Logistics cost for airfreight is 8% of CIF value: Cyrus Katgara

Cyrus Katgara, Partner, Jeena & Company notes, “Logistics cost for goods carried by air is already at eight per cent of Cost, Insurance and Freight (CIF) value. It reaches 14 per cent only when all modes of transportation such as road, rail, sea and air are combined together. This also includes inventory holding cost. World bank formula is linked to GDP.” Logistics costs is one of the challenges which the industry is facing at present. According to reports, it accounts for 14 per cent of GDP, with 60 per cent direct costs and 40 per cent indirect costs, compared to an average of 10 per cent indirect costs in developed countries. Also, The value of the Indian logistics sector was $250 billion in 2021. Growing at an impressive CAGR of 10-12 per cent, it may reach $350 billion by 2025.