Promoting digitalisation and fostering innovation can drive the sector's transformation.

Dr. Sharmila H. Amin,

Managing Director - South Asia India, Bertling Logistics India

How do you view the progress of Indian warehousing and logistics sector in the past couple of years?

Over the past few years, the warehousing and logistics sector in India has been experiencing significant growth and development. The implementation of the Goods and Services Tax (GST) in 2017 has played a crucial role in transforming the logistics landscape by streamlining inter-state movement of goods.

Additionally, various government initiatives such as the Make in India campaign and the dedicated freight corridors have aimed to boost infrastructure and logistics capabilities in the country. The rapid expansion of e-commerce has also contributed to the growth of warehousing and logistics services.

What are the key challenges faced by the sector in spite of the progressive steps from the government? What is the way forward?

Despite the progressive steps taken by the government to support the logistics sector in India, there are several key challenges that continue to impact its growth and efficiency. Some of the prominent challenges include:

Infrastructure deficiencies: While infrastructure development initiatives have been undertaken, challenges like inadequate road networks, congested ports, limited last-mile connectivity, and a lack of modern warehousing facilities persist. Insufficient infrastructure can lead to delays, higher transportation costs, and inefficiencies in the supply chain.

Fragmented industry structure: The logistics sector in India is highly fragmented, with a large number of small-scale players and limited consolidation. Fragmentation results in suboptimal utilization of resources, lack of economies of scale, and challenges in providing end-to-end integrated solutions.

Complex regulatory environment: Despite efforts to simplify regulations, the logistics sector still faces complexities in areas such as documentation, compliance, taxation, and inter-state movement of goods. Multiple government agencies, varying state regulations, and compliance requirements add to the administrative burden and increase costs.

Shortage of skilled workforce: There is a shortage of skilled personnel in the logistics sector, particularly in areas such as supply chain management, technology integration, and operations optimization. The lack of a skilled workforce hampers the adoption of advanced technologies and limits the sector's overall efficiency.

Inefficient logistics processes: Inefficiencies in processes, such as lengthy border clearance procedures, complex documentation requirements, and suboptimal inventory management practices, result in delays, increased costs, and lower customer satisfaction. Inefficiencies need to be addressed through process optimization and technology-driven solutions.

High logistics costs: Logistics costs in India are relatively high compared to other countries. Factors contributing to high costs include inadequate infrastructure, multiple taxation points, complex regulatory procedures, and inefficient logistics practices. High logistics costs affect the competitiveness of businesses and can hinder overall economic growth.

To address these challenges and pave the way forward, the following steps can be considered:

Continued infrastructure development: The government should sustain its efforts to invest in infrastructure development, focusing on improving road networks, ports, railways, and logistics parks.

Streamlined regulations: Ongoing efforts should be made to simplify regulations, harmonize procedures, and create a uniform and business-friendly regulatory environment across states. Single-window clearance systems and standardized processes can reduce paperwork, minimize compliance complexities, and enhance ease of doing business.

Skill development and training: Fostering skill development programs and training initiatives can address the shortage of skilled manpower in the logistics sector. Collaborations between industry, academia, and vocational training institutes can help develop a skilled workforce equipped with the knowledge and capabilities required for modern logistics operations.

Technology adoption: Encouraging the widespread adoption of technology-driven solutions such as warehouse management systems, automation, real-time tracking, and data analytics can optimize logistics processes, improve efficiency, and reduce costs. Promoting digitalization and fostering innovation can drive the sector's transformation.

Public-private partnerships: Collaboration between the government and private sector through public-private partnerships can bring in expertise, investment, and innovation to address infrastructure gaps, improve efficiency, and drive industry consolidation.

Industry consolidation and integration: Encouraging consolidation and integration within the logistics industry can enhance economies of scale, improve operational efficiency, and provide end-to-end integrated solutions. Initiatives that promote collaboration and partnerships among logistics service providers can lead to a more streamlined and efficient sector.

What are the major innovations in operations to meet the growing demands in the logistics/warehousing market?

Automation and robotics: Companies are increasingly adopting automation and robotics technologies to improve efficiency and reduce manual labour in warehousing and logistics operations. This includes the use of automated guided vehicles (AGVs) for material handling, robotic picking systems, and sorting systems, which can increase throughput, accuracy, and speed.

Internet of Things (IoT): IoT technologies enable the connection and data exchange between various devices and systems. In logistics and warehousing, IoT can be used for real-time tracking and monitoring of assets, inventory management, condition monitoring of goods, and predictive maintenance of equipment. IoT solutions provide greater visibility, optimize operations, and improve decision-making.

Artificial Intelligence (AI) and Machine Learning (ML): AI and ML technologies are being utilized to analyse vast amounts of data, optimize routing and scheduling, predict demand and supply patterns, and improve overall operational efficiency. These technologies enable companies to make data-driven decisions, enhance forecasting accuracy, and optimize resource allocation.

Blockchain: Blockchain technology has the potential to revolutionize supply chain management and logistics by providing secure and transparent transactional records. It can enhance trust, reduce paperwork, enable efficient traceability, and streamline processes such as contract management, customs clearance, and payment settlements.

Augmented Reality (AR) and Virtual Reality (VR): AR and VR technologies are being explored to improve training programs, simulate warehouse layouts, assist in order picking, and enhance maintenance and repair processes. These technologies can improve accuracy, reduce errors, and provide immersive experiences for employees.

Drones and autonomous vehicles: The use of drones and autonomous vehicles in logistics and warehousing is gaining traction. Drones can be used for inventory counting, surveillance, and last-mile deliveries in areas with challenging terrain. Autonomous vehicles, including self-driving trucks, can optimize transportation routes, reduce fuel costs, and improve delivery efficiency.

Data analytics and predictive analytics: Advanced data analytics and predictive analytics tools help companies analyse large datasets, gain actionable insights, and make informed decisions. These technologies enable better demand forecasting, inventory optimization, route optimization, and supply chain risk management.

Collaborative platforms and sharing economy: Digital platforms that facilitate collaboration, resource sharing, and crowd shipping are emerging in the logistics and warehousing space. These platforms connect shippers, carriers, and warehouse owners, enabling efficient utilization of resources, reducing empty miles, and optimizing capacity.

How is technology playing a key role in the modernization of logistics/warehousing operations in the country?

Technology is playing a crucial role in the modernization of logistics and warehousing operations in India. Overall, technology is driving the modernization of logistics and warehousing operations in India by improving efficiency, reducing costs, increasing visibility, and enhancing customer satisfaction. The adoption of technologies like WMS, automation, data analytics, and real-time monitoring is transforming the sector and enabling businesses to stay competitive in a rapidly evolving market.

How do you visualize the growth of Indian logistics sector?

The Indian logistics sector has been witnessing significant growth and is expected to continue expanding in the coming years.

Economic growth: India's strong economic growth is a driving force behind the expansion of the logistics sector. As the economy grows, there is an increased demand for efficient and reliable logistics services to support industries such as manufacturing, retail, e-commerce, and agriculture.

Government initiatives: The Indian Government has been actively working on initiatives to promote the logistics sector, such as the implementation of the GST and the development of dedicated freight corridors. These measures aim to simplify logistics processes, reduce costs, and improve overall efficiency.

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