Professional Documents
Culture Documents
Warehousing and
Packaging Sector (2022)
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Human Resource and Skill
Requirements in the
Transportation, Logistics,
Warehousing and
Packaging Sector
Study on mapping of human resource skill gaps in
India till 2022
Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Table of Contents
1. Environment Scanning and Competitiveness of the Transportation, Logistics, Warehousing
and Packaging Sector ........................................................................................................................... 5
1.1. Overview of the Transportation, Logistics, Warehousing and Packaging Sector ................... 5
1.2. Industry Size and Growth of the Transportation, Logistics, Warehousing and Packaging
Sector 7
1.3. Demand Drivers of the Transportation, Logistics, Warehousing and Packaging Sector ...... 20
1.4. Key Success Factors and Risk Factors for the Transportation, Logistics, Warehousing and
Packaging Sector ............................................................................................................................... 21
2. Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing
and Packaging Sector ......................................................................................................................... 24
2.2. Skill Requirements and Skill Gaps in the Transportation Segment: Road Transport ........... 28
2.3. Skill Requirements and Skill Gaps in the Transportation Segment: Ship Transport ............ 32
2.4. Skill Requirements and Skill Gaps in the Transportation Segment: Railway Transport ...... 37
2.5. Skill Requirements and Skill Gaps in the Third Party Logistics Segment............................ 42
2.6. Skill Requirements and Skill Gaps in the Warehousing Segment ........................................ 49
2.8. Projected Industry Size and Human Resource Requirements ............................................... 59
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
List of Figures
Page 3 of 67
Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
List of Tables
Table 1: Growth rates of various segments of Transportation, Logistics, Warehousing and Packaging
Sector ...................................................................................................................................................... 9
Table 2: Trends in Rail-Road Modes in Passenger and Goods Traffic................................................. 13
Table 3: Warehouse capacity plans of major 3PL Companies ............................................................. 17
Table 4: Level-wise Distribution of Human Resources in the Road Transport Segment ..................... 26
Table 5: Functional Distribution of Human Resources in the Railway Transport Segment ................. 27
Table 6: Functional Distribution of Human Resources in the Ship Transport Segment / at Logistic
providers dealing in export-import, freight forwarding ........................................................................ 27
Table 7: Level-wise Distribution of Human Resources in the Warehousing Segment ......................... 27
Table 8: Distribution of human resources by education level............................................................... 28
Table 9: Skill requirements and skill gaps in the Road Transport Sub-segment ................................. 29
Table 10: Typical configurations of small, medium and large players in Ship-based Transport.......... 33
Table 11: Skill requirements and skill gaps in the Ship Transport Sub-segment ................................. 34
Table 12: Cadre-wise Staff Strength in Indian Railways ...................................................................... 38
Table 13: Strength and Profile of employees in Groups A, B, C and D ............................................... 38
Table 14: Skill requirements and skill gaps in the Rail Transport Sub-segment .................................. 39
Table 15: Skill requirements and skill gaps in the Third Party Logistics Segment (Specific to
Warehousing) ........................................................................................................................................ 45
Table 16: Skill requirements and skill gaps in the Third Party Logistics Segment (Specific to Export
and Import Transactions, Custom clearances and Freight forwarding) ................................................ 48
Table 17: Skill requirements and skill gaps in the Warehousing Segment ........................................... 52
Table 18: Projected on-road M&HCVs and human resource requirement in M&HCVs for drivers and
cleaners (in ‘000s) ................................................................................................................................. 60
Table 19: Incremental human resource requirement in the Road Sector till 2022 (in ‘000s) ............... 60
Table 20: Projected growth in the Airline Industry in India ................................................................. 61
Table 21: Projected Industry Size and Human Resource Requirement in the Airline Industry ............ 62
Table 22: Incremental human resource requirement till 2022 in Warehousing (organised sector) and
3PL (in ‘000s) ....................................................................................................................................... 63
Table 23: Incremental human resource requirement till 2022 in the Transportation, Logistics, and
Warehousing sector (in ‘000s) .............................................................................................................. 63
Table 24: Focus areas for skill building ................................................................................................ 64
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Logistics is defined as a business planning framework for the management of material, service,
information and capital flows. It includes the increasingly complex information, communication and
control systems required in today's business environment. It is also defined as the procurement,
maintenance, distribution, and replacement of personnel and material. A typical logistics framework
consists of physical supply, internal operations and physical distribution of goods and services.
The global annual logistics spend is valued at about USD 3.5 trillion. The annual logistics cost for the
USA is about 9% of GDP and internationally it varies between 9% and 20% of the GDP. The US
logistics market is the largest in the world and accounts for one-third of the world logistics
market1.The global logistics industry has registered significant growth in the last decade wherein the
big driver has been the emergence on Third Party Logistics (3PL) and Fourth Party Logistics (4PL)
players in industry who are expected to play a much more important role in the years to come.
The global logistics industry is characterised by high costs of operations, low margins, shortage of
talent, infrastructural bottlenecks alongside increasing demand from clients for providing one-stop
solutions to all their needs and for investing in progressive technology . All these factors will further
decrease the margins involved in this industry and fasten the process of consolidation in industry
through acquisitions, mergers and alliances.
The entities in a typical supply chain are the supplier, the manufacturer, the distributor, the retailer
and the customer. Goods, information and finance move unidirectionally or bi-directionally between
these entities. A typical supply chain is as shown below:
1
Report on Logistics industry overview by Armstrong and associates
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
The terms Logistics and Supply Chain Management (SCM) are typically used interchangeably in
common parlance, though there is a subtle difference between the two. While SCM is more strategic
in nature, logistics is more operations-oriented. Logistics can be considered as a part of SCM which
encompasses planning activities, implementation, control of the efficient forward and reverse flow
and storage of goods, services and related information between the point of origin and the point of
consumption in order to meet customer and legal requirements. The activities involved in a typical
supply chain are typically inbound activities or outbound activities; inbound logistics refers to
activities relating to bringing goods into the organization, while outbound logistics deals with
activities relating to taking the goods out of the organization.
Goods that are received from the manufacturer are loaded and stuffed into containers of the right size.
The goods are then transported by any of the modes of transportation (rail, road, air, etc). The
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
transported goods are brought to a warehouse and stored. The goods are then re-packed in the format
to be sent to the customer, and then finally delivered to the customer.
Logistics is a critical component relevant across agriculture, manufacturing and service sectors and
has to be optimally managed for smooth functioning of production and distribution operations.
Additionally, logistics cost accounts for a major component of the input costs in all sectors, more so in
the case of sectors such as cement, steel, automobiles, FMCG, retail, pharmaceuticals etc. With rising
competition in the sectors that use logistics services, it has become even more important to enhance
the efficiency of the system and use the cost-benefit in increasing the company’s competitiveness.
Besides, with increasing globalisation a larger number of multi-national companies (MNCs) are
sourcing, manufacturing and distributing goods on a global scale, and thus need more complex supply
chains to be managed. Given such developments, the Transportation, Logistics, Warehousing and
Packaging Sector is expected to become a more specialised and niche expertise area where high
premium will be charged for increased quality and quantity of service delivered by logistic service
provider.
The annual logistics cost in India is valued at Rs. 6,750 billion (US$ 135 billion) and it is growing at
8-10% annually2. Logistics cost3 by value accounts for around 13% of the GDP of India – this is much
higher than that in the US (9%), Europe (10%) and Japan (11%) but lower than that in countries such
as China (18%) and Thailand (16%). In particular, the percentage-wise share of transport cost (an
important constituent of total logistic cost incurred by a nation) by value of GDP has been steadily
increasing.
The high cost of logistics in India when compared to developed nations may be attributed to poor
quality of infrastructure and inadequate service quality vis-a-vis counterparts such as US and Europe.
The Transportation, Logistics, Warehousing and Packaging Sector in India is dominated by the
unorganised segment (small4 truck owning companies linked to intermediate brokers or transport
companies, small warehouse operators, custom brokers, freight forwarders, etc.); the organised
segment accounts for less than 10% of the total logistics market in India.
2
Cygnus research
3
Logistic cost is inclusive of transport cost, estimated inventory carrying cost and administration cost
4
Possessing less than 5 trucks
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
As is the case with other industries, the employment is distributed across worker or supervisor or
management levels in all segments with some unique feature particular to specific segments such as
third party logistic providers, etc. Semi-skilled or minimally educated workers constitutes a large
portion of the employment. The details of persons employed in various segments are provided in
subsequent sections in this report.
The type of logistics services provided in India are yet evolving; the focus in India has been on
enabling ‘physical distribution’ as compared to developed nations where the focus has progressively
shifted to ‘integrated logistics management’.5
Global
logistics
External Management
Integrated • USA,UK
logistics-4PL
Internal • Hong Kong
Integrated • Korea
Logistics-3PL • Singapore
• China
• Philippines
Physical • Indonesia
Distribution
• India
• Vietnam
• Laos
Traditionally Indian logistic industry is made of core service providers and contracts are issued for
trucking, shipping, Inland Container Depot (ICD), Container Freight Station (CFS) etc. There is a
gradual shift towards 3PL (providers who bundle services such as transport, warehousing, freight
forwarding etc.) and 4PL (who work as business process providers; manage co-ordination with
various 3PL). This shift is driven by global customers’ demand for more control, higher technology
and one-stop solutions for all logistics needs. Global logistic management is new generation futuristic
concept where a single supplier will be able to meet customers’ logistic needs across geographies.
5
ENAM logistics research report
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
The logistics value chain consists if three main segments, namely, Transportation, Warehousing and
Value Addition Services, as below:
Logistics
Value‐added
Transportation Warehousing
services
•Packaging
•Labeling and
assembling
•Express Services
•Tracking and tracing
•Cold Chain
The transport service could be undertaken by different modes such as road and rail which are
primarily used for inland transport of goods or by water (ship) or air (express or courier), which are
used mainly for inter-country exchange of material. The warehousing services are by large
fragmented in India; individual set ups are controlled by local clearing and forwarding (C & F) agents
while there are some special multi modal warehouses such as ICD or CFS centres often used by rail,
ship, road modes of transport. There are various kind of value adding services such as packaging,
labelling, cross bundling, track and trace which are common irrespective of modes of transport and
some special services such as express, cold chain etc.
The growth rates of the various segments of the Transportation, Logistics, Warehousing and
Packaging Sector are as below:
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Transportation
During FY2008, the share of Indian transport sector in GDP aggregated 6.38% at current prices and
6.36% at constant prices. This segment recorded a turnover of Rs. 57,530 crore in this year7. The
segment has grown at a CAGR of 10.8% during 2003 to 2008. Historically, the share of transport
sector in GDP increased from 3% in the 1950s to 4% by the late-1960s, 5% by 1980, and over 6% for
the current decade
The transportation segment includes the sub-segments of road, rail, water, air (the major segments)
and pipeline transportation (minor segment). The sub-segment-wise share is as below:
6
Growth rate for the period 2002-2008
7
CMIE, Excluding Railways
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1971-80 1981-90 1991-99 2000-03 2004-08
Railways Road Water Air Others
Source: Government of India (GoI), IMaCS Analysis
India has the world’s second-largest network of roads (3.83 million km after US’s 6.43 million km)8;
national highways form only 2% of the total roads by length and carry about 40% of the traffic. About
80% of the roads in India are village roads. The road sector is significant to India’s Transportation
Segment as it accounts for nearly 65% of the freight and 85% of the passenger traffic in the country.
This sub-segment is highly fragmented, with the truck operators owning less than five trucks
estimated to account for over 75% of the truck fleet. It is estimated that 10% of the market belongs to
those with 6-10 trucks; 4% to those with 11-15 trucks; 3% belongs to those with 16-20 trucks; and
only 4% of fleet belongs to those with more than 20 trucks. This industry is also characterised by
intense competition which is the result of relatively lower capital requirement, ease of obtaining
driving licenses and permits.
The small operators are involved mainly in the physical movement of goods and depend on brokers
and other fleet operators who in turn depend on the booking agents for obtaining business. The small
operators are not in a position to perform functions of aggregating, handling, delivering of cargo and
marketing. Besides, they do not have the geographical reach and necessary infrastructure to tap
business on a continuous basis, and thus rely on brokers.
8
CII Institute of Logistics
Page 11 of 67
Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
The large fleet operators are small in number, and generally operate throughout the country. These
fleet operators primarily work on a hub and spoke model. The hub and spoke distribution system
enables optimisation of costs and higher revenues for the transport companies and fleet operators.
These transport companies generally have formal contracts with the users, which is very rare in the
case of small operators. Large operators can also bid for the contracts with customers. They utilise the
services of the smaller operators when additional vehicles are required.
Over the period FY2001-07, for which detailed data is available from the Government of India (GoI),
the average annual growth in the road sector was around 14.3% at current prices and 9.6% at constant
prices, which was much higher than the overall GDP growth during the period.
India has the second largest rail network (63,000 km) in the world9. The Indian Railways have grown
into a vast network of over 7,500 railway stations, a fleet of about 8,600 locomotives, 41,000 coaches
& over 2,40,000 wagons10. Railways serve as a major mode of transportation for freight and
passengers and provide low cost effective options for long distance transportation. Rails are operated
by the Indian Railways, which records about 70% of its revenues and most of its profits from the
freight sector.
Railway freight loading has increased at a CAGR of 8.3% during the period 2002 to 200811. About
90% of rail freight traffic is contributed by eight major commodities - coal, fertilisers, cement,
petroleum products, food grains, finished steel, iron ore, and raw materials to steel plants.
A privatisation scheme was introduced recently to improve the performance of freight trains and
companies are now being allowed to run their own container trains. The wagon industry certainly
stands to reap a rich harvest from the large investment in the rail sector of the order of US$ 46 billion
in the 11th Plan. The Ministry of Railways has also planned to construct a new Dedicated Freight
Corridor (DFC) covering about 2,762 route km on two corridors, Eastern Corridor from Ludhiana to
Sone Nagar and Western Corridor from Jawahar Lal Nehru Port Mumbai to Tughlakabad or Dadri
along with interlinking of two corridors at Khurja. Upgrading of transportation technology, increase in
productivity and reduction in unit transportation cost are the focus areas for the project.
The Indian Railways employs about 1.4 million people12. Recruitment in the Indian Railways is
formalised through the Railway Recruitment Board, with the Government being the only employer.
9
Economic Survey 2007-08
10
IRFC
11
Centrum
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
The comparison between road and rail transport in terms of the goods traffic handled is as below:
The air freight segment presently accounts for a small pie of India’s freight market but it is growing at
a fast pace. Liberalisation and globalisation has given a fillip to the growth of this segment. For
example, about 740 thousand tonnes of cargo was handled at airports during 2007-08 as against about
655 thousand tonnes during the previous year13. Sophisticated machinery components, pharmaceutical
dyes, fruits, vegetables, flowers, fish and meat form part of air cargo.
An investment of about Rs. 400 billion (US $ 8 billion) is projected for the development of airports
during the 11th Five Year Plan. Airports Authority of India (AAI) has taken action for the
development of infrastructure in the country through the PPP model and joint ventures for the
modernisation of Delhi and Mumbai airports and development of Greenfield airports at Bangalore and
Hyderabad. The level of formalisation and standardisation of operations in the air freight segment is
greater than in other sub-segments such as in roads transportation. This sector has traditionally been
12
Economic Survey 2007-08
13
Airports Authority of India
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
relatively more organised leading to greater regard for manpower development. The aviation
companies typically have established internal structured training practices to train the staff employed
at this level (which is typically 10th pass or sometimes 10+2).
Indian aviation provides direct employment to over 1 lakh persons. Employment in aviation is further
expected to increase to a large extent.
Approximately 95% of India’s international trade by volume and 70% by value are seaborne. India
has 12 major ports, 1 corporate port, and 187 minor ports along 7,517 km long Indian coastline14. It is
strategically located as a major maritime nation due to its long coastline that flanks important global
shipping routes.
The Indian shipping tonnage increased from 0.19 million GRT15 in 1947 to 867 ships of 8.99 million
GRT at end-March 2008. The strongest growth was witnessed during the 1960-80 period (the GRT
increased from 0.48 million GRT at end-FY1961 to 5.54 million GRT at end-FY1980), when factors
such as expanding foreign trade, availability of finance on easy terms and major support by the
government encouraged the expansion of the Indian shipping industry. However, after this period the
growth slowed and even declined for some part of the 1990s.
14
CII Institute of Logistics
15
Gross Tons (GT) or Gross Registered Tons (GRT): GT/GRT is the fundamental measurement of the physical
size of a ship. It refers to the volume enclosed by the ship’s hull and superstructures in hundreds of cubic feet.
All registered ships will be assessed for their GT and this is the parameter normally referred to when the size of
a merchant ship is quoted in tons.
Page 14 of 67
Human Resource
R and Skill Requirem
ments in the Transportation
T n, Logistics, Warehousing
W aand Packaging
g Sector
Figgure 7: Grow
wth in India’ss Shipping Fleet
F
10,000 900
GRT (thousaand tonnes) No. off ships
9,06
60
9,000 8,4664 8,595 800
8,013
8,000 700
7,100
0 6,916 7,066 6,9444
6,8433 6,868 6,817 6,8221
7,000 6,555 600
6,178
6,000 500
5,000 400
4,000 300
3,000 200
1995 1996
6 1997 19988 1999 20000 2001 20022 2003 20004 2005 20006 2007 Sep
p-
07
7
From 20002-07, the GRT
G of Indiaan fleet increeased significcantly in respponse to firm
m trends in th
he freight
market and introduuction of toonnage tax scheme by the Indiann governmennt with effeect from
FY2005.Both tonnagge and fleet size
s have groown significaantly over the last few yeears.
Shipping
Coorporation of
India
25%
Others
38%
Great Easternn
Mercator Lines
L
Shipping
5%
Company
Varun Shippping Reliaance Ports 18%
Companny and Terminals
T
6% 8%
Source: CMIE,
C IMaCS
S Analysis
About 80%
8 of total volume of ports traffic handled is in the form of dry and liquid bulk, with the
residual consisting of
o general cargo, includding containeerised cargo.. Oil and prroducts’ trafffic is the
major foorm of liquidd bulk trafficc, accountingg for around 33% of total major portss traffic. Oth
her major
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
traffic comprises iron ore (18%), and coal (13%). Container traffic of various items constitutes around
16% of traffic handled at major ports.
There are around 128 institutes approved by the Director General of Shipping, offering various pre-
sea and post-sea training courses in various disciplines, and about 6,500 candidates pass out in a year.
The Government is responsible for creation of the trained manpower required for the country's
merchant navy fleet and also facilitation of training and employment of seafarers for possible
employment in foreign flag vessels. This is being met through the Government training institutes and
number of other approved training institutes in the private sector; trained maritime personnel from
India are much sought after by other nations.
This is used by oil sector companies for mass movement of petroleum products including gases. It is
one of the preferred modes of transportation due to significantly low operating cost.
Warehousing
Warehousing refers to the storage of product and goods to be transported, whether inbound or
outbound. A warehouse is often used as a stock piling location to manage demand-supply gaps over a
longer term. The Warehousing segment is expected to grow from Rs. 1,000 billion (US$ 20 billion) to
Rs. 2,750 billion (US$ 55 billion) by 2011, constituting about 35% of the total logistics industry in
India16. Major players in the warehousing segment are Central Warehousing Corporation, State
Warehousing Corporation, and Food Corporation of India, and other private players.
Various material handling equipments or systems are used in warehouses for loading and unloading
operations and movement of goods over short distances. Components of material handling systems
include lifting and storage equipment (fork lift trucks, order picking trucks, overhead cranes, tower
cranes and belt, chain and overhead conveyors), storage equipment (racks, mobile shelf units, and
plastic, wood and steel containers), automated handling equipment (automated guide vehicles, storage
and retrieval equipment, conveying systems and product sorting equipment). Robots may be used for
repetitive, monotonous, mundane tasks that need precision.
Warehouses also make use of Warehouse Management Systems (WMS) whose basic objective is to
help manage warehouse resources. WMS are generally associated with larger, more complex
distribution operations. However, even smaller and mid-size companies are increasingly recognising
the significance of WMS in today's environment of integrated logistics, JIT delivery, and e-commerce
16
CII Institute of Logistics
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
fulfilment. WMS uses advanced technology and operating processes for optimising all warehousing
functions, beginning from receipts from suppliers and ending with shipments to customers; it includes
all inventory movements and information flows in between.
Safexpress 3 10 2010
Gati 1 2 2009
Source: Centrum
3PL and 4PL
3PL services are a combination of all logistics activities - 3PL providers manage all the logistics
functions of a company. 3PL could imply the use of a transportation carrier, a warehouse, or a third
party freight manager to perform all or part of a company’s production distribution functions.
Demand for integrated 3PL solution providers has grown dramatically over the last several years and
they are increasingly becoming an effective way to reduce costs and spread risks for traditional,
vertically integrated firms. 3PL is estimated to grow at about 30% annually and become a Rs. 1,500
billion (US$ 30 billion) industry by 201017.
17
Cygnus
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
ValueAdded Services
Packaging
Packaging is a coordinated system of preparing goods for transport, warehousing, sale, and end use.
Packaging mainly protects the goods from damage and spoilage.
Packaging
The Indian packaging industry was valued at Rs. 700 billion (US$ 14 billion) in 2007. It is growing at
the rate of 14-15% annually and is expected that this rate would double over the next two years18.
Indian packaging industry is highly fragmented and unorganised, dominated by small players.
The growth of the packaging industry is closely linked to the growth of its major user industries. The
major user industries such as retail industry including food and beverages, pharma and auto
components industries are expected to play a major catalyst role in driving the packaging industry
growth. Indian packaging industry is expected to reach Rs. 3,000 billion (US$ 60 billion) by 2014
from the current US$14 billion19.
18
Centrum and CII Institute of Logistics
19
Centrum and CII Institute of Logistics
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Cold chain logistics system may be defined as a series of inter-related facilities for maintaining ideal
storage conditions for perishables from the point of origin to the point of consumption in the food
supply chain. The chain starts at the farm level (e.g. harvest methods, post-harvest and pre-cooling)
and continues till the consumer level or the retail level. A well organised cold chain reduces spoilage,
retains the quality of the harvested products and guarantees a cost efficient delivery to the consumer.
Emerging sub-sectors
Express services by both road and air modes are fast growing. While the Air Express and Courier
segment is reasonably organised, the Road Express segment is relatively less developed. Track and
trace as a technology is inevitably going to become a dependable part of transportation. Human
Resource capable of operating and maintaining the systems would be increasingly in demand. Cold
chain services are likely to gain significance with the growth organized food retail. This would
particularly give rise to the need for technically competent manpower capable of understanding the
temperature and humidity control requirements of various perishables and operating sophisticated
controlled atmosphere equipment.
Figure 11: Demand drivers for the Transportation, Logistics, Warehousing and Packaging Sector
Robust Trade
Growth
Globalisation
Emergence and
of
growth of 3PL
manufacturing
& 4PL
systems
Growth of Streamling of
Demand
MNCs and indirect tax
Drivers
organised retail structure
• Growth fuelled by emergence of MNCs and organised retail: The key driver of demand for
world-class logistics services is the growth of MNCs whose bottom line success requires low-
cost manufacturing locations, connected to consuming markets through highly efficient
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
supply lines. A comprehensive supply chain strategy is one that achieves flexibility,
responsiveness and reliability with cost savings. Thus the growth in these MNCs increases the
demand for efficient logistics services. Also the rapid growth of organised retail in India is
increasing the demand for logistics services to support the industry.
• Emergence and growth of 3PL & 4PL: Third party logistics or 3PL is a concept where a
single logistics service provider manages the entire logistics function for a company. While
the Indian 3PL market is still very much in its infancy compared to other countries, it is
experiencing healthy growth and attracting new companies eager to capitalise on the plentiful
opportunities it offers.
• Robust Trade Growth: Strong economic growth and liberalisation have led to considerable
increase in domestic and international trade volumes over the past five years. Consequently,
the requirement for transportation, handling and warehousing is growing at a robust pace and
is driving the demand for integrated logistics solutions.
• Globalisation of manufacturing systems: Globalisation of manufacturing systems along with
advancements in technology is increasingly compelling companies across verticals to
concentrate on their core competencies and avail the cost saving potential of outsourcing
logistics function. This is expected to contribute to an increase in the need for integrated
logistics solutions.
• Streamlining of the indirect tax structure: The standardisation of tax regimes across states is
a welcome step for Indian logistics firms. Logistics firms have been facing difficulties
because of several policies regarding local taxes and central sales tax. With the
standardisation of tax structure, 3PL logistics is expected to gain more market share.
1.4. Key Success Factors and Risk Factors for the Transportation,
Logistics, Warehousing and Packaging Sector
• Quality manpower: With the growth of 3PL and 4PL services in India, many trucking and
warehousing companies that are competent only in a particular sub-segment are quickly re-
branding themselves as overall logistics service providers. The present manpower available
with these companies does not have the requisite skills to handle the entire supply chain, and
training of personnel will be key to the success of these players.
• Keeping pace with technology: Information Technology (IT) plays a key role in supporting
the Transportation, Logistics, Warehousing and Packaging Sector. Some of the areas of
logistics industry where IT plays an important role include WMS, Transportation
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Management System, Track and Trace, Enterprise Resource Planning, etc. Technology has
crept into all areas of logistics such as product movement (RFID tags for tracking, GPS),
warehousing (WMS), etc. Technology helps organised logistics companies score over the
unorganised ones, and will be key to their operations going ahead given the competition.
• Enhanced operational efficiency: With industry margins under constant pressure and the
growing competition, improving operational efficiency will be critical to the success of
logistics firms.
• Highly unorganised and fragmented market: A large part of the Transportation, Logistics,
Warehousing and Packaging Sector in India is unorganised. A fragmented market increases
costs and the efforts required for efficient resource utilisation.
• Infrastructure issues: The inadequate infrastructure and poor condition of roads in India
translates directly into higher vehicle turnover. This in turn increases operating costs and
reduces efficiency.
• Lack of standards and processes within the sector: The highly unorganised nature of the
sector and the prevalence of ownership-based firms make it difficult for implementation of
standard operating procedures in this sector.
• Regulatory restrictions: Container transportation charges through railways in India are
among the highest in the world and can have an unfavourable impact on the growth of the
container business20. Besides this, in road transportation, whenever there is a sudden rise in
demand of a certain product, transporters make alliances and overcharge customers due to
lack of suitable regulations. This increases the overall logistics costs.
• Lack of skilled manpower: The Transportation, Logistics, Warehousing and Packaging
Sector is considered an unattractive career option and fails to attract skilled manpower – this
is especially critical in the case of integrated logistics providers.
20
ET Intelligence Report
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
To obtain leadership in the industry, companies will need to focus on the following drivers of
competitiveness that will generate increasing shareholder and customer value:
21
Cygnus
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Varied skill requirements in Indian logistics emerge due to the different modes, i.e. the road, rail, sea,
air available for transport, the range of service providers operating in the industry and the
corresponding activities performed. The movement of the Indian Transportation, Logistics,
Warehousing and Packaging Sector from in-house staff, who simply manage inventory to complex
third party supply chain management has intensified the skill gap situation. This is emphasised by the
fact that apart from domain training and expertise, supply chain managers are required to be
analytical, capable of multi-tasking, delegation, and able to handle stressful situations.
Specialised managerial, interpersonal and analytical skills are a must for the Indian Logistics industry
today, particularly in its nascent stages when it struggles to overcome critical infrastructure and
organisational challenges. At management and mid-tier levels, the unorganised structure of the
Transportation, Logistics, Warehousing and Packaging Sector in India has lead to problems of poor
organisation, lack of leadership, disjointed skills and positions, and a lack of process-driven systems
which needs to be tackled for achieving targets set for sectoral growth and support to overall
development.
A broad overview of the Indian Transportation, Logistics, Warehousing and Packaging Sector is as
below:
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Service providers:
* Broker/ agent
*Trucking company
*Multi mode operator
*3PL/4PL
Transport? Distribution
Yes
Customs origin, port
services
International transport
(Usually Sea/ air; may
Service providers: be land)
*Freight forwarders
*Express Cargo
*3PL/4PL
*Multi mode operator Received at port
(customs, services)
Container de-stuffing
and storage in
warehouse
Final delivery
Inland transport
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
The Transportation, Logistics, Warehousing and Packaging Sector in India currently employs around
7.3 million persons22. Of these, the maximum proportion is employed in the Road Transport Segment
and personnel employed in the Road Transport and Rail Transport Segments constitute over 90% of
the total employment in this sector in India.
Established logistics hubs in India include Mumbai, Kolkata and Chennai while the emerging hubs
are Gurgaon, Vizag, Nagpur and Indore. Emerging hubs such as Jamshedpur, Alwar, Ahmedabad,
Bangalore and Ambala, and nascent hubs such as Kochi will further help fuel the growth of the
Transportation, Logistics, Warehousing and Packaging Sector in India.
During our interaction with the industry as part of our Primary Research, we analysed the proportion
of workforce at various functional levels across different segments. As seen in the following tables, a
significant proportion of the workforce is involved in operations at the worker level, followed by
supervisory and other top level management personnel across functions. While in road transport,
warehousing the majority of employment is across core operations; in ship and rail a considerable
percentage is also involved in support activities such as communication with customer, sales and
marketing functions.
Functions Distribution
22
IMaCS analysis, will be elaborated in the later sections
23
Level-wise distribution is considered since most Road Transport companies are small scale, and do not have
human resources divided into different functions
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Functions Distribution
Table 6: Functional Distribution of Human Resources in the Ship Transport Segment / at Logistic
providers dealing in export-import, freight forwarding
Function Distribution
Operations 30-35%
Function Distribution
The following table represents the education-wise break-up of people across various segments of the
transportation, logistics, warehousing sector in India. As seen, most of the persons employed in the
transport sector in India are minimally educated and most have studied till 10th standard or below.
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
The following figure illustrates the composition of the value chain in the Road Transport Sub-
segment:
Consulting Packaging
Receiving Storing Pick up
goods Express/cold Track
chain and trace
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
The Road freight transport sub-segment in India is unorganised and fragmented, and the majority is
composed of small-time entrepreneurs owning one to ten trucks and this segment constitutes around
93% of the total players24. These entrepreneurs have limited resources and capital investment
capabilities, and their focus on investing in the future by improving the technology or by training their
manpower is limited.
2.2.2. Skill requirements and skill gaps in the Road Transport Sub-segment
The following table presents the skill requirements and gaps across various functions and
hierarchical/reporting ‘levels’ in the Road Transport Sub-segment.
Table 9: Skill requirements and skill gaps in the Road Transport Sub-segment 25
24
CII study on skill gaps in the Indian Logistics Sector
25
This is elaborated on at different levels for employment intensive functions such as driving, supervisory staff
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
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Human Resource
R and Skill Requirem
ments in the Transportation
T n, Logistics, Warehousing
W aand Packaging
g Sector
The following figuree illustrates the composition of the vaalue chain in the Ship Traansport Sub-ssegment:
The twoo entities innvolved in ship based logistics arre logistic providers w
who provide for the
warehouusing, transpoortation and shipping neeeds of the cu
ustomer, and the companiies that own ships. In
some caases the logisstic providerss don’t own the ship and
d containers (Non-Vessell Operating Common
C
Carrier). They arrannge for the caargo shippinng by buying
g space in thee ships throuugh their nettwork. In
these cases they couuld provide foor FTL (Fulll truck load) consignmennts or Less Thhan Truckloaad (LTL)
consignm
ments (wherre one comppany doesn’’t buy the full
f containeer space). Inn other casees where
companyy own the shhips they mayy run in the FTL
F or LTL mode depennding on requuirements.
Typical configuratioons of small, medium andd large playerrs in this seggment are:
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Table 10: Typical configurations of small, medium and large players in Ship-based Transport
1-2 people
Small 10-15 30-50 100-200 employed in each
location
3-5 people
Medium 30-40 100-150 200-600 employed in each
location
The following figure illustrates the profile of people employed in the Ship Transport Sub-segment.
Workers - school
educated/minimally educated Workers Workers
2.3.3. Skill requirements and skill gaps in the Ship Transport Sub-segment
The following table presents the skill requirements and gaps across various functions and
hierarchical/reporting ‘levels’ in the Ship Transport Sub-segment.
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Table 11: Skill requirements and skill gaps in the Ship Transport Sub-segment
Page 34 of 67
Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Sales and Manager Ability to maintain good working Inadequate ability in using
marketing relationships with old customers tools/spreadsheets for
while scouting for new customers tracking customer
for consignment filling from time behaviour, identifying old
to time customers from whom there
Ability to undertake negotiations is currently no business or
with concerned parties, finalise reduced business, etc.
the quotation for the service and Inadequate verbal
close the deal communication skills for
Ability to coordinate with agents influencing new customers
for customs clearances in the about the services offered
absence of an in-house officer at Inadequate ability to lead
the receiving end sales team
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
The Indian Railways, under the aegis of the Ministry of Railways of the Government of India,
operates most of India’s rail transport. About 70% of its revenues and a substantial profit is received
from the freight sector and most of its freight earnings come from transporting bulk goods such as
coal, cement, food grains and iron ore. Ports and major urban areas might have their own dedicated
freight lines and yards, and many important freight stops have dedicated platforms and independent
lines. The railways carry a large variety of goods ranging from mineral ores, fertilisers and
petrochemicals, agricultural produce, iron & steel, and others. In case of multi-modal transport rail is
one of the modes used most often. The rail freight segment faces competition from trucks which offer
cheaper rates and this may lead to resultant decrease in freight traffic.
The following figure illustrates the profile of people employed in the Railway Transport Sub-segment.
Graduate engineers /
diploma engineers with 5- Group A
6 years experience
Graduate engineers /
diploma engineers with 2- Group B Group B
3 years experience
Diploma
holders/matriculation Group C / D Group C / D Group C / D
(given training)
Page 37 of 67
Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
The recruitment in railways at all levels is directly controlled by the Government of India; the
infrastructure available for training and development is also in place in the Indian Railways. There is a
keen focus on manpower development in this segment – for example, the non-salary expenditure on
manpower is about 36% of the total expenditure on manpower, which is much higher than the overall
sector average of 13-14%26. However, this segment would require skill building given that Container
Operations has been opened to private participation.
Group A
1-2% Management personnel
Group B
Group C 60-70% Workshop employees, Engineers in mechanical, civil,
Group D 30-40% electrical trades, signaling, telecommunication staff
As regards training needs of railway officers, there are seven Centralised Training Institutes (CTI)
which cater to this. These are the Railway Staff College (Vadodara), Indian Railways Institute of Civil
Engineering (Pune), Indian Railways Institute of Signal Engineering & Telecommunications
(Secunderabad), Indian Railways Institute of Mechanical & Electrical Engineering (Jamalpur), Indian
Railways Institute of Electrical Engineering (Nasik), Indian Railways Institute of Transport
Management (Lucknow), and, Jagjivan Ram Railway Protection Force Academy (Lucknow). The
CTI’s apart from probationary training cater to the various specialized training needs of Indian
Railway officers – for example, the Railway Staff College provides inputs in general
management, strategic management and function-related areas for serving railway officers. Other
CTIs conduct specialized technical training courses in respective functional areas. Training
Programmes on Information Technology are also being conducted by the CTIs to provide
26
CII study on skill gaps in the Indian Logistics Sector
Page 38 of 67
Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
solutions for information management and decision support requirements. Training needs of non-
gazetted staff are being taken care of by over 200 training centres located over IR. Training regarding
safety has been made mandatory at different stages for staff.
2.4.2. Skill requirements and skill gaps in the Railway Transport Sub-segment
The following table presents the skill requirements and gaps across various functions and
hierarchical/reporting ‘levels’ in the Railway Transport Sub-segment.
Table 14: Skill requirements and skill gaps in the Rail Transport Sub-segment
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
The skill requirements and gaps with respect to warehousing, ICD/CFS is covered in the following
sections separately.
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
2.5. Skill Requirements and Skill Gaps in the Third Party Logistics
Segment
Third Party Logistics companies act as a third party or facilitator between the first party or supplier
and the second party or customer (Buyer or User). This concept is still at a nascent stage in India
(55% of large corporate use this service as compared to international benchmark of 75%) but with the
advent of multinationals in India and trends such as more companies wanting to outsource non-core
activities while concentrating on the core business activity, the requirement for 3PL is set to increase.
It is most commonly used for import or export management and customer clearing & forwarding
aspects of outbound transportation and inbound transportation in India. Over 30% of the 3PL users,
use the services for transportation, custom clearing & forwarding. Of the rest about 75% don’t use
these services because of doubtful quality of delivery of services.
Inventory
management
Labelling & Information
Packaging technology
Outbound transportation
Inbound
• Outbound warehousing warehousing
• Import/ Export management
• Customer clearing &
forwarding
The major use of third party logistic provider is for reducing costs incurred in transactions by using
expertise of these providers and making the operations flexible. The existing network reach of these
service providers is usually higher than the in-house reach of the company which gives a much wider
net for the customers to tap in less time and more efficiently. With more Indian companies going
Page 42 of 67
Human Resource
R and Skill Requirem
ments in the Transportation
T n, Logistics, Warehousing
W aand Packaging
g Sector
• nt: In the exxpress service segment inn India both documents and non-
Express Serrvice Segmen
document caargo is handled by logisttics providerrs, with docuuments cargoo constituting
g 52% of
the cargo handled.
h Exxamples of players
p opeerating in thhis space arre Blue Darrt, AFL,
Continental air express, DTDC, Gatii, TNT India,, etc.
• Multi-modaal Transport Operations (MTO): MT
TO Providerss are integraated service providers
p
who acts ass a link betw
ween differennt modes off transport (aair, sea, landd) in order to
t ensure
efficient andd cost effectiive door to door
d movemeent of goods. They proviide safe transsit at low
Page 43 of 67
Human Resource
R and Skill Requirem
ments in the Transportation
T n, Logistics, Warehousing
W aand Packaging
g Sector
F
Figure 19: Value
V chain in Multimod
dal Transporrt Operation
ns
2.5.2. Prof
ofile of peopple employeed
Page 44 of 67
Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Figure 20: Profile of people employed in the Third Party Logistics Segment
Graduates with no
experience or with 1-2 Executives / Executives /
years experience (these
account for ~60% of the Sr. Executives Sr. Executives
workforce)
2.5.3. Skill requirements and skill gaps in the Third Party Logistics Segment
The following table presents the skill requirements and gaps across various functions and
hierarchical/reporting ‘levels’ in warehousing of 3PL operations:
Table 15: Skill requirements and skill gaps in the Third Party Logistics Segment (Specific to
Warehousing)
Level /
Function Skills required Skill gaps
Description
Page 45 of 67
Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Level /
Function Skills required Skill gaps
Description
Page 46 of 67
Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Level /
Function Skills required Skill gaps
Description
Page 47 of 67
Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
The following table presents the skill requirements and gaps across various functions and
hierarchical/reporting ‘levels’ in export and import transactions, custom clearances and freight
forwarding of 3PL operations:
Table 16: Skill requirements and skill gaps in the Third Party Logistics Segment (Specific to
Export and Import Transactions, Custom clearances and Freight forwarding)
Page 48 of 67
Human Resource
R and Skill Requirem
ments in the Transportation
T n, Logistics, Warehousing
W aand Packaging
g Sector
The following figuree illustrates the composition of the vaalue chain in the Warehouusing segmen
nt:
Warehouusing activitty commencees when gooods are receiived from thhe supplier or factory or port. An
acknowlledgement foor receipt off goods is geenerated at the
t warehouuse. Further tto this, inspeection of
quantityy of goods recceived, and inspection
i off the conditio
on of packagging are condducted. The goods
g are
then placed in the waarehouse deppending on thhe plan of diispatch an apppropriate loccation. The processes
p
of packaaging, re-pacckaging, bunndling with promotion items
i (in som
me cases waarehouses bu
undle the
promotioonal items with
w main good at their ennd for cuttin
ng costs) mayy be carried out as value addition
steps onn a case to caase basis. Proocessing (whhich includes prioritisingg orders, schheduling disp
patch etc)
is underttaken as andd when orders are receiveed from custo
omers. Valuee addition maay also be caarried out
at the warehouse,
w a includess packaging activities su
and uch as MRP
P tagging, rrepackaging,, product
mixing before
b actuall distributionn, assembly, etc. After co
onfirmation of
o the order, goods are picked
p up
using FIIFO methodoology and shhipped or traansported to the
t customerr location. T
The delivery of goods
is ascerttained by a suupporting recceipt issued by
b the custom
mer at the tim
me of deliverry.
The reggional tax reegime which existed inn India has led to fraggmented waarehouses which
w are
commonnly owned byy C&F agentts rather thann centralised set ups undeer direct supeervision of co
ompany.
2.6.2. ICD
D and CFS
27
Sourcee: Ministry of Commerce annd Industry, Government
G off India
Page 49 of 67
Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
These providers facilitate the country’s export, import, domestic trade and commerce by providing the
requisite logistic support. ICDs and CFSs act as concentration points for long distance cargoes and
their unitisation. They also service as a transit facilities and enable customs clearance facility
available near the centres of production and consumption. Some other features include reduced level
of demurrage and pilferage, no customs required at gateway ports, issuance of through bill of lading
by shipping lines hereby resuming full liability of shipments, reduced overall level of empty container
movement, competitive transport cost and reduced inventory cost. Key industry users of ICDs and
CFSs include exporters and importers across industries such as steel, agri-products, auto-components,
telecom equipments, retail, consumer durables, etc.
The import and export cycles with respect to ICD and CFS are as below:
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Custom examination/Stuffing
ICDs and CFSs follow the hub-spoke model for operation, whereby the cargo is picked from the
customer’s door-step; after stuffing the container with cargo it is transported to the nearest ICD and
CFS. Functionally there is no distinction between an ICD and CFS. Both act as transit facilities that
offer services for containerisation of break bulk cargo and vice-versa. These could be served by rail
and/or road transport. The difference lies in the location of the ICD and CFS – an ICD is generally
located in the interiors (outside the port towns) of the country and away from the servicing ports while
a CFS is an off dock facility which is located near the servicing ports. It helps in decongesting the port
by shifting cargo and customs related activities outside the port area. CFS are largely expected to deal
with break-bulk cargo originating or terminating in the immediate hinterland of a port and may also
deal with rail borne traffic to and from inland locations.
Operations or functions at ICD and CFS include Receipt and dispatch or delivery of cargo, Stuffing
and stripping of containers, transit operations by rail or road to and from serving ports, Customs
clearance, consolidation and de-segregation of LCL cargo, temporary storage of cargo and containers,
reworking of containers, maintenance and repair of container units.
The following figure illustrates the profile of people employed in the Warehousing Segment.
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Diploma holders/
graduates with 4-5 years Supervisors Supervisors
of experience
The following table presents the skill requirements and gaps across various functions and
hierarchical/reporting ‘levels’ in the Warehousing Segment.
Table 17: Skill requirements and skill gaps in the Warehousing Segment
Manager Excellent spoken and written language skills Limited knowledge of the latest
for meaningful interaction with customers and & innovative warehousing
(C & F
proper documentation technologies / formats available
agents)
Knowledge of local language for interacting Inadequate exposure /
with in house-workers knowledge of IT systems in
Team skills to be able to motivate the team of warehousing
workers for improving efficiency in day to day Inadequate ability to invest in
operations human resource development of
Awareness of the new warehousing personnel working with them
technologies so as to be able to take decisions Inadequate knowledge of
regarding capital investment in appropriate measures of safety and security
technologies of stock
Knowledge of inventory, order management Inadequate knowledge of
Ability to maintain specific standards and industry specific stocking and
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
• Growth in Consumption: The proportion of containerised cargo handled at Indian ports has
been showing a constant increase driven by various trade liberalisation policies, increasing
containerisation in general cargo commodities such as durables, engineering components,
machinery, auto components, food products and apparels. Further, value added goods are
expected to increase which will further increase the need for more secure containerized
transport. Containerised transportation will also be driven by rising international trade,
increasing investments in port infrastructure by the government and through public-private
partnerships (PPPs). The cold chain industry is also expected to grow at a double digit growth
rate. The growth will be driven by organised retail, shift towards horticultural crops, growth
in processed food sector which be boosted by government initiatives and demand from the
pharmaceutical sector.28 Consumer segments such as FMCG, organised retail are poised for
growth in India driven by favourable shift of population towards middle income group and
expanding disposable incomes. New customer segments are emerging for 3PL services;
presently, auto and IT hardware industry as the largest end-user industry for 3PL services,
with multinational companies being the predominant users of these services. Other sectors
that have shown substantial contribution to 3PL market and significant growth potential
include FMCG, pharmaceutical and retail sectors. As the consumption in these sectors will
grow in volumes, the corresponding logistics support needs are also slated to grow
proportionately. As more and more controls are applied on stocking levels at the point of sale,
the demand for time bound deliveries will increase, because unavailability at selling point will
translate in significant losses.
28
Primary Research
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
• Consolidation in the market: There are expected to be larger distribution centres to handle
higher volumes as compared with the current small size. To benefit from pan-India coverage,
an increasing number of larger warehouse facilities operated by transport companies or
clearing and forwarding agents are expected with the consolidation of smaller warehouses -
this will be driven by mergers and acquisitions in this area. In the future, it is expected that
suppliers and manufacturers will pick out the most central and convenient warehouse or DC
for their needs, as opposed to having one in each state or location thereby driving economics
of scale.
• Foreign investments: In India, 100% FDI is allowed in logistics. Almost all large global
logistics companies have their presence in India. However it is presently restricted to freight
forwarding. For domestic transportation and warehousing these companies have tie-ups with
Indian companies. As the Indian logistics scenario looks promising, these MNCs are expected
to play a bigger role, probably by forming wholly-owned subsidiaries or taking the
acquisition route. Going forward, the latter may be the preferred route of investment since the
asset base and distribution network would already be in place. For example, DHL Express is
the majority stakeholder in Blue Dart Express and holds over 80% equity in the firm. Blue
Dart, however, continues to operate as an independent brand and provides a complete
spectrum of domestic and international express services through synergies with DHL.
• Product innovation- Market view: With customers becoming more selective about services
on cost and quality basis, the operations of companies going global and more track-trace
sought today by customers, the new internationally popular services in warehousing, freight
forwarding are becoming popular in India as well. For example, TCI Supply Chain Solutions
is offering some unique value added services such as Reverse Logistics, PDI or COD
Services, Kitting Services, Customs Clearance, E-logistics, Facilitating Risk and Tax
Management29. Indian players entering new markets – for example, after acquisition of Air
Deccan (Low-frill Indian airline carrying a 60:40 mix of passenger to cargo weight) by
Kingfisher airlines, Deccan Cargo and Express Logistics Pvt. Ltd have been started which
links Indian customers with international locations. Deccan 360 is the only Indian cargo
airline that is operating on both domestic and international routes.
29
www.tcil.com
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Quadrilateral will ensure improved efficiencies in road or rail transport and reduce delays,
losses due to accidents to a considerable extent. The national tax regime will bring changes in
terms of network designs for companies distributing in India. There will be a sea change in
the domestic distribution landscape resulting from a normalisation of inter-state taxes.
Schemes have been launched by GOI to increase private participation in containerised cargo
market. It has given out new licenses for private players to generate a competition for
CONCOR and consequently improve efficiency in segment. This complemented with lower
cost of ownership for reach stackers many more companies will enter this business. Presently,
container train operation is restricted on account of non-availability of train engines or driver
from CONCOR. With improved servicing, long distance road cargo is expected to decline and
boost container rail transportation for domestic movement, which at present takes about one
week time to deliver.
• Information technology: The present IT requirements in the Indian logistics and shipping
industry are Track and Trace, Warehouse Management System (WMS), Transportation
Management System (TMS), ERP and Scanner Implementation, Automatic Conveyor Belt
system, Scan based Auto Sorting tables and process, etc. For example, WMS is used for
stacking and retrieval. WMS is used only by logistics companies which have a large
warehouse at multiple sites and carry a large number of SKUs. The TMS gives an idea about
the pickup point and delivery.
• New technologies: The technologies which are not widely used as of now but are becoming
popular in India are Warehouse Control System (WCS), Standard Interfaces (EDI standards)
for B2B transactions, Web Services, RFID technology to track shipments and Telematics,
GPS use for tracking for the fleet, Telemetric: It is similar to GPS but also provides
information about the expected time of arrival, and monitoring and analysing the vehicle and
route usage, Advanced track and trace (SMS-based or e-mail-based tracking), RFID: It is a
mobile technology, wherein customers can keep tabs on a particular shipment. Besides time,
position or destination of the shipment some specialties include ability to track configurations
and temperature etc. The e-commerce segment is set to be a significant contributor to top line
of companies such as Blue Dart and it is expected to be one of the fastest growing segment, so
more companies are expected to enter this market in future as all the B2B or B2C consumers
want to do online transactions.
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
• Driving Skills: Driving skills in road transport are expected to undergo a change. Drivers are
currently not formally in handling heavy weight vehicles and safety procedures. They also
need to be aware of compliance to road rules, procedures for inter-state movement, etc. This
problem is further compounded by the fact that they are generally minimally educated.. They
are also not aware of the specifics of handling complex materials, hazardous
substances/chemicals or newer trucks with complex controls or working, and need to be
formally trained in these areas. With the growing impetus of government in improving the
situation on national level more government supported IDTRs, private institutes such as
Maruti Driving Schools, etc. are emerging.. The focus of these training would also include
behavioural or attitudinal training regarding issues such as lane discipline, no usage of drugs
while driving, apart from technical aspects such as maintenance activities for vehicle, etc.
Going forward, the drivers will also be trained in segments such as route planning based on
peak hours or normal hours basis, map reading which will help them in increasing efficient
fuel usage.
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
this industry. Areas such as good handling practices, supervisory skills have not been focused
on in formal training organised at national level. Warehouse handlers have to acquire skills in
using equipments such as printing devices, scanning devices, basic computing devices, etc.
They are also expected to become conversant with more popular value addition services such
as labelling, handling requirements specific to heavy or fragile material, special consolidation
or bundling requirements etc.
Apart from these, the service providers need to be skilled in aspects related to state-specific
rules, procedures, compliances to required paper-work, excise, etc.
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
The GDP of the Transport sector30, in real terms at 1999-00 constant prices, increased from Rs.1,107
billion in 2001 to Rs. 1,991 in 2008, recording a Compounded Annual Growth Rate (CAGR) of 8.7%.
In the same period, the GDP of the Indian economy grew by about 8%.
For the period 2008 to 2022, we expect the GDP to grow between 7.5% and 8%31. Accordingly, we
project that the Transportation sector would record a growth of 8.5% to 9% over the same period.
Figure 25: Projected GDP growth in Transportation sector – 2008 to 2022 (Rs. billion, constant
prices 1999-00)
7,000
6,000
5,000
4,000 8.6%
3,000
2,000
1,000
-
2008 2012 2018 2022
2.8.2. Projected Industry Size and Human Resource Requirements in the Road
Transport Sector
The requirement for human resource in the Road Transport sector will be driven by the production of
Commercial Vehicles, Cars, and Three Wheelers (3Ws). A major portion of this requirement will
arise from Medium and Heavy Commercial Vehicles (M&HCVs).
The following projection takes into account the current M&HCVs in India, expected projection,
number of drivers and cleaners required, keeping in mind the retirement of a portion of the fleet of on-
road vehicles32.
30
classified as ‘Railways’, and ‘Transport by other means’
31
Source: IMaCS analysis
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Table 18: Projected on-road M&HCVs and human resource requirement in M&HCVs for drivers
and cleaners (in ‘000s)
On similar lines, keeping in mind the expected growth in the Auto Sector, we estimate the following
current and incremental human resource requirement for drivers, cleaners, and loading supervisors33
in Road Transport sector34.
Table 19: Incremental human resource requirement in the Road Sector till 2022 (in ‘000s)
2.8.3. Projected Industry Size and Human Resource Requirements in the Port
Sector
According to the report titled ‘Coordinated Port Development Plan’ of the Indian Ports Association,
the projected revenue of major ports in India is expected to grow at a CAGR of 9.5% from Rs. 5,446
crore in 2008 to Rs. 9,375 crore by 2014. Keeping in mind the overall GDP growth, we project that
32
Source: IMaCS analysis; assumes a retirement of about 10% - 12% of older M&HCVs every year from the
previous year’s total.
33
Every M&HCV would require 1 to 2 cleaners/helpers; the number of loading supervisors is assumed to be
15% of M&HCVs on-road
34
Refer IMaCS report for NSDC on Human Resource and Skill Requirement in the Auto and Auto Components
sector for details.
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
the revenue of all ports would grow from Rs. 7,000 crore in 2008 to over Rs. 25,150 crore in 2022, at
about at a CAGR of 9.5%35.
The employment in the port sector would increase from the current levels of over 93,000 persons to
about 2.2 lakh persons by 2022.
2.8.4. Projected Size and Human Resource Requirement of the Airline Industry
Air Transport in India has been growing at a CAGR of 18% to 20% between 2005 and 2008. Usually,
the Airline sector grows at twice the GDP growth. Accordingly, we expect the airline sector 15% to
16% between 2008 and 2022.
The following details the expected growth in the Airline sector as per projections of Airports
Authority of India36.
Table 20: Projected growth in the Airline Industry in India
Air Traffic Movements Passenger (in million) Cargo (in '000 tonnes)
(in '000s)
35
Including minor ports
36
AAI, FICCI report on ‘Indian Aviation: Scaling New Heights’ - 2008
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Air Traffic Movements Passenger (in million) Cargo (in '000 tonnes)
(in '000s)
The projected human resource requirement in the Airline sector is detailed below.
Table 21: Projected Industry Size and Human Resource Requirement in the Airline Industry
India has about 1,800 to 1,900 million sq. ft. of warehouse space of which only about 8% is in the
organised sector. The organised sector, which includes warehouses of companies and 3PL providers,
is growing at over 10%37.
37
CII Report on Skill Gaps in the Indian Logistics sector - 2007
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
Based on the GDP growth of the Transportation sector, we estimate that the warehousing space would
continue to record a CAGR of over 10% till 2022.
Accordingly, the warehouse space in the organised sector would increase from about 150 million sq.
ft. in 2008 to about 450 million sq. ft. of space in 2022. This would drive the requirement for human
resource in this sector.
Accordingly, we project the human resource requirement for the Warehousing and Transportation
sector in the organised and 3PL space38.
Table 22: Incremental human resource requirement till 2022 in Warehousing (organised sector)
and 3PL (in ‘000s)
The overall projected human resource requirement in the Transportation, Logistics, and Packaging
sector is shown in the following table.
Table 23: Incremental human resource requirement till 2022 in the Transportation, Logistics, and
Warehousing sector (in ‘000s)
38
Assumption: A warehouse of 10,000 sq. ft. of space requires about 1 warehouse manager and about 100
workers
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
The demand for human resource in the Transportation, Logistics, and Warehousing sector is thus
expected to increase from about 7.3 million to about 25 million, leading to an incremental human
resource requirement for about 17.7 million persons.
The possible focus areas for skill building through short-term (3 to 6 months) and medium-term
(under a year) skill building initiatives are mentioned in the following table.
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
The above are areas indicative of skills which are in demand to a great extent and the possible areas of
training content for the same.
Addressing these requirements is critical for the competitiveness of the Transportation, Logistics,
Warehousing and Packaging sector in the long run.
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Human Resource and Skill Requirements in the Transportation, Logistics, Warehousing and Packaging Sector
This report has been prepared by ICRA Management Consulting Services Limited (IMaCS).
IMaCS is a multi-line management and development consulting firm headquartered in India. It has an
established track record of over 15 years in consulting across various sectors and countries. IMaCS
has completed over 950 consulting assignments and has worked in over 30 countries across the globe.
Through the process of carrying out several assignments over the last decade and half, IMaCS has
accumulated considerable analytical and consulting expertise, backed by the following capabilities:
The Education and Skills practice at IMaCS focuses on identifying skill gaps, mapping future skill
requirements, and formulating strategies to address them. Our service offerings encompass diagnosis,
design and implementation of education and skill development interventions for government and
private sector.
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National Skill Development Corporation
D-4, Clarion Collection, (Qutab Hotel)
Shaheed Jeet Singh Marg
New Delhi 11 0 016
Tel : 011 46 56 0414
Fax : 011 4656 0417
Email : nsdc@nsdcindia.org
www.nsdcindia.org