Revolutionizing India’s Logistics: The Impact of AI, IoT, and Blockchain on Supply Chain Efficiency
CXOToday has engaged in an exclusive interview with Sarita Sharma, Co-Founder & Director at Orangestar and Lokesh Kanwar, Founder & Director at Orangestar
How is technology like AI, IoT, and blockchain reshaping India’s logistics and supply chain industry?
The Indian logistics and supply chain industry is witnessing a transformation with the advent of disruptive technologies like AI, IoT, and blockchain. With the help of progressive and past data, it also helps to predict tonnage, demand, efficiency, and supply trends while minimizing human interference and enhancing decision-making. AI has made predictive analysis possible. The most significant impact of IoT on shipments, especially temperature-sensitive products like pharmaceuticals, has been in tracking by using IoT-enabled devices for monitoring temperature and humidity. The technology has become indispensable because smaller logistics participants are also integrating these tools to scale their operations quite efficiently. Blockchain is adding to the visibility of transactions, thereby protecting them from tampering of any kind across supply chains. The combined application of AI, IoT, and blockchain is making logistics a much more automated, efficient, and reliable business operation process that improves overall service and reduces costs, aligning India with global logistics.
What are the biggest challenges facing India’s logistics sector, and how can they be addressed effectively?
The primary issues in Indian logistics are cost inefficiencies and infrastructure deficits. The domestic shipping, especially land transport, is highly expensive at 13-14%, much higher than the international cost. Shipping from India to the USA might be inexpensive, but within India, it is very costly. This is because of the high rail transport costs. A Delhi-Mumbai container shipment costs between Rs. 70,000-80,000. To complement this, India’s logistics infrastructure, consisting of ports and transport corridors, stands much behind international levels. The government has initiated diverse programs, such as the National Logistics Policy, the development of logistics corridors, and further infrastructure development with a significant emphasis on capacity enhancement and modernization of key ports like Paradip Port under the Sagarmala Programme. With this, efficiencies, connectivity, and cost reduction will be realized through improved infrastructure development. The focus on enhancing the logistical ecosystem is also seen to help India be competitive in global trade, particularly against countries like China.
How is the growth of e-commerce influencing logistics strategies, particularly for last-mile delivery?
It is well known that the fast-growing e-commerce industry has completely changed the logistics strategies, specifically last-mile delivery. All the companies, be it Amazon, Flipkart, or any other major player, are increasingly concentrating on last-mile delivery speed, cost-effectiveness, and efficiency. E-commerce is still growing, and earlier it was the scenario of using electric vehicles (EVs) for delivery to reduce the cost as well as environmental impacts. Moreover, newer technologies such as drones and autonomous vehicles are being tested for faster delivery. This is important as the demand for faster delivery grows, especially in urban regions. As e-commerce companies grow, logistics companies are utilizing AI and IoT to manage high volumes of orders, optimize routes, and track real-time information. This is also shifting last-mile delivery towards green practices by embracing the adoption of EVs and decreasing carbon footprints in the delivery operation.
What innovative approaches are being used to enhance supply chain efficiency and reduce costs?
Today, logistics companies make use of complex higher technologies to improve efficiencies in their supply chain and ultimately reduce costs. Among these are artificial intelligence and predictive analytics to forecast demand, optimize supply chain routes, and manage stock inventories. AI provides sufficient information to predict tonnage, demand, and supply trends for better resource allocation. IoT enables real-time monitoring of shipments, which can also yield data-related measurements of the transported products, such as temperature and humidity, that can specifically address sensitive goods such as pharmaceuticals. Compared to paper usage, the logistics industry is on its way to becoming paperless with e-invoicing and other digital platforms to help with processes in a manual-paperless manner. Electric vehicles (EVs) for last-mile deliveries are among the innovations that could considerably save on fuel and mitigate the negative environmental impact. It will also ensure efficient supply chains that are secure and traceable while reducing operational costs and improving the reliability of services through blockchains that ensure transaction security, openness for all parties, and accountability in the system.
How significant is the role of sustainability in the future of logistics, and what steps are companies taking in this direction?
The emphasis in the logistics industry has recently started to become critical because of concerns for the environment and low-cost solutions. More companies are now turning towards environmentally-friendly practices in their operations, especially last-mile deliveries. Introducing electric vehicles into operations can be seen as one of the main steps. The emission of carbon is minimized along with dependence on fossil fuel, thus becoming more efficient. Sustainable packaging and energy-efficient warehousing have gained more prominence. International clients and customers demand sustainable practices, which puts pressure on logistics providers to meet such expectations. The emerging industry now tracks carbon footprint while introducing so-called green logistics solutions, allowing supply chains to be efficient while also ecologically sound. It is mostly about making any of the regulations easy and, in turn, more readily achieved in creating a good corporate image with the wider audience of global environmental goals. Such trends would continue to drive innovation in all eco-friendly practices throughout the logistics industry.
How have government policies, such as the PM Gati Shakti initiative, impacted logistics operations and infrastructure development?
Policies by the Indian government, including the PM Gati Shakti initiative, have transformed the logistics operation and infrastructure development. This initiative is a policy for enhancing connectivity through the development of dedicated logistics corridors, new ports, and better road and rail networks. By reducing infrastructure gaps and improving logistics efficiency, this policy has reduced the transportation cost which remains the biggest challenge in India. Modernization of ports like Paradip Port in Assam and the improvement in railway connectivity would also enhance the flow of goods across the country. These would be critical for the global competitiveness of India, especially if logistics costs are lesser than others, such as in China. The push for digitalization and paperless systems, such as e-invoicing and e-way bills, has also aided in streamlining logistics, making them more transparent and efficient. These policy initiatives set the stage for a more modernized logistics ecosystem in India.
What emerging trends do you see shaping the logistics industry in India over the next five years?
Digitalization, sustainability, and automation will strongly govern the activities of the Indian logistics industry during the upcoming five years. Increasing adoption of AI and IoT technologies will help optimize supply chain operations, whether it be inventory management or efficiency improvement. On the other hand, electric vehicles (EVs) and other green logistics solutions are likely going to become the new norms: sustainability is rapidly becoming a determinant in not only businesses but also consumers. Drones and other autonomous delivery vehicles will fundamentally reshape the last mile in the logistics space: making delivery times and costs plummet even further. The growth momentum of e-commerce will scale up logistics providers, as well as enhance the penetration of blockchain technology in transactions. Going paperless and real-time tracking, along with data-driven insight, will make supply chains quicker, reduce errors, and be customer-centric.
What skills and technologies should logistics professionals focus on to stay competitive in a rapidly evolving industry?
Gearing up with experience in digital technologies such as AI, IoT, and blockchain in the current fast-evolving logistics space should do industry professionals quite a lot of good. Data analytics would form the fulcrum of any given supply chain optimization, demand forecasting, and efficiency improvement. This aspect of education therefore should be supplemented by fresh developments in the logistics of green practices such as EVs and carbon footprint management as sustainability becomes saltier and saltier for the spit. Key to these would be some automation skills, given that the logistics industry would have to employ considerable levels of automation in processes. Online platforms and paperless systems, supplemented by e-invoicing for business transactions, will also be very pertinent for logistical optimization. The more the industry turned into a tech-driven world, the more one needs to understand how to make the most effective use of its tools in optimizing logistics strategies. Meeting other emerging demands like drone deliveries and last-mile innovation would also be key to remaining competitive in this sector which changes very rapidly.
