Logistics Industry Outlook, challenges, and technological developments

Sumit Sharma
By Sumit Sharma, Co-founder of GoBolt, a next gen Tech-Logistics company in Delhi.

Logistics is regarded as the backbone of the economy, providing efficient and cost- effective flow of goods on which other commercial sectors depend. The logistics industry in India is evolving rapidly, it is the interplay of infrastructure, technology and new types of service providers, which defines whether the logistics industry is able to help its customers reduce their costs in logistics sector and provide effective services.

Despite of the weak economic sentiments, the logistics industry continues to witness growth due to the growth in retail, e-commerce, and manufacturing sectors. The Global Logistics sector was expected to grow 10-15% in the period 2013-14. The logistics industry is expected to reach over $2 billion by 2019. The rise of e-commerce, logistics and increased domestic consumption will lead the way for the industry in the coming years. With a promise of growth and improvements, the service oriented logistics industry is ready to expand beyond the horizons in the latter half of this decade.

Logistics Industry

Recent scenario

The recent Indian logistics sector comprises inbound and outbound segments of the manufacturing and service supply chains. Of late, the logistics infrastructure has gained a lot of attention both from business industry as well as policy makers. The role of managing this infrastructure, to effectively compete, has been slightly under – emphasized. Inadequate logistics infrastructure has an effect of creating bottlenecks in the growth of an economy.

The logistics management regimen has the capability of overcoming the disadvantages of the infrastructure in the short-run while providing cutting-edge competitiveness in the long-term. There exist several challenges and opportunities for the logistics sector in the Indian economy.

Challenges faced by the recent logistics industry in India

The most essential challenge faced by the industry today is insufficient integration of transport networks, information technology and warehousing & distribution facilities. Regulations exist at a number of different tiers, is imposed by national, regional and local authorities. However, the regulations differ from city to city, hindering the creation of national networks.

Trained Manpower is essential both for the third party logistics sector as well as the manufacturing and retailing sectors, which is very weak at a practical level, i.e., IT, driving and warehouse as well as at a higher strategic level. The disorganized nature of the logistics sector in India, its perception as a manpower-heavy industry and lack of adequate training institutions has led to a shortfall in skilled management and client service personnel. There is a lack of IT standard, equipment and poor systems integration.

Poor facilities and management are the reason for high levels of loss, damage and deterioration of stock, mainly in the perishables sector. Part of the problem is insufficient specialist equipment, i.e. proper refrigerated storage and containers, but it is also partly down to lack of training. The practitioners and the academicians are now aware of the importance of logistics and supply chain; however the field is still under penetrated as far as research is concerned. It is essential to prioritize research and development so that the weaknesses in the industry can be taken care of and improved.

Darshan Roadlines

Solutions to some of the challenges

Infrastructure is the backbone of every country’s growth and prosperity and for the logistics industry to flourish special emphasis has to be on building world-class road networks, integrated rail corridors, modern cargo facilities at airports and creation of logistics parks which need to be given a status equivalent to Special Economic Zones.

It is necessary to realize that the benefits which can vastly be practiced in logistics industry can be brought about by the companies by establishing training intuitions, so that there is improvement in the overall service quality of the sector. Good storage and Warehousing facilities are important for the growth of the logistics industry. With the increase in the transportation of perishable products, the logistics agencies need to give a lot of importance to enhancing the Warehousing facilities.

Logistic

Future prospects The logistics firms are moving from a traditional setup to the integration of IT and technology to their operations to reduce the costs incurred as well as to meet the service demands. The growth of the Indian logistics sector depends upon its soft infrastructure like education, training and policy framework as much as the hard infrastructure.

The global economic outlook, indeed, that of India is expected to significantly improve as India Inc begins to tackle the economic downturn. With a new government many policies are expected to be implemented which will give a fresh impetus to India’s growth engine, particularly in the corporate and SME sector which in turn will expand demand for the logistics sector.

With the implementation of the GST, the logistics companies, which are currently forced to set up many small warehouses across multiple cities can set up just a few, big warehouses region wise and can follow the hub-and-spoke model for freight movement from the warehouses to the different manufacturing plants, wholesale outlets, retail outlets and the various POS. This growth is backed by the boom in the e-commerce sector and expansionary policies of the FMCG firms.

This has increased the service geography of the logistics firms but they also have to meet the demands of quick delivery and tight service level agreements. The industry has moved from being just a service provider to the position which provides end to end supply chain solutions to their customers. Thus, all this has paved the way for further growth of Logistics and Warehousing industry in the coming years.

Technology & Development

In developing countries like India, the development in logistics is quite different from other countries. Technological innovations and advancements are currently the governing mechanism for selecting supply chain partners, coordinating and monitoring the end to end process delivery. Technology has brought several innovations in logistics. There are several recent technologies such as the internet of things, mobile, augmented realty, social media, cloud storage, big data analytics and computing which improves the efficiency of the logistics operations.

The addressable market for a tech logistic company is of US$40bn. India needs more than 10 companies to scale upto more than USD 1 billion in revenues in this space (intercity full truck load) to make Indian Logistics Industry efficient. Tech logistic startups like GoBOLT have given emphasis on the following elements to deliver value to its clients and other stakeholders:
  • Unique hybrid operating model: It operates through an innovative model involving combination of owned, dedicated and marketplace fleet for control over the operation, balanced capital deployment & risk management.
  • Monitoring the vehicles & every process - With the help of technology, monitoring of vehicles can be done accurately. One can send the proper updates to customers alongside the estimated time of reaching the destination.
  • Drivers’ ecosystem getting changed - Life of truck drivers are getting better because there is a fixed rotational shift allocated to each and every driver. Now, the drivers are having a GPS tracker in their vehicles which is enable them to reach their destinations without any hassels. Also, trucks are not heavily loaded because of proper segmentation. Hubs have been created to provide them proper shelter, food and a place to rest after a driving span of 8 hours. Another driver will continue the journey and so on.
But everyone has to maintain a uniform time for covering a particular distance, so that the goods reach to the destination in time. The company will monitor the same simultaneously. Trucks are well maintained and have modern facilities which enable the drivers to avoid exhaustion and pilferage or spoiling of the goods to be delivered.
Lifting & Specialized Transport u2014 January - March 2018
Infra Engineers India: Supplier of Used Construction & Mining Equipment

Infra Engineers India: Supplier of Used Construction & Mining Equipment

For nearly a decade, Infra Engineers India Pvt Ltd (IEPL) has asserted its formidable presence within the industry, distinguishing itself as a reliable supplier in the field of used construction and mining equipment.

Read more ...

MYCRANE signs MoU with fellow innovator Equip9

MYCRANE signs MoU with fellow innovator Equip9

Online crane rental platform MYCRANE and aggregated digital platform Equip9 have signed a Memorandum of Understanding (MOU). MYCRANE developed the world’s first online crane rental platform in 2021

Read more ...

MYCRANE Launches Free Inspections App to Boost Confidence of Crane Rental Customers

MYCRANE Launches Free Inspections App to Boost Confidence of Crane Rental Customers

A new Inspections App that allows customers to rent lifting equipment with confidence is now available at MYCRANE. Downloaded via Apple or Android stores, the free MYCRANE Inspections App helps prevent fraud and reduces risk by digitalising the crane

Read more ...

CE Industry Need to Find a Balance

CE Industry Need to Find a Balance

With over two-thirds of construction equipment sold in the market being purchased by the rental industry, the market is seeing an imbalance in supply and demand, which has affected rental rates. Satin Sachdeva, Founder & Secretary General, Construction Equipment

Read more ...

Urgent Reforms Needed for Equipment Rental Industry

Urgent Reforms Needed for Equipment Rental Industry

Global projections for construction equipment rental market are encouraging. According to Mordor Market Report, the construction equipment rental market was valued at USD 118 billion in 2021, and is expected to reach USD 180 billion by 2027

Read more ...

Crane Rental Business Adapting & Growing

Crane Rental Business Adapting & Growing

Premal Thaker, President, Crane Owners Association of India (COAOI), discusses the scope and financial viability of the construction equipment / crane rental business, and the challenges that rental companies have to contend with in order to sustain their business

Read more ...

Infrastructure Projects Spur Crane Usage

Infrastructure Projects Spur Crane Usage

According to Amin Ladha, Managing Director, Modern Crane Service, advantages such as mobility, fast installation and setup time, will increase the usage of mobile cranes and raise their demand in the rental market. Restrictions due to the government enforced lockdown during

Read more ...

Financial Viability Driving Crane Rentals

Financial Viability Driving Crane Rentals

Manoj Kumar, Marketing Head, Gandhi Cranes, discusses the huge scope for growth of the crane rental industry, provided certain issues are addressed with viable solutions. The pandemic caused many small crane rental companies to sell their cranes. Many sold all their assets including

Read more ...

Rent-A-Machine - An Attractive Option

Rent-A-Machine - An Attractive Option

In this article, construction equipment manufacturing companies JCB, L&T, Case, GHH, and Kobelco, discuss the key factors that are driving their business in the rental space, while rental associations and companies like

Read more ...

Mahindra’s Hello Machine A Reliable Business Partner for Rental Equipment

Mahindra’s Hello Machine A Reliable Business Partner for Rental Equipment

“For developing countries to develop their infrastructure faster, machine rental is the most effective model in the construction space.” Jalaj Gupta, Business Head, Commercial Vehicles, Mahindra and Mahindra

Read more ...

Time for Rental Companies to Adapt, Consolidate & Perform

Time for Rental Companies to Adapt, Consolidate & Perform

Challenging times, like the current pandemic, must drive industries to adapt to the situation, reshape their business strategies, and revisit their growth plans, in order to emerge stronger.

Read more ...

Time for Construction Equipment Rental Industry to Reinvent Itself

Time for Construction Equipment Rental Industry to Reinvent Itself

Covid-19 pandemic has hit the infrastructure industry severely, and consequently, the equipment rental industry is passing through a challenging phase. The work progress is sluggish and has not started at many sites since

Read more ...

Allcargo: Driving Crane Rental Business

Allcargo: Driving Crane Rental Business

With a fleet of 1000 equipment for all kinds of jobs and over 125 cranes, Allcargo Logistics is at the forefront of the crane rental service in the Indian subcontinent; it is not only providing the machines, but also has

Read more ...

Heavy equipment auctioneer RITCHIE BROS at bauma 2019

Heavy equipment auctioneer RITCHIE BROS at bauma 2019

Ritchie Bros., a multichannel, multi-solution platform for buying and selling industrial assets, will present its main brands (Ritchie Bros. Auctioneers, IronPlanet, Marketplace-E and Mascus) and latest innovations.

Read more ...

Mtandt exhibits a revolutionary solution for creating  Temporary roads and terrains

Mtandt exhibits a revolutionary solution for creating Temporary roads and terrains

Mtandt Ltd, a leading technology and service provider has done it once again ! A new revolutionary product "Portadeck" was showcased this time at the Bauma show. Portadeck was launched recently to meet the

Read more ...

India Bulls to expand fleet; become total solutions provider for many infra sectors

India Bulls to expand fleet; become total solutions provider for many infra sectors

India Bulls Store, the fully owned, construction equipment rental agency and subsidiary of India Bulls Finance, is expanding its equipment fleet to make the machines available for varied applications. This will

Read more ...

Goldhofer's PST/SL-E and a taxi ride for King Kong

Goldhofer's PST/SL-E and a taxi ride for King Kong

Occupying 20 hectares of land, the Vialand leisure park – with its 26 modern rides – opened in the Eyüp district of Istanbul in 2013 as the first leisure park in the whole of Turkey. Last spring, one of the main attractions

Read more ...

Allcargo Logistics: Surmounting challenges with ingenuous solutions

Allcargo Logistics: Surmounting challenges with ingenuous solutions

For India's leading biofuels company, Praj Industries Limited, it was a challenging task to transport a gigantic column — 64m long and weighing 150 metric tons — over a 600km distance from its Kandla SEZ unit

Read more ...

Universal Transport moves ultra-heavy components for an F60 opencast mining conveyor bridge

Universal Transport moves ultra-heavy components for an F60 opencast mining conveyor bridge

With the help of Goldhofer heavy-duty modules supplied by Trans A.D.M., Universal Transport, last summer, handled an exceptional transport challenge: delivery of huge replacement components for the

Read more ...

To get latest updates on whatsapp, Save +91 93545 87773 and send us a 'Saved' message
Click Here to Subscribe to Our eNewsletter.