The logistics industry is looking at exponential growth, not just revival

- Huafreed Nasarwanji

Chief Commercial Officer, Gati KWE

How is logistics sector progressing in the country and what future do you see in the coming years?

Known as the backbone of the economy, the logistics industry plays a critical role in facilitating time- and cost-efficient transportations. The accelerated integration of digital technologies to navigate pandemic-induced disruptions has spurred a phase of massive growth for the logistics industry. With the rapid development of the country's digital economy creating new growth avenues, the logistics industry needs to build capabilities by combining technology, infrastructure and service innovations to up its game. The fast-paced growth of e-commerce has also been driving growth for the logistics sector.

The geopolitical developments and pandemic impact have forced a lot of global multinationals to explore the possibilities to shift their manufacturing base from China to a viable alternative destination. India can project itself to those companies as an attractive destination to build manufacturing base with a favourable policy framework and an efficient logistics ecosystem in place. All in all, the industry is poised for a robust growth phase. The government push for multimodal infrastructure development will further catalyse the growth.

What are the developments happening in Indian logistics sector towards new investments from foreign as well as Indian investors?

Growth opportunities are huge in the logistics sector for the next 10 years on the back of rapid e-commerce growth and government's continued focus on logistics infrastructure development and growth-focussed policy support in the form of Production Linked Incentive (PLI) scheme, etc. All these developments are encouraging foreign investors, private equity investors as well as domestic investors to invest in the logistics industry. In fact, the warehouse segment in particular and the logistics industry as whole has emerged as a dependable and resilient asset class thanks to sustainable return on investment.

How do you assess the market revival in logistics sector in the post-Covid times?

Despite disruptions in warehousing, transportation operations during the pandemic due to curbs and restrictions on movement and resource deployment, the logistics industry demonstrated resilience to remain operational. As the economic activities are reviving, businesses and consumers are aggressively adopting digital channels to transact and with internet penetration is rapidly expanding, the logistics industry is looking at exponential growth, not just revival.

How is the company expanding its operations?

In line with our group's mission to serve customers with agile, flexible and sustainable logistics solutions, we are relentlessly working towards strengthening our express logistics infrastructure to drive growth for Gati. We have plans to build warehousing and transportation hubs in Ambala, Bengaluru, Delhi, Hyderabad, Indore, Mumbai and Nagpur. All these hubs will have large areas and be equipped with advanced technologies and automation. We firmly believe that logistics has a pivotal role to driving business growth for SMEs, the growth engines of economy. Therefore, apart from strengthening their distribution network, we are helping growth-focussed SMEs capture new markets and further expand their customer base with our well spread out and deeper market connect, distributor knowhow and strategic guidance and inputs.

What are the new technology trends that take logistics operations to the next level? How are you incorporating digital solutions in your operations for better operational efficiency?

New-age technologies have the capabilities to transform the traditional operational framework and add precision to supply chain operations and agility to decision-making processes. On the back of digitised supply chain framework, the next phase of technology interventions will be led by artificial intelligence, machine learning, blockchain technology and the Internet of Things. All these new-age technology deployments aim to predict disruptions, eliminate errors and boost productivity and resilience.

At Allcargo Logistics, our sustained focus has been on strengthening our digital capabilities. As a part of that mission, we are in the process of integrating data analytics and predictive analytics into our operations to boost the service delivery competencies of our express logistics arm, Gati. For that, we have developed GATI Enterprise Management System (GEMS 2.0), an advance resource planning software to transform Gati from a leading express distribution player to an end-to-end logistics powerhouse. GEMS 2.0 aims to enhance productivity by optimising warehouse management, route optimization, freight consolidation, etc.

What is the way forward for making Indian logistics sector more productive and cost-effective in operations?

Infrastructure development and modernisation as well as technology integration will build the platform for a far-reaching transformation for the industry. Enhanced connectivity, strong technology backbone and superior operational and cost efficiency will help the logistics companies drive growth by expanding to under-penetrated markets. Thanks to our warehousing hubs across the country, the SMEs are now able to strengthen their market penetration and hold inventories in close proximity of the target markets to enhance delivery efficiency.

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