What Is Digitization In 3PL Space? How Does It Function?

The term third-party logistics (3PL) describes a service that provides a wide range of customized services, often to consumers, businesses, or multi-users, to reduce costs. Additional services can also be supplied as warehousing, inbound and outbound transportation, and value-added services. “Services can include just one service, such as freight transportation or warehouse storage. IT can also be a network-wide service bundle that handles supply chain management from beginning to end.”

Today, in the global 3PL space, it isn’t easy to separate current trends from technological trends based on the current trends in the industry. Often, even movements that aren’t based on tech products are enabled by technological advancements.

Analytical expertise is required as clients expect data-driven decisions. Basic descriptive analytics will evolve into prescriptive and cognitive analytics in 3RD Party Logistics companies. “3PLs are actively seeking to expand their role in the value chain beyond low-margin commoditized services to higher-margin managed services or even end-to-end services.”

What Does the Term Digitization In 3PL Space Mean?

According to supply chain research firm Armstrong & Associates, the third-party logistics market in the U.S. will reach $1.1 trillion in revenues by 2022, up from $800 billion in 2016. The Asia Pacific accounts for 38% of worldwide 3PL revenue, making it the most significant market globally. In its 2018 3PL study, the research company spotlights two critical trends in the industry: the ever-closer relationships between shippers and 3PL service providers and the growing importance of emerging technologies, including blockchain and automation. Nowadays, online shoppers expect to get their purchases within shorter delivery windows. There are currently many retailers offering same-day, next-day, and one-hour deliveries. Changing increased package volumes are driving distribution networks. Shippers now need to improve their fulfillment capabilities by providing strong last-mile delivery capabilities and better data to optimize routes and improve operations.

What Are the Benefits and Uses?

Blockchain, the technology first connected with bitcoin, provides shippers and 3PLs with a powerful new tool for maximizing supply chain value. Blockchain provides a permanent record of every transaction created every time a product changes hands. Because each transaction is verified and recorded by an independent third party, the technology improves security because all participants can access this distributed ledger where transactions are recorded. Thus, time delays and human error are reduced, while safety, transparency, and governance are enhanced. Moreover, it provides irrefutable evidence that wood and paper pulp has been sustainably produced, enabling brands to comply with regulations, preventing them from using banned products, like conflict minerals, or checking the provenance of raw materials.

The robot workforce is already widespread on assembly lines around the world and is steadily expanding into logistics – primarily driven by the product picking needs of the e-commerce sector. In 2021, market research firm Tractica expects 620,000 robots to be used in warehousing and logistics, increasing 40,000 in 2016.

Also, robots have been successfully piloted at DHL’s supply chain warehouse in Unna, Germany. During pick up in the warehouse, robots assist the pickers with heavy lifting and drop off orders once loaded. As a result, injuries can be reduced at the workplace, and employee welfare and productivity can be improved.

Transnet, which operates an integrated logistics company in South Africa, knows it must innovate fast to stay ahead of the game, which is why it has been partnering with Microsoft to establish a DevOps process that spans all areas of development. It will lead to a reduction in Transnet’s product delivery costs and the creation of scalable, IoT-based solutions, helping it improve its assets’ efficiency.

Small and medium businesses have become more interested in working with local partners for their delivery operations. In the wake of the pandemic, logistics companies have been forced to develop contingency plans to mitigate risk, and Digitization In 3PL Companies play an essential role in these plans. As demand and capacity increase, infrastructure requirements such as additional trucking fleets, shipping facilities, and warehousing and storage facilities will increase.

Scope of Digitization In 3PL Space

More and more customers are looking forward to collaborating and working with their 3PLs in the long term. We expect them to embrace change, plan with us for the next four to five years, and involve us in every aspect of the organization. Providing 24/7 accurate and efficient services for 3PL companies is essential to meet customer demands. New collaboration and communication technologies are being adopted to meet this demand. As IoT and cloud-based logistics management systems interact, they transform data into actionable, value-added information, which increases visibility, thereby increasing productivity only because of Digitization In 3PL Space. Making informed decisions can minimize disruptions when planning and using proactive information.

All parties within the supply chain benefit from increased communication and collaboration, improving their ability to plan and execute shipments, thus improving decision-making. 3PLs that provide added value services, such as returns handling and inventory management, are those that will differentiate themselves in what is a fiercely competitive industry. Speed and time are crucial in the digital economy, so the transportation industry must transform to competitive.

Why Should You Choose Genex Logistics?

In addition to providing Global Logistics and Project Logistics, Genex Logistics also offers supply chain management, transportation, and distribution services. Genex Logistics is dedicated to providing world-class products and services through thought leadership, sustainability, and an innovative workforce. Our responsibility to our customers, society, and the environment is to deliver sustainable benefits.

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Customer Focused Supply Chain

The overall customer delivery experience would take into account these four critical elements ~ Speed, Cost, Efficiency, and sensitivity. And these elements are an outcome of a mix of strategy, technology, people, and systems. In an environment of continuous change, the right combination and strong coordination among these parts will create an agile and responsive supply chain which, ultimately, will enrich the consumers.

As markets are changing from a predictable demand state to a highly unpredictable demand state, a fully integrated supply chain is the need of the hour. But the understanding of the subject within the practitioner’s fraternity is limited. People and organizations are busy operating in their silos. But this operating style may not sustain itself for longer especially in a customer Focused era.

Benefits of a Customer Focused Supply Chain

Implementing a Customer Focused Supply Chain can yield a plethora of advantages for businesses:

• Enhanced Customer Satisfaction: By tailoring your supply chain to meet specific customer needs, you can greatly enhance their satisfaction levels. Happy customers are more likely to become loyal ones.

• Improved Efficiency: Streamlining your supply chain processes leads to improved efficiency. This, in turn, reduces operational costs and boosts profitability.

• Reduced Lead Times: A responsive supply chain can significantly reduce lead times. This means faster delivery, which is a crucial competitive advantage in today’s fast-paced markets.

• Better Risk Management: With a flexible supply chain, you’re better equipped to manage risks. Whether it’s a natural disaster or a sudden market shift, your supply chain can adapt and mitigate potential losses.

Implementing a Customer Focused Supply Chain

Now that we’ve explored the fundamentals and benefits, let’s delve into how you can implement a Customer Focused Supply Chain within your organization.

Step 1: Customer-Centric Data Collection

To meet customer demands effectively, you need data—lots of it. Start by collecting and analyzing customer data to identify their preferences, buying habits, and pain points.

Step 2: Supply Chain Redesign

Based on the insights gained from customer data, it’s time to redesign your supply chain. This may involve changes in procurement, manufacturing, and logistics to align with customer-centric goals.

Step 3: Technology Integration

Leverage technology to enhance transparency and responsiveness. Implementing advanced analytics, IoT devices, and cloud-based platforms can provide real-time visibility and automation.

Step 4: Continuous Improvement

A Customer Focused Supply Chain is an ongoing journey. Continuously gather feedback from customers and make incremental improvements to stay aligned with their evolving needs.

There exists a great deal of opportunity at every level for the deployment of the right technology. Whether it is the collaboration with the customers and partners or re-hashing delivery models, Technology is helping organizations in creating a unified network and bridging the gap between demand and supply. Technology is not only enhancing the efficiency of Supply Chains, it is also enhancing the speed of delivery and making it more responsive. Analytics is becoming instrumental in identifying de-coupling points for organizations. This will go a long way in enhancing the overall delivery experience to the customer. However, the right set of people would have to be inducted to create and implement this change. And as a start, a great deal of shift in the thought process of the organizations would be required to effect this overall change.

Conclusion

In conclusion, the Customer Focused Supply Chain is not just an emerging trend; it’s a transformational shift in Digitization In 3PL & how businesses operate. By aligning your supply chain with customer needs, you can enhance satisfaction, improve efficiency, and stay ahead of the competition. Implementing this trend may require effort, but the rewards are substantial. So, embrace the Customer Focused Supply Chain and embark on a journey to deliver unparalleled value to your customers.

Watch out for this section for more on Logistics Cost and its various dimensions!

FAQs

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Logistics Cost Meaning in Indian GDP

Lets us look at the constitution of GDP where Agriculture contributes 18.1% to GDP, Industry 26.3%, services 55.6%, etc. This tells us about the constitution of GDP where each individual sector assumes a size as a share of GDP. Does Industry at 26.3% of GDP, tells up about the state of Industry in India? It primarily tells us about the size of the Industrial sector in our country.

Incidentally, Logistics encompasses all these sectors and if carved out as a separate constituent it’ll also show up as a %age in the GDP pie. That’s how the existing

academic research work in the logistics sector tends to aggregate total logistics costs and express them relative to some economic baseline, such as GDP. But that gives an idea of only the size of the 3PL Logistics Industry in the country. And size does not automatically relate to performance i.e. bigger or smaller is better etc. The case of logistics adds to the confusion due to the fact that unlike many other sectors logistics assumes two roles in trade policy agenda ~ One is the trade-in services of which logistics is considered a separate cluster for discussions and 2nd is trade facilitation where logistics is assumed to be facilitating the trade. While the 1st represents the size of the sector and can be seen as the %age of GDP but does not necessarily tell anything about its performance and hence its interpretation with respect to trade facilitation may not be correct.

Now, lets us discuss the composition of the Logistics cost deduced as 13% of GDP ~ how did one arrive at this cost of 13% of GDP? With Logistics gaining importance around the globe, different studies have been conducted in different parts of the world to establish a comparative number to it. The methodology to deduce this figure has gone through a kind of evolution. From a trade research point of view, the logistics costs can be measured or proxied through various approaches viz, as a %age of total firm cost, as a %age of GDP and using performance variables such as World Bank’s LPI.

Regardless of which approach is taken to measurement, a key requirement for trade research focusing on logistics is the need for comparable data across a variety of countries and time periods. For most of the studies, so far, the data source used is either National Accounts data used by OECD member countries (ISIC Rev. 3 classification) or Input-Output data used by non-OECD countries. The issue with these data sets is that industry classification in these data sets does not consider Logistics as a separate sector. Thus the building blocks which go into making Logistics costs within these data sets are proxied. So many proxies need to be made in the data sets to deduce logistics cost and as a result, logistics cost has been defined in three scales in these data sets namely narrow, medium and broad.

The narrow definition takes into account very specific segments related to Logistics captured in datasets whereas the broad definition takes into account the ancillary segments as well in addition. India being a non-OECD country, the data taken to deduce the logistics cost in her case is based on Input-Output data of 2003-04, and the Logistics sector value-added as a %age of GDP for India was calculated as 6.42% as per ‘narrow’ definition and 18.42% as a ‘broad’ definition. The big gap in numbers is confusing and indicates that there is a lot that has been included in the broader definition of Logistics with respect to data. And it is quite possible that lots of undesired data may have been included due to the structure of the data itself.

Other leading researchers, in a paper published in 1999, computed the logistics cost for India and expressed it at 12.9% of GDP which is almost average of the values deduced from narrow, medium, and broad definitions of logistics as deduced from Input-Output data. So, this seems to be the basis of 13% Logistics cost. Though this number 13% (12.9%) is even disputed in academic circles as it seemed to have included data on passengers as well and considering that India is a populous country, the passenger movement expenditure in India would be substantial hence the dispute seemed significant.

A Few Points Emerge From This:

• 1st the number so far cited as %age of GDP has lots of questions marks as the datasets used to deduce the number has inherent structural problems.
• 2nd the number which appears as a %age of GDP is representative of the size of the sector, may assume relevance from a broader policy perspective but may not have much application to trade practitioners.
• 3rd, the number certainly is not to be seen as representative of the transactional costs. The transactional cost would vary from segment to segment, from industry to industry, and from company to company.
• 4th, this also does not mean that logistics cost in India is high or low, or logistics in India is efficient or not. This only points out that without identifying the micro issue of inefficiency, we may end up (largely, we actually do) employing solutions for issues that are not there and leaving the concurrent issue unresolved thereby damaging the supply chain further.
• 5th, a bigger number for Logistics costs as a % age of GDP is generally seen as an opportunity by the investor’s community largely with the perception that transactional costs exist at this level and can be brought down substantially. However, the opportunity is with respect to the size of the sector and exists in business models or macro infrastructural platforms and not in transactions!

Watch out for this section for more on Logistics Cost and its various dimensions!

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Free Trade Warehousing Zone (FTWZs) are a special category of Special Economic Zone, offer services such as speedy delivery of cargo, one-stop for Customs clearance capability; integrated solutions, such as packing management, sorting, inspection, re-invoicing, strapping and kitting, assembly of complete and semi-knocked down kits, and taxation benefits. Basically, the Free Trade & Warehousing Zones (FTWZ) is a special category of Special Economic Zones with a focus on trading and warehousing.

Free trade warehousing zones (FTWZs) have been a phenomenal success in Jebel Ali, Singapore, and Rotterdam. One has to visit these zones to see their sheer size and contribution to the regions they are located in becoming major logistic hubs.

As per The Hindu (March 6, 2011), The Jebel Ali Free Zone (Jafza) accounts for 25 percent of all container throughput at Jebel Ali port and 12 percent of all air freight at Dubai International Airport. Established in 1985, it covers a 48 sq km area and is home to over 6,400 companies from across the world. It sustains over 160,000 jobs in the UAE through its companies and accounts for over 50 percent of Dubai’s exports

Genesis:

In India, Free Trade and Warehousing Zone was introduced in the Exim Policy with the objective to facilitate the import and export of goods and services. Each Zone was considered to have Rs. 100 crores outlay and 5 lakh sq. its built-up area. The government of India introduced the FTWZ Policy as a part of Foreign Trade Policy (FTP) 2004-2009 governed by the SEZ ACT, 2005 and SEZ Rules, 2006 to leverage India’s strategic geographical location and cost and skill arbitrage.

For the development and establishment of FTWZ, the government has permitted 100% Foreign Direct Investment.

Concept of Free Trade Warehousing Zone:

FTWZ is a ‘Sanitized Zone’ designated as Foreign Territory for carrying on a business.  FTWZ’s are envisaged to be Integrated Zones & to be used as ‘International Trading Hubs’. Each Zone would provide ‘World Class’ Infrastructure for:

• Warehousing for various kinds of products
• Handling and Transportation Equipment
• Commercial office space
• All related utilities – telecom, power, water, etc
• One-stop clearance of Import and Export of goods
• FTWZ would be a key Link in Logistics and Global Supply chains – servicing both India and the Globe.

Objective:

The objective of FTWZ is to create trade-related infrastructure to facilitate the import and export of goods and services with the freedom to carry out trade transactions in free currency. The scheme envisages the creation of world-class infrastructure for warehousing of various products, state-of-the-art equipment, transportation, and handling facilities, commercial office-space, water, power, communications, and connectivity, with one-stop clearance of import and export formality, to support the integrated Zones as ‘international trading hubs’. These Zones are planned to be established in areas proximate to seaports, airports, or dry ports so as to offer easy access by rail and road.

Free Trade and Warehousing Zones (FTWZs) are envisaged to be essential logistics infrastructure to facilitate EXIM trade and to root out inefficiencies associated with the movement and valued addition of EXIM cargo in India.

Envisaged Benefits of Free Trade Warehousing Zone :

Envisaged benefits for Imports in India

Flexibility to clear cargo in part consignments (unlike in the case in other Container Freight Station (CFS)/ International Container Depot (ICDs) thus allowing flexibility towards consumption/end distribution duty deferment benefits (freeing up working capital and reduction in costs) de-stuffing and stuffing of cargo from shipping line containers into other containers for avoiding Shipping Line detention charges and customized delivery. The same product could also be stored in the warehouses within the FTWZ at much lower costs as compared to detention charges that plague users. A few of the envisaged benefits for imports into India are listed as below:

• Quality control prior to duty payment, hence no duty to be paid on rejected products
• Exemption of SAD, VAT & CST on imports through FTWZ Service
• Tax exemption for Handling & Transportation of containers from Port to FTWZ
• Availability of state-of-the-art Container Storage Yard with World Class Safety, Hazardous Storage and Maintenance and Repair Facilities within the FTWZ with Service Tax Exemption
• Free foreign exchange transaction capability for the services rendered including CY/Container Freight Station services.
• Value addition services can be provided like labeling, packing, kitting, bar-coding, palletization, and other authorized services.

All such activities are exempted from service tax as well as any purchases of packaging material, labels, and the like from DTA into the FTWZ would be treated as exports from such suppliers

Also Read: Digitization In 3 PL Space

Envisaged Benefits for Exports from India

A few of the envisaged benefits for exports from India are listed below

• Factory stuffed containers entering the FTWZ are treated as deemed export providing immediate export benefits
• Local Tax Exemption (e.g. CST, Sales Tax, Excise & VAT) on all activities conducted inside the FTWZ
• Increased efficiency through lowered reverse logistics activities through quality control before dispatch from India
• Lowering ‘back to town’ costs with better aggregation and consolidation
• Facilitating consolidation of cargo with other users of the FTWZ for cost optimization through last-mile distribution
• Value addition services can be provided like labeling, packing, kitting, bar-coding, palletization, and other authorized services with all fiscal and regulatory benefits
• Availability of state-of-the-art Container Storage Yard with world-class safety, hazardous storage, maintenance, and repair facilities within the FTWZ with service tax exemption
• Free foreign exchange transaction capability for the services rendered including ICD/CFS services

Envisaged Benefits for Re-Exports from India

A few of the envisaged benefits for re-exports using FTWZ are listed below

• Income tax exemption on all profits generated through re-exports activity through the FTWZ
• Hassle-free re-export process by routing cargo through FTWZ integrated with ICD/CFS services
• Ability to leverage India’s cost, skill, and geographic positioning advantage as a hub for regional/global distribution post value addition activities
• Service tax exemption on services availed by routing containers through FTWZ integrated with ICD/CFS services
• Permission of 100% FDI for the set-up of units by the unitholder of the FTWZ
• Value addition services as described below can be provided with all fiscal and regulatory benefits
• The value-added services that can be performed in the FTWZ are packaging, re-packaging, labeling, re-labeling, strapping, refurbishment, crating, carbonization, fumigation, choking, lashing, tagging, shrink/stretch / bubble wrapping, palletization, bagging, re-bagging, quality assurance, kitting, de-kitting, sorting assorting, making combination pack, consolidation, agglomeration, washing, cleaning, processing, repairs & maintenance, CKD/SKD assembly, bottling, blending, cutting, polishing, painting, coating, filming, re-sizing, splitting, threading, coupling and the like.

Thus, FTWZs is a comprehensive infrastructure required for improving India’s container volumes and enabling Importers-Exporters to efficiently and cost-effectively carry warehousing, trading, and value addition activities.

FAQs about Free Trade Warehousing Zone (FTWZ)

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3PL Logistics For Outsourcing

Firms are increasingly seeking to treat logistics operations strategically to gain a competitive advantage. Greater flexibility, operational efficiency, reduced cost, improved customer service levels, and a better focus on their core businesses are part of the advantages that may accrue from Logistics but firms often lack the competence to run efficient logistics services. As Tom Peters says, every organization should “Do what they do best and outsource the rest”. Likewise, many researchers support the idea of outsourcing Logistics functions to third Partly Logistics (3PL) providers. Outsourcing, as such, has proven to be a big value creator in many other industries. In terms of user expectations; reduction in Logistics Cost, focus on core competence, improvement in customer satisfaction, productivity improvement, improved return on assets, and increased inventory returns are the top parameters for which firms outsource logistics.

However, a study on user experiences of 3PL usage in India does not show encouraging results on the user’s expected parameters. This study by Frost & Sullivan shows that Indian Logistics Service Providers (LSPs) lag significantly below end-user expectations on key performance criteria such as the attitude of staff, process improvement capabilities, and material safety. As per the report, a significant share of companies across industries could not gain notable (5 percent or more) improvement in their logistics efficiency despite using third-party logistics (3PL) providers. Does it mean that LSPs simply lack the capability to deliver or is it an issue with the wrong selections of LSPs?

While globally, LSPs have delivered greater benefits to firms in managing complex supply chains, the (missing) key here seems to be outsourcing logistics activities to experienced logistics service providers (LSP), also known as third-party logistics (3PL) providers. As a result, the crux seems to be losing out in the translation of user expectations into LSP deliverables due to inexperienced 3PLs getting selected to perform the job. Lower preference for the long-term contracts by many firms with 3PLs as found out in the report, also indicates that firms perceive many of these ‘3PLs’ as mere ‘handlers’ rather than “value creators”.

With Logistics cost as 13% of GDP, Indian Logistics Industry is pegged at more than 200 Bn$. Though 3PL forms a very small share of that, however, its rapid growth may push many such ‘handlers’ from the wide and fuzzy Indian Logistics spectrum into performing the job.

Hence users need to understand and select the right 3PLs in order to create value through outsourcing. And, choosing the right 3PL provider would require careful examination of what the firm expects from a 3PL provider. Quality, delivery, and price are considered the traditional selection factors that receive the greatest attention from industrial buyers. Many studies found that the strongest reasons for outsourcing were access to skills, cost reduction, gaining flexibility, performance improvement.

However, with the enhanced importance of Logistics, its fast-changing landscape, and its quest for time-based competence, the list and relevance of selection parameters are also changing. Broadly these parameters can be classified into four categories:

4 Forms of 3PL Logistics For Outsourcing 

• Functional Capability: Do the LSPs have enough bandwidth to comprehend and execute user expectations into a workable process? Can they map out the delivery process with respect to an intangible outcome? Do they understand the specifics of an industry that they are pitching in? Do they have enough management bandwidth and manpower to execute such activities? How much are they geared up to cope up with change and complexity? Are they mere ‘handlers’ or value creators?
• Solutions Capability: Do the LSPs understand the geographical, regulatory, competitive, cultural, and social environments? Do they understand the emerging trends in the industries? Are they capable of analyzing the challenges that firms face with respect to the above parameters and any other emergent parameters? Are they capable of thinking of solutions combining all the above? Can they think of logistics solutions that align with the broader business strategy of the firms? Are they mere ‘warehouse finders’ or Logistics consultants?
• Infrastructure & Resourcefulness: How resourceful are the LSPs. Do they have or can they arrange required resources important to deliver the service? Do they have enough financial, knowledge, and IT resources?
• Current Performance / Experience: Do the LSPs have enough showcases in the region? Or do they have the commitment of resources for knowledge transfer across regions?

The idea here was to acquaint you with the criticality of LSP / 3PL selections in order to enhance your user experience. As Logistics plays an important role in your overall business strategy, a wrong selection will not only dilute your position as a selector but also hampers your organization’s business goals big time.

The above list gives a broad categorization of parameters and does not offer a workable process for LSP selection. However, you can use the above categorization to create your own list of parameters specific to your requirements. Do check this space for a drilled-down list of parameters / detailed selection process in the subsequent article soon.

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The client had given the details of these shipments to a couple of other ‘leading logistics companies as well but most of them have responded with the standard freight rates for shipping and storage only as below:

• Freight from China Port to India warehouse: USD 2500/40 feet container (All inclusive)
• Cost of storage in the pallet in the warehouse in India: INR 1000/Pallet per month (~USD18/pallet/month)

No one had responded to the exact customer queries. As part of the discussions, the client gave the shipment details to our team as well. The details areas:

The customer was planning to bring yarn from China. The yarns spools were to be packed in cartons which in turn would be stuffed in a 40 feet container. This container would be brought to India via Ship. In India, these cartons were to be de-stuffed from the container and to be placed in standard pallets, and stored for about 2 months, until sold.

The client wanted to have a minimum cost of shipping as well as storage per carton. This meant that maximum cartons should be stuffed inside the container and also maximum cartons should be placed in one pallet.

Dimensions of the Carton, Container, and Pallet Areas [Quiz]:

Carton Box
Length – 580mm,
Width – 385mm,
Height – 525mm

Container (Inner Dim)
Length – 39.39 feet
Width – 7.71 feet
Height – 7.80 feet

Pallet
Length – 1.0 Meters
Breadth – 1.2 Meters
Height – 1.5 Meters

Customer Queries For You as Logistics Experts [Quiz]:

Question 1: How many of these carton can be stuffed in the 40 feet Container?

Question 2: How many pallets are required to accommodate the total cartons stuffed in 40 feet container?

Question 3: What is the minimum cost per carton for freight and storage in pallets for 2 months?

You Can Write Your Answers to Any of the Below [Quiz]:

In the blog itself below:

• Twitter – http://twitter.com/Genexlogistics 
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• LinkedIn – http://www.linkedin.com/company/Genex-logistics-india
• info@genexlogistics.in

In order for your answers to be eligible for a prize and listing of your Name & Photograph in Genex Logistics media pages, your replies should reach us on or before 6 PM of 12^th February 2013!

Watch out for our Social media Pages for results as well as for more quizzes and case studies!

This quiz is a prologue to a series of case studies that Genex Logistics plans to bring to you to stimulate your brains and test your Innovative Quotient in Logistics & Supply Chain.

Genex Logistics has always been at the forefront of offering innovative solutions to its clients in Contract Logistics, Service Logistics, Reverse Logistics, Freight Management, Project Logistics, and consolidation service for International Freight across industries. Come tap into our network of International Freight, Bonded warehouses, Logistics Centers, and FTWZ footprints spread around the country.

For more information you can check at www.genexlogistics.in  or can write to info@genexlogistics.in

Note: The above quiz is proprietary of Genex Logistics and any use of the above material for any purpose can only be done with prior written permission from Genex Logistics.

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As emerging markets, especially BRIC nations, assumes larger importance, many such companies would be thinking to enter a market like India and most of them generally go through such a dilemma of business models. Many companies go wrong in their entry strategies into a country like India.  The list of issue that add to this dilemma are:

• Through a Sole Importer cum Country Distributor Model, there is no control on the prices of the products.
• No consistency on the purchases as Sole Distributors has limited band width in terms of expansion, investments and interest.
• Country Distributor’s model is good from the perspective of risk but it lacks visibility and touch with the potential market.
• Such models also have limitations in terms of creating an after sales service network.
• A country distributor may not be an exclusive distributor and may not give required heed to the new products.

Every business model would have its own sets of advantages and challenges, so what is the model available for such companies to adopt while entering a market like India? The answer would vary from company to company and would depend upon their long term strategies; however, a quick start can be through a Free Trade Warehousing Zone (FTWZ), a concept recently introduced in India by the Govt. and where companies like Genex Logistics have acquired Special expertise from its lineage of running and managing Bonded warehouse operations for years!

A Readily Available Solution of FTWZ via Genex Logistics: Free Trade Warehousing Zone (FTWZs) are an area within a country in which goods may be landed, handled, manufactured or reconfigured, and re-exported without the intervention of the customs authorities. Only when the goods are moved to consumers within the country in which the zone is located (India, in this case) do they become subject to the prevailing customs duties. These are a special category of Special Economic Zone, with services such as speedy delivery of cargo, one-stop for Customs clearance capability; integrated solutions, such as packing management, sorting, inspection, re-invoicing, strapping and kitting, assembly of complete and semi-knocked down kits, and taxation benefits. Basically the Free Trade & Warehousing Zones (FTWZ) is a special category of Special Economic Zones with a focus on trading and warehousing. And Genex Logistics is a key player in offering FTWZ services in India.

As I was keenly listening to the list of challenges through a distributor model, as narrated by the Gentleman, I was amused to correlate that Genex Logistics has been facilitating such trades and transactions through their Bonded warehouses and FTWZ services for years!

When I shared with the head Honcho that in order to test market India, their company can start using the FTWZ without having to register as an operating entity in India. And that they can bring the material into FTWZ and store it there without paying the custom duty for period of up to 3 years. And that the Custom duty would be paid only against the clearance of a part shipment order by the client. It is like having a warehouse close to the customer and also have the advantage of custom duty deferment and other value additions.

Advantages – No need to build inventory by the distributors; reduced time to market; payment of lesser custom duty by 4%; payment in foreign current directly to the company in o’seas; hassle free third country exports from FTWZ and lastly NO capital investments.

This discussion resulted in the company started using our FTWZ at NCR of Delhi few weeks later, by shifting material from Free Trade Zone in Hong Kong, thereby reducing the time-to-market from weeks to days !

Genex Logistics offers customized solutions that fit the need of clients without increasing their costs. Come tap into our network of FTWZ footprints, Bonded warehouses and 3PL Logistics Centers spread around the country. Genex Logistics also offers International freight Management and Warehousing & Distribution services across industries to Time critical After Sales, Production Logistics, Finished Goods, Promotional material and reverse Logistics for various industry segments.

FAQs

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Introduction

In a world where time is of the essence and environmental sustainability is paramount, the logistics industry stands at a critical crossroads. The confluence of speed and environmental concerns has spurred remarkable innovations and transformations in how we envision the logistics of the future. This article delves into this exciting journey, offering insights and answers to questions about the logistics landscape that lies ahead.

Navigating the Speed and Environment Logistics Landscape

The Need for Speed

In today’s fast-paced world, the demand for speedy deliveries has reached unprecedented levels. Customers expect products at their doorsteps almost as soon as they click the “buy” button.

Sustainability Takes the Wheel

Conversely, the environment has taken center stage as we grapple with climate change and resource depletion. The 3PL logistics industry has realized that sustainable practices are not just ethical but also economically beneficial.

Speed vs. Sustainability: Finding the Balance

Achieving the right equilibrium between speed and sustainability is the key challenge for the logistics of the future. It’s about meeting the ‘need for speed’ while ensuring the ‘green’ agenda isn’t compromised.

Innovations Shaping the Future

Electric and Autonomous Vehicles

Electric and autonomous vehicles have emerged as game-changers in the logistics sector. Electric delivery vans and self-driving trucks promise both speed and eco-friendliness.

Drone Deliveries

Drones are no longer confined to military use; they are becoming a staple in logistics. These aerial couriers can swiftly deliver packages to remote locations, reducing carbon footprints.

Hyperloop: The Future of Freight

Hyperloop technology is revolutionizing freight transport. By propelling cargo through vacuum tubes at incredible speeds, it offers a sustainable solution for long-distance logistics.

With Speed and Environment at Crossroads: How Would Logistics of Future Be?

In this pivotal section, we explore the very question that defines our article. With the dual imperatives of speed and sustainability, the logistics of the future will be characterized by unprecedented efficiency and environmental consciousness.

FAQs

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Mr. Supply Chain Manager (Mr. SCM) is always under pressure from Mr. CFO to reduce inventory levels while balancing the needs of Mr. Sales & Services Manager to reduce and fulfill client downtimes. So where must Mr. SCM draw the line?

Role of Reverse Logistics Solutions in India

Reverse Logistics helps Mr. Supply Chain Manager to keep both his clients happy. He now has the wherewithal to deliver parts to clients for service within agreed SLA’s while incorporating a process to get the faulty part back to the mother warehouse, thus helping Mr. CFO.

India, due to its large geography and complex regulatory environment, has always posed a monstrous challenge for the movement of spare parts across states and far-flung regions for Mr. SCM. So how can he set processes to work in such an unorganized sector?

The ANSWER lies in working with the right partner – one who offers specific solutions through set systems and processes.

Industry experts speak of the following benefits through reverse logistics: Reverse logistics done properly can decrease returns processing costs by 25%, increase productivity by at least 10%, increase asset realization by 2x to 4x, increase customer satisfaction by 100%, and increase profitability by 2% to 5 % apart from being compliant with waste management, especially e-waste regulations.

One of my recent experiences with a leading OEM for home networking products (Wi-Fi Routers to be precise) was less than pleasing once the router was declaring faulty by the call center executive. I was provided with the phone number of their service center in Andheri – East. Andheri – East! There goes my day. I had to go over to Saki Naka and give my faulty router and collect the good one. The exercise was simple but I dedicated an entire half-day to this process thus ensuring that my work suffered. This company could have easily offered this service: Field SWAP, where:

• A 3PL Logistics like Genex carries the fresh part to the client (me)
• Asks for the faulty part while handing over the good part
• Carries the part back to a repair center and if repairable does so and return it for managing warranty cases
• Faulty equipment scrapped as per company or e-waste guidelines

We at Genex LogiSolution cater to this large un-tapped need at the client’s place in the Indian market. We offer customized solutions that fit the need of every client without increasing their costs. Come tap into our network of warehouses and Logistics Centers spread around the country and an established distribution network (partly owned). Genex Logistics offers Warehousing & Distribution services across industries to Time-critical After Sales, Production Logistics, Finished Goods, Promotional material and reverse Logistics, etc.

Genex Logistics currently manages more than 500,000Sq Ft of space and is likely to add another 500,000 Sq Ft in the next few months time frame. The industry segment that we are catering to for warehousing is Apparel & Fashion, Retail & FMCG, Power Electronics, High-end office furniture, high-end automation spare parts, high-end cosmetics, drugs & pharma, Industrial batteries, wine & Liquors, Precision Engineering & Automotive.

FAQs of Reverse Logistics

Q: What is Reverse Logistics? Reverse Logistics involves the movement of goods from their final destination back to the manufacturer or a designated disposal point.

Q: Why is Reverse Logistics important in India? In India, Reverse Logistics presents an untapped opportunity to recover value from returns, promote sustainability, and open new revenue streams.

Q: What challenges does Reverse Logistics face in India? Challenges include inadequate infrastructure, regulatory complexities, and the need for consumer awareness.

Q: How can technology help in Reverse Logistics? Technology like IoT and data analytics can optimize processes, improving efficiency and reducing costs.

Q: What is the role of consumer engagement in Reverse Logistics? Consumer engagement is crucial in encouraging responsible product returns and recycling through incentives and awareness campaigns.

Q: How can businesses collaborate for successful Reverse Logistics? Businesses should form partnerships with logistics providers, recycling firms, and regulatory experts to streamline operations and ensure compliance.

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