Logistics serves as the backbone of India’s expanding economy, enabling the movement of products and services to over 1.4 billion consumers. The sector is riding high on the tide of rising demand and technological disruptions. Valued at around $288.19 billion currently, analysts predict the Indian logistics market will likely surpass $484.43 billion by 2029, clocking an impressive CAGR of 9.04%.
Several trends are expected to shape the future of logistics in India. Let us discuss some that will drive greater efficiency, transparency and sustainability of supply chains:
Sustainability is now a strategic priority for logistics enterprises in India. The sector alone accounts for nearly 10% of the country's total greenhouse gas emissions. To reduce carbon footprint, companies are making substantial investments in clean energy transportation.
According to industry estimates, the electric vehicle market share in logistics is forecast to grow at a whopping CAGR of 49%between 2022-2030. E-commerce bigwigs like Amazon have begun deploying nearly 1,000 electric delivery vans across 100 Indian cities to achieve net-zero carbon by 2030. DHL, too, has expanded its electric van fleet- making up to 18% of its total vehicle fleet.
Furthermore, eco-friendly packaging is gaining ground as firms like Nippon Express, Caterpillar, and Flipkart aim to minimise their packaging waste.
Automation is helping supply chains enhance productivity, efficiency and accuracy while reducing labour and operational costs. According to Mordor Intelligence, warehousing automation in India will grow at over 26.9% CAGR between 2023-2028. Automated systems powered by AI, ML and analytics are reducing manual processes in warehousing, inventory, order and transport management.
For instance, a Gurugram-based robotics company, GreyOrange, has utilised over 10,000+ robotic systems across customer sites to automate everything from inventory audits to order sorting. Its robots can inspect 500 packages per hour with extreme accuracy. While self-driving trucks are still in their infancy, automated fulfilment centres and distribution hubs are the next big thing of 2024 - promoting seamless movement of goods within logistics networks.
Digital technologies like Blockchain, IoT, Big Data and Cloud Platforms are transforming conventional logistics operations into data-driven, insights-led processes. India’s SaaS logistics market is poised to reach $3.53 billion by 2024 at a CAGR of 10%.
Blockchain improves the traceability of orders, compliance and prevents fraud. Mahindra Logistics has piloted a blockchain solution to enhance transparency in a vendor-order-factory-dealer ecosystem. IoT enables remote tracking and monitoring of shipments in real-time.
Additionally, 96% of Business leaders in India plan to invest in cloud solutions by the next year due to its operational agility and increased resilience. Furthermore, Big Data analytics and AI are increasingly leveraged to forecast demand, reduce risks, and enable predictive maintenance.
As omnichannel retail grows exponentially, customer expectations of fast and flexible deliveries have also risen. 50% of all e-commerce orders today are direct-to-door deliveries. To meet this surge, hyper-local distribution hubs and an agile transportation network for last-mile services are a must.
E-commerce firms are heavily investing in same-day and instant delivery capabilities. Amazon has over 60 fulfilment centres in 15 states offering quick delivery services. Meanwhile, Flipkart has deployed 200+ dark stores across India to enable 90-minute deliveries. Quick commerce firms like Dunzo, Swiggy and Zomato are partnering with stores and e-retailers for express delivery.
Logistics companies are also attempting to provide varying SLAs based on customer needs. A growing trend to look forward to is “inventory positioning”, which will allow for quicker and demand-aware fulfilment.
With the increased use of emerging technologies, cyber risks have also grown. According to multiple studies, over 80% of supply chain executives in India suffered a cyber attack. Supply chains must be cyber-resilient to prevent unauthorised access and disruption.
Leading firms are beginning to appoint capable Chief Information Security Officers (CISOs) and conduct regular audits to identify internal and external threats. Furthermore, government-led initiatives like CERT-In will further strengthen the cyber security posture across logistics.
With the increasing integration of automation, the need for reskilling and upskilling logistics workers is expected to rise by 2024. Companies will need to provide regular training and development programs to employees on leveraging advanced technologies, cyber security protocols, warehouse automation systems, etc.
Initiatives like the Logistics Sector Skill Council (LSC) will continue playing a pivotal role in building a future-ready workforce. This workforce will be critical to fully capitalise on upcoming innovations.
By 2024, specialist logistics firms will increasingly bundle their offerings as on-demand services for greater flexibility. Transportation-as-a-Service, Warehousing-as-a-Service, and Cold Chain-as-a-Service are some models that will gain wider adoption.
Tech-enabled, asset-light platforms will provide enterprises with the agility to scale up and down as per dynamic requirements. Usage-based pricing will also drive the services model.
The Indian government has undertaken robust policy measures and initiatives to act as a catalyst for logistics infrastructure growth and enhanced connectivity. Multimodal logistics parks, the PM GatiShaktin master plan, increased roadways & railways and air cargo capacity will improve coordination and reduce inefficiencies across supply chains.
This infrastructure boost will be augmented by logistics players themselves, significantly expanding their reach in India's smaller cities. Logistics networks will align investment with the geographic spread of demand beyond metros and turn tier-2 and tier-3 into the focal point for last-mile delivery, warehousing and fulfilment infrastructure.
In the upcoming year, companies that recognize and capitalise on the potential of smaller cities will gain a competitive edge. Overall, the progress is positive news for India's economic growth trajectory.
Future of Logistics in India
India’s logistics sector is at an exciting point where leveraging sustainability, automation, digitization, and consumer-centricity will give companies a competitive edge in 2024 and beyond. Proactively adopting these future trends will significantly enhance efficiency, lower costs, minimise risks and drive higher transparency across supply chains.
With the right vision and execution, India’s logistics has the opportunity to serve as the driving force for economic growth and nation-building.
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