Logistics in India

When you ask people if they know about logistics, the standard response would be about transporting goods. What they don’t know is that logistics is more than just transporting goods alone, it is a process that ensures proper and smooth movement of products or services in the entire supply chain resulting in proper and timely delivery. The overall logistics system includes packaging, storage, handling and transportation along with proper flow of information in both directions from the manufacturer to consumer and vice versa. Today there is fierce competition in the market to see who offers the best product and service at the lowest possible price and time delivered to the customers door step, this fierce competition in the market has led to the government agencies, national and multi-national companies collaborating together to enhance the logistical industry which has grown to a mammoth size in India over the recent years.

In the past, India as a country had been a student rather than the expert when it comes to the field of logistics, but today the logistics industry in India has taken a big leap by the implementation of latest technology, getting the basic infrastructure like roads, and rail network developed to have a seamless flow of both passenger and cargo movement from one end of the country to the other end. India has also given thought to creating world-class warehouse facilities at strategic locations across the country so that companies can make use of these facilities to ensure the logistics industry flourishes and add to the revenue growth of the country. India’s logistics sector, currently valued at $160 billion, is expected to grow at a CAGR of 10% to $215 billion by 2022, as reported by General (Dr) V.K.Singh (retd.), Hon’ble Minister of State, Ministry of Road, Transport and Highways at a conference on the Logistics and Transport sector. He also mentioned that we have about 5.5 million kilometres of roads, and out of this, if we take the national highways, which carry 40% or more of the heavier loads, it is only 2.29% of this 5.5 million. And hence, the inference is that this needs to grow. The focus of the government is to ensure that we create more expressways and better highways-so that connectivity and the various corridors get linked in a shorter timeframe.

Looking at the way Indian logistics industry has grown over the past 5 years and it seems to be magical. The growth was driven by logistical start-up’s, transportation and Ecommerce companies and the entry of more foreign companies in the FMCG sector, boosted India upward in Ease of Doing Business. In 2019 a lot of logistical start-up’s focussed their energy in optimizing the last mile delivery. Many large logistical players partnered with last-mile partners who provide manpower for running delivery centre operations and last-mile delivery services. This helped them not only to reduce their manpower cost but also opened up a huge space in delivery models which was previously ignored or even less serviced.

IndoSpace, a premier developer of Grade A industrial real estate and logistics parks, has announced the launch of three new industrial and logistics parks across India at Gujarat, Andhra Pradesh, and Haryana. The launch of these three parks will pave the way and lay a strong foundation for grade A logistics infrastructures across the country which will offer modern logistics and warehouse facilities across strategic locations.

The Indian logistics sector provides livelihood to over 22 million people, which in the next couple of years is expected to grow significantly and is ranked 35th in the World Bank’s Logistics Performance Index (LPI). Equipping the sector with the latest digital technologies and automation in operations would lead to a 10 percent decrease in indirect logistics costs, placing India in good stead with countries like the US, China and Japan when it comes to both domestic as well as international trade. Majority of logistical companies have realised that the way forward making logistics and supply chain work efficiently is to get technological ideas integrated into the system. The customs department has taken a leap by the introduction of faceless cargo assessment concept to be implemented across the country in a few months, meaning consignments will be assessed by a virtual group irrespective of where the Bill of Entry is filed. This will help cargo to be examined and assessed with the same standard across the country’s seaport without any deviations to the standard rules set by the customs department. Automation is the first step forward in implementing technology in the simplest form which are driven by software that improves operational efficiencies in machines with minimal human intervention. Automation is applied in the areas of manufacturing, transportation, facility operations and many others. In a manufacturing factory automation takes care of operations such as assembly, inspection, processing and even material handling, thereby increasing the output quality and quantity by reducing lead time which is a major factor that causes delay in getting the product out of the factory for sales and distribution. Automation not only increases production output but also aids to mitigate labour/ skill shortages, eliminate manual tasks, improve product quality and reduce lead time.

The Indian logistics industry will witness a steady development than before and as per The Economic Survey of 2017-2018, it is expected to reach INR 215 billion by 2020. A combination of hard and soft infrastructure along with elements like education, effective training and policy-making are sure to have a positive effect on the logistics industry. Indian logistical industry has a huge potential to grow in the days to come, mainly due to the fact that there are a lot of young graduates and under-graduates who are turning to start and build their career in logistics with its diverse opportunities and portfolios. Today’s younger generation has a lot of career options in front of them soon after they finish their education. Students who have just completed their pre-graduation studies are also turning towards logistics as it is offering a lot of opportunities to such individuals which was not available a few years back.