A PROJECT REPORT ON

Comparison of International and Indian logistics scenario on Customer Satisfaction.

Project Submitted in fulfillment of Post Graduate Diploma in Management (PGDM)

Submitted by: Derly Thomas Roll No. P1115 Batch 2011-2013

Under the guidance of Prof. Prasanna Salvi

Declaration

I, Derly Thomas solemnly declare that the project work entitled Comparison of International and Indian logistics scenario on Customer Satisfaction, is my original work, it is neither copied from any earlier submitted work elsewhere or not merely copied, this is specifically prepared as a part of PGDM curriculum, to be conducted in Year 2013.

Signature of the student: ________________________ Name of the Student: Derly Thomas

Acknowledgement

I would sincerely thank Mr. Aji Chako who has been my guiding light throughout these two months and supported and helped me do justice to this project. I would also thank my Institution and Prof. Prasanna Salvi without whom this project would have been a distant reality.

Date:

Sign:

Table of Contents
Executive Summary........................................................................................................... 7 Objectives of the Project.................................................................................................... 8 Scope ............................................................................................................................. 9 Approach........................................................................................................................ 9 Limitations of the Study.................................................................................................. 9 Logistics........................................................................................................ 10 Origin:........................................................................................................................... 11 Production logistics.................................................................................................... 12 Logistics management............................................................................................... 14 Warehouse management systems and warehouse control systems..........................14 Third-party logistics................................................................................................... 14 Fourth-party logistics................................................................................................. 14 ..................................................................................................................................... 16 Logistics in International Scenario................................................................................. 16 Logistics in Indian Scenario............................................................................................ 19 Customer Satisfaction............................................................................................ 24 About the Organization DHL Express.............................................................................. 26 ..................................................................................................................................... 26 History:............................................................................................................................. 27 Domestic expansion................................................................................................... 27 Deutsche Post purchase............................................................................................. 28 Services......................................................................................................................... 31 DHL Aviation................................................................................................................ 31 Research Methodology..................................................................................................... 32 Sampling Technique...................................................................................................... 33

Sample Size................................................................................................................... 33 Methods of Data Collection........................................................................................... 33 Nature of Questions Asked............................................................................................ 33 Data Representation..................................................................................................... 33 Data Collection & Analysis............................................................................................... 34 1. Questionnaire............................................................................................................ 48 Suggestions for Improvement.......................................................................................... 51 Future prospects ............................................................................................................ 55

Executive Summary
Logistics is the management of the flow of resources between the point of origin and the point of destination in order to meet some requirements, for example, of customers or corporations. The logistics of physical items usually involves the integration of information flow, material handling, production packaging, inventory, transportation, warehousing, and often security. The complexity of logistics can be modeled, analyzed, visualized, and optimized by dedicated simulation software. The minimization of the use of resources are common motives. Thus, the entire supply chain and the profits thrive on how well the logistics are managed. This project aims at: 1. 2. 3. 4. 5. Understanding the International logistics market. Understanding the Indian logistics market. How well the markets have developed and manage customer satisfaction Establish a comparison Successfully chart out solutions for improving the market

Objectives of the Project

Purpose
Logistics is a vital aspect to any business which is often neglected. Purpose of this project is to study the International players and how well have they managed customer satisfaction. Compare the same with the Indian market conditions.

Scope
The project is defined only to the extent of information made available from the organization

Approach
1. Understanding the nature of business 2. Understanding the International Logistics market 3. Understanding the Indian Logistics market 4. Getting first hand information from organization through questionnaire 5. Comparison the Indian and international logistics market with respect to Customer Satisfaction 6. Coming to plausible solution.

Limitations of the Study

1. Information collected is limited to the scope mentioned above 2. Respondents did not have an earlier experience of answering questionnaires 3. Lack of experience as a researcher

Logistics

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Origin:
The term logistics comes from the late 19th century: from French logistique, from loger 'to lodge'. Logistics is considered to have originated in the military's need to supply itself with arms, ammunition, and rations as it moved from a base to a forward position. In the ancient Greek, Roman, and Byzantine Empires, military officers with the title Logistikas were responsible for financial and supply distribution matters. The Oxford English Dictionary defines logistics as "the branch of military science relating to procuring, maintaining and transporting material, personnel and facilities." However, the New Oxford American Dictionary defines logistics as "the detailed coordination of a complex operation involving many people, facilities, or supplies", and the Oxford Dictionary online defines it as "the detailed organization and implementation of a complex operation". Another dictionary definition is "the timerelated positioning of resources." As such, logistics is commonly seen as a branch of engineering that creates "people systems" rather than "machine systems". According to the Council of Logistics Management, logistics includes the integrated planning, control, realization, and monitoring of all internal and network-wide material, part, and product flow, including the necessary information flow, in industrial and trading companies along the complete value-added chain (and product life cycle) for the purpose of conforming to customer requirements. Logistics is the process of planning, implementing, and controlling the effective and efficient flow of goods and services from the point of origin to the point of consumption. Field of Logistics: Given the services performed by logisticians, the main fields of logistics can be broken down as follows:

Procurement logistics Production logistics Distribution logistics After sales logistics Disposal logistics Reverse logistics Global logistics Domestics logistics

Procurement logistics consists of activities such as market research requirements planning, make-orbuy decisions, supplier management, ordering, and order controlling. The targets in procurement logistics might be contradictory: maximizing efficiency by concentrating on core competences, outsourcing while maintaining the autonomy of the company, or minimizing procurement costs while maximizing security within the supply process.

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Production logistics connects procurement to distribution logistics. Its main function is to use available production capacities to produce the products needed in distribution logistics. Production logistics activities are related to organizational concepts, layout planning, production planning, and control. Distribution logistics has, as main tasks, the delivery of the finished products to the customer. It consists of order processing, warehousing, and transportation. Distribution logistics is necessary because the time, place, and quantity of production differs with the time, place, and quantity of consumption. Disposal logistics has as its main function to reduce logistics cost and enhance service related to the disposal of waste produced during the operation of a business. Reverse logistics denotes all those operations related to the reuse of products and materials. The reverse logistics process includes the management and the sale of surpluses, as well as products being returned to vendors from buyers. Business Logistics One definition of business logistics speaks of "having the right item in the right quantity at the right time at the right place for the right price in the right condition to the right customer". As the science of process, business logistics incorporates all industry sectors. Logistics work aims to manage the fruition of project life cycles, supply chains, and resultant efficiencies. Logistics as a business concept evolved in the 1950s due to the increasing complexity of supplying businesses with materials and shipping out products in an increasingly globalized supply chain, leading to a call for experts called "supply chain logisticians". In business, logistics may have either an internal focus (inbound logistics) or an external focus (outbound logistics), covering the flow and storage of materials from point of origin to point of consumption. The main functions of a qualified logistician include inventory management, purchasing, transportation, warehousing, consultation, and the organizing and planning of these activities. Logisticians combine a professional knowledge of each of these functions to coordinate resources in an organization. There are two fundamentally different forms of logistics: one optimizes a steady flow of material through a network of transport links and storage nodes, while the other coordinates a sequence of resources to carry out some project. Production logistics The term production logistics describes logistic processes within an industry. Production logistics aims to ensure that each machine and workstation receives the right product in the right quantity and quality at the right time. The concern is not the transportation itself, but to streamline and control the flow through value-adding processes and to eliminate nonvalue-adding processes. Production logistics can operate in existing as well as new plants. Manufacturing in an existing plant is a constantly changing process. Machines are exchanged and new ones added, which gives the opportunity to improve the production logistics system accordingly. Production logistics provides the means to achieve customer response and capital efficiency.

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Production logistics becomes more important with decreasing batch sizes. In many industries (e.g., mobile phones), the short-term goal is a batch size of one, allowing even a single customer's demand to be fulfilled efficiently. Track and tracing, which is an essential part of production logistics due to product safety and reliability issues, is also gaining importance, especially in the automotive and medical industries.

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Logistics management Logistics is that part of the supply chain that plans, implements, and controls the efficient, effective 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. A professional working in the field of logistics management is called a logistician.

Materials management Channel management Distribution (or physical distribution) Supply-chain management

The Chartered Institute of Logistics and Transport (CILT), established in the United Kingdom in 1919, received a Royal Charter in 1926. The Chartered Institute is one of the professional bodies or institutions for the logistics and transport sectors that offers professional qualifications or degrees in logistics management. Warehouse management systems and warehouse control systems Although there is some overlap in functionality, warehouse management systems (WMS) can differ significantly from warehouse control systems (WCS). Simply put, a WMS plans a weekly activity forecast based on such factors as statistics and trends, whereas a WCS acts like a floor supervisor, working in real time to get the job done by the most effective means. For instance, a WMS can tell the system that it is going to need five of stock-keeping unit (SKU) A and five of SKU B hours in advance, but by the time it acts, other considerations may have come into play or there could be a logjam on a conveyor. A WCS can prevent that problem by working in real time and adapting to the situation by making a last-minute decision based on current activity and operational status. Working synergistically, WMS and WCS can resolve these issues and maximize efficiency for companies that rely on the effective operation of their warehouse or distribution center. Logistics Outsourcing Logistics outsourcing involves a relationship between a company and an LSP (logistic service provider), which, compared with basic logistics services, has more customized offerings, encompasses a broad number of service activities, is characterized by a long-term orientation, and thus has a strategic nature. Third-party logistics Third-party logistics (3PL) involves using external organizations to execute logistics activities that have traditionally been performed within an organization itself. According to this definition, thirdparty logistics includes any form of outsourcing of logistics activities previously performed in house. For example, if a company with its own warehousing facilities decides to employ external transportation, this would be an example of third-party logistics. Logistics is an emerging business area in many countries. Fourth-party logistics

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The concept of a fourth-party logistics (4PL) provider was first defined by Andersen Consulting (now Accenture) as an integrator that assembles the resources, capabilities, and technology of its own organization and other organizations to design, build, and run comprehensive supply chain solutions. Whereas a third-party logistics (3PL) service provider targets a single function, a 4PL targets management of the entire process. Some have described a 4PL as a general contractor that manages other 3PLs, truckers, forwarders, custom house agents, and others, essentially taking responsibility of a complete process for the customer.

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Logistics in International Scenario

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The global logistics industry is estimated to be worth USD 300 billion. Though most of the large service providers are headquartered in Europe, the biggest market is the US, which captures about onethird of the world market. The global logistics industry is characterized by high costs of operations, low margins, shortage of talent, infrastructural bottlenecks, demand from clients for investing in technology and providing one-stop solutions to all their needs, and consolidation through acquisitions, mergers and alliances. This section gives an overview of the size of the global logistics industry and its current status and prevailing dynamics. Size of the global logistics industry Currently the annual logistics cost of the world is about USD 3.5 trillion. For any country, the annual logistics cost varies between 9% and 20% of the GDP, the figure for the US being about 9%. USbased Armstrong & Associates, Inc. tracks the issues and trends in the world logistics market and in the US logistics market, in particular, in their annual surveys of top 25 global LSPs. According to the firm, the global logistics market sizes in 1992, 1996 and 2000 were USD 10 billion, USD 25 billion and USD 56 billion, respectively. In 2003 and 2004, the corresponding figures were USD270 billion and USD 333 billion, registering high growth rates. Though most of the large LSPs are headquartered in Europe, the US logistics market is the largest in the world capturing one-third of the world logistics market. In 2003, it was about USD 80 billion. In 2004, it grew to USD 89 billion, and in 2005, it registered an impressive growth rate of 16% to cross the USD 100 billion mark for the first time and reach USD 103.7 billion (Foster and Armstrong, 2004, 2005, 2006). However, considering the fact that the logistics market in the US is about 10% of its annual logistics cost (Foster and Armstrong, 2006), there is still immense potential for growth of 3PL in the US in particular, and in the world in general.

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Current status and dynamics of the industry The extant literature on the logistics industry points to a number of issues that service providers have to address, such as pricing pressures, high costs of operations and low returns on investments, hiring and retaining talent, pressure from clients to broaden the range of service offerings and internationalize operations, demand for customized solutions and more value-added services, besides infrastructural bottlenecks and government regulations. Service providers complain that clients expect them to have the latest software, databases and ERP (Enterprise Resource Planning) packages, and invest in new technologies such as RFID and satellitebased real-time tracking systems. Clients perceive that these investments are part of the basic service package, and often do not want to match the same with increased payments for these additional services. Pressure from clients to broaden the range of service offerings and internationalize operations, has forced service providers to look for suitable alliances, mergers and acquisitions that help fill the gaps in service offerings, and industry verticals and geographic areas served, achieve economies of scale and enhance service providers capability to support international operations. Currently, the world logistics market is going through a consolidation phase. Tibbett & Britten Group of North America was acquired by Exel Logistics in August, 2004, and Deutsche Post World Net, parent company of DHL, took over Exel in December, 2005. Bax Global was taken over by Deutsche Bahn, parent company of Schenker, in November, 2005 while A. P. Mller acquired P&O Nedlloyd in February, 2006, and TNT Logistics was sold to Apollo Management L. P. in November, 2006. However, mergers and acquisitions have their own set of problems in terms of integration of two diverse business units. Carbone and Stone (2005) tracked the evolution of 20 leading European LSPs between 1998 and 2004 in terms of their approach to mergers, acquisitions and alliances, and found that although growth led to more coverage, integration of two different cultures was one of the most difficult challenges faced by these firms in the consolidation process. Recent trends in the logistics industry indicate that to be successful, service providers have to differentiate themselves from their competitors in terms of offering value-added services, focus on key customer accounts that have the potential to generate high profitability for a long term, enter into suitable alliances to complement the range of services offered and geographic areas served, and sell logistics services to clients suppliers and customers, thus leading to complete supply chain integration.

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Logistics in Indian Scenario

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This section gives an overview of the size of the Indian logistics industry, its competitive dynamics and future prospects. Size of the Indian logistics industry The annual logistics cost in India is estimated to be 14% of the GDP, which translates into USD 140 billion assuming the GDP of India to be slightly over USD 1 trillion. Out of this USD 140 billion logistics cost, almost 99% is accounted for by the unorganized sector (such as owners of less than 5 trucks, affiliated to a broker or a transport company, small warehouse operators, customs brokers, freight forwarders, etc.), and slightly more than 1%, i.e. approximately USD 1.5 billion, is contributed by the organized sector. So, one can see that the logistics industry in India is in a nascent stage. However, the industry is growing at a fast pace and if India can bring down its logistics cost from 14% to 9% of the GDP (level in the US), savings to the tune of USD 50 billion will be realized at the current GDP level, making Indian goods more competitive in the global market. Moreover, growth in the logistics sector would imply improved service delivery and customer satisfaction leading to growth of export of Indian goods and potential for creation of job opportunities.

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Competitive dynamics and other issues The following problems existing in the Indian logistics industry make it unattractive for investments and also create entry barriers. Logistics is a high-cost, low-margin business. The problem of organized players is compounded by unfair competition with unorganized players, who can get away without paying taxes and following operating norms stipulated in the Motor Vehicles Act such as quality of drivers and vehicles, volume and weight restrictions, etc. Economies of scale are absent in the Indian logistics industry. Even the organized sector that contributes slightly more than 1% of the logistics cost, is highly fragmented. Existence of the differential sales tax structure also brought in diseconomies of scale. Though VAT (Value Added Tax) has been implemented since April 1, 2005, failure in implementation of a uniform VAT structure across different states has let the problem persist even today. Apart from the non-uniform tax structure, Indian LSPs have to pay numerous other taxes, octrois, and face multiple check posts and police harassment. High costs of operation and delays involved in compliance with varying documentation requirements of different states make the business unattractive. On an average, a vehicle on Indian roads loses 24-48 hours in complying with paperwork and formalities at different check posts en route to a destination. Fuel worth USD 2.5 billion is spent on waiting at check posts annually. A vehicle that costs USD 30,000 pays USD 7,500 per annum in the form of various taxes, which include the excise duty on fuel. This is why freight cost is a major component of the cost of a product in India. There is lack of trust and awareness among Indian shippers with regard to outsourcing logistics. The volume of outsourcing by Indian shippers is presently very low (~ 10%) compared to the same for the developed countries (> 50%, sometimes as high as 80%). The unwillingness to outsource logistics on part of Indian shippers may be attributed to skepticism about the possible benefits, perceived risk, and losing control, of sensitive organizational information, and vested interests in keeping logistics activities in-house. Indian shippers expect LSPs to own quality assets, provide more value-added services and act as an integrated service provider, and institute world-class information systems for more visibility and realtime tracking of shipments. However, they are unwilling to match the same with increased billings; even pay little attention to timely payments that leave LSPs short of adequate working capital. Indian freight forwarders face stiff competition from multi-national freight forwarders forinternational freight movement. MNCs, because of their size and operations in many countries, are able to offer low freight rates and extend credit for long periods. Indian freight forwarders, on the other hand, because of their smaller size and lack of access to cheap capital, are not able to match the same. Moreover, clients of MNCs often want to deal with a single service provider and especially for FOB (Free on Board) shipments specify the freight forwarders, which most of the time happen to be

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the multi-national freight forwarders. This is sort of a non-tariff barrier imposed on Indian freight forwarders. Poor physical and communications infrastructure is another deterrent to attracting investments in the logistics sector. Road transportation accounts for more than 60% of inland transportation of goods, and highways that constitute 1.4% of the total road network, carry 40% of the freight movement by roadways. Slow movement of cargo due to bad road conditions, multiple check posts and documentation requirements, congestion at seaports due to inadequate infrastructure, bureaucracy, redtapeism and delay in government clearances, coupled with unreliable power supply and slow banking transactions, make it difficult for exporters to meet the deadlines for their international customers. To expedite shipments, they have to book as airfreight, rather than sea freight, which adds to the costs of shipments making them uncompetitive in international markets. Moreover, many large shipping liners avoid Indian ports for long turnaround times due to delays in loading/unloading and hence Indian exporters have to resort to transshipments at ports such as Singapore, Dubai and Colombo, which adds to the costs of shipments and also delays delivery. Low penetration of IT and lack of proper communications infrastructure also result in delays, and lack of visibility and real-time tracking ability. Unavailability and absence of a seamless flow of information among the constituents of LSPs creates a lot of uncertainty, unnecessary paperwork and delays, and lack of transparency in terms of cost structures and service delivery. For example, a shipper has to pay a higher freight rate if it cannot ensure return load. At present, there is no real time process by which a shipper may know about the availability of trucks and going rates at the destination market. Therefore, it has to pay more. Had the market information been available to both the shipper and the service provider, the service providers cost structure would have been transparent to the shipper and it would have ended paying the actual market rate. Another example would be that LTL (Less than Truckload) shipments cost more than FTL (Full Truckload) shipments. Now, when a shipper books a LTL shipment, it has no idea about the status of its shipment after it leaves the warehouse at the origin and before it reaches the warehouse at the destination. The service provider may still convert this LTL shipment into a FTL shipment at its own warehouse before delivering at the destination. So, the shipper ends up paying LTL rates for a FTL shipment. Had there been visibility during delivery, this problem would not have occurred. Since most of the LSPs are of relatively small size, they cannot provide the entire range of services. However, shippers would like service providers to offer more value-added services and a single-stop solution to all their logistical problems. The inability of service providers to go beyond basic services and provide value-added services such as small repair work, kitting/dekitting, packaging/labeling, order processing, distribution, customer support, etc. has not been able to motivate shippers to go for outsourcing in a big way. Service tax levied on logistics service fees (currently 12.36% with educational cess) may make outsourcing costly and outweigh the possible benefits.

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 There is lack of skilled and knowledgeable manpower in the logistics sector. Management graduates do not consider logistics as a prime job. To improve the status of the industry, service providers have to move beyond the level of brokers and truckers to attract and retain talent.

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Customer Satisfaction

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Customer satisfaction, a term frequently used in marketing, is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals." In a survey of nearly 200 senior marketing managers, 71 percent responded that they found a customer satisfaction metric very useful in managing and monitoring their businesses. It is seen as a key performance indicator within business and is often part of a Balanced Scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. "Within organizations, customer satisfaction ratings can have powerful effects. They focus employees on the importance of fulfilling customers expectations. Furthermore, when these ratings dip, they warn of problems that can affect sales and profitability. These metrics quantify an important dynamic. When a brand has loyal customers, it gains positive word-of-mouth marketing, which is both free and highly effective." Therefore, it is essential for businesses to effectively manage customer satisfaction. To be able do this, firms need reliable and representative measures of satisfaction. "In researching satisfaction, firms generally ask customers whether their product or service has met or exceeded expectations. Thus, expectations are a key factor behind satisfaction. When customers have high expectations and the reality falls short, they will be disappointed and will likely rate their experience as less than satisfying. For this reason, a luxury resort, for example, might receive a lower satisfaction rating than a budget moteleven though its facilities and service would be deemed superior in 'absolute' terms." The importance of customer satisfaction diminishes when a firm has increased bargaining power. A multitude of companies today has already identified the need to create a loyal customer base and acknowledges that maintaining existing customers and extending business with them is significantly less expensive than acquiring new customers. Empirical proof of the proliferation of such customer loyalty efforts in the business world is e.g. provided in the form of loyalty programs, which many companies have installed during the past years. By engaging in efforts aimed at creating customer loyalty, which in turn fosters financial success in monetary terms firms react to increasing competitive challenges.

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About the Organization DHL Express

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History:
Larry Hillblom was studying law at University of California, Berkeley's Boalt Hall School of Law and had little money. He started running courier duty between San Francisco and Los Angeles, picking up packages for the last flight of the day, and returning on the first flight the next morning, up to five times a week. When he graduated, Hillblom decided to go into the courier business himself. He found a niche that no other company was filling, offering to fly bills of lading from San Francisco to Honolulu. By flying the documents ahead of the freight they could be processed prior to vessel arrival and save valuable time after arrival. Hillblom put up a portion of his student loans to start the company, bringing in his two friends Adrian Dalsey and Robert Lynn as partners, with their combined initials as the company name. All three shared a Plymouth Duster that they drove around San Francisco to pick up the documents in suitcases, then rushed to the airport to book flights using another relatively new invention, the corporate credit card. As the business took off, they started hiring new couriers to join the company. Their first hires were Max and Blanche Kroll, whose apartment in Hawaii often became a make shift flophouse for their couriers. The company started expanding their service through the early 1970s, first to the Philippines, then Japan, Hong Kong, Singapore and Australia. For lower-volume routes the company would hire couriers on a one-off basis, trading airline tickets for the delivery. This simple expedient would repeatedly save the company many legal hassles in the future, when would-be investigators would take them up on the open offer and make a delivery while taking their family on vacation. The first was when the FBI was tipped off about the groups of briefcase-carrying young men making repeated trips to Hawaii, and when they investigated and found nothing amiss, several agents became regular couriers for the company.

Domestic expansion
In the 1970s DHL was one of the only truly international delivery companies, and the only one offering overnight service. The only major competitor in the overnight market was Federal Express (FedEx), which didn't open its first international service until 1981, expanding to Toronto, Ontario, Canada. Nevertheless, the domestic market was extremely profitable, and DHL was the third largest courier behind FedEx and the UPS. DHL turned their attention to the overnight market in the U.S., following the success of FedEx, and opened a major distribution hub in Cincinnati in 1983. However, DHL was never able to overcome FedEx's head start, capturing only 6% of the domestic market. In comparison, at the same time they were by far the largest international carrier, with 40% of that market. By the late 1980s the domestic operations were losing money, while the foreign operations continued to account for 2/3 of the company's income. A European hub opened in Brussels in 1985. DHL may also have been reluctant to invest in the U.S. market during the 1990s due to numerous lawsuits involving the company in the U.S. courts, instituted by South Pacific Islanders claiming paternity of children by Larry Hillblom, who had died in an air crash over the Pacific Ocean, his body never recovered. These lawsuits persisted throughout the 90s and were only settled when DNA was, under pressure of the courts, obtained from the relatives of Mr. Hillblom.

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Deutsche Post purchase

Deutsche Post began to acquire shares in DHL in 1998, finally reaching majority ownership in 2001. Following the completion of the purchase in 2002, Deutsche Post effectively absorbed DHL into its Express division, while expanding the use of the DHL brand to other Deutsche Post divisions, business units and subsidiaries. Today, DHL Express shares its well-known DHL brand with other Deutsche Post business units, such as DHL Global Forwarding, DHL Freight, DHL Supply Chain, and DHL Global Mail. All US domestic flights were handled by DHL Airways, Inc. which in 2003 was renamed ASTAR Air Cargo. DHL's first airline still remains with over 550 pilots in service, as of October 2008.

2001: Deutsche Post acquired a majority (51%) of DHL's shares, and the remaining 49% in 2002. The new DHL was launched by merging the old DHL, Danzas and Securicor Omega Euro Express. 2001: The Packstation, an automated delivery booth, is introduced as a pilot project in Dortmund and Mainz. 2002: Bashkirian Airlines Flight 2937, a Tupolev Tu-154 passenger jet, collided with DHL Flight 611, aBoeing 757-200 cargo jet, at 35,000 ft (11,000 m) over berlingen, Germany. The 69 people aboard the Tupolev (consisting mainly of Russian schoolchildren) and the two pilots of the Boeing were killed. December 2002: Introduced red and yellow new color scheme and logo. August 2003: Deutsche Post acquires Airborne Express, and begins to integrate it into DHL. The Airborne Express Airline named ABX Air is to provide contract ACMI service until 2011. 22 November 2003: DHL shootdown incident in Baghdad: Iraqi insurgents fired an SA-7 "Grail" surface-to-air missile at a European Air Transport Airbus A300 operating on behalf of DHL. The aircraft had taken off from Baghdad airport. The missile struck the left wing, disabling all three hydraulic systemsand setting the wing on fire. The aircraft began a dangerous phugoid (vertical oscillation) but the crew managed to land safely at the airport despite only being able to control the aircraft by adjusting the engine thrust. September 2004: a planned expansion by DHL at Brussels International Airport created a political crisis in Belgium. 21 October 2004: DHL Express announced that it would move its European hub from Brussels toLeipzig, Germany (Vatry, France was considered and rejected). DHL's unions call a strike in response, paralyzing work for a day. 8 November 2004: DHL Express invests 120 million in Indian domestic courier Blue Dart and becomes the majority shareholder in the company. September 2005: Deutsche Post made an offer to buy contract logistics company Exel plc, which had just acquired Tibbett & Britten Group.

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On December 14, 2005, Deutsche Post announced the completion of the acquisition of Exel plc. When integrating Exel into its Logistics division, it added its well-known DHL brand acquired with the purchase of DHL Express to form the name DHL Exel Supply Chain. Following the latest deal, DHL have a global workforce of 285,000 people (500,000 people including DPWN and other sister companies) and roughly $65 billion in annual sales. September 2006: DHL wins ten-year contract worth 1.6 billion, to run the NHS Supply Chain (part of the UK's National Health Service). DHL will be responsible for providing logistics services for over 500,000 products to support 600 hospitals and other health providers in England. As part of this new contract, in 2008 DHL will open a new 250,000 sq ft (23,000 m2) distribution centre to act as a stock holding hub for food and other products, with another distribution centre opening in 2012. The two new distribution centres will create around 1,000 new jobs. September 2007: DHL Express co-founds new cargo airline AeroLogic, based at Leipzig/Halle Airport, in a 50:50 joint venture with Lufthansa Cargo. The carrier will operate up to 11 Boeing 777Fs by 2012. December 2007: DHL becomes the first ever carrier to transport cargo via wind powered ships flyingMS Beluga Skysails kites. May 2008: DHL Aviation moved their central depot to Leipzig; Germany, resulting in a significant positioning for improved service and timeliness to the European Union. 28 May 2008: DHL Express announced the restructuring plans for its United States network, including terminating its business relationship with ABX Air and entering into a contract with competitor UPS for air freight operations. Its cargo hub would shift from Wilmington to Louisville. The Air Line Pilots Association, International protests. October 2008: Two DHL Express Middle East senior executives, David Giles and Jason Bresler, were assassinated in Kabul, by one of their own Afghan employees; they received military honors by the U.S. military, the first of such kind in Afghanistan. 10 November 2008: DHL announces that it is cutting 9,500 jobs as it discontinues domestic air and ground operations within the United States to deal with economic uncertainty. It is retaining international services, and is still in talks with UPS to transport DHL packages between U.S. airports. January 2009 DHL ends domestic pick up and delivery service in the United States, effectively leaving UPS and FedEx as the two major express parcel delivery companies in the United States Limited domestic service is still available from DHL, provided that the packages are tendered to USPS for local delivery. New Egg is one such company that uses this option as of May 10, 2011. April 2009: UPS announced that DHL and UPS have ended negotiations for an agreement for UPS to provide airlift for DHL packages between airports in North America. DHL said in a statement, "We have not been able to come to a conclusive agreement that is acceptable to both

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parties." DHL will continue to use its current air cargo providers, ASTAR Air Cargo and ABX Air for now.

On 18 March 2010 a DHL Antonov An-26 aircraft made an emergency landing on the frozen Lake lemiste, close to Lennart Meri Tallinn Airport. Initial reports indicated problems with the landing gear and one of the engines. The flight was being operated by Exin on behalf of DHL. The aircraft involved was SP-FDO and the flight had departed from Helsinki Airport. Two of the six crew members were injured.

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Services
DHL Express's global headquarters are part of the Deutsche Post headquarters in Bonn. Headquarters for the Americas are located in Plantation, Florida, USA, while its Asia-Pacific and Emerging Markets headquarters are located in Singapore, Malaysia and Hong Kong. The European hub is in Leipzig. Most of DHL Express' business is incorporated as DHL International GmbH. Major competitors include FedEx, UPS, TOLL, TNT and national post carriers such as United States Postal Service and Royal Mail. However, DHL has a minor partnership with the USPS, which allows DHL to deliver small packages to the recipient through the USPS network. It is also the sole provider for transferring USPS mail in and out of Iraq and Afghanistan. DHL offers worldwide services, including deliveries to countries such as Iraq, Afghanistan and Burma. As it is German-owned, DHL is not affected by U.S. embargoes or sanctions and will ship to Cuba, North Korea. However there are strict codes for delivering to North Korea, as the country has shaky relations with the West. The only country currently not being serviced by DHL is Turkmenistan. As DHL is not a US company, it is not allowed to make domestic flights between U.S. airports. DHL contracts these services to other providers. DHL Aviation Deutsche Post owns five airline subsidiaries operating for DHL Express, operating a total of 96 aircraft and another 21 aircraft on orders, which are collectively referred to as DHL Aviation:

DHL Aero Expreso, Panama City, Panama, services destinations in Central and South America. DHL Air UK, Hounslow, United Kingdom, provides services for the European network from East Midlands Airport. European Air Transport, Brussels Airport, Belgium, runs the European network. Its base has been moved to Leipzig/Halle Airport. SNAS/DHL, Muharraq, Bahrain, provides services from Bahrain International Airport for a wide variety of Middle East destinations, including Afghanistan, Iraq and Pakistan. Blue Dart Aviation, Chennai, India, provides services for the Indian network from Chennai Airport.

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Research Methodology

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Sampling Technique The sampling technique used is simple convenience sampling method. Information is collected only from a representative part of the population; the method of collection is called sampling.

Sample Size The total population of employees at Greaves Cotton ltd. (Head office Prabhadevi) approximate 100 out of which the sample size taken is 15.

Methods of Data Collection The data was collected through: Primary data: Questionnaires and Interviews Secondary data: Online, books. Nature of Questions Asked The questionnaire consists of: Close-ended, Dichotomous questions Data Representation The data are presented through Pie-charts and graphs.

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Data Collection & Analysis

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1. Customers overall experience to accessibility and responses of DHL representative through Telephone.

Options Excellent Very Good Good Fair Poor Total

Respondents 16 16 32 16 0 80

Percentage 20 % 20 % 40 % 20 % 0% 100 %

Interpretation: 20 % of the customers responded that their overall experience to accessibility and responses through Telephone is Excellent. Next 20 % says it is very good. Good being awarded by 40 % of the customer. Final 20 % is not so satisfied so they said that the service is fair.

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Fair 20%

Poor 0%

Excellent 20%

Excellent Very Good Good Very Good 20% Fair Poor

Good 40%

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2. Customers overall experience to accessibility and responses of DHL representative through Email.

Options Excellent Very Good Good Fair Poor Total

Respondents 16 16 32 16 0 80

Percentage 20 % 20 % 40 % 20 % 0% 100 %

Interpretation: 20 % of the customers responded that their overall experience to accessibility and responses through E-mail is Excellent. Next 20 % says it is very good. Good being awarded by 40 % of the customer. Final 20 % is not so satisfied so they said that the service is fair

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Fair 20%

Poor 0%

Excellent 20%

Excellent Very Good Good Very Good 20% Fair Poor

Good 40%

3. Clearance representative ability to help customer issue/need Options Excellent Very Good Good Fair Poor Total Respondents 15 17 22 19 7 80 Percentage 19 % 21 % 28 % 24 % 9% 100 %

Interpretation: 19 % of the customers responded that their overall experience to ability to help resolve issue or need is Excellent. Next 21 % says it is very good. Good being awarded by 28 % of the customer. 24 % is somewhat satisfied so they said that the service is fair. 9 % is not satisfied with the service.

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Poor 9%

Excellent 19%

Fair 24%

Excellent Very Good Good Very Good 21% Fair Poor

Good 27%

4. Customers Overall experience with DHL Clearance Department Options Excellent Very Good Good Fair Poor Total Respondents 17 15 14 30 4 80 Percentage 21% 19% 18% 38% 5% 100 %

Interpretation: 21 % of the customers responded that their overall experience with DHL clearance department is Excellent. Next 19 % says it is very good. Good being awarded by 18 % of the customer. 38% is somewhat satisfied so they said that the service is fair. 5 % is not satisfied with the service.

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Poor 5%

Excellent 21%

Excellent Fair 37% Very Good 19% Very Good Good Fair Poor

Good 18%

5. Customers Overall experience with DHL Shipment Delivery at doorstep Options Excellent Very Good Good Fair Poor Total Respondents 9 25 40 4 2 80 Percentage 11% 31% 50% 5% 3% 100 %

Interpretation:

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11 % of the customers responded that their overall experience with DHL clearance department is Excellent. Next 31 % says it is very good. Good being awarded by 50 % of the customer. 5 % is somewhat satisfied so they said that the service is fair. 3 % is not satisfied with the service.

Fair Poor 5% 3%

Excellent 11%

Excellent Very Good Very Good 31% Good 50% Good Fair Poor

6.Customer Satisfaction level with DHL Express Pvt Ltd Options Extremely Satisfied Satisfied Neutral Dissatisfied Extremely Dissatisfied Total Respondents 15 20 22 18 5 80 Percentage 19% 25% 28% 23% 6% 100 %

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Interpretation: 19 % of the customers responded they are Extremely Satisfied with the service. Next 25 % they are satisfied. Neutral is 22 % of the customer. 23 % is somewhat satisfied so they said that the service is fair. 3 % is not satisfied with the service.

Extremely Dissatisfied 6% Dissatisfied 23%

Extremely Satisfied 19% Extremely Satisfied Satisfied Neutral Satisfied 25% Dissatisfied Extremely Dissatisfied

Neutral 27%

7. Customer Responses or Reasons for satisfaction with DHL Express Pvt Ltd Less transit time

Clear tracking

Advance furnishing of documents

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Keeping customer fully informed

Timely clearance

Good Shipment delivery at doorstep

Interpretation: Various reasons are given by customers for satisfaction like less transit time, Clear tracking, Advance furnishing of documents, keeping customer fully informed, Timely clearance, Good Shipment delivery at doorstep etc.

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8. Customer Responses or Reasons for Dissatisfaction with DHL Express Pvt Ltd Original Bill of Entry getting only after 3 days after our follow up, this should come along with delivery

Freight Bill received 30 days after delivery this should deliver within 24 hrs, so that your payment will not be delayed

The currency some times wrongly mention in the B/E before filing with Customs, check the invoice or check with the customer - this will help avoiding mistake.

In some of the instances your response is not proper

Since express service is preferred only when there are some urgency, though the cargo reaches at airport. clearance team takes minimum 7-25days takes for customs clearance

Commitment not met in several cases

Interpretation: Various reasons are given by customers for dissatisfaction. The company need more focused approach for satisfying the customers

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9.Recommend DHL Express to others Options Yes No Total Respondents 51 29 80 Percentage 64% 36% 100 %

Interpretation: 64 % of the customer responded in favour of recommending DHL Express to others. On the other hand 36 % of the people say No to recommend DHL Express to others.

No 36% Yes No Yes 64%

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10. Over the past years loyalty towards DHL Express has grown stronger Options Yes No Total Respondents 55 25 80 Percentage 69% 31% 100 %

Interpretation: 69 % of the customer responded in favour that loyalty towards DHL Express has grown stronger. On the other hand 31 % of the people say No that loyalty towards DHL Express has not grown stronger.

No 31%

Yes No

Yes 69%

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11. DHL Express Values people & Relationships ahead of Short-term goals Options Yes No Total Respondents 41 39 80 Percentage 51% 49% 100 %

Interpretation: 51 % of the customer responded in favour that DHL Express Values people & Relationships ahead of Short-term goals. On the other hand 49 % of the people say No that DHL Express do not Values people & Relationships ahead of Short-term goals.

No 49%

Yes 51%

Yes No

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1. Questionnaire
Q1. Your overall experience and response of DHL express through telephone. O Excellent O Very good O Good O Fair O Poor

Q2. Your overall experience to accessibility and response of DHL representatives through e-mail. O Excellent O Very good O Good O Fair O Poor

Q3. Clearance representative ability to help customer issue/need. O Excellent O Very good O Good O Fair O Poor

Q4. Your overall experience with DHL Clearance department. O Excellent O Very good O Good O Fair O Poor

Q5. Your overall experience with DHL shipment delivery. O Excellent O Very good O Good O Fair O Poor

Q6.Satisfaction level with DHL express O Extremely satisfied dissatisfied O satisfied O Neutral O Dissatisfied O Extremely

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Q7. Reasons for Satisfaction: _________________________________________________ Q8. Reasons for Dissatisfaction ________________________________________________ Q9. Will you recommend DHL service to others? O Yes O No

Q10. Over the past years loyalty towards DHL Express has grown stronger
O Yes O No

Q11. Does DHL value people and relationships over short term goals?

O Yes

O No

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Suggestions for Improvement

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DHL has many satisfied customers and it must tap the dissatisfied customers and convert them into satisfied ones only to expand themselves further. Indian Logistics face tough competition from the companies like DHL, Fedex and other big names like these. Thus, they should learn the art of developing customer satisfaction and growing their market through them. Also, the Indian logistics industry is concerned, logistics managers of user firms need to realize that, with supply chains getting more and more complex, outsourcing part or all of their logistical activities to experienced LSPs will help reduce their overheads, streamline supply chains, reduce costs and improve service delivery. The organizational interests should be put above vested interests, if any. They need to realize that organized LSPs are professionals, who will maintain confidentiality of sensitive client information. Since clients usually prefer a single-point solution to all their logistical problems, managers need to broaden the range of their service offerings, internationalize operations and cover as 8 many industry verticals as possible. They may focus on key customer accounts gradually moving away from accounts generating low, even negative, profitability. However, small-to-medium-sized companies that seem to have high growth potential should not be ignored in the process. In order to become a single point of contact for clients, logistics companies may pursue acquisitions or alliances, which, however, pose the challenge of integration of diverse cultures. Attracting, recruiting, training, motivating and retaining management talent are also a great challenge that logistics managers need to take on. A survey of North American LSPs found that logistics managers perceived internationalization of operations, industry focus or specialization, investment in information systems, availability of skilled logistics professionals, integration of supply chains, customer focus and breadth of service offerings as the most important factors for success as a LSP. However, the survey identified significant gaps between expectations and actual achievements of LSPs with respect to internationalization of operations, skilled logistics professionals and integration of supply chains, which should be seriously looked into by managers. The survey also established relationships among a set of performance metrics and key success factors to identify significant predictor and criterion variables. One of the most important observations was that collaborative relationships with clients and investments in assets are necessary but not sufficient conditions for success in logistics. The findings of the survey may provide a useful guideline to logistics managers for allocation of scarce resources.

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As far as the Indian logistics industry is concerned, logistics managers of user firms need to realize that, with supply chains getting more and more complex, outsourcing part or all of their logistical activities to experienced LSPs will help reduce their overheads, streamline supply chains, reduce costs and improve service delivery. The organizational interests should be put above vested interests, if any. They need to realize that organized LSPs are professionals, who will maintain confidentiality of sensitive client information. The Indian government should also focus on developing infrastructure and encourage public-private partnerships in investments in infrastructure. Highway projects such as golden quadrilateral and eastwest, north-south corridors connecting all four metros are already underway. Private investments in inland containerized transportation by railroad, which was a monopoly of Container Corporation of India Limited (CONCOR), a subsidiary of Indian Railways, until recently, have been allowed. 100% FDI is also allowed in Free Trade and Warehousing Zones (FTWZ) to create necessary traderelated infrastructure to facilitate import and export of goods and services. The government may create logistics SEZs (Special Economic Zones) or logistics hubs with concessions in land and tax rates. Incentive schemes may also be extended for construction of modern automated warehouses and cold chains. Access to cheap capital should be made available to LSPs for investments in infrastructure, enabling them to extend longer credit periods to their clients and supplementing their working capital. The government may create a uniform tax structure and do away with multiple check points and documentation requirements, which would lead to speedier delivery of cargo. To generate awareness, the government may organize seminars, workshops, exhibitions and meetings to bring in representatives of logistics users, service providers and government under one roof, and also sponsor courses in leading Indian institutes to attract talent. Growth of the logistics industry in India will not only contribute to the GDP, but also generate employment.

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Future prospects
Despite problems, The Indian logistics industry is growing at 20% vis--vis the average world logistics industry growth of 10%. Since the organized sector accounts for merely 1% of the annual logistics cost, there is immense potential for growth of the sector. The major opportunities are highlighted below. Many large Indian corporate such as Tata and Reliance Industries have been attracted by the potential of this sector and have established logistics divisions. They started providing in-house logistics services, and soon sensing the growth of the market, have started providing services to other corporate as well. Large express cargo and courier companies such as Transport Corporation of India (TCI) and Blue Dart have also started logistics operations. These companies enjoy the advantage of already having a large asset base and an all-India distribution network. Some large distributors have also forayed into the logistics business for their clients. Since logistics service can be provided without assets, there is growing interest among entrepreneurs to venture into this business. Indian shippers are gradually becoming more aware of the benefits of logistics outsourcing. They are now realizing that customer service and delivery performance are equally important as cost to remain competitive in this global economy. The Indian economy is growing at over 9% for the last couple of years (compared to the world GDP growth rate of 3%), which implies more outputs and more demand for specialized logistics services. The Indian government has focused on infrastructure development. Examples include the golden quadrilateral project, east-west and north-south corridors (connecting four major metros), Free Trade and Warehousing Zones (FTWZ) in line with Special Economic Zones (SEZ) with 100% Foreign Direct Investment (FDI) limit and public-private partnerships (PPP) in infrastructure development. It is expected that infrastructure development would boost investments in the logistics sector. In India, 100% FDI is allowed in logistics whereas in China, until recently, foreign investment was not allowed in domestic logistics. Almost all large global logistics companies have their presence in India, mainly involved in freight forwarding. For domestic transportation and warehousing, they have tie-ups with Indian companies. As the Indian logistics scenario looks promising, these MNCs are expected to play a bigger role, probably forming wholly-owned subsidiaries or taking the acquisition route. The latter may be the preferred route of investment since the target company is readily acquired with its asset base and distribution network, and the need for building everything from scratch can thus be avoided. The benefits for the acquired company include the patronage of an MNC and access to the

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MNCs global network. As an example, DHL Danzas, the biggest logistics company in the world, has taken over Blue Dart.

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Conclusion:
This project has helped me understand the logistics market in International scenario as well as Indian scenario. It has helped me understand the importance of customer satisfaction and how markets can develop and grow. Also, it has helped understand the potential of Indian market when it comes to Logistics and its future prospects.

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Bibliography:
http://en.wikipedia.org/wiki/Customer_satisfaction

http://en.wikipedia.org/wiki/Logistics

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