Traditionally, one of the most ignored sectors in logistics, warehouses today have developed into sophisticated stockrooms with advanced, real-time tracking mechanisms, and other state-of-the-art facilities, which have been instrumental in shaping the modern economy.

Aditya VaziraniAditya Vazirani, CEO, Robinsons Global Logistics Solutions
Warehousing is an important component of the Logistic value chain and plays a significant role in quality storage of goods and merchandise during the varied stages of transportation. Until a few decades ago, warehouses were mere ‘holding’ areas, housed in dingy or dilapidated buildings with poor light or ventilation facilities. Since then, warehousing as a sector in India has evolved manifold, with the low-grade godowns being replaced by pre-engineered structures that are insulated, ventilated and climate-proof, with round the clock surveillance, and standard safety procedures.

The Indian warehousing industry, estimated to be worth INR 561 Billion (excluding inventory carrying costs, which amount to another ~INR 4,340 billion) in 2017, is estimated to grow at 9.5% CAGR to reach INR 968 Billion by 2024. Riding high on the structured reforms wave, including the recent infrastructure status granted to logistics, and the implementation of GST, the Indian warehousing and logistics sector is estimated to attract nearly 10 Billion USD investments over the next 4-5 years. With addition of around 200 million sq ft warehousing space across India, total supply is expected to nearly double by 2022, estimated JLL India. It accounts for ~5% of the Indian logistics market (excluding inventory carrying costs, which amount to another ~30%).


Indian Warehouse Market: Growth Drivers

Apart from conventional storing services, warehouses in India are now equipped to provide value-added services like consolidation and breaking up of cargo, packaging, labelling, bar coding, reverse logistics, kitting etc. The growth in warehousing in India is primarily being driven by the following factors:
  • Make-In-India: With the government thrust, there has been an accelerated growth in the manufacturing sector, particularly in areas like Textiles, Pharmaceuticals, Telecommunications, Automobiles and Food and Beverages
  • Enhanced Trade: Apart from manufacturing, sectors like organized retail, information technology, telecommunications, and healthcare have evolved dramatically over the last few years, driving consumption and thus a strong demand, leading to growth of warehousing
  • Superior Technology and Digital India: With a wider internet penetration, technology enabled growth drivers like automation, real time tracking, RFID for automated data collection and stock identification are becoming increasingly popular, even in warehouses in tier 2 cities and metros. Further, the modern Warehouse Management Systems (WMS) and other IT driven solutions, help create a sophisticated and efficient warehousing network that provides integration with automatic material handling equipment, cross-docking, yard management, labour management, billing and invoicing, etc.
  • Government Policies: With the granting of infrastructure status to the logistics segment, there has been a significant rise in investments in the warehousing sector, especially for free trade warehousing, zones (FTWZs) and logistic parks. The government policies on relaxed international trade, implementation of superior and reformed tax structures like GST have further led to the fast growth of the sector
Logistics In Supply Chains

Efficiency is the buzzword in the warehousing sector today and technology has been a key enabler to drive this this and has showcased its ability to make certain skills redundant, force the aggregation of certain skills while eliminating certain low-end jobs. This has also led to a new business trend of outsourcing logistics through 3PL and 4PL players, thus driving core competency for businesses while also reducing the expenses incurred on logistics.

This paradigm shift in warehousing has two sides: customers and logistics providers. It is driving innovation and digitalisation is imminent with the advances in technology. With the introduction of robotics and complex algorithms in software used in warehouses, the complexities have increased and traditional inventory management without real time tracking is a thing of the past. It is an exciting time to be part of the industry, even though we aren’t comparable to our colleagues in the West. But the gap is lessening, and the talent pool is also getting better with a large investment in education making this segment exciting.

The Way Forward

The warehousing industry in India is still at a nascent stage and has a long way to go before we can match global standards and business growth. Leveraging the fast-evolving trade, infrastructure, technology, and human resources, warehousing can soon become the backbone of the logistics and modern trade in India.

RGL’s Warehousing & Distribution Solution

Robinsons Global Logistics Solutions (RGL), an integrated warehousing and distribution solutions company, recently launched its operations independently after being spun off from its 65-year-old parent company Robinsons Cargo & Logistics (RCNL), with an aim to offer strategic solutions and create deep-rooted partnerships with its customers for the Indian market.

Logistics In Supply Chains

The exponential growth in the warehousing and supply chain industry in India has led to the entry of organized players in the sector, resulting in standardization of processes, introduction of IT-enabled services, and creation of structured systems and processes. However, there are still many challenges that need to be addressed. Today, logistics cost in India accounts for 13-17% of the Gross Domestic Product (GDP), which is nearly double (6-9%) the logistics cost to GDP ratio in developed countries such as the US, Hong Kong, and France. Much of the higher cost could be attributed to the absence of efficient intermodal and multimodal transport systems. Moreover, warehousing has also been facing major challenges, leading to increased logistics cost that is borne by the end-users and other stakeholders.

RGL, with over half a million square feet of warehousing space under its management, is amongst the modern and technologically enabled warehousing and distribution service providers in the country; catering largely to the exponentially growing demands of sectors like manufacturing, Retail, Infrastructure, IMPEX, and SME’s and E-Commerce. Through superior technology enabled operations, RGL warehouses are governed through automated Warehouse Management Systems and implementation of Business Intelligence and Analytics. Key distribution services include Long-haul and inbound & outbound services, Last mile distribution, Reverse Logistics, Odd Dimension Cargo, Network Optimization and Route Planning.

Apart from warehousing and distribution services, the company also offers In-factory Logistics solutions that are customized to suit the needs of a vast variety of clients. Further, through efficient implementation of Single Line Feeding (SLF) process, RGL undertakes complex in-factory services like sequencing, kitting & trolley loading for Just-In-Time and Lean Manufacturing Processes for automotive and other manufacturers. In line with the company’s philosophy of excellence, the SLF process is fully equipped to undertake functions like active inventory tracking on regular basis, triggering re-order flags, receipt & physical verification of materials, creating kits, trolley filling and managing high value parts, and, most importantly, ensuring that the right product is being dispatched as to avoid manufacturing stoppages.

Apart from the above, RGL also offers integrated solutions for supply chain, freight forwarding, and customs clearance, through its other company, RCNL.
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