The Road Ahead For India’s Logistic Sector

India (14/08/2022): The Indian logistic sector has grown by leaps and bounds in the past few years. With the rising popularity of e-commerce clubbed with economic liberalization, there is a growth in the logistic sector in India and across the globe. At present, the current valuation of the Indian logistic sector is close to $250. Additionally, it is experiencing a CAGR of 10-12% further, it is expected that by 2030, the logistic sector will be a $500 billion industry. . Also, the demand for the logistic service is so huge that it is giving rise to many challenges too. 

 

The challenges are often in the form of increased visibility, transparency, and simplifying the documents and payment options. Also, there is a need to build resilience in the highly fragmented supply chain. However, to work in the growth of the logistic sector in India, there is a proper roadmap which starts with technological adoption in the sector. 

Technological Adoption In The Logistic Sector 

Many logistic companies, especially prominent ones like Delhivery, use technology to speed the delivery process. In addition, it is making things easier both for the employees and the end consumers. The real need for technology in the logistic sector was prominently realised during the global pandemic, where only the digital businesses showed a higher degree of resilience to the wrath of the pandemic. 

Customer Satisfaction Is The Top Priority 

E-commerce platforms and the logistic sector saw a mutual boom in the past few years. It further presented the need for integration, especially of the end-to-end logistics. Not only are the current customers demanding, but they are also conscious of the services that they are using. There is a high demand for improving the visibility of the shipment. Therefore, The Professional Couriers and other logistic companies offer their customers the freedom to track their shipments whenever possible. 

 

To satisfy the customers, it is not only essential to improve the visibility but also to work on the supply chain. Only then is it possible to retain the customers and grow the business further. 

Third-Party Logistics Are On Rising 

The demand for logistic services is so high that it is not surprising that many third-party logistics companies have entered the competitive market. In fact, in 2020, the valuation of third-party logistics stood at $7.34 billion, and this sector is witnessing a CAGR of 16-18%. 

 

The role of third-party logistics is especially high in fulfilling the demands of the e-commerce industries in the country. It is because third-party logistic companies cover wider geographic locations than single courier companies. This is especially helpful in meeting the shipping demands to and fro from the country’s remote location. 

There Is An Urgent Requirement To Work On Operational Efficiency 

Currently, in India, more than one crore trucks are working to meet the services of the logistic companies. Most of these trucks come in different sizes and are operated by the unorganised sector. These trucks are disjointed and further, face problems in technological adoption too. 

 

However, now, their trucking operators are employing technological adoption to mark their online presence, but still, it is not enough. There is a need to improve operational efficiency by further working on the technological adoption that can help the logistic business to run digitally. 

Indian Logistic Cost Will Soon Come Down

The logistic cost in India is higher in comparison to other nations. However, it will soon enter the global competitive market, thanks to the government’s planning to improve the efficiency of the logistic sector. Not only is the government working to improve efficiency, but it is also working to improve the last mile connectivity. 

 

Currently, the government is making a huge investment to build the infrastructure. It will improve mobility within the country and will cut down the logistic cost by a considerable margin. According to reports, with improvement in mobility, the logistic cost, currently set at 16-18%, will come down to 10%. 

 

Further, as stated by Ashwani Vaishnav, Railway Minister, the government is investing in new fuels to transport goods through railways. This again will help in lowering the logistic cost. 

 

If India manages to bring down the logistic cost close to 10%, it will be at par with the logistic cost of Europe, the US and China. The use of renewable energy will play a key role in cutting down the logistic cost in the country. Simply cutting down the transportation cost can lead to a massive improvement in the Indian logistic sector.