Logistics & Supply Chain News: Key Developments for August 2024

JLL Highlights Strong Growth Trends in Logistics and Industrial Sectors for 2024

Synopsis: In the first half of 2024, India’s industrial and logistics sectors grew rapidly. The strong demand for warehouse and manufacturing spaces caused the cost of renting Grade A and Grade B properties in major cities to increase by 4.8% and 6.4%, respectively. Grade A properties had a 6.6% vacancy rate, while Grade B properties had a higher rate at 15.4%, according to the JLL report. Seventy percent of the 24.2 million square feet of leased space were grade A properties.

News: India’s logistics and industrial sector has seen impressive growth in the first half of 2024, highlighting its strength in today’s market, according to a report by real estate firm JLL.

In major cities like Mumbai, Delhi NCR, Bengaluru, Kolkata, Chennai, Hyderabad, Ahmedabad, and Pune, rents for top-quality (Grade A) and slightly lower-quality (Grade B) industrial spaces have increased significantly by 4.8% and 6.4% respectively, compared to last year.

This rise in rent shows that there’s a high demand for warehousing and light manufacturing spaces.

The report also mentioned that vacancy rates, or the percentage of unoccupied properties, were 6.6% for Grade A spaces and 15.4% for Grade B spaces in the first half of 2024. The total area of industrial spaces leased out in these top eight cities is about 24.2 million square feet, with 70% being Grade A properties and 30% being Grade B.

Currently, the total supply of industrial properties in India is 393 million square feet, and it’s expected to grow to around 595 million square feet by 2027, showing the sector’s strong growth potential.

Organized Grade A warehouses now cover 204 million square feet, surpassing the 189 million square feet covered by Grade B warehouses. This indicates that businesses prefer more modern and efficient spaces, which also meet higher standards for environmental sustainability and automation.

The report also highlighted that the third-party logistics (3PL) sector is the biggest demand driver, accounting for 38% of all leases. The auto and engineering sector follows this at 23%, and the FMCG (Fast-Moving Consumer Goods), FMCD (Fast-Moving Consumer Durables), and retail sectors together contribute 20%.

India's Container Prices Soar 27% Amid Global Tensions

Synopsis: Geopolitical tensions led to a 27% rise in container logistics costs in India’s shipping market in July. Despite this volatility, India showed resilience compared to other Asian markets. Experts anticipate further price increases in August. Since the beginning of 2024, India’s container prices have been steadily climbing, with significant hikes noted in major ports like Chennai. The ongoing global geopolitical challenges, particularly since April 2024, have contributed to this upward trend and market instability.

News: Geopolitical challenges led to a 27% increase in container logistics costs in India’s shipping market in July. Despite this volatility affecting Asian markets, India has shown resilience, according to a report released on Thursday.

Most supply chain experts expect container prices to rise further in August, based on the results of the ‘Container xChange August Forecaster Survey.’

Christian Roeloffs, co-founder and CEO of Container xChange, a Germany-based online platform for container trading and leasing, stated that the Asian container logistics market has been unstable since last November when Houthi attacks caused disruptions in the Red Sea.

“India’s average container prices have been more stable compared to other Asian countries in 2023 and throughout 2024,” Roeloffs noted.

Since the beginning of 2024, India has seen a steady increase in container prices each month. Prices rose in July to $2,028, up from $1,941 in June and $1,603 in May 2024.

The report highlighted a continuous rise in average container prices in Chennai, increasing from $1,502.5 in December 2023 to $2,072.5 in July 2024.

The global geopolitical situation has particularly affected India’s container logistics market since April 2024, leading to higher prices and increased market instability.

TCI Reports 10% Rise in Q1 Net Profit, Reaches ₹92 Crore

Synopsis: In the first half of 2024, India’s industrial and logistics sectors grew rapidly. The strong demand for warehouse and manufacturing spaces caused the cost of renting Grade A and Grade B properties in major cities to increase by 4.8% and 6.4%, respectively. Grade A properties had a 6.6% vacancy rate, while Grade B properties had a higher rate at 15.4%, according to the JLL report. Seventy percent of the 24.2 million square feet of leased space were grade A properties.

News: Transport Corporation of India (TCI) announced a 10% increase in its consolidated profit after tax (PAT), reaching ₹91.6 crore for the quarter ending June 30, 2024. This is up from ₹83.2 crore in the same period last year, according to a filing with the BSE.

The company’s income also grew, rising to ₹1,056 crore from ₹958.3 crore a year ago.

Vineet Agarwal, TCI’s Managing Director, expressed satisfaction with the company’s strong performance in the first quarter of FY2025. He highlighted growth across all product segments, particularly in coastal shipping, rail multimodal solutions, 3PL/warehousing, and cold chain logistics. Agarwal emphasized TCI’s ongoing focus on delivering customized, technology-driven solutions to its customers.

Additionally, TCI continues to invest in essential infrastructure, such as warehouses and yards, while utilizing data from e-waybills and FASTag to better predict demand and improve logistics efficiency.