Road Transportation Market: Challenges and Opportunities


Logistics is an essential sector to a country’s sustenance, growth and economic development. Yet, the Indian logistics sector has been lagging behind in terms of technology and operating efficiency. In the early stages of the pandemic outbreak, there was a disruption in logistics operations pan-India. However, things were brought under control soon and the industry posted impressive growth. A great change is now set to transform the unregulated logistics sector into an efficient technology-driven space.

Before we look at the upcoming opportunities, there is a need to identify the challenges to be overcome for achieving growth in the Indian logistics industry.

  • Lack of optimization – Indian companies are now manufacturing an ever-increasing number of goods ranging from raw materials such as steel to heavy equipment and everything in-between. These huge cargo shipments need speedy and safe transportation, but, the conventional and unorganized logistics service providers are lagging behind in meeting this demand. With millions of vehicles on the roads, the challenge is not entirely the lack of vehicles, but rather the under-utilization of their capacity. In the absence of technology-driven operations, a majority of vehicles remain idle at any given time while the shippers keep wasting time looking for vehicles through agents etc.
  • Need for digital transformation – Majority of logistics operations are still carried out by small fleet owners and drivers who own their vehicles. This leads to a lack of coordination among different players, and standardization of services remains a challenge. There is not enough transparency and technology driven tracking and management of the supply chain. Digital transformation is essential, but smaller players are often not able to integrate technology due to a lack of know-how and willingness to invest in tech infrastructure.

Technology driven opportunities

While there are challenges, the rapid surge in economic activities in recent years, and the sustained efforts of the Indian government under initiatives such as Make in India and Aatmnirbhar Bharat are going to create an incredible potential for the logistics providers in the years to come.

As per projections, the Indian logistics industry is set to grow at a CAGR of 10.7% until 2024. Major fleet operators and pan-India brands are deploying cutting-edge technologies and automating supply chains to boost growth. Efficiency, capacity optimization and ability to safely and swiftly deliver a diverse range of shipments such as perishables, electronics, metals, components, raw materials and high-value goods are going to necessitate technology integration at an unprecedented scale. Agility and responsive supply chains are going to be the new norm. App-based systems for customer interactions, marketing, order booking, compliances, tracking of shipment and customer service are going to be the standard in the years ahead.

Expansion of digital platforms that leverage marketplace technologies to optimize performance, is going to play a major role in the sector. The marketplace adoption augurs well for the industry as it seamlessly allows the smaller, unregulated operators to enjoy the efficiency of technology-driven corporate players.

Performance optimization is being ensured by such marketplace interactions as they eliminate the need for spending long hours chasing agents and prospective customers telephonically. Since the demand is already there, these platforms can bring the shippers and shipping service providers together in real-time by deploying advanced AI algorithms and integrated communication channels. Instead of remaining parked on urban outskirts, vehicles such as trucks, lorries, container carriers and speciality goods vehicles can be optimally kept operational through online load booking. By going for robust automation of the processes such as marketing, order booking, paperwork, load allocation and consignment tracking, the transporters stand to gain the most from the imminent economic surge which the post-pandemic India will witness.

With all the automation and online business processes, the logistics sector players with superior cybersecurity of data and cargo will gain operational advantage. Digital reliability of operations and integration of AI, Blockchain and IoT technologies will play a proactive role in this economic evolution.

Moving forward, it is essential for all cargo service providers, irrespective of their scale or area of operations, to undergo a digital-first transformation. The future will belong to the digital ecosystem-driven approach and those who integrate seamlessly into the community will lead the market!

This article has been authored by Mr Karan Shaha, CEO and Co-Founder, Vahak.

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