Like the other industry, Logistic and Transportation Industry is one of the growing and profitable industry. Let we start with the logistic, Logistics refers to the process of planning and coordinating resources and services from the point of origin to the point of consumption. The major components of logistics involved in the proper functioning of an organization include inventory management, inbound and outbound transportation, material handling, warehousing, etc.
Logistics industry includes many businesses that will be profitable in future like warehousing, Intermodal, Air, and Ocean, International / Freight Forwarding, Truckload and many more business idea that have huge potential. In recent years, the logistics industry has benefitted from the advancements made in technology, integration, globalization, legislation, and confederations.
The Indian logistics sector is on a big growth tide. The logistics sector in India primarily comprises of freight and transportation via road, rail, air, and water, as well as ancillary sectors such as inventory stocks and warehousing. However, road transport dominates the industry, constituting about 60 percent of the total freight traffic.
The India logistics industry is projected to be worth $215 billion by 2020-21, recording a 10 per cent compounded annual growth rate (CAGR) over its approximate size of $160 billion in 2016-17. Improving logistics sector has huge implication on exports and it is estimated that a 10 per cent decrease in indirect logistics cost can increase 5-8 per cent of exports.
The Indian logistics industry which provides employment to more than 22 million people has grown at a compound annual growth rate (CAGR) of 7.8 per cent during the last five years.
The supply growth drivers include improvement in logistics infrastructure, integrated logistics and birth of numerous logistics start-ups, especially tech led start-ups. According to an industry expert, “Tech-enabled startups have a huge scope to grow as well drive the growth of the sector”.
For technology to play an integral part in this industry, there has to be effective training of the people in order to create a digital culture and to prepare the workforce to use such tools on a regular basis. Still, even in its currently limited capacity, technology plays a crucial role in the interface between customer and logistics service provider and there are several examples of its benefits.
Every industry has their positive or negative points and there are some challenges facing the industry. Logistics industry also facing some challenges that can not be erase easily.
- Fuel Cost
- Economy
- Driver shortage & retention
- Improve customer services
- Business Process improvement
- Government Regulations
- Environmental issues
- Technology Strategy an implementation
In order to develop this sector, it is important to focus on new technology, improved investment, skilling, removing bottlenecks, improving inter modal transportation, automation, single window system for giving clearances, and simplifying processes.