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Evolution of Logistics Industry in India

The need of Logistics in the country and the policies affecting it explained in simple words. 

Wednesday July 12, 2017,

4 min Read

Logistics, a term often misinterpreted as transportation is in actuality much more than transporting goods and services. It is in fact, a system that ensures proper and smooth movement of product or services in the entire supply passage resulting in proper and timely delivery. The overall logistics system includes packaging, storage, handling and transportation along with proper information flow. Our country’s industrial policy always kept the company’s manufacturing units at far-off places away from the market giving the logistics sector with enormous opportunity to grow, but unfortunately, the poor transportation and communication network in the country didn’t let the proper utilisation happen. However, the steep competition level due to the rise in entrepreneurs and MNCs (Multi National Companies) in the market has led to the government agencies and companies collaborating to improve the overall logistics landscape in the country.

Evolution Lead by IT & E-commerce

Recent years witnessed a steep rise in the range of internet penetration in the country, with industries largely ditching the brick and mortar look and going digital with their way of working. This paved the way for the booming e-commerce market offering ease in shopping along with favourable demographics and easy payment and return/refund options. The e-commerce market which was already loaded with a huge number of traditional market players coming online was further burdened with raised traffic of startups coming online due to the easy entrance modes making the competition level fiercer than ever. In such high-rise competition, customers don’t just weigh on the discounts and offer provided by an online shopping portal, but also have a keen eye on the kinds of and quality of logistics services provided by them.

Logistics is not just any other function that can be ignored by online marketers, but instead is the blood running through the veins of the e-commerce industry. Both share a mutual relationship with each other, and as the latter grows, the former will also expand simultaneously. According to the ‘Logistics Market in India 2015-2020’, the logistics sector is India’s fifth most thriving sector in terms of growth and volume that is estimated to grow at a compound annual growth rate (CAGR) OF 12.17 percent by 2020. By bringing in cloud-based GPS tracking systems, radio-based frequency identifying software’s and other amazing technologies in line with the logistics work, Internet of things is making it sure to help the sectors grow double-folds in the coming years.

Evolution Lead by Infrastructural Developments

Other than the technological up-gradations provided by Internet of Things, it is the infrastructure that mainly requires improvisation in the country. From constructing smooth rail and road networks to creating world- class cargo and warehousing facilities for companies, there is a lot that needs to be down to make the logistics industry flourish to its 100% capacity in India. The recent policies of bringing the GST (Goods and Services Tax) and electronic way bills are sure to lead to the growth of the sector immensely. Speaking on the policies, road transport and shipping minister Nitin Gadkari recently said, the implementation of GST and e-way bills will bring down the logistics cost by 20% and will also help the sector get rid of illegalities happening on the state border.

Preparation for the Future

To keep up with the fast-paced global practices, companies first need to take initiatives to educate the youth about the industry’s internal working and communication processes. This will not only provide the youths with insight about the industry but will also help the industry with well-trained and educated workforce supply. The employment process in the near times will focus more on individuals capable of developing or encouraging the use of indigenous technology which can result in more effective and efficient service dealings. Along with training the newcomers with transporting and communication practices, it is necessary to give them proper knowledge of goods storage and warehouse facilities as the future is of supplying perishable items right at the customer’s location.