systems framework).
 Product/Skill Centers (supply chain engineering).
 IT System Center (the pure IT selection for design and
implementation/
connectivity).
 4PL Back Office (administration, quality, finance, legal, etc.)

Indian logistics industry still alien to 4PL concept

Indian logistics industry so far has been much unorganized with

different players handling different aspects of cargo handling. It is only
recently in India that companies have realized of outsourcing their
logistics requirements to a single player and focus on their respective
core competencies. 3PL still is a new concept in India. A 3PL company
is an external provider who manages, controls, and delivers logistics
services on behalf of the shipper. Third party logistics (3PL) provider is
an outsourced provider that manages all or a significant part of the
logistics requirements of manufacturers and traders and performs
transportation, locating and some product consolidation activities.
Revenues for the 3PL market in India were estimated at $250 million in
2003. Market for 3PL services is forecasted to grow at a CAGR of 20.4%
over the period 2004-09. This market is expected to generate revenues
of $970.3 million by 2009. India’s transport system handles 870 btkm
(billion tonne kilometers) of freight and 2450 billion passengers-
kilometers a year Revenues of logistics industry from manufacturing
sector was estimated at $13460 million in 2003. Revenues are
forecasted to reach $19540 million by 2009 on the strength of a
growing economy and higher international trade. Chemicals, metal &
metal products, FMCG, cement and textiles are the top five revenue
contributors for logistics. The 3PL market is witnessing higher growth
due to entry of MNC’s, and exports focus of Indian companies. This
market is expected to generate revenues of $970.3 million by 2009.
Currently, automotive, IT hardware and FMCG companies are large
users of 3PL services. Emerging users include textiles, auto
components, retail and pharmaceuticals industries. Plan outlay for
transport sector (Roads, Railways, Air transport) has not been sufficient
enough to remove the bottlenecks for sustained economic
development.
Indian Logistics Industry…… A Snap Shot

The logistics market in India is estimated to be Rs. 260,000 crores and

constitutes 13 per cent of the GDP. It is much higher than for the U.S.
but lower when compared to countries like China and Korea. The major
advantage for Indian logistic industries is that the GDP of Indian
economy is going to cross 8%. India is going to one of favorite
destination for logistic industries following reasons:

• One quarter of world’s youth live in India

• 54% of Indian population is less than 25 yrs age
• 2nd largest English speaking workforce
• Second largest pool of technically qualified knowledge workers
• 10th largest economy and 4th in PPP terms.
 The logistics market in India can be considered as fragmented and
far from being saturated. With Indian economy booming, the freight
volumes have been increasing. Logistics costs in India are
estimated to be 13% of GDP as against 8.7% of GDP for US. Hence,
for total GDP of US$576 billion in 2005-06, the size of the logistic
industry in India is pegged at US$75 billion as of 2005-06. Since
liberalization of Indian economy in 1991-92, inventories as a
percent of net sales for the manufacturing sector has consistently
declined.

Globally, logistics service provider organisations have shifted from

courier and cargo to logistics, from freight forwarders to integrated
shippers and from customs clearances to consultants. A similar
trend is visible in recent times in Indian market. Service providers
have shifted from just movers of materials to logistic and supply
chain service providers. truckers have moved into integrated
haulers, large Indian organisations with multi-million spends on
logistics are hiving off entire divisions into service providers who
handle not just the parent’s logistics but also of others, others are
forming joint venture into leverage skills.

In the current set-up the, logistics service providers in India can be

broadly classified into courier services, express service providers
and end-to-end logistics service providers.

Indian courier industry has undergone a large change in recent

past. Courier industry which was once dominated by Indian postal
department is now dominated not only by a few large national
players but also by several multinational, regional and local
players. Due to presence of of large number of players, margins are
thin in this business, prompting many to diversify into express
services. At the national level, there are several express service
providers like Gati, Safexpress, Blue Dart and XPS. The logistics
market across the world is increasing at rapid rate. According to
the sources the logistic revenue was US$300 billion in 2006 and it
will touch US$350 billion in 2007.
 Indian Logistics Industry Structure

Logistics Services

Courier Services Cargo Services End-to-End Logistics

Services

Road/Expres
Rail Water Air
s

Cross-Country logistics Cost Comparison

Country Logistics Logistics activities

Cost/GDP
China, India 16-20 % < 10 %
US 9.9 % 57 %
Europe 10 % 30-40 %
Japan 11.37 % 80 %
Elements of logistics cost facing by Indian Logistic industries

 Transportation 35 %
 Inventories 25 %
 Losses 14 %
 Packaging 11 %
 Handling & warehousing 9 %
 Customer’s shopping 6 %

According to World Bank report the Indian logistics cost is one of

the highest in the world. By comparison, the cost of logistics in
India is 17.25% of total value of goods where as in Japan it is
11.37% of total value of goods. The following three factors are
primarily responsible for the high cost of logistics in India.

1. Congestion Cost
2. Transaction Cost
3. Demand and supply factors

Congestion Cost

Congestion at ports, inland and roads have rapidly increased

thus directly augmenting logistics cost and also resulting in over
all high inventory cost as delivery time increases.

Transaction Cost

Administration cost including insurance and government taxes

continue to be very high. The logistics cost could rise further due
to supply and demand factors.

Demand and supply factors

The continued rise in container traffic is leading to increased

traffic congestion in rail and road network, as exports and imports
growing 22% to 25% annually.

The high cost of terminal development along with relatively

latest innovation in finalizing the strategies result in only moderate
pace in supply chain addition. There is also lack of proper road
infrastructure in the class-b and
Elements of logistics cost facing by Indian Logistic industries

 Transportation 35 %
 Inventories 25 %
 Losses 14 %
 Packaging 11 %
 Handling & warehousing 9 %
 Customer’s shopping 6 %

According to World Bank report the Indian logistics cost is one of

the highest in the world. By comparison, the cost of logistics in
India is 17.25% of total value of goods where as in Japan it is
11.37% of total value of goods. The following three factors are
primarily responsible for the high cost of logistics in India.

4. Congestion Cost
5. Transaction Cost
6. Demand and supply factors

Congestion Cost

Congestion at ports, inland and roads have rapidly increased

thus directly augmenting logistics cost and also resulting in over
all high inventory cost as delivery time increases.

Transaction Cost

Administration cost including insurance and government taxes

continue to be very high. The logistics cost could rise further due
to supply and demand factors.

Demand and supply factors

The continued rise in container traffic is leading to increased

traffic congestion in rail and road network, as exports and imports
growing 22% to 25% annually.

The high cost of terminal development along with relatively

latest innovation in finalizing the strategies result in only moderate
pace in supply chain addition. There is also lack of proper road
infrastructure in the class-b and class-c towns. The lack of specific
logistics professionals is also hampering the growth.

Name of the country Logistics Cost (in Rupee)

France 5.5/km
Japan 3.7/km
Canada 2.0/km
India 7.5/km

(Comparison of cost of logistics between different countries)

Transport Mode Capacity (Mn Tons) Amount (Rs Bn)

Port 573 172
Air 1.3 123
Rail 667 365
Road 1560 1495

1800
1600 1560
1400 1495

1200
1000 Series1
800 Series2
667
600 573
400 365
200 172 123
0 1.3
Port Air Rail Road

Indian Logistics Industry is dominated by roads.

 Logistic Market Scenario in Asia Pacific Region

Indian logistics sector at the lower end of the evolution stage

compared to Asian market
 Retail boom fuels growth in logistics sector

India's vast middle class and its almost untapped retail industry are
key attractions for global retail giants wanting to enter newer markets.
Driven by changing lifestyles, strong income growth and favourable
demographic patterns, Indian retail is expected to grow 25 per cent
annually. Modern retail in India could be worth US$ 175-200 billion by
2016. With the economy booming, competition in the marketplace is
fierce. According to 'Retail in India Getting Organised to Drive Growth',
a report by AT Kearney and the Confederation of Indian Industry, retail
is one of India's fastest growing industries with a 5 per cent
compounded annual growth rate and expected revenues of US$ 320
billion in 2007. Rising incomes, increasing consumerism in urban areas
and an upswing in rural consumption will fuel this growth to around 7-8
per cent. KSA-Technopak, a retail consulting and research agency,
predicts that by 2010, organised retailing in India will cross the US$
21.5-billion mark from the current size of US$ 7.5 billion

Logistics companies, which now provide services from transportation to

warehousing and inventory management, will soon have to expand
their products basket to include value-added services such as
packaging, labelling and reverse logistics. As India's retail sector opens
up on a huge scale, domestic logistics companies are planning
significant investments to expand their portfolio of services. It is
expected that in the next two years, the logistics sector will have
undergone major changes, offering a wide spectrum of services.

Consider this: Global retail giant Wal Mart announces its entry into
India through a joint venture with Bharti. Reliance puts on its drawing
board a mega plan of Rs 25,000-crore to create 100 million sq ft of
retail space. The Aditya Birla group makes a retail foray with plans to
invest Rs 15,000 crore. The Tatas plan to participate in the retail race
with renewed vigour. Pantaloon plans to create a retail space of 30
million sq ft by 2009-10. Shoppers Stop may have 6 million sq ft of
retail space by the same time. Global retailers from the US, European
Union and Australia are all eyeing the retail revolution in India. Indian
players in the logistics space are keenly tracking these developments,
as they suddenly find their services in big demand. Although some
retailers, like Reliance, may have their own logistics subsidiaries, most
of the others are working with third-party providers. The Indian
logistics sector is at the beginning of a strong growth path. Not only
retail, there are other growth drivers like the manufacturing, FMCG and
auto components sectors and IT hardware sectors. Players in the
segment are, indeed, ramping up their capital expenditure
programme. the six major players in this sector — Concor, Gateway
Distriparks Ltd (GDL), Allcargo, SICAL, Transport Corporation of India
and Gati — will spend Rs 3,400 crore over the next three years to cash
in on the growth opportunities. These companies together invested
about Rs 500 crore in the last fiscal. The companies plan to expand
their service portfolios. For example, Concor and SICAL's future growth
area is cold chain logistics, GDL and SICAL's is container train
operations, while TCI and Gati's is warehousing. Other trucking and
courier companies are leveraging on their networks to offer express
and supply chain distribution solutions, apart from developing
expertise in 3PL (third-party logistics) services. The different sectors
within the logistics segment are also poised to absorb significant
investments. Edelweiss estimates that the container train sector
(thrown open to private sector recently) will see a capex of Rs 1,600
crore in the next three years, while warehousing will get Rs 200 crore,
trucking/XPS Rs 380 crore and offshore logistics Rs 250 crore.
However, the infrastructure will certainly see brisk development in the
coming years, with the Government attaching high priority to this
sector. The road sector alone will see investments of about Rs 1,52,000
crore between 2006 and 2012. Airports, which together handled a
cargo of 1.4 million tonnes last fiscal, as against 0.65 million in 1995-
96, will also see significant expansion and development.

Challenges facing by the logistic industry in India:

 Fragmentation and overlapping of responsibilities among the

various government agencies.
 Lack of IT infrastructure
 Lack of professionally competent logisticians
 Poor system management skills among different companies
 Poor road condition, slow speeds, traffic congestion in Indian
road
 The six major air ports carry only 88% of total air cargo
 Poor infrastructure in air ports for the successful operation air
cargo
 Poor ware housing and transportation infrastructure
  Handling less amount of bulk cargo in different sea ports of India.

Snapshot of Logistics Operations via Major Channels

Roads

 Road transport accounts for 85% of passenger traffic and 70% of

freight traffic
 Currently Indian roads handles over 1,176 bn tonnes Km of
freight per annum
 Total number of goods vehicle has increased from 82,000 in
1951 to 4.04m in 2006

Railways

 15% of passenger traffic and 30% of freight transport

 Freight contributes over 65% of its revenue
 In 2004-05 it handled 602 mn tonnes of freight
 95% of revenue comes from the bulk commodities such as Coal,
iron ore, cement, fertilizers and food grain. Coal alone
constitutes nearly 50% of all bulk freight

Air

 Cargo handled at airports has gone up at a CAGR of 7.8% from

0.65 mn tonnes in 1995-96 to 1.3 mn tonnes in 2004-05
 International cargo handled has increased at 6.8%per annum,
while domestic has increased at 9.9 % per annum
 5 major airports have accounted for 90% of total cargo handled
in the country

Water

 Major ports handle 90% of seaborne trade

 In 2005-06 major ports together have handled 423.41 mn tonnes
of cargo traffic out of the total 604.58 mn tonnes of cargo from
all ports in the country
 Container traffic has gone up by 14.2% during 2000-2006
 Characteristics of surface logistics in India

 The elements of logistics market and its components are mostly

like a traditional small sector.
 More than 1 million transport operators owning and running
above 4 million trucks.
 500 large transport operators having more than 100 trucks of
various sizes.
 The road transport system has two categories – primary &
secondary.
 Technological innovations have direct impact on transport
operation and reduce the operation cost and it is estimated
around Rs 33,660 crore in a year.
 Most of operators are providing stand-alone logistics solution in a
traditional technology.

Opportunities for Indian logistics sector

 Automotive industry is one of fastest and largest growing

industry.
 Automotive industry in India is growing at 18% per annum
creating a huge opportunity for Indian logistics industry.
 India’s auto export is growing 25% per annum
 Textile industry is growing 18-25% per annum in India
 India’s auto components & heavy engg. goods sector is
growing 15-18%.
 India’s foot wear business will generate US $ 858.8 million by
2015.
 Gross Turnover of Indian automotive industry

(Gross turnover as % of GDP of Indian Logistics Industry)

 Courier Industry: Business Of Trust

A courier is a person or company employed to deliver messages,

packages and mail. Couriers are distinguished from ordinary mail
services by features such as speed, security, tracking, signature,
specialization and individualization of services, and committed delivery
times, which are optional for most everyday mail services. As a
premium service, couriers are usually more expensive than usual mail
services, and their use is typically restricted to packages where one or
more of these features are considered important enough to warrant
the cost.

Different courier services operate on all scales, from within specific

towns or cities, to regional, national and global services. The world's
largest courier companies are UPS, followed by FedEx and DHL . The
first two being based in the United States and the latter now owned by
Deutsche Post, a German company, and offer services worldwide,
typically via a hub and spoke model. The fourth major player Gati is
basically an Indian company with its operation in five countries across
the world.

Types of courier:
In cities, there are often bicycle couriers or motorcycle couriers but
most couriers today use trucks and aircraft. Owner Drivers operate
alone or in small groups, covering both regular routes and often
undertakes 'overflow' work from larger courier companies and major
integrators.

Many companies who operate under a Just-In-Time or "JIT" inventory

method often utilize on-board couriers. On-Board Couriers are
individuals who can travel at a moments notice anywhere in the world,
usually via commercial airlines. While this type of service is the second
costliest - general aviation charters are far more expensive -
companies analyze the cost of service to engage an on-board courier
versus the "cost" the company will realize should the product does not
arrive by a specified time (i.e. an assembly line stopping, untimely
court filing, lost sales from product or components missing a delivery
deadline, organ transplants). There are companies that special in
utilizing professional on-board couriers such as Legal Air Worldwide link
title.

The courier services was once a part of the emergency program during
world war –I. During that time the non-medical persons were taken into
courier programme who assisted nurses by delivering supplies to
remote outpost clinics, grooming and caring for the clinics’ horses
assisting the nurse midwife in home visits and occasionally lending a
helping hand with home deliveries. Thus, the courier program was all
started in 1928. by the end of the world war-I the use of courier service
was further increased. To-day one comes across the plethora of courier
services that have mushroomed in the neighborhood and are available
with any time, for any sort of delivery to any place in this world. With
the advancement of the technologies, speed is not only consideration.
These days various courier companies are vying with one another to
provide specialized packaging, multi-centre coordination, temperature
control and on line monitoring of their parcels and documents etc.

There are various factors like the growth of the industrial segment,
growth in export and import and overall economic scenario of the
country which have contributed to growth of the courier industry. The
courier industry has world over been recognized as an essential and
indispensable part of any economy. Various international companies
are marked their presence the world over with their specialized
features and customerized value added services. The couriers abroad
are not limit to delivery of documents or parcels but they are also
transport temperature sensitive biomedical products and infectious
diagnostic samples with a promise of same day delivery to any parts of
the world. World courier company of Australia is one such company,
which has successfully transported human organs for transplant,
handled cryogenic shipments and also live animal transportation.

Other companies engaged in this service are TNT, which has spread its
network in Europe, Asia North and South America. Similarly UK’s
premier courier company courier Net is specialized in online booking
services that saves customers’ time and provides facility to its
customers to track their packages from collection to its final delivery
and provides real time proof of delivery. The Indian cargo giant Gati is
the 1st company who has introduced such type facilities to its
customers in India.

As compared to the advanced countries indian courier industry with a

combined turnover in excess of Rs 20 billion is still in its blooming
stage. Even the courier industry of China is 5 times greater than ours.
India has more than 2300 courier companies. The courier industry in
india is disintegrated with nearly 20 in the organized sector, 2000 in
the semi organized sector and the rest are in the unorganized sector.
There are few major players in organized sector who have a combined
market share closer to 90%. Though many companies are emerging in
the organized sector, four major players dominating the Indian courier
market are Gati, AFL, Blue dart express and first flight.

The Indian courier industry is not regulated and entry barriers are not
high.However, it is a manpower intensive service requiring a pool of
trained manpower to provide seamless service and sustain in the
market. Most of the large Indian courier companies of today have had
international alliances in the past that have helped in enhancing its
manpower skills and deploy contemporary

Blue dart have a tied-up with DHL and Elbee had collaboration with
UPS. The collaboration helped these pioneers to ramp up in reaching a
critical mass and also deploy process engineering methodology to
progressively reduce the operational cost without compromising the
quality in service. Focus was also maintained on developing the
nascent industry and brand building.

Historically indian courier industry started with the growing resentment

for the postal service during the seventies. The angadiyas especially in
Mumbai offer point-to-point overnight courier services to destination
Gujarat at attractive rates. In 1979, DHL entered in indian market
primarily for handling international courier shipment out of India. In
course of time they started providing the domestic services in
partnership with domestic players. During the late eighties many
courier companies burgeoned like First flight, overnite & blaze flash
etc. These courier companies focused on domestic business
opportunities. This period also saw the growth and consolidation by the
domestic major like Bluedart and Elbee both of whom acquired a
freighter aircrafts for quicker services and made in-roads in the well
entrenched traditional postal services. The later years saw the entry of
another Indian courier giant Gati which enjoys market leadership yet in
the Indian courier market.

The advent of customers and the rapid growth of information

technology boosted the performance and service standards of the
courier industry as the leaders in this industry were among the first to
embrace the emerging technologies solution to revolutionize their
services. Further internet and e-commerce activities specially the
business-to-business (B2B) and business-to-consumer (B2C) models
have generated immense business potential helping the courier
companies in saving cost and managing inventory more efficiently.

The courier companies has changed the environment and the way
people corresponded, communicated and distributed packages. They
are now also able to accurately identify and anticipate changing
customer needs and to respond and service them. Today, the courier
companies become an important part of the supply chain for many
industries. They have almost single-handedly expanded the market.
Today, the Indian market – both domestic and international – is
estimated at Rs. 25,000 million. The courier companies’ market share
is 35% of the domestic, organised has an in-house development and
investment in technology, to date, has been in excess of Rs. 570.

Courier Industry in the world

The express industry globally is estimated to have generated total

sales revenue (i.e. turnover) of US$130 billion in 2003. While the
Courier industry itself is a small part of the global economy, it has been
growing very rapidly. Stripping out the effects of inflation, the courier
industry’s turnover is estimated to have risen by almost 35% in real
terms since 1998 – i.e. at an average annualized rate of almost 6% a
year, nearly 2½ times the rate of growth of the world economy as a
whole. USA forms the largest courier market in the world, with
estimated revenues of US$59 billion in 2003; the courier sector now
accounts for over 60% of the US domestic air cargo market. With
revenues of US$33 billon and US$26 billion respectively, the European
and Asia-Pacific markets for courier services have significant scope for
further expansion as companies increasingly adopt best international
business practice with regard to time-definite, guaranteed delivery.
The vast majority of courier deliveries are inter-regional i.e. between
countries and states within either the Americas, Europe or Asia-Pacific.
Courier deliveries between these three regions account for just under
10% of total courier industry revenues. Nevertheless, intra-regional
Courier deliveries generated revenues of almost US$11 billion in 2003.
The market for courier services in the rest of the world is estimated at
less than US$4 billion.

India’s courier industry

The courier industry in India is mainly dominated by private

companies. Same day work is offered by many small & big players.
Before 1990 the courier service was mainly dominated by the Indian
postal department. But people faced a lot of troubles while getting the
service offered by Indian Postal Department. Indian Postal Department
failed to offer some distinguished services such as speed, security,
tracking, and committed delivery times to its customers which led to
revolutionize the courier industries by the private courier companies.
The Indian courier market is mainly dominated by the courier giant
Blue dart, DTDC, XPS and Gati which are specialized in shipping
packages, non-documents & documents across the country and also
across the world with committed delivering time & security to its
customers’ material. The consignments handled by courier companies
in India can broadly be classified into two types viz. documents and
non-documents. Any material comprising of paper such as
correspondence, bill/invoices, brochures, catalogues, manuals, annual
reports, account details, books, files etc are categorized as documents.
The non documents consignment would include items that may/may
not have commercial value such samples, CKD units, small
machineries, electronic parts and goods, spare parts. Indian Courier
industry comprises Large organized service providers, EMS speed post
(Product of universal postal union), regional semi-organized service
providers and local un-organised service providers. There are over
2300 Courier companies operating in this space.
Quick facts about Indian courier industry:

 2,500 operators
 Rs 40 bn crore in revenues from servicing distribution needs in
India
 Rs 22.5 bn in revenues from servicing import/export needs
 Over 1 bn shipments moved
 Over 1 mn full time equivalent jobs
  Rs 25 bn investment in brands and infrastructure

Organised Sector: These service providers operate in domestic and

international markets. This sector also includes service providers in
international niche markets.

Semi-organised Sector: Operate by and large in the domestic

sectors, and has a reach within limited geographical area. This also
includes operators catering to center-specific niche markets (intercity).

Unorganised Sector: Operate in local (intra-city) markets.

EMS Speed Post: This is an express arm of the Department of Post

and
Telegraph, Government of India. EMS is the product of the Universal
Postal Union of which India is a founder member.

The organised sector dominates the courier industry in India,

accounting for 64% of the market in terms of revenues. The semi-
organised and un organized sector accounts for 30% of the courier
industry market size. The share of EMS speed post is estimated at
about 6% in FY’ 03.

6%
Organiz ed Sector
30%
S em i & Unorganized
S ector
64% E MS

Market Share of Indian Courier Industry

Organized Sector
These are the courier service providers having national and
international reach armed with fully equipped infrastructure and other
value added services. They have their own collection and distribution
infrastructure. This sector includes large Indian companies and MNCs.
Organized sector constitutes to about 66% of the total business mainly
catering to the document and non-document / commercial parcels. The
major user sectors are Pharmaceuticals, IT, Readymade Garments and
FMCG products.
Major Service Providers
The major domestic and international service providers are:
AFL Pvt. Ltd.
Blue Dart Express Ltd.
First Flight Couriers Ltd.
Overseas Courier Service
DHL Worldwide Express (I) Pvt. Ltd.
Blue Dart Express Ltd.
 Overnite Express Ltd.
Gati

Federal Express Corporation

Business Characteristics

The large service providers are technology driven companies with

major emphasis on customer service and speed. The organized sector
business thrives on:
· Speed of delivery - major operation through air, own fleet for surface
delivery
· Reliability - time bound delivery, insurance facility
· Technology - tracking facility, web enabled services

Semi-Organized Sector

The semi-organized sector comprises service providers operating

within a limited
geographical area. The operations could be between geographical
regions (North-
South; East-West), between states or between specific sectors
(Ahmedabad -
Mumbai, Delhi - Jaipur, etc.) i.e. domestic niche markets. Such
companies generally have their own network in the regions in which
they operate.
There are few local companies who book consignments bound for any
domestic
locations. However, such companies do not have their own distribution
network, and rely on the network of other similar companies in various
locations or act as
wholesalers to organized sector companies. The semi-organized
sectors match the reach of organized sector service providers. Semi
organized sector player, by and large operate in the domestic market,
however some of the semi organized sector player also accept the
international consignment and use the service of other major
international service providers. The business in document sector
predominates the total shipment handled.
Business Characteristics:

The semi-organised sector companies have their own network of

branches and franchisees in the regions where they operate. They
operate in tie up with similar
Companies in the neighboring regions. Some of the semi-organised
service providers also accept the international consignments. The
consignments are also shipped through co-loaders. The semiorganised
sector also generates its revenues through wholesale business
(acceptance of a sizable lot of consignments) from small local service
providers. There are some courier companies, which operate between
niche market sectors like major wholesale markets in India for specific
items. Such niche sectors are observed between Mumbai, Ahmedabad,
Baroda and Surat (all textile markets), Delhi (automobile parts),
Calcutta and Chennai (leather markets). In Mumbai such courier
companies (40 of them) have formed an association called Bombay
Courier
Association. Some local express/courier companies were observed to
operate independently, without any distribution network of their own.
Such companies book the consignments for any destinations. The
consignments are then handed over to organised sector or semi-
organised service providers.

Un-organised Sector
Un-organised sector of the courier industry comprises companies,
which have
restricted operations within the boundaries of a particular city (intra-
city couriers). Such companies are by and large found in metropolitan
cities and semi-metropolitan cities.

Business Characteristics:
Typically, such companies have one or more branches in a city, based
on the spread of the city and volume of the business from different
locations within a city. Intra-city couriers have dedicated personnel for
collection and distribution of consignments. The delivery schedules are
based on the urgency of the consignments. Almost entire market for
intra-city business is accounted for by documents. Intracity courier’s
carryout distribution of promotional materials, magazines and
newspapers. Large number of small service providers marks this
market. The major centers for intracity business are Mumbai, Delhi,
Calcutta, Bangalore, Chennai, Indore and Jaipur.
EMS Speed Post

EMS is the express arm of post and Telegraph department in India

operating in
association with other member countries of Universal Postal Union.
Both Speed Post Domestic Services and Speed Post International
Services are offered under the brand Speed Post. Electronic Track and
Trace System has been implemented for Speed Post and Express
Parcel Post wherein a customer can find out the status of his
consignment online through Internet. It has started operations in
national Speed Post Centers. At Present State Speed Post Centers are
not directly linked with the web-server. In the Tenth five Year Plan, it is
proposed to link all the State Speed Post centers with the web-server
for providing on-line track and trace service for all speed post articles.

Products and Services of the Courier Industry:

Products
In addition to the distribution of the consignments, courier service
providers offer
customer specific products. Various products and services offered by
the courier
industry are:

Courier (Document and non document)

This is the basic product of all express service providers. The time
bound delivery of consignments is ensured under this product. The
delivery time depends upon the distance between the pick-up and
delivery locations and type (document, non document) and size of
consignments. The general delivery time offered by the courier service
providers are:
· 12 noon delivery
· 24 Hour delivery
· 48 Hour delivery
· 72 Hour delivery
Door to door (by Air and surface)
Under this product the courier companies offer an option selection of
mode of
transport. If the customer does not specify the mode of transport, the
consignments are generally transported by air. In case of heavy
consignments and/or the pick- up and destinations are on the trunk
route then the surface may be used.

Services
The basic service of courier service providers is time bound delivery.
However in the view of the fierce competition, the service providers
offer value added services. Some of the value added services offered
by the courier companies are
· Pick-up
· Proof of Delivery
· Collection of cheque
· Payment after delivery
· Bill the consignee
· Monthly payments
· Tracking service
· Web enabled services

As is mentioned earlier, the consignments handled by the organised

sector service providers are largely non-documents. Usually these
consignments are high valued. Hence service providers offer track and
trace services. Under these services the customer is able to trace the
movement of his consignment through Internet from his own office
premises. The leading service providers are also offering 10 and 15
boxes. These boxes relieve the customer of packaging difficulties and
ensure the safe delivery of his consignments.

1016
Domestic
International
1420

Market Share of Courier Industry (In crore)

EMS 45

EMS

Semi/Un
Semi/Un Organized
Organized 15
Sector
Sector
Organized Sector

Organized
950
Sector

0 200 400 600 800 1000

 Market share of Courier Industry in International Sector

EMS 200

EMS

Semi/Un
Semi/Un Organized
Organized 561
Sector
Sector
Organized Sector

Organized
665
Sector

0 200 400 600 800

Market share of Courier Industry in Domestic Sector

Market share of organised player

The revenue of organized sector player in domestic and international
courier business for the year 2004-05 was estimated to the tune of
about Rs 1,628 Crore (Domestic Rs 665 Crore + International Rs 950
Crore). The international courier business is mainly the domain of large
MNC players.

Express Industry: Break-up by consignment type

Primarily, two types of consignment handled by express industry in
domestic and
international market; documents and non-documents. On overall basis
Document
accounts for about 60% of the total organised sector revenue valued at
Rs 977 crore. Non-documents constitute to another 40% of the total
organized sector revenue valued at Rs 651 crore.
40%
Documents
Non-documents
60%
 Indian Cargo Industry

In today's business big or small, domestic or global, the value of time is

clearly immense.Companys today is focusing on how it can deliver
goods and services to global markets in a timely and reliable manner.
Besides efficiency in pick up, timely delivery, timely information and
availability of other infra structural facilities for efficient handling of
cargo transportation have become the need of the day. In other words
prompt customer service is what gives competitive edge to the players
of the cargo transportation industry in today's rapidly changing
environment. It was this need which stimulated the growth of the
express cargo industry worldwide.

The express cargo industry is judged primarily on the following key

parameters:

Speed of distribution

World wide service

Security and reliability

Value added Service

Customer care

To meet the above needs , the express industry is developing

effective use of information technology, which forms the backbone of
the industry. Right from the pickup point, the precise status of the
consignment needs to be monitored at every stage of its journey.
Secondly the use of multi modal services assumes importance in order
to provide turnkey solutions to the customer. Also, guaranteed timely
delivery gives the required confidence to the customer to reduce his
inventory positions at various levels of distribution.

The Key stage of a typical express delivery

Indian Scenario

Today the Indian customer's standard and the level of

expectation have gone up dramatically. They have become world
class customers and thus expect world class services. Hence it is
customer service which is going to give the competitive edge to any
industry in the future. The Indian cargo sector growing at 12%
contributing 4.9% GDP.

The domestic express cargo industry is meeting the customer

satisfaction needs by providing speedy and safe delivery of cargo like
documents, packages, samples, exhibition material etc. Domestic
market for door-to-door express cargo market is more than Rs.400
crore and the current rate of growth is in a region of a healthy 35%
per annum. The industry has been making an increasingly important
contribution to the economic growth of the country by providing
logistics to the cargo movement.

Sector-wise Market Share- Express Cargo

Express cargo can be segmented in four categories as Organized

Sector, which operates in domestic as well as international markets,
semiorganised sector, unorganized sector and EMS speed post,
which is express arms of the postal department.

Indian Cargo Sector has divided in to three broad areas.

1. Surface
2. Air
3. Water
According to economic survey 2005-2006, govt of India, cargo industry
has experienced a significant revival with growth of 5.3%, which is also
reflected in freight traffic movements in major ports, airports and
railways. The drivers of change are a) technology b) global
competitiveness c) Benchmarking to the best international practices
and India is taking full advantage of all the three factors. The
industrialized countries have appreciated the IT revolution in India.
With the changing economic scenario, factors such as globalization of
markets, international economic integration, removal of barriers to
business and trade and increased competition have enhanced the
need of transportation. It is one of the most important infrastructure
requirement which is essential for the expansion of opportunities and
plays an important role in making or breaking the competitive
positioning.
Transport volumes in India remain much less than those in the
developed countries. India has still to go a long way in strengthening
its transportation network. The countries transportation network
suffers from several inadequacies and, in particular it has little
resilience to deal with unforeseen demands.

Transportation, like all industries is largely influenced by information

and communication technologies with the focus being on knowledge of
customer needs and value added services. Surface transport is
provided by the Road and the Indian Railways (primarily for carrying
low value bulk commodity, mostly for the government sector). Cargo
Road Transport is entirely in the hands of the private sector. An
estimated 1.2 million trucks (9 tons capacity) crisscross the country
covering more than 80,000 kilometers of roads. In India road
transportation is preferred for cargo movement, where flexibility of
routing assumes importance. It facilitates door-to-door delivery,
overcoming unnecessary delays which normally take place in the other
modes of transportation.
In today's business big or small, domestic or global, the value of time is
clearly immense. Business today is focusing on how it can deliver
goods and services to global markets in a timely and reliable manner.
Besides efficiency in pick up, timely delivery , timely information and
availability of other infrastructural facilities for efficient handling of
cargo transportation have become the need of the day. In other words
prompt customer service is what gives competitive edge to the players
of the cargo transportation industry in today's rapidly changing
environment. It was this need which stimulated the growth of the
express cargo industry worldwide.

The link between transport infrastructure and economic development

is like giving water to a tree. The key factor, which largely influences
the economic growth process, is the transportation infrastructure.
According to the World Development Report 1994, the infrastructure
capacity grows in concert with economic output. An 1% increase in the
stock of infrastructure is associated with a 1% increase in GDP across
countries. India is a country where most of the people reside in rural
area. And depend mostly on agricultural activity. In order to get
remunerative price on their products, they have to transport the
products to the marketing area. For these purpose there must be well
road links to the market area and the nearest railway station.

The railway, on the other hand, provides the service between the
area of production and the consumers at a distant place and
between manufacture in the town and the agriculturist in the
village. With the globalization of economic process, the role of
shipping transport has been crucial for national economic growth.
The Indian economy is passing through an interesting phase. The
growth in GDP is ranging between 7% - 8% and the rate is likely to
be sustained over the next five years and the growth drivers are
clearly shifting from agriculture to services.

Opportunities for Indian Cargo Industry:

Over 380 million Indians have an annual house hold income of over
$10,000. This is expected to increase expected to increase to 550
million by 2010. The market for basic goods such as groceries and
textiles is already large, driven by the demands of an enormous
population.
 Over 100 million telephone subscribers, growing at over 25
million p.a.
 Over 8 million TV sets and 4 million refrigerators are sold
annually with a growth rate over 20% p.a.
 Over 8.6 million production of vehicles with a growth rate over
35% p.a.
 Abundant mineral resources
 India is the 2nd largest in manganese and 1st in producing
chromites.
 India is largest producer of Tea and Milk in the world & second
largest producer of vegetables, fruits and Wheat etc.
 India’s retail boom has created a major opportunities for
cargo industry in India.

Express industry of India

The express market in India can be characterized by the existence of
organized, Semi organized and unorganized players. There are over
2000 express companies operating in India. About 20 companies in
organized sector, 25 in semi organized sector and rest of the
companies are in unorganized sector. The present express market is
estimated at Rs.2493 crore. The domestic market constitutes to about
59%, value at Rs 1,468 crore. The international market constitutes of
41% of the total industry, valued at Rs 1,025 crore.

41%
Domestic

59% International

Total Express Industry: Rs 2,493 crores

Organized sector constitutes about 64% of total market, Valued at Rs
1,628 crores. Semi organized sector and un organized sector constitute
to about 30% of total market, valued at 618 crores. The share of EMS
speed post, express arm of Indian post is pegged at 6%, valued at RS
247 crores.

6%
Organized Sector
30%
Semi & Unorganized
Sector
64% EMS

Total express industry: Rs 2493 crore

EMS speed post is express arm of Indian postal is out of come of
international postal union. The Sales revenue of EMS speed Post for the
year 2002-03 is estimated at Rs 247 crore.

49%
Documents

51% Non-Documents

Market share of documents & non documents

in domestic business.

The express industry in India is sustained the growth with emerging

business opportunities in various user sector. Liberalization of Indian
economy and integration of international trade has attributed to the
sustained growth in express industry. The growing customer
requirement and scaling up of operation has led to the heavy
investment by the express industry in infrastructure set up, hub and
new technology. The express industry has witnessed fundamental
changes in its composition over the past few years, owing to fierce
competition in the business. The international sector now contributes
to 41% of total revenue, as compare to over 50% market in 1990s.
During past 4-5 yrs new association and strategic sales arrangement
have been between companies.
The unorganized sector is thriving on price and unable to keep pace
with the market. They are not reliable and time bound service
providers. The express service provider operates on economies of
scale where large companies cater to the higher business volume. The
future year may witness a scenario wherein unorganized sector will not
exist any more at a national level due to its inability to keep pace with
the technology and customer demand.

The growth in express industry is dependent on extent of business

activity. Historically the growth of express industry has been
dependent on the growth in domestic business and international trade.
However recent year has witnessed the growth of emerging business
area in the new economy such as service sector, banking sector and IT
industry. Based on current estimates, the express industry is expected
to touch the Rs 6,203 crores mark by FY 08.

7000 6203

6000
5169
5000 4308

4000 3590
2992
3000 2493
Series1

2000

1000
X- Year
0
2002- 2003- 2004- 2005- 2006- 2007- Y-
03 04 05 06 07 08 AMOUNT
(IN CRORE)

Projected future market for express industry in India

(Source:-EICI)

Indian Cargo
Industry

Road Rail Water Air

Indian Cargo Industry structure

Roads
 Roads are the dominant mode of transportation in India today.
They carry almost 90 percent of the country’s passenger traffic
and 65 percent of its freight. The density of India’s highway
network -- at 0.66 km of highway per square kilometer of land –
is similar to that of the United States (0.65) and much greater
than China's (0.16) or Brazil's (0.20). However, most highways in
India are narrow and congested with poor surface quality, and 40
percent of India’s villages do not have access to all-weather
roads

3315231
3500000
3000000 2650000
2500000
2000000
Series1
1500000
1000000
467763
500000 65569 131899

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India
n Road Network
length (NHAI 2005)

Road Development in India

The economic development of the country and the consequent

surge in the demand for transport services, and also the strategic
needs of the country necessitated expansion as well as improvement
of the road network. The country took up this uphill task in a planned
manner.

Recognizing the need to develop arterial routes to link the Union

capital with the state capitals, major seaports and other highways, the
National Highways Act, 1956 was enacted. In 1957, the chief
-engineers (road and bridges development) of the Central and the
state governments met in Bombay. Having taken into account the size
of area, population, regional levels of development and feature
potential, the engineers presented a 20-year Road Development Plan
(1961-81) in 1958 which is popularly known as the Bombay Plan.

The Plan anticipated an increase in road length from 6. 10 lakh km in

1960 to 10.50 lakh km in 1981. The Plan target was to achieve a
density of 32.5 km of roads per 100 sq km of area, 44 km for
developed agricultural areas, 19 km for semi-developed and 12 km for
underdeveloped areas at an estimated cost of Rs 5,200 crore, including
Rs 630 crore for village roads.

The Bombay Plan set a target of 8.88 lakh km of major district roads,
order district roads and classified village roads. This target was
exceeded in 1978 with the construction of 9.7 lakh km of roads. The
target of 98,000 km of state highways could only be achieved a decade
later. Of the target of 52,000 km only 34,619 km was achieved till 1
April, 1997. Another Road Development Plan (1981-2001), known as
the Lucknow Plan of the Indian Road Congress, has made a case for
66,000 km of National Highways by 2001 A.D.

The National Transport Policy Committee, set up in 1978 under

the chairmanship of B. D. Pandey, submitted its report in May 1980. It
recommended 37 roads with a 12,955 km length for inclusion in the
National highway network. Out of these, only 11 roads, aggregating
3,595 km length, were completed over a span of one-and-a-half
decades.

The Government of India instituted an Asian Development Bank-

aided study in February 1990 on Development of Long-Term Plan for
Expressways in India. The study, was completed in 1991 and it has
recommended development of 10,020 km of expressways by 2015 at
an estimated cost of Rs 58,000 crore.

Growth Trends

Growth of Road Freight Industry

During the period 1951 to 1994, the average yearly growth of traffic
has been of the order of 8 to 10%. (Source: Transport India 2000
Conference Paper)

Fig. 2 indicates that freight traffic has increased from 6 billion tones
kilometers (BTK) in 1951 to 800 BTK in 1999. Such a rapid growth
has occurred mainly owing to the flexibility and accessibility offered
by road transportation.

Growth of Vehicular Traffic

Since Independence, the number of motor vehicles in the

 country has been increasing rapidly. The number of goods vehicles
increased from 82,000 in 1950-51 to 17.96 lakh in 1994-95. During
the same period, the number of buses increased from 34,000 to
4.25 lakh. The total vehicle population swelled from 3.06 lakh in
1950-51 to nearly 302.87 lakh in 1994-95.

The private sector, mostly unorganized and comprising

individual operators, has had a dominant presence in the field of
road transportation. It runs almost the entire goods-carrier industry
and also owns nearly 73.75 per cent of the buses at present. After
the Road Transport Corporation Act 1950 became operational,
almost all states and union territories have nationalized passenger
transport in varying degrees by setting up corporations. In other
cases, these services are operated by municipal corporations or
registered companies. At present, the number of such bodies stands
at 69 with a fleet strength- of 1, 11, 538 buses carrying 6.88 crore
passengers every day. The Motor Vehicles Act 1988 replaced the
Motor Vehicles Act 1939 and introduced far-reaching changes in the
road transport sector.

The rapid growth in the number of goods vehicles is indicative of the

increased volume of freight handled by road.

The no. of goods vehicles has been steadily increasing; however it is

still not sufficient to meet the high demand. The annual growth of
trucks during the period 1995-96 has been negative (-6.3%) as
indicated in Fig.2 indicating that during this period the growth of other
goods vehicles such as LCVs was far more greater, whereas it has
sharply increased to 13.5% between 1996-97.

Indian Road Freight Industry

Organized Vs. Unorganized Sector

The road freight industry stands out unique with the majority of the
market share held by the unorganized sector. Out of the entire market
size of approximately Rs. 38,000 crores, Rs 6000 crores is with the
organized sector and the remaining with the unorganized sector

Organised vs Unorganised

India’s
total highway
mileage
 (Details of cargo transported through road & rail mode)

Railways.
Indian Railways is the largest railway in Asia and the fourth most
heavily used system in the world. It carries some 14 million passengers
a day and is one of the world’s largest employers. Till recently, the
railways played a leading role in carrying passengers and cargo across
India’s vast territory. However, with tariff policies that overcharges
freight to subsidize passenger travel, the moving
freight is increasingly shifting from railways to roads. But the railways
have been
losing their share of freight to road consistently over the past 20-30
years, mainly due to the relative flexibility of train movement. Until the
formation of inland container depots in 1990s it was extremely difficult
to load goods to wagon. Most companies needed sidings, which would
be expensive. Today, ICDs have made exports and import made easier
and concor, the monopolistic multi modal provider, has done a good
job of linking ICDs to the ports. Overall rail movement remains
cumbersome for most except some materials like coal and steel.
Wagons have been the bane of the railways for many years. They have
simply not been enough to ferry cargo seamlessly. Contrast this to
nearly 3mn trucks and cargo carriers that exists on India’s roads. The
rail traffic is growing and is expected to touch 624 mn tons in 2006-07
from 484 tons in 2001-02.
Similarly freight tonne KMs are also expected to increase from 323
tons in 2001-2002 to 396 bn tons in 2006-07.

Ports.

Sea traffic is expected to carry 95% of India’s export and so ports are
very critical for handling the goods, planning expansion and linking
seamlessly to production centres across India. India may produce
world class goods in many industries but these goods reach in the
market where they have the demand. And these days geographical
distances are no excuses for not supplying in time. This is where port
plays an important role. With transport volumes expanding more
rapidly than the GDP, and the road and rail network suffering from
chronic congestion, water ways is a feasible option as it combines
efficiency with sustainability. Port plays an important role in supply
chain of most of exporter from India. Ports have to get ship in and clear
them out and dispatch them loaded as soon as possible. India has 12
major and 140 minor ports along its vast coastline. These ports serve
the country’s growing foreign trade in petroleum products, iron ore,
and coal, as well as the increasing movement of containers.

Key Statistics:

India has

 Twelve major ports

 One hundred and forty minor ports
 Seventy five percent of the traffic is by major ports
  India ranks 21st in the container traffic in the world
 The ports spend approx of Rs.8bn per annum on infrastructure,
Rs 40 bn worth of private sector investment stand approved.
 Inland water transportation remains largely undeveloped despite
India's 14,000 Km of navigable rivers and canals.

Tankers

Bulk carriers

12% 4% 25%
Container Ships

General Cargo
13% ships
39%
7%
Passenger Ships

Other

An overview of cargo Ships in Indian seaports

Cargo at Indian ports

 180
154.3
160
140
120
100
71.3 Series1
80 61.1 62.4
54.3
60
40
13.5
20
0

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Port Traffic projections 2006-07 (mn tons) (Source: Ministry of

Shipping)

Opportunities

1. Construction or operation of container terminals

2. Construction or operation of break-bulk, multipurpose and

specialized cargo berths

3. Warehousing, container freight stations, Storage facilities and tank

farms

4. Cranage and handling equipment

5. Setting up captive power plants,

6. Dry docking and ship repair frailties

Aviation.

Aviation holds a small but significant value share of India’s freight

market. Emerging industries like telecom, ITES, BPO, Gems and fashion
have developed faster and better than ever before and are using air
logistics much more as they are highly time sensitive industries. A lot
of liberalization has occurred since 2002. Private airlines have been
taken off; newer airports have been linked by low cost regional airlines.
India has 60 airports, including 11 international airports. The dramatic
increase in air traffic for both passengers and cargo in recent years has
placed a heavy strain on the country’s four major air ports. It is
estimated that the cargo traffic grow at over 20% p.a. over next five
years and it will cross 3.3 million tonnes by 2010. Government is now
focusing major investment for construction of new air fort and
upgrading of existing air port. Many Indian and MNC cargo companies
are preferring cargo transport through air. Blue Dart, the leading air
cargo operator within India, already has six air hubs across India and
has tie-up with MNC major DHL for inbound traffic. Gati, the market
leader in Indian cargo sector has already tie up with Indian Airline for
its inbound and outbound traffic and is going to start its air cargo
operation with its own flights in July, 2007. Aviation plays an important
part in overall logistics and supply chain management due to speed
and efficiency combined with low cost carriers and infrastructures
facilities at various metro and non metro air ports.

1.6 1.5

1.4 1.3

1.2 1.1
1
1 0.9

0.8 Series1

0.6

0.4

0.2

0
FY 02 FY 03 FY 04 FY 05 FY 06

Cargo Movements (mn tones) (Source: Ministry Of Civil Aviation)

 800
700
700

600

500
400
400 Series1

300

200

100

0
2005 2012

Projection of Indian Air cargo (In bn)

Challenges:

The major challenges facing the sector are:

India’s roads are congested and of poor quality.

Lane capacity is low - most national highways are two lanes or less. A
quarter of all India's highways are congested, reducing truck and bus
speeds to 30-40 kmph. Most roads are of poor quality. Road
maintenance remains significantly under-funded - only around one-
third of maintenance needs are met. This leads to the deterioration of
roads and high transport costs for users.

Rural areas have poor access.

Roads are significant for the development of the rural areas - home
to almost70 percent of India's population. Although the rural road
network is extensive, some 40 percent of India’s villages do not
have access to all- weather roads and remain cut off during the
monsoon season. The problem is more acute in India's northern and
northeastern states which are poorly linked to the country’s major
economic centers.
The railways are facing severe capacity constraints.

All the country’s high-density rail corridors face severe capacity

constraints. Also, freight transportation costs by rail are much higher
than in most countries as freight tariffs in India have been kept high to
subsidize passenger traffic

Ports are congested and inefficient.

Port traffic has more than doubled during the 1990s, touching 385
million tons in 2001-02. This is expected to grow further to about 900
million tons by 2011-12. India's ports need to significantly ramp up
their capacity and efficiency to meet this surging demand.

Airport infrastructure is strained.

Air traffic has been growing at over 15 percent a year leading to

severe strain on infrastructure at major airports, especially in the Delhi
and Mumbai airports which account for around 50 percent of nation’s
air traffic.

Express cargo industry is undergoing phenomenal growth due to the

rising popularity of e-commerce. There is bound to be conspicuous
diversion of low volume, high value tiny packages from traditional
cargo to express mode in the coming years. Keeping that in view, there
is lot of scope to flourish the express cargo industry in Indian scenario.
To yield the fruit of these positive changes it is important that the
industry works in close tandem with the regulatory agencies and the
role of the latter should be of a facilitator rather than that of a
regulator.
 Brand Recall

Brand Recall is the extent to which a brand name is recalled as a

member of a brand, product or service class, as distinct from brand
recognition. Common market research usage is that pure brand recall
requires “unaided recall”. For example a respondent may be asked to
recall the names of any cars he may know, or any whisky brand he
may know.

Some researchers divide recall into both “unaided” and “aided” recall.
“Aided recall” measures the extent to which a brand name is
remembered when the actual brand name is prompted. An example of
such a question is “Do you know of the “Gati” brand?” In terms of
brand exposure, companies want to look for high levels of unaided
recall in relation to their competitors. The first recalled brand name
(often called “top of mind”) has a distinct competitive advantage in
brand space, as it has the first chance of evaluation for purchase.
 Gati’s Brand recall as a “courier and cargo” service provider

Traditionally Gati has been operating with a philosophy of one product

suitable for all markets. Often the market reach and presence is
moderated by the product scope and utility. Gati’s brand recall as a
cargo service provider is excellent in the market as Gati cargo is
providing a unique value added services to its customers. Gati cargo
has achieved a good customer satisfaction level. But Gati Courier still
now has not fetch a good brand recall. It is due to low positioning of
Gati Zipp and Gati Savor, poor brand awareness among the customers.
Still now Gati courier is struggling to fetch a good brand recall in
courier market even the presence of courier giant DTDC and Blue Dart
which are already enjoying a high level of Brand Recall.
 PROJECT DESIGN

This presents the every objective of the entire study and also the
methodology and tools adopted in collection and analysis of data by
the researcher. This also presents the nature of information required
the source data, sample, survey universe details and limitations of the
study.

Objective of the study:

• To find out the market potential for products/services of Gati in

Hyderabad.

• To know the position of Gati Ltd. with respect to its competitors.

 • To study the attitude of customers on services offered by the
company.

• To study the brand recall of Gati Cargo and Gati Courier among
the people of Hyderabad.

Possible value addition to the company through this study:

• Attracting the customers with more innovative strategies

• Segmenting its market more accurately
• Identifying new segments
• Trace out the customers’ perception
• Value added to the old customers

Survey Universe Details:

For market survey on “understand the brand recall of Gati brand

in cargo and courier needs” I have selected the Hyderabad City as
the survey universe.

About the Hyderabad:

Hyderabad is the capital city of the Indian state of

Andhra Pradesh. Situated in the Telangana region of Andhra
Pradesh, the city has an estimated population of 6.1 million people
(61 lakh), making it the 6th most populous metropolis in India. This
city was named after the beloved queen of Muhammad Quli Qutb
Shah “Hyder Mahal” who is popularly known in Indian history as
“Bagmati”.
 Hyderabad City Map (Map not to scale)

Geography and climate:

Hyderabad city is located in the South Indian state of Andhra Pradesh,

in the region of Telangana. It lies on the Deccan Plateau, 541 meters
(1776 ft) above sea level, over an area of 625 km² (244 mile²).

Population:

The population of the city is 3,632,094 which mainly consists of

lower class, lower middle class, higher middle class and upper class.

Upper Class

24% 16%
Higher Middle
Class

26% Lower Middle

class
34%
Lower Class

Industries:
 The Hyderabad city is mainly dominated by IT, ITES and BPO
industries. The city also has a good growth of pharmaceutical
industries. Companies like Microsoft, Oracle, Infosys, and TCS, Dr.
Reddy’s Lab, Matrix Lab, Aurobindo Pharmaceutical, Wipro Infotech
and HCL infosystems have open their production and research units in
Hyderabad.

Education and research:

Hyderabad is an important seat of learning in southern

India. The city is home to three Central Universities, houses two
Deemed Universities, and six State Universities. Among them is
Osmania University, established in 1918, it is the seventh oldest in
India and the third oldest in South India. Many institutes for technical
education like Jawaharlal Nehru Technological University, International
Institute of Information Technology, Acharya N.G. Ranga Agricultural
University , and medical colleges such as the Gandhi Medical College
are located here. Also based here is Indian School of Business,
Hyderabad Central University and the National Academy of Legal
Studies & Research. Hyderabad has various research institutes such as
the Indian Institute of Chemical Technology, Centre for Cellular and
Molecular Biology and Central Institute of English and Foreign
Languages ( CIEFL was accorded Central University status recently). It
is the home of Maulana Azad National Urdu University as well as BR
Ambedkar Open University. Defence Research and Development
Organization (DRDO) had set up Defence Electronics Research
Laboratory (DLRL) in 1962, to work on the design and development of
communication and radar systems. Currently DLRL is involved in the
Integrated Guided Missile Development Programme (IGMDP) of DRDO.
Nuclear energy sector has a strong presence with three organizations
under Department of Atomic Energy (India) such as Atomic Minerals
Directorate for Exploration and Research (AMD), Nuclear Fuel Complex
(NFC) and Electronics Corporation of India Limited (ECIL), located here
for conducting basic research and providing the much needed
materials and technology required for carbon free energy generation.

Transport:

Hyderabad is connected to the rest of the country by National

Highways—NH-7, NH-9 and NH-202. Hyderabad has a light rail
transportation system known as the MultiModal Transport System
(MMTS) which offers connectivity between rail and road transport for
the facility of the commuters. The South Central Railway headquarters
are located at Secunderabad. The three main railway stations are
Secunderabad Railway Station, Hyderabad Railway Station (Nampally)
and Kachiguda Railway Station. The Begumpet Airport has domestic
and international terminals.

Marker Profile:

Hyderabad is known as the city of pearls, lately, for its IT Companies.

Products such as silverware, saris, Nirmal and Kalamkari paintings and
artifacts, unique Bidri handcrafted items, lacquer bangles studded with
stones, silk-ware, cotton-ware and handloom-based clothing materials
are made and traded through the city. Hyderabad is a major center for
pharmaceuticals.

Methodology:

The objective of the present study can be accomplished by

conducting a systematic Market Research (MR). This MR process
that will be adopted in the present study consists of the following
stages:
 Defining the problem and research objective:
The Research objective states that what information is needed to

solve problem-finding impact of service marketing.

Sample Size:

The Sample size for this study includes 40 residentials, 30 SMEs

and Industry Houses in Hyderabad.

Sampling Technique:

To study the projects, a simple random sampling technique is used.

 Source Data:

The Data collected for this project work were from two sources:

1. Primary Sources
2. Secondary Sources

Primary Data:

The primary data have been collected from primary sources.

The data from consumers were collected mainly from observational
study and unstructured interview.
The retailer and industry survey was done after the consumer survey
and the data was collected through a structured questionnaire.
Secondary Data:

Secondary data were collected by interacting with my

company guide Mr. Mathew Joseph, Manager – All India Retail and also
with other managers and employees of Gati, Secunderabad. Some data
are also collected from website of Gati and other website.

Tools Applied:

Analysis of primary data was done mainly using statistical

tools like mean, mode, tally method and graphical analysis. The
analysis has been three phases i.e. mass market, retailer/SME and
corporate/industry houses

Limitations:

• The data collected from retailers/SMEs, Consumers and

corporate /industry houses were bound to have some
factors of biasness in them. Hence necessary
adjustment made to correct it.
• Time was limiting factor to conduct extensive study.
• Very less amount of sample size was taken due to
limited period of time.
• Casual attitude of respondent at time stand as
hindrance to the present study.
MARKET SURVEY
RESULTS
 Survey results for Cargo
 Survey results for courier
 Survey Results (CARGO)

1. Which cargo company do you use?

Gati 20 66.66%
Speedage 4 13.33%
AFL 5 16.66%
XPS 4 13.33%
TNT 3 10%
Blue Dart 1 3.33%
Professional Courier 2 6.66%
Local Transporters 6 20%
Safexpress 2 6.66%
FedEx 2 6.66%

6.66% Gati
Speedage
6.66%
AFL
20%
XPS
6.66% 66.66%
TNT
3.33% Blue Dart

10% Profess ional Courier

13.33%
Local Transporters
13.33%
Safex press
16.66%
FedEx

2. Type of companies using cargo services

Chemical Industries Chemical Industries

13.33%
Engg.equipment Manufacturer 20%
Garments Engg.equipment 11.11%
Manufacturer
Electrical & Electronics Industries Garments
17.77%
6.66%4.44% 13.33%
Pharmaceutical Industries 26.66%
26.66% 20%
FMCG Industries Electrical & Electronics
Industries
6.66%
IT Hardware industries 11.11% Pharmaceutical 4.44%
17.77% Industries
FMCG Industries

IT Hardware industries
 3. Why do you use this cargo company?

Company Brand Name Good Service Economic Rate

Gati 0 70% 0
AFL 0 13.33% 63.33%
Safexpress 0 6.6% 56.66%
Local 0 0 73.33%
Tranporters

0.8 73.33%
70%
0.7 63.33%
0.6 56.66%

0.5 Brand Name

0.4 Good Service
0.3 Economic Rate

0.2 13.33%
0.1 6.60%
0 0 0 0 0 0
0
Gati AFL Safexpress Local
Tranporters

4. How do you know about this company?

Near to my office/company 13.33%
Banners & Hoardings 0
Cargo Company vehicle 26.66%
Visiting of Company Executives 63.33%

13.33%
0 Near to my
office/company
Banners & Hoardings

26.66%
Cargo Company vehicle
63.33%
Visiting of Company
Executives

5. How do you rate your experience with the following?

A. Service

Name Of the Excellent Good Average Poor

Company
Gati 16.66% 26.67% 50% 6.66%
AFL 0 13.33% 30% 0
XPS 20%
Speedage 0 0 24.37% 0
Safexpress 0 6.6% 33.33% 3.3%
Professional 0 0 10% 0
Couriers
Local
60.00% 0 0 13.33% 0
50%
Transporters
50.00%
Excellent
40.00% 33.33%
30% Good
30.00% 26.67% 24.37%
20% Average
20.00% 16.66% 13.33% 13.33%
6.60% 10% Poor
10.00% 6.66%
3.30%
0 0 00 0 0 00 0 00 0
0.00%
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B. Price

Name Of the Excellent Good Average Poor

Company
Gati 0 3.3% 6.6% 40%
AFL 0 0 13.33% 0
XPS 0 13.33% 16.66% 0
Speedage 0 0 30% 0
Safexpress 0 0 20% 0
Professional 0 3.3% 0 0
Couriers
Local 0 0 23.3% 0
Transporters

0.45 40%
0.4
0.35 30%
Excellent
0.3
23.30%
0.25 20% Good
0.2 16.66%
13.33% 13.33% Average
0.15
6.60% Poor
0.1
3.30% 3.30%
0.05 0 00 0 0 0 00 0 00 0 0 00 00 0
0
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C. Response & Over All Performance

Name Of the Excellent Good Average Poor
Company
Gati 0 26.66% 33.3% 0
AFL 0 0 13.33% 0
XPS 0 16.66% 0 0
Speedage 0 0 23.3% 0
Safexpress 0 16.66% 0 0
Professional 0 6.6% 0 0
Couriers

33.30%
0.35
0.3 26.66%
23.30%
0.25 Excellent
0.2 16.66% 16.66% Good
13.33%
0.15 Average
0.1 6.60% Poor
0.05 0 0 00 0 0 00 00 0 0 00 0 00
0
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Survey Results (Courier)

1. Which courier company do you use?

 Gati 7 17.5%
DTDC 26 65%
Blue Dart 18 45%
First Flight 13 32.5%
Over Nite 11 27.5%
Professional courier 11 27.5%

Gati
27.50% 17.50%
DTDC
27.50%
65% Blue Dart
First Flight
32.50% Over Nite
45%
Professional courier

2. Purpose of using courier services

Official purpose 25%

Business Purpose 57.5%
Household Purpose 30%
Academic Purpose 20%

Academic 20%
Purpose

Household 30%
Purpose
Series1
Business
Purpose
57.50%

Official purpose 25%

0% 10% 20% 30% 40% 50% 60%

 3. How often do you visit a courier Office

Daily 0
Weekly 10%
Monthly 47.5%
Half Yearly 22.5%
Yearly 27.5%

0.5
0.45
0.4
47.50%
0.35
27.50%
0.3
22.50%
0.25 Series1
0.2
0.15
10%
0.1
0.05
0 0
Daily Weekly Monthly Half Yearly Yearly

4. How do you know about this company?

News Paper 10%

Banners & Hoardings 25%
Courier Company vehicle 12.25%
Friends & Relatives 17.5%
Near to my location 37.5%

40%
35%
37.50%
30%
25%
25%
17.50%
20% Series1
12.25%
15%
10%
10%
5%
0%
News Banners & Courier Friends & Near tomy
Paper Hoardings Company Relatives location
vehicle

5. Why do you use this courier company?

Company Brand Name Good Service Economic Rate

Gati 0 7.5% 10%
DTDC 15% 30% 20%
Blue Dart 25% 20% 0
First Flight 0 10% 22.5%
Professional 7.5% 0 20%
courier
0.35
30%
0.3
25%
0.25 22.50%
20% 20% 20% Brand Name
0.2
15% Good Service
0.15
10% 10% Economic Rate
0.1 7.50% 7.50%
0.05
0 0 0 0
0
C
i

rt

r
ht
at

rie
D

Da

lig
G

DT

ou
tF
e
u

lc
rs
Bl

na
Fi

sio
es
of
Pr

6. How do you rate your experience with the following?

A. Service

Name Of Excellent Good Average Poor

the
 Company
Gati 0 10.8% 9.6% 0
DTDC 0 37.8% 20.7% 10%
Blue Dart 25.6% 0 20.8% 0

0.4 37.80%

0.35

0.3
25.60%
0.25
20.70
2%0.80% Series1
0.2 Series2
Series3
0.15
10.80% 9.60% 10%
0.1

0.05
0 0 0 0 0
0
Gati DTDC Blue Dart

B. Price

Name Of Excellent Good Average Poor

the
Company
Gati 0 0 25% 47.5%
DTDC 0 42.5% 35% 0
Blue Dart 7.5% 20% 27.5% 15%
First Flight 12.5% 52.5% 32.5% 17.5%

0.6
52.50%
0.5 47.50%
42.50%
0.4 35% Series1
32.50%
27.50% Series2
0.3 25% Series3
20%
0.2 17.50% Series4
15%
12.50%
0.1 7.50%

0 0 0 0
0
Gati DTDC Blue Dart First Flight

C. Response & Over All Performance

Name Of Excellent Good Average Poor

the
Company
Gati 0 20% 33% 7.5%
DTDC 27.5% 32.5% 17.5% 0
 Blue Dart 10% 0 37.5% 12.5%
First Flight 0 0 42.5% 22.5%

0.45 42.50%
0.4 37.50%
0.35 32.50% 33%

0.3 27.50% Series1

0.25 22.50% Series2
20%
0.2 17.50% Series3
0.15 12.50% Series4
10%
0.1 7.50%
0.05
0 0 00 0
0
Gati DTDC Blue Dart First
Flight
 Findings & Conclusion

Findings

Gati brand recall as a cargo company:

 Gati’s brand recall as a cargo service provider is excellent.

 As per survey maximum customers have rated excellent to
Gati for its service.
  Customers are opting for Gati not only for its services but also
for its value added services which is not provided by Gati’s
competitors.
 Gati’s brand recall is high among the customers for its good
response and over all performance.
 The brand recall is poor among some of customers for its high
price than its competitors.

Suggestion for improvement of brand recall:

 Gati should upgrade its services to match up with the
service expectations that customer has.
 The service should be good in quality according to its
price.
 More proactive service response approach may create
good impression about the service and there by minimize
the gap between the price and value expectation of
customer.

Gati brand recall as a courier company:

 Gati’s brand recall as a courier company is negligible.

 As per survey only 7% people are aware of Gati’s courier
arm Gati Zipp.
 There is low brand recall among the customer about Gati
Zipp.
 As per survey maximum people are opting for DTDC for
their courier purpose and DTDC is enjoying the market
leadership position in Indian courier market in terms of
recall.
 The reason behind it is easy accessibility of their service
points and visibility of their counters everywhere.
 Maximum people knows Gati as a cargo service provider
and the people have no idea about Gati Zipp.

Suggestion for improvement of brand recall:

 There should be product awareness needed for Gati

Zipp.
 More number of courier outlet should be opened in city
area to have more reach and penetration.
 Gati should encourage the people to take the franchise
and there by mushroom the easy access points which
create awareness, recall and business improvements.
  There should be special incentive schemes given to
the franchise people doing business for Gati Zipp.
 Posters, Stickers should be excessive for the promotion
of Gati Zipp.
 There should be attractive schemes given to the
customers to make them continuously visit Gati
counter .
 Monthly customer feed back should be done for Gati
Zipp.
 Annually customer meeting should be done inoder to
promote Gati Zipp.

Conclusion

According to the survey Hyderabad market offers a huge potential for

Indian cargo industries. From the survey we found that:

 Pharmaceutical Industries are the major customer of cargo

companies. i.e 26.66% pharmaceutical companies are using
cargo services.
 Only 20% engineering equipment manufacturers are opting for
cargo services for supply of their products.
 73.33% companies are using a particular cargo company for
economic rate.
 70% companies are using a particular cargo company for getting
good service.
 No companies are looking for brand name in cargo service
providers.
 63.33% companies become aware of the cargo service providers
after visiting of cargo company executives to their company.
 In cargo survey we found that 16.66% customers are rated
excellent to Gati for its outstanding service where as its
competitor AFL rated as good by 13.33% companies.
 40% customers have expressed that Gati’s price is very costly
than all its competitor.
 26.66% customers and 33.3% customers are rated Gati’s
response and over all performance as good and average
respectively.
 In courier market survey we found that Gati Zipp has a poor
market share. Only 17.5% customers are using Gati Zipp where
as DTDC is used by 65% of customers and has dominated courier
market.
 Maximum courier service is used for business purpose.
 Only 47.5% people are visiting courier office on every month.
 Maximum people are aware of courier companies as it is near to
their location.
 Maximum people are using a particular courier company because
of only good service.
 Gati is having very poor position in courier market. i.e. only 7.5%
people are using Gati courier service only for getting good
service.
 37.8% people has rated good to DTDC for its service where as
Gati is having only 10.8%.
 42.5% people has rated good to DTDC for its economy price.
 47.5% people have expressed their views that Gati’s price is very
costly among all other courier companies.
 Only 20% people are expressed that Gati’s response and overall
performance is good where as DTDC has rated as excellent by
27.5% people for its response and overall performance.
Recommendation
 Recommendation

From the survey we found out that the following strategy should be
followed:

 Gati should upgrade its services to match up with the service

expectations that customer has.
 In cargo sector SME are playing an important role. So Gati
should try to capture the SMEs in order to attain a market
leadership position.
 Gati should try to capture the automotive industries and
textile industries as both the industries are growing 18-25%
per annum.
 To generate more revenue it should open more number of
CCC-F & CCC-K in remote and untapped area.
 It should focus more on small amount cargos.
 Packaging industries has huge amount of opportunity in
current market. So Gati should enter in to that sector.
 It should give some discounts to its customers those are doing
business with Gati on regular basis.
 The market position of Gati Zipp is very poor. So Gati should
go for product awareness for Gati Zipp among the customers.
 Price of Gati Zipp should be low so that it will be affordable to
all kind of customers.
 Massive TV campaigning should be done to promote Gati
Zipp.
 It should go for customer meet from time to time.
 Posters, Stickers should be excessive for the promotion of Gati
Zipp
 Special incentive scheme should be given to franchise people
 Sales campaign and road shows should be done to promote
its products.
 More number of courier outlet should be opened in city area
to have more reach and penetration.

 Café D’eliver is the showcase of company’s image to the

people. Café D’eliver can generate good business for Gati. So
more attention should be given to Café D’eliver.
 Gati should target more to the educational institutes as it can
generate more revenue.
 Gati should go for corporate social responsibility like literacy
campaign, polio eradication programme through which it can
promote its products.
 It should participate in exhibitions in order to promote its
products.
 There should be special incentive schemes given to the
franchise people doing business for Gati Zipp.

Books:

 Marketing Management – Philip Kotler

 Marketing Management – Rajan Saxena

Website:

 www.gati.com
 www.gati.net
 www.tcil.com
 www.cargotalk.com
 www.indianlogistics.com

News Paper & Magazines:

 The Economic Times

 The Business Line
 Cargo Talk
 Cargo Times

Journals & Market Research Reports:

 The Indian Logistics Industries Report : Indian School Of

Business(ISB),Hyderabad
 Kotak Logistics Sector : March 2006
 Indian Logistics Sector Report : Religare
 Market Study on Express industry in India: Acnlelsen
Orgmarg
 Supply Chain Management Review: Icfai University
Case Study:

 Gati Limited: Evolution of a third party logistics

organization: A case study on Gati Ltd. from IIM,
Ahmedabad