By Mr. Gurdeep Singh
The logistics sector, according to an IBEF (India Brand Equity Foundation) report, accounts for about 14.4% of the GDP in India. This data emphasizes the importance of the ever-evolving industry as a vital contributor to the country’s economic growth. In fact, the industry has been experiencing steady growth and has transformed into the backbone of the economy as it supports other businesses and provides quick, affordable, and effective shipping of goods worldwide.
Particularly in the modern era of hyperlocal delivery and real-time inventory management, the logistics sector has grown exponentially. From e-commerce, manufacturing, and healthcare to agriculture, medications, and transportation, logistics has become essential to every industry. In fact, the sector is anticipated to expand in the near future, given the wide range of participants, including small exporters and importers to medium-sized and large traders to MNCs projected to enter the market and demand efficient movement of goods.
Days of the past
Human nature is driven by consumption. Ever since the emergence of human beings on Earth, they have been consuming goods and services derived from the environment. In order to meet their demands and lead a quality life, humans are continuously on the lookout for things. This, as a result, led to the emergence of trade, which necessitated the transportation of goods from the site of manufacture to the point of consumption. Consequently, logistics came into being with a motive to ensure the smooth transit of commodities.
However, due to the use of labor-intensive logistics methods in the past, not only was the shipping procedure time-consuming and tiresome, but it also resulted in delayed delivery. Furthermore, because commodities were transported using outdated modes of transportation like horses and boats, it required more labour and was deemed expensive. In addition, there was no means for individuals to trace their shipments due to a lack of resources, leaving them with no choice but to wait.
Fortunately, as technology progressed, the logistics sector witnessed a significant upheaval as we switched from horses and old boats to amazing aerial and maritime vehicles that expedited the entire product movement process.
Modern-day scenario
The logistics industry underwent a sea change as a result of the advent of new-generation technologies. The sector is currently at its most active state, which can be attributed to the multiple developments that are occurring at a rapid pace. Modern technologies like artificial intelligence, big data analytics, the Internet of Things (IoT), and cloud computing have made it possible for logistics organizations to streamline operations, increase productivity, and cut costs.
Prior to now, obtaining and analyzing vast amounts of data was seen to be a laborious effort for logistics businesses. Big data analytics, on the other hand, has made it possible for the logistics industry to readily collect data, offer insights into customer behaviour and demand trends, and supply chain optimization. Additionally, cloud computing has made it easier to share and store the collected data in an effective and safe manner. And when it comes to tracking the movement of goods in real-time, IoT has made it simple for logistics companies to follow the flow of items from the point of manufacture to the point of delivery, assess their condition throughout transit, and optimize route planning. Aside from technological developments, the government’s promotion of local manufacturing through the ‘Make in India initiative’ is also helping the industry progress.
Another key factor that has contributed to the development of last-mile delivery services, the advent of e-commerce, and the expansion of the logistics sector is a change in consumer behaviour. The logistics industry has come a long way from keeping clients clueless to giving them increased transparency, with the goal of offering them same-day or next-day delivery options as well as quick-tracking opportunities.
According to the World Economic Forum, by 2025, the digital transformation of the logistics industry could result in direct participant benefits of $1.5 trillion and indirect societal benefits of $2.4 trillion. Given the present growth trajectory of the evolving industry, it is realistic to assume that logistics startups will heavily adopt forthcoming technologies in the future to offer innovative solutions and supplant the traditional way of operations.
Road ahead!
Over the past decade, the logistics industry has witnessed a significant shift brought on by technical improvements and shifting consumer tastes. The old manner of doing business has been disrupted by developments in the logistics industry, including hyper-local delivery, real-time inventory management, quick data analysis, and simplified tracking. Additionally, as we move to the future, the industry will continue to experience consolidation, process standardization, technology advancements, digital transformations for greater agility, and integration between not only modes of transportation but also users and outside service providers.
(The author is Mr. Gurdeep Singh, Chairman, Jujhar Logistics, and the views expressed in this article are his own)
