March 20 2023
According to estimates, 14.4 percent of India’s GDP comes from the logistics sector. The unorganized sector, however, makes for more than 90% of the logistics market. India wants to reduce its logistics expenses from 14 to 8 percent of GDP over the course of the next five years in order to improve its performance in the Logistics Performance Index to 25. The National Logistics Policy established these objectives to guarantee that the industry acts as a catalyst for growth and makes a significant contribution to pushing India’s GDP to a $5 trillion economy. The proposed strategy intends to boost the nation’s economy and corporate competitiveness by creating an integrated, smooth, effective, and cost-efficient logistics network that makes use of top-of-the-line tools, procedures, and trained personnel. The strategy will establish a single-window e-logistics market and provide MSMEs significant credit for their capacity to compete and expand their workforce.
The industrial and logistic asset classes are expected to perform better than other real estate and infrastructure in the future. The industry has received 8,257 crore in investments since the year began. The World Bank estimates that in order to keep up with the nation’s fast growing urban population, Indian cities will need to invest $840 billion in infrastructure and municipal services by 2036.
These are the few trends which are likely to shape the logistics section in 2023.
States must accelerate logistics policy :
Only 13 states have produced state-specific policies to date since the Central Government launched the National Logistics Policy. The state policies must be in accord with the strategic goals of the national government for India to advance in the Logistics Performance Index. All projects to develop the logistics infrastructure will be guided by an Integrated National Logistics Action Plan. Gati Shakti is currently working on a number of initiatives involving various modes of transportation. The government’s multidimensional approach gives the sector a wide strategic direction and will be a key motivator of investments. It is employed in the policy to propose regulatory and procedural changes affecting infrastructure ,human capital and service. The I&L stock is projected to treble by 2030 to reach 700 million square feet as occupiers continue to grow in industries including e-commerce, 3PL, engineering, and manufacturing. If the states banded together and accelerated the logistics policy, Indian logistics would unquestionably enjoy spectacular growth in the years to come.
Prioritize digitalization in logistics sector :
The logistics policy in India needs to be automated urgently. Truckers may increase their overall efficiency and price competitiveness with the aid of logistics marketplaces, but it’s crucial to install comparable automation and technology, such as RFID, GPS, warehouse management systems, etc. Access to cutting-edge technical solutions and improving labor skill levels are also essential.
The logistics industry will see additional changes in the future years as a result of digitization. As part of the PM Gati Shakti National Master Plan, a key component of the National Logistics Policy, infrastructure planning and data layers from various central ministries, departments, and agencies, as well as data layers from the relevant state agencies and bodies, are being digitized and uploaded on a single portal. Logistics firms will leverage technologies like artificial intelligence, cloud, automation, robotics, block chain, big data, and IOT to provide their clients sophisticated and cutting-edge logistics solutions. Even logistics companies will need to reassess their business strategy if they want to succeed in the rapidly evolving logistics industry.
Last mile Delivery :
Last mile delivery is one of the imperatives driving the whole logistics industry. Last-mile delivery is an expensive endeavor even though it is the final step in the delivery process and is when the goods and services are transferred from the distribution center to the final site. Businesses are being compelled to utilize the most recent technological solutions as a result of the complexity and cost increases caused by the growing demand for speedy delivery.
An increasing number of shipments are being ordered by households for delivery. In India, the problem isn’t a lack of drivers; it’s terrible roads, ambiguous addresses, gridlock, and a lack of thorough maps. The costs of road congestion in just four Indian cities—Delhi, Mumbai, Kolkata, and Bengaluru—totaled a startling $22 billion, according to a 2018 Boston Consulting Group report. There are many factors to think about while trying to improve last-mile delivery. Efficient last-mile delivery operations increase sales, foster brand loyalty, and increase profitability while keeping consumers happy and satisfied.
Efforts that are sustained to open the road :
The logistics industry has been the one most affected by the COVID-19 pandemic among all other businesses. But, as most of the world’s affairs resumed normalcy, the sector recovered. The CO2 emissions from the sector have gotten worse over time. 11% of global greenhouse gas emissions are attributed to warehouses, ports, and freight transportation; by 2050, the logistics industry is anticipated to be the largest carbon dioxide emitter. As a result, logistics executives are working to reduce carbon emissions. In order to cut greenhouse gas emissions, the sector will need to take strict steps and be ready to accept the changes that could completely transform it.
Growth will be aided through adaptability :
The supply chain and the logistics sector are always evolving as a result of the unpredictability of the global environment. In the current business environment, it can be challenging to control the weather and politics, but firms still have a say in how they adapt to new difficulties. Due to the vulnerability of the logistics industry, executives in the logistics and supply chain will continue to create more efficient risk-reduction measures. Whether this is a trend in logistics or not, if companies want to succeed, they must anticipate the disruption and put effective strategies in place beforehand.
Takeaway :
The more tech-savvy and quick needs of modern consumers are driving the growth of the logistics sector. Companies will need to concentrate on expanding operations and making sure delivery services are affordable for both the company and the client. It is becoming more and more important for logistics service providers to innovate, simplify complex business operations, and satisfy the demands of individuals working in and considering entering the industry in order to improve supply chain management for OEMs & linked sectors and reduce logistical costs. With both the demand and supply side logistics companies adopting cutting-edge AI powered technology platforms and community-focused features that aid in the creation of reliable and supportive logistics ecosystems, India is likely to take significant steps towards improving its global ranking in the World Bank’s Logistics Performance Index and becoming more competitive on the global stage.
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