Overview of Indian logistics industry in 2023

The contribution of logistics in India’s GDP is about 14.4% of the GDP and is expanding at a rapid pace. The logistics market in India is expected to grow at Compound Annual Growth Rate (CAGR) of 15.5% by 2024. Moreover, the logistics sector in India employs over 22 million people and is further expected to create employment to another 1.2 million by 2025.

Some of the growth drivers in the sector includes government’s focus on infrastructure development, FDI reforms and the recently implemented Goods and Services Tax (GST) that will have an impact on the logistics industry in India. Different initiatives like Make in India and Digital India are also expected to contribute towards the growth of the logistics industry in the country.

This article will give you an overview of logistics industry in India – its existing and emerging scenarios, its challenges and the trends that is likely to contribute to its transformation.

What are the challenges faced by logistic industry in India?

It is a fact that logistics industry in India is evolving rapidly and is regarded as the backbone of the economy for moving goods across the country. However, evolutionary changes like technological innovations, change in consumer demands and new regulations often bring challenges to this sector. In addition to that, the meaning of logistics services has also expanded over the years, especially with the advent of eCommerce business, posing different challenges with reference to timely delivery, cost reduction, returns and refund management, and more.

Here are some of the challenges that logistics companies face in India:

• Transportation cost: One of the biggest heads in any logistics company is transportation cost and unstable fuel prices and maintenance can increase it further. If you are looking at saving transportation cost, you can adopt alternatives like combining shipments, installing routing software and reducing carriers. Many businesses today switch between partial-truckload, less-than truckload, and full truck load shipments (FTL vs PTL vs LTL) to manage costs based on cargo.
• Manpower management: Manpower plays a significant role in logistics and communicating with drivers and staff who mostly are on the road gets difficult. The logistics sector needs skilled manpower and shortage of drivers is a never-ending challenge. Moreover, there is a lack of training institutions too.
• Handling customer experience: The logistics industry is highly competitive, and customers are spoilt for choices. Logistics companies are expected to deliver the best to create customer delight and thereby generate repeat business. Providing assistance at every touchpoint can be challenging for providers and affect customer experience.
• Visibility: Lack of complete control and visibility of the supply chain map is often a challenge for logistics companies. It is important to have complete visibility of the supply chain at all stages to ensure that shipments are been transported through the correct route and delivered on time.
• Regulations: Logistics rules and regulations in India that are enforced by national, regional and local authorities keeps changing at times and needs constant monitoring. If not handled in a timely manner, these impact logistics and delivery timelines, and efficiency is compromised.
• Technology adaption: It is a must to adopt technology in logistics, and inability to implement tools like shipment tracking systems, automation systems, data analytics, etc. often prove to be a deterrent for logistics companies.

Who are the major players in logistics industry in India?

Every business requires an efficient logistics partner to take care of their logistics and delivery operations. Finding an end-to-end logistics company may get challenging considering the range of players and types of logistics and transportation services offered. Depending on the size of your business and the requirement, you can choose from these major players for your logistics needs.

• Blue Dart: A global carrier with a huge network across India and abroad, Blue Dart offers you options to select your preferred date of delivery and time, through scheduled and slot-based delivery. It also offers specialised services like automated proof-of-delivery updates, weather-resistant packaging, cash-on-delivery and online payment options.
• Delhivery: Another Indian logistics company that handles logistics for 7,500+ e-commerce businesses across India. Their USP includes on-demand delivery, including next-day and same-day delivery services and scheduled deliveries. Equipped with API integration, Delhivery ensures picking, packing, shipping label generation, and delivery of orders within timelines.
• FedEx: FedEx is a well-equipped logistics provider with trained personnel and top-of-the-line transportation services equipped to handle all kinds of cargo. They also aid in customs clearances for cross-border and interstate shipments.
• Ekart Logistics: Originally a Flipkart initiative to serve inhouse orders, Ekart has now evolved to provide logistics support to various other eCommerce enterprises. Popular due to low rates and delivery to remote locations, Ekart caters to same-day delivery in 13 cities in India and next-day delivery in 50.
• DHL: An international logistics company, DHL has an extremely wide distribution network across India to optimise supply chain and logistics solutions domestically and globally. DHL logistics also provides warehousing services and has over 800 fulfillment centres scattered throughout the world.

Author: Pradeep h

Pradeep a SEO professional and passionate content writer who loves writing on various topics with 5 years of experience. At Tata nexarc, it has been 4 years since he is helping MSMEs to know the business challenges deeper and strategies to solve those. While not writing, he loves reading about digital marketing to hone his skills for business growth.