The role of the Indian logistics sector is paramount in propelling the Indian economy to the pinnacles of growth. Our world logistics index rankings have certainly come a long way since its slow ascent to success. The last few years have recorded unprecedented growth owing to the infusion of technology in its arena. There are areas where improvement could be implemented for better performance which could redefine the logistics sector in 2020.
Let’s look at the key areas that will fuel logistics growth in 2020.
The World of E-commerce
At present, the value of the Indian logistics Industry in 2019 is expected to be around $160 Billion and this is expected to grow to at least $250 Billion in the year 2020. A part of this growth can be attributed to the increasing number of e-commerce retailers and their stellar services to the citizens of the country.
People are already dependent on e-commerce for their needs and it is expected that by 2020, there will be huge online-shopping market potential for the logistics industry. The advancement of e-commerce will soon scale new benchmarks for success, resulting in more potential for the logistics industry to make a mark on express deliveries and round the clock services. Making constant changes and upgrades in the operations system of the logistics companies will bring benefit to the customers since this creates an environment of healthy competition while bringing the best services forward.
Towards sustainability: Empty Miles Elimination
In keeping with the global cry for sustainability, elimination of empty containers will be deemed highly important across the shipping industry. In the context of freight, more wastage signifies the consumption of more fuel, more carbon emission. Empty miles or non-revenue miles are detrimental to the industry, as businesses end up paying more to move cargo. From shippers to carriers to customers, the cost of empty miles is borne by everyone, including the environment.
Key Policies and Regulations
A major role will be played by key policies and reforms rolled out by the Indian government like the GST and relaxation of FDI policies. With the onset of GST, the logistics industry shifted towards multi-modals and large formats, Industrial centres that can act as goods distribution and aggregation hubs were also encouraged to expand due to the introduction of GST.
The advantage that GST gave to logistics companies was saving on organization and capital. Instead of running multiple warehouses all over the country that resulted in huge overall expense in the storage department, they can now utilize few but huge capacity warehouses that saved them the costs of maintaining multiple warehouses and transportation. This system drastically improved the model of freight and cargo movement that the logistics companies depended on, for transportation from manufacturing units to the warehouses, wholesale market, retail market and the points of sale.
This is a core area for the logistics sector that requires attention. There have been attempts made to bring in Infrastructural Development through the outlet of functionality modernisation. Projects focusing on heightening efficiency in the supply chain and improving problems of connectivity faced due to the geographical distribution of the country have taken centre-stage, however, in order to bring a substantial change, there are also other factors worth considering. Logistics education, training, and an understanding of the framework are very crucial for the overall progress of the logistics industry just as hardcore infrastructural development is.
Linking Human Intelligence to Artificial Intelligence
At present, machine learning engines consists of infusing thousands of labelled images to help machines recognize simple objects or animals like a cat. Yet errors surface when images of blurred shapes resembling that object are presented. An infant, on the other hand, through experiences learns to recognize a cat whether on photos or on pictures.
In order to recreate this experience in machines, ML programs are being developed to be rewarded for curiosity versus accuracy. This research, linking human brains to AI, will prove to be pivotal towards enhancing human attributes in machines. As supply chains head towards autonomous processes, machine learning and AI platforms will continue to observe by analyzing humans and data signals that span across parties, regions and supply chains, to decode the complexities of global trade.
Infusing Latest Technology
Technology is responsible for the stellar progress in the world of logistics. Artificial intelligence, machine learning and the internet of things have proven to be groundbreaking to traditional logistics operations in the country. Despite debates concerning the high costs of technological advancements, it is in the best interest of the logistics industry to integrate their organization with them before the gap between their current and the future technology stretches.
Advantages like optimizing cost, smart decision making, reducing execution time, efficient documentation, and more productivity are inevitable with the integration of the latest technology. This calls for initial investments like installation, test runs and training the personnel to run these programs, but once completely set up, the companies will experience a new world of streamlined processes that the older technology can barely match up to. In 2020, technology will empower logistics industries to handle bigger clientele space because of powerful management tools.
In 2020, the value of the logistics industry is expected to touch upon the $250 Billion mark by bringing a substantial improvement to operations and overall management. We expect to see prominent changes and development in these key growth factors for the growth of India’s logistics sector in 2020.