Transportation in India

joel.francis.7351

Par 100 posts (V.I.P)
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.

Future of Logistics in India

Infrastructure is integral to the economic development of any country. The Indian logistics industry is undergoing development – owing to technology, investment and expansion – that is helping to improve efficiency as well as reduce costs. The Government as well as the business industry of the country are collaborating to help the infrastructure of the country go from strength to strength. However, the road is long and there are still many milestones left to be achieved for the Indian logistics industry to reach its optimal capacity.

Transportation and logistics all over the world is bubbling with new startup interest now more than ever before. The total value of all the goods and services produced by the entire world in 2015 was USD 73.8 trillion. This sizable production is enabled to a great extent by the planet’s logistics infrastructure which (comprising of air, rail, road, water, pipeline, courier & warehousing sectors) is estimated to be about USD 8.6 trillion – 11% of global GDP.

There is an absence of any organisation that can exert enough influence to move the industry forward. There is also an acute shortage of drivers in the industry. One in every four trucks in India is lying idle because trucking in India is extremely challenging and physically demanding. Despite this, truck drivers earn a third as much as cab drivers do. Finally, our road infrastructure is extremely inadequate. “As of 2011, India had almost 47,00,000 Km of roads, almost 6,00,000 more kilometers than China. However, only about 54 percent of roads in India were paved, whereas 84 percent of Chinese roads are paved.”

The economy can surely experience efficient services and reduction in cost in its infrastructure only if technological advancements such as online freight booking and newer services such as online truck booking in India are encouraged.

logistics market, in terms of revenue, is set to expand from US$8.1 trillion in 2015 to US$15.5 trillion by 2023, registering a CAGR of 7.5% from 2015 to 2024. By volume, the market is expected to clock in a 6.0% CAGR from 2016 to 2024

In 2015, Asia Pacific led the global logistics market thanks to significant contribution from countries such as China, India, Singapore, Indonesia, Japan, and Malaysia. China is the major contributor to the growth in this region due to the presence of a large manufacturing base. India, on the other hand, is one of the most promising markets, which has attracted the government as well as logistics players to make massive investments in the country…

Ref: Indian Logistics Industry: Current Scenario and Future Outlook

https://www.entrepreneur.com/article/290266

https://www.entrepreneur.com/article/292904
 

rajivmarathe

New member
Nice topic, Thanks for sharing. The industry of logistics and supply chain management is evolving day-by-day. After GST launch in India, which is very beneficial for this industry, because in India there are lots of type taxes acceptable by different states which cost much for the transporters.
 
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