Categories: Movers and Packers

Overview Of Indian Logistics Industry And How It Is Affecting Indian Economy?

The logistics industry is considered a crucial sector to boost international trade as a consequence of digitalization and globalization. The logistics and freight industry is evolving rapidly and regarded as the backbone of the economy in India as it ensures quick, efficient and economical transport of goods across India and many commercial sectors rely on it. The innovative and advanced technologies have provided increased efficiency and extra combined operating models in the logistics industry in India.


The growth of the logistics companies in Chennai and other popular towns contributes to the growth of the logistics sector which in turn increases the competitiveness among the different nations and therefore, it becomes a vital element of economic development and growth of the country. Logistics is the interplay of technology, infrastructure, skilled manpower and new types of service providers which defines whether the logistics sector will be able to aid its customers, minimize their costs and provide quality services.

Recent Scenario

The recent logistics industry in India comprised of inbound and outbound sectors of the production and services supply chains. Lately, the logistics infrastructure has achieved the much-needed attention from business companies as well as policymakers. The way the logistics marketplace behaves these days has changed a lot. With the implementation of advanced technology and refined processes, the planning, implementation, and control of the goods movement have become faster and efficient. The modern processes and activities offer support in various supply chain processes. The innovative logistics activities boost knowledge, improvements and new strategies to attain profitability for the businesses that offer transport services in Vadodara and other parts of the country.


Of late, inadequate logistics infrastructure and traditional practices created bottlenecks in the growth of the Indian economy. But the latest logistics management procedure has the ability to overcome the difficulties at the same time offering cutting-edge competitiveness in the long run. The manufacturing businesses ensure that their products reach the end customer quickly, and thus, they outsource their logistical operations to logistics service providers in Hyderabad transport. These logistics activities involved material management, sorting facilities, storage and retrieval of information on goods, warehousing, distribution, cargo handling, inland waterways and plan of processing strategies. The third-party service providers tend to satisfy their customers’ needs for logistical services but somehow, due to poor infrastructure and old technology, they were unable to offer their best services.

Some Of The Challenges Faced By Logistic Industry In India-

  • Different rules and regulations at different stages are enforced by national, regional and local authorities.
  • Lack of integration in transport networks, poor warehousing and distribution facilities and information technology were the major challenges for businesses dealing in the logistics industry.
  • The logistics sector needs skilled manpower and there is a lack of training institutions that are causing various issues among the employees and the logistics managers.
  • Poor management and storage facilities are the reason for a major loss, damage and deterioration of the material, especially in the perishables sector. Good refrigerated storage and containers and maintenance is needed.
  • Building the infrastructure, manage the requirements of the various sectoral supply chain, changing industrial policies to ease efficient production and transportation of goods and deploying effective managerial practices and technology to enhance competitiveness are the major issues.

Despite various challenges and its peculiarities, the logistics industry in India is transforming by developing innovative business models, outsourcing their supply chain operations to 3PL services providers and by removing the structural and policy-based stringencies.

The Changing Logistics Infrastructure

Logistics management is a subject of research that has been grabbing the attention of educators, professionals and practitioners over the past two decades. Efficient logistics management and online transport service can lead to reduced operational costs, better delivery performance and enhanced customer satisfaction levels, henceforth, making an organization more competitive in terms of quality, cost, flexibility and delivery.

With rising consumer demand and the subsequent growth in global business, the role of infrastructure support concerning to roads, rails, ports and warehouses has become crucial for the success of the Indian economy. The bottom-up approach of many logistics companies in Chennai has introduced a culture of innovation in the industry and has produced over a hundred ideas so far, many of which have been executed or are in development. These ideas incorporate an automated purchase-order system, GPS technology, a box-on-demand system, warehouse management system, drone technology and many others.

Due to globalization and digitization, the demand for logistics has increased more. Numerous multi-national companies are sourcing, manufacturing and supplying on an international level, making their supply chains very intricate to manage. However, outsourcing their logistics and transport operations to professional logistics service providers has assisted the businesses to get tailored logistical support while enabling them to focus on their core organizational activities.

At present, many large multi-national providers that deliver complete supply chain solutions across multiple countries in terms of their political and socio-economic environments. In addition to main logistical activities such as transportation, warehousing, and supply chain, these service providers also offer value-added services such as freight forwarding, customs clearance, import/export management, inventory management, packaging and labeling, assembly/installation, distribution, reverse logistics, after-sales support, and so on. By outsourcing logistics, businesses in the logistics industry can leverage the expertise of large multi-national service providers while focusing on their key competencies.

The Efficient Logistics System Indicates Economies Of Scale-

Logistics Services in India is an important sector in terms of support to national and state economy, trade flows, FDI (Foreign Direct Investment) as well as employment. Considering the major contribution of transportation and logistics in economic growth 14% (nearly) of the GDP (Gross Domestic Product) is spent on the transport and logistics industry in India in comparison to 8 -10%.

With the increased investor interest across the industry, mainly in the warehousing management service, the private investments have increased over the years along with huge Foreign Direct Investments. In 2017, the Indian warehousing industry was worth INR 560 billion and is rising with a rate of 10-12% every year. Implementation of Goods and Service Tax (GST), growing domestic consumption, growth of e-commerce and digitization, increasing international trade and development in private online transport service providers and foreign investments in infrastructure are the various factors which are boosting the growth of transportation and logistics industry.

Indian Scenario

There is a lot of investment that the logistics and transport industry is attracting in the coming year. Owing to the transformations and changes led by these investments, the industry will create huge jobs. As per the experts’ prediction, by 2022, the transport and logistics industry can be the largest job creator.

At present, the industry employs over 22 million people in India. The report also indicates that the growth in the industry would result in a 10 % reduction in indirect cost which in turn resulting in a 5 to 8 % growth in exports. It is expected that by 2020, the Indian logistics sector will reach US$ 215 Billion.

In the year 2017-18, the logistics Industry profits account for US$ 160 Billion and it is expected to reach US$ 215 Billion by the year 2020. The Indian government has made an announcement that it is working at the policy to develop the new logistics plan in India. The aim is to develop the most economical way to transport goods by 2035.

If the country’s economy needs to optimize its GDP, the supply chain barriers need to be controlled and thereby international business can also be increased. The advantages of the reduction in tariffs will minimize the logistics cost and thus, the GDP of the economy will be increased.

Globalization and increasing expanding global trade volume have forced the nations to increase their logistics capacities. The logistics industry’s development has facilitated manufacturing, distribution and marketing, offering global competitive advantages to the country that invested in the sector. Accurate and strategic planning of logistic companies in Chennai and other cities in India became a significant tool for the country to get advantages in both costs and efficiency.

Transportation joins together the elements of production in a complex net of connections between consumers and manufacturers. The consequence is usually a more efficient part of manufacturing by the exploitation of geographic comparative advantages as well as the means to create economies of scope and scale. Economic growth is increasingly associated with transport expansions, specifically infrastructures, but also with managerial expertise that is significant for logistics. Thus, even though transportation is an infrastructure intensive process, hard assets must be supported by a range of soft assets, particularly labor, warehouse management and information systems.

About TruckGuru

With more than a decade of expertise in the logistics and supply chain industry, TruckGuru has transformed itself from a start-up transport company to one of the leading logistics companies in Chennai. TruckGuru is dealing with every challenge in a perceptive manner. It has a dedicated fleet of trucks with GPS for seamless logistics operations. It has a skilled team to make the proper use of the resources for effective output and utilization. TruckGuru is investing heavily in technology to stay ahead of its rivals and going with the latest trends.

TruckGuru

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