With the aggressive pace of economic growth, India is on a fast track to development, powered by innovation and disruption across key sectors, encouraging government policies, and robust and aggressive growth in IT. Globally, as in India, the logistics sector is undergoing an unprecedented transformation, fuelled by innovations in IT and digitization.
Despite this, the Indian logistics sector, regarded as the backbone of a healthy economy, is highly fragmented and unorganised. As a result, the logistics spend in India currently amounts to 14-15 percent of GDP compared to the 5-6 percent of the GDP spend in developed economies. However, with focused initiatives on manufacturing, like the Make in India campaign, and thrust on digitisation with the Digital India campaign, the Indian logistics sector has slowly begun its disruptive transformation.
According to a study by The Associated Chambers of Commerce and Industry of India (ASSOCHAM), the logistics market in India is expected to grow to USD 307 billion by the year 2020, recording a CAGR of 16 percent on an average.
Some key areas where digitisation will play a major role in transforming logistics into a robust, IT-enabled, intelligent service, include:
Access to authentic and reliable data has been the biggest boon of digitisation. For the logistics sector as well, the intelligent analysis of data has helped create a massive transformation in not just managing client expectations but also to increase efficiency, cut costs, and drive growth. Some key areas where data analytics is helping shape logistics include:
Internet of things (IoT) can be explained as the ability for multiple physical objects to connect to the internet and share data, without human intervention. This has effectively transformed several businesses, including logistics. Many logistics experts are already using these new resources to improve systems and supply networks, reduce costs, and look for opportunities to generate more revenue too. Listed below are some practical applications of IoT in logistics:
Blockchain, a distributed database that maintains an ever-growing list of records called ‘blocks’, transfers information with a timestamp that is locked and cannot be altered. Modern logistics networks today cater to the expanding global markets, resulting in supply chains that span over hundreds of stages over months and multiple geographical (international) locations, including tonnes of shipping and customs paperwork and multi-level payments involving numerous stakeholders. Hence, logistics is an ideal sector where blockchain can be applied to:
AI has been a buzzword in the supply chain world for a while. Worldwide, logistics and supply chains are undergoing a transformation as more “artificial intelligence” is being employed to manage both domestic and international movement of goods. Some key applications of AI include:
While the industry is suddenly flooded with data unlike ever before, digitisation of processes continues to remain a challenge. Despite this, the industry is waking up to the potential transformation that it can undergo by leveraging the new-age technologies that can drive the sector in the near future. There are vast opportunities, from improving performance to creating customer satisfaction, and the Logistics Service Providers are increasingly seeing the benefits of being a part of a digitally integrated value chain that is truly global, scalable, agile, and cost-effective.
Samir Lambay is CEO and Co-founder of Freightcrate Technologies Pvt Ltd.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)