The Indian logistics sector is rapidly growing. Due to the revolutionary shifts taking place in the Indian logistics arena, large companies such as Deloitte are commenting on these developments by stating,
“ASSOCHAM recently organized a conference titled “India on the cusp of a logistics revolution” in which diverse stakeholders groups including policymakers, transport, and terminal infrastructure service providers, and logistics service providers (LSPs) deliberated on issues impacting the sector.”
At this stage, the Indian logistics industry is estimated to be worth $160 billion, however, there are numerous challenges India still faces in the midst of this unprecedented logistics growth, including poor infrastructure and a lack of sufficient trained manpower and technology.
In this article, we will explore a number of interesting facts about the current state of the Indian logistics industry.
Indian freight transports all types of goods across the nation and internationally, including parcel traffic as well as smaller consignments, agricultural products, raw materials like iron ore and petroleum, and even finished goods such as automobiles.
The problem of quality supply isn’t the problem Indian logistics is facing, one of the major issues is a lack of quality infrastructure to support the timely and cost-effective movement of these goods.
Unfortunately, India is well known for poorly designed warehouse and storage facilities not to mention its lack of key transport terminals.
In recent times, the Indian Government has been encouraged by business leaders across the globe to take a stronger stance on logistics infrastructure and encourage investment into the sector allowing for the development of quality buildings and facilities to cater to the expanding market.
Deloitte further states, “In 2016, India was ranked 35th in The World Bank LPI Index that ranks countries based on their logistics performance — moving up from 54th in 2014. While this is reflective of an improvement in the sector, multiple challenges of infrastructural deficiency, lack of integration amongst stakeholders, lack of skilled manpower, and slow adoption of technology continue to weigh it down.”
Lack of manpower
There is evidence to suggest that India is facing a large gap in the market when it comes to skilled supply chain workers which are inevitably hindering key growth.
Investors looking to put their money into India’s logistics industry, may first need to take into consideration how manpower is key to building a healthy supply chain empire and may be smarter to put their funds into educational programs to support youth with a logistics education.
Survey across India have shown that there are a very limited number of logistics education institutions, which may be the reason behind the lack of skilled workers in this field.
Policy makers may need to look at fixing the education system to ensure sustained future growth of this crucial industry.
Unlike more developed nations around the globe, India has taken a far slower approach to the adoption of technology in this logistics space.
Deloitte comments on the lack of digital technology in the Indian logistics sectors by stating, “Awareness about the economic benefits of using digital technology is low and collaboration among stakeholders far from satisfactory. As a result, the logistics ecosystem is fraught with operational inefficiencies poor asset utilization.”
The fact that technology has not yet been sufficiently integrated with the Indian supply chain means that many logistics operators are faced with poor trucking software, warehouse and transport management systems, which leads to ineffective processes and delays.