INDIA Reimagining India’s logistics sector

Currently, ranked 44 globally based on the Logistics Performance Index, India’s logistics industry is expected to reach USD 330 billion by 2025 as per industry estimates. With a massive growth potential, the sector plays a critical role in the development of industries, infrastructure, and economy at large. However, to achieve this, there is an urgent need to address multiple challenges such as poor utilization of assets, over-dependence on road transportation, high fragmentation with many small players and low digital adoption.

The recently launched National Logistics Policy (NLP) aims to bring down India’s logistics cost from the current 13-14% of gross domestic product (GDP) to 8-9% of GDP by 2030. Key sectors contributing to the revenue of the logistics industry include agriculture, commodities, and e-commerce. Specifically in agriculture, NLP could help in ramping up the cold storage facilities, providing access to farmers and real time tracking through Unified Logistics Integrated Platform (ULIP), thereby reducing wastage, costs, and turnaround time. When it comes to commodities, NLP’s focus on Multi-Modal Logistics Parks (MMLP) and e-Logs to address queries in real-time can help in boosting the sector’s revenue, profitability, and efficiency. Logistics Ease Across Different States (LEADS) as part of NLP is aimed at reducing delays across state borders. End-to-end visibility through ULIP can help truck operators improve utilization and lower turnaround time.

Businesses and consumers are looking for better reliability, last-mile delivery capabilities, 24/7 customer support and instant quoting from their logistics providers. With changing consumer preferences and in the face of heightened volatility from global events, natural disasters, or macroeconomic shifts, these demands are accelerating at a rapid pace. Embracing digital technologies, new skills and improved infrastructure can help the logistics industry reinvent itself. In this period of change, logistics companies have an opportunity to use technology to add even greater integration, reliability, transparency, personalization where required, and help scale up or expand services.

Transforming into technology-driven, connected ecosystem

A key element of the NLP is ULIP that envisions the integration of 1600 data fields from 30 logistic systems of seven ministries through 120 application programming interfaces (APIs). Logistics companies have an opportunity to leverage technology and data to improve ease of movement promoting the vision of one nation, one permit. For example, logistics control tower can track and trace with alerts and analytics can help in pilferage detection and cargo safety, thereby increasing visibility and efficiency across the value chain. Similarly, when it comes to vehicle tracking, Internet of Things (IoT) devices can help with continued tracking across modes.

To become more competitive and resilient, the logistics sector needs to focus on a few key areas:

  • Data aggregation and standardization: Data standardization can help improve scalability, visibility, ease of use, insights, thereby helping in better decision-making. This would also improve interoperability across the platform and external agencies, along with customer experience.
  • Building a model of trust: Trust can be established through data transparency and a collaborative approach to solution development. For example, the large-scale logistics platform GSBN is built on a permissioned blockchain which allows only authorized parties to contribute and consume shipping-related data. With the help of this trusted data, participants in the supply chain – terminals, carriers, shippers, truckers, and financial institutions, can collaboratively design solutions.
  • Green logistics and packaging: A key goal of digitization should be to reduce the use of paper and promote returnable packaging and eco-friendly fuels (EV/CNG). Companies across the world are prioritizing sustainability, and supply chains play a crucial role in reducing carbon emissions.

The logistics sector will significantly benefit from more public-private partnerships and co-innovation efforts. For example, a subscription-based model for TMS (Transportation Management System) and WMS (Warehouse Management System) solutions can incentivise small-scale transporters to adopt the ULIP platform faster. Better collaboration between enterprises, consulting companies, startups, and academia can also help in building industry-specific capabilities to optimize the impact of NLP.

In a nutshell, with concerted efforts by the ecosystem players, NLP can be a game changer not only for the logistics sector but for businesses across industries, thereby generating new employment opportunities. Learning from the global best practices, leveraging existing assets and capabilities, and co-innovation through collaboration can help accelerate the execution of NLP and drive more holistic outcomes.

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