Traditionally one of the most ignored sectors in logistics, warehouses have now developed into sophisticated stockrooms with advanced, real-time tracking mechanisms and other state-of-the-art facilities.Aditya Vazirani
Warehousing is an important component of the logistics value chain and plays a significant role in quality storage of goods and merchandise during the varying stages of transportation.
Until a few decades ago, warehouses were mere ‘holding’ areas in dilapidated buildings with poor light or ventilation. Since then, warehousing in India has evolved manifold, with low-grade godowns being replaced by pre-engineered structures that are insulated, ventilated, and climate-proof with round-the-clock surveillance and standard quality and safety procedures. Traditionally one of the most ignored sectors in logistics, warehouses have now developed into sophisticated stockrooms with advanced, real-time tracking mechanisms and other state-of-the-art facilities, which have been instrumental in shaping the modern economy.
The Indian warehousing industry was estimated to be worth Rs561 billion (excluding inventory carrying costs, which amount to another Rs 4,340 billion) in 2017 and is estimated to grow at 9.5 percent CAGR to reach Rs 968 billion by 2024. Riding high on structured reforms wave, including the recent infrastructure status granted to logistics, and the implementation of GST, the Indian warehousing and logistics sector is estimated to attract nearly $10 billion investmentover the next four-five years. With the addition of around 200 million sq ft warehousing space across India, total supply is expected to nearly double by 2022, estimated JLL India. It accounts for 5 percent of the Indian logistics market (excluding inventory carrying costs, which amount to another 30 percent).
Apart from conventional storing services, warehouses in India are now equipped to provide value-added services like consolidation and breaking up of cargo, packaging, labelling, bar coding, reverse logistics,kitting, etc. The growth in warehousing in India is primarily being driven by the following factors:
This paradigm shift in warehousing has two sides, customers and logistics providers. It is driving innovation and digitalisation is imminent and prevalent with technological advances. With the introduction of robotics and complex algorithms in software used in warehouses, complexities have increased and traditional inventory management without real-time tracking is a thing of the past. It is an exciting time to be a part of the industry. And even though we aren’t comparable to our colleagues in the West, the gap is lessening, and the talent pool is also getting better with a large investment in education making this segment ‘sexy’.
While the warehousing industry in India is still at a nascent stage, leveraging the fast-evolving trade, infrastructure, technology, and human resources can make warehousing the backbone of logistics and modern trade in India.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)