Logistics sector is considered as a backbone of India’s developing economy and has justified its presence during the COVID-19 breakdown. But this sector is also very complex, costly and highly defragmented impacting the entire ecosystem of logistics market in India. There are significant bottlenecks and gaps that need to be mended for the smooth and hassle free journey.
E-logistics and Its Market Potential in India
The process of utilising information and technology facilities in the traditional supply chain process to ease sharing of knowledge, data transmission, and so on is referred to as e-Logistics. It basically includes performing the majority of conventional transportation processes in the supply chain via an online platform. With the development of new business models, e-logistics market is also booming and will continue to grow over the next few decades.
With a large number of businesses engaging in E-commerce, logistics has been heavily influenced in the background. IT technology is critical in improving the efficiency and effectiveness of supply chain management in the practise of E-commerce logistics. Tools such as the Internet of Things, Big Data Analytics, and Cloud Computing could be used to improve E-commerce logistics at the system, operational, and decision-making levels in the next decade, making them real-time and intelligent.
A good logistics environment is believed to act as a catalyst for enhancing the efficiency of all areas of the economy. Thus, improving efficiency and competitiveness and lowering logistics costs are critical to India in order to capitalise on this strategic shift and meeting its well-defined goal of becoming a $5 trillion economy by 2025.
Policy Environment for Improving E-logistic
Logistics division in the Ministry of Commerce and Industry was created for “Integrated development of logistics sector”. The Commerce and Industry Ministry’s National Logistics Policy will boost India’s trade competitiveness, and improve India’s performance in global rankings, and pave the way for India to become a logistics hub. The policy envisages creating a single-window e-logistics market that will address the gaps and generate employment. The long-debated National Logistics Policy (NLP) must be implemented quickly in order to alleviate supply chain bottlenecks and accelerate the development of an integrated logistics ecosystem. The NLP is expected to improve the flawless transport of products across the nation and encourage the business climate for many players in the industry, in addition to lowering time, waste, and cost, and thus ensuring sustainability. It will strengthen the warehouse management sector even further by ensuring the standards of storage infrastructure, such as specialised warehouses, and increasing warehousing capacity by identifying areas for consistency and optimization.
One of the right ways to do it is through the Gati Shakti programme, which was initiated last year for multi – modal connectivity. PM Gati shakti is a revolutionary approach to New India’s sustainable development and economic growth. One of the seven engines identified to propel the economy forward is the revamping of logistics infrastructure. The scheme’s primary goal is to develop innovative methods for seamless movement by incorporating cutting-edge information technology and communication channels.
Logistics in India is expanding and will be one of the fastest growing industries in the country in the coming year. This will not only help for a single window solution, but will also help the booming ecommerce logistics, create more jobs, and grow the Start-ups, Micro – enterprises, and Small and medium businesses markets in India, all of which are desperately needed today. The Ministry of Commerce and Industry recently released the Logistics Ease Across Different States (LEADS) 2021 Index. According to the LEADS index, Gujarat, Haryana, and Punjab are the best performing states in terms of goods mobility and logistics chain efficiency.
Recommendations and Way Forward to Revamp E-logistic Segment
The Nation may inspect and explore the industry’s barriers and may take the following initiatives to overcome it:
- Analyse the implementation of digital measures to prevent unjustified service interruptions and the associated irregular transactions.
- Identify high-risk highway locations and consider implementing IT facilities for monitoring and tracking of key freight rates.
- RFID or BARCODE technology can be used to reduce unneeded stoppages and improve traceability services.
In India, the goal of e-logistics is to improve customer service, lower costs, and meet timelines. Despite numerous obstacles, India’s logistics sector is developing by implementing innovative business models such as e-logistics and changing policy-based rules. By 2030, India is expected to play a key role in revamping the entire supply chain and contribute significantly to the global economy. Reducing logistics costs and time, boosting the manufacturing sector with incentives, and increasing supply chain efficiency will bring India closer to this goal.