How logistics industry in India is evolving

The logistics industry in India is evolving rapidly and it has been the backbone of the economy. All the commercial sectors depend on logistics requiring efficient, cost effective flow of goods. The logistics & warehousing industry continued to grow with the emerging of e-commerce and growth in retail, manufacturing sectors. Even the global logistics sectors is expected to grow 10–15% this fiscal year and with the current growth, Indian logistics sector is all set to expand beyond the horizons in the latter half of this decade. The Indian logistics industry was valued at an estimated US$ 130 billion in 2012–13. It has grown at a CAGR of over 16 per cent over the last five years. 3PL logistics market in India is expected to be worth US$ 301.89 billion by 2020.

Although the logistics industry is expected to grow tremendously, there are keys challenges faced such as : poor infrastructure, trade regulations, trained manpower, lack of training institutions, poor warehousing and inefficient storage, information and communication technologies, lack of research and development (R&D)in the industry and many more challenges associated with the logistics industry in India. As infrastructure is the backbone for any country’s prosperity, it has to be emphasized for logistics sector in India by improving the infrastructure quality and resources. The integration of the fragmented components of the logistics sector such as services, transportation, packaging, tracking, etc. and the move from the use of traditional “warehouses” to functional warehouses has indeed made the logistics sector much more efficient.

Transportation, the largest stakeholder in the logistics in India has primarily been using roadways with almost 57 percent of the goods transported through roads. It is a fact that India depends on the costliest mode of transport which is by road for majority of its domestic freight transfers. Companies like Sendit, Rivigo has been helping the businesses in moving the goods across India and also within cities for their logistics needs for the businesses. India has the 2nd largest road network in the world and in terms of quality of road, its lags drastically behind other countries. However, there are many infrastructure proposals coming-up in India for infrastructure development. As far as the Storage and warehousing is concerned , it is the second most important component in Indian logistics sector. Due to the modernisation of the logistics supply chain, warehousing has been a critical factor and today, warehouses not only provide safe custody for goods, but also offer value-added services, such as sorting, packing, blending and processing. With the Indian Government’s implementation of GST, the logistics companies, commercial retail and e-commerce sector will be benefited with the reduction in cost for fleet transportation and helping the growth of organizations.

Gautham Pasupuleti

Product Manager

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