The logistics sector has a good share of around 13% in India’s GDP. The sector is growing exponentially with higher investments and drift toward technology. This segment is undergoing continuous changes in security and automation, being the most important aspects. Like every sector, logistic also faces some challenges, along with reforms initiated by the Government. Let’s know more about them
Challenges of logistic
India’s logistics market is growing, still, there are various bottlenecks faced by this sector, such as
- Underdeveloped infrastructure: Poor and insufficient modes of transportation, and connectivity are a major hurdle.
- Regulatory challenges: There are bureaucratic issues, environmental problems, land acquisition, and policy issues.
- Cost: As GDP percentage, India suffers huge logistics costs in comparison to other developed nations.
Ongoing Reforms in logistic
- GST: Now India has uniform tax liabilities across all states. The major decisions on logistics will be based on operational efficiency. GST has eliminated the need to have a warehouse in every state, thus saving cost significantly. So, businesses can set up few warehouses and have efficient transportation for connectivity.
- Logistic infrastructure: Government understands the requirement and importance of infrastructure in conducting business and logistics operations. It has developed networks such as
- Project Sagarmala aimed to increase seaways transport by the upgrading of seaports.
- Logistic parks are into creation to cut down the transportation costs and smoothen freight movement between hubs and warehouses.
- Creation of five industrial corridors spread across 15 Indian states for swift movement of freight.
- Technology: Numerous technological advancement such as mobile apps, IoT, cloud, AI, are and will be playing major roles in logistic expansion and transparency in the system. Below are some of the major technologies in this sector
Fleet management: Fleet management via a global positioning system (GPS) is gaining immense popularity with the convenience of managing vehicles or deliveries. This allows a fleet manager to track his fleet location, real-time traffic details, and delivery time calculation. It saves a large amount of cost and time lost with instant re-routing in heavy traffic and bad weather conditions. Fleet management ensures safety and on-time delivery of the product.
Enterprise Resource Planning: Logistic and supply chain is a complex process and Enterprise Resource Planning (ERP) is great for automation of backend operations. It also enables smooth and continuous communication across different departments. ERP facilitates information across departments of the logistics sector. ERP makes certain that the supply chain management functions properly and boost the proficiencies of this sector.
Electronic Data Interchange (EDI): Logistic companies have started exchanging business information via EDI. This software that has a standardized format for creating a purchase order and it transfers without any manual effort. Another boon of Artificial Intelligence (AI), this creates a continuous electronic communication between everyone involved in the logistics process.
Application Programming Interface: Getting immense popularity, Application Programming Interface (API) is preferably implemented by various industries nowadays. It allows the companies to have control over their data and services. It offers real-time tracking of shipment or cargo location via the driver’s mobile device. API counts down any other additional steps and offers better visibility and efficiency in the logistic sector.
In addition to the above-mentioned technologies, there are various mobile apps to cater to operational needs in the logistics segment.