"Moreover, companies entering the country may not be conversant with the complex business and tariff laws and so they require a 3PL service provider with a grasp on such aspects."

New analysis from Frost & Sullivan (http://www.transportation.frost.com ), Strategic Analysis of the Third Party Logistics Markets in India, finds that this market earned revenues of $890.3 million in 2005 and is likely to reach $3.56 billion in 2012.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the latest analysis of 3PL markets in India, then send an e-mail to Alice Chia, Corporate Communications, at alice.chia@frost.com with your full name, company name, title, telephone number, fax number, and e-mail address. Upon receipt of the above information, an overview will be sent to you by e-mail.

The overall 3PL market is still at a nascent stage in India. Sectors such as automotive and IT hardware and electronics have seen a greater acceptance of 3PL, with the concept of end-to-end outsourcing becoming increasingly popular as companies realize its many advantages. In contrast, sectors such as pharmaceuticals and fast moving consumer goods (FMCG) have a relatively low penetration of 3PL services due to strained profit margins.

Mohan observes that there is an increasing trend toward outsourcing of logistics operations of a company to professional 3PL service providers.

"This is a positive trend for the 3PL service providers and it is taking place because companies have realized the importance of concentrating on their core competencies, leaving logistics to the experts," Mohan says.

He adds that the level of outsourcing of services may vary between industrial sectors, with some of the companies opting for either a partial or a full service depending on the need.

The repealing of the present sales tax system and the adoption of a uniform national VAT system are likely to reorganize the existing decentralized distribution models into more centralized zones. "This could result in the considerable growth of a number of large zonal warehousing hubs managed by 3PLs, facilitating efficient distribution of goods," Mohan says.

Strategic Analysis of the Third Party Logistics Markets in India examines major market drivers, restraints, industry challenges, and also provides revenue forecasts and end-user analyses. A detailed overview of the competitive scenario highlights the key opportunities for 3PL service providers. In this research service, Frost & Sullivan's expert analysts thoroughly examine the following logistics functions: transportation, warehousing, freight forwarding, and MIS and other value-added services. Interviews with the press are available.