The logistics sector is forecast to grow at a CAGR of approximately 8% over the next 3-5 years as per the Confederation of Indian Industry (CII). There has been a considerable increase in domestic and international trade volumes over the past few years, owing to strong economic growth and liberalisation. Consequently, the requirement for transportation, goods handling and warehousing is growing at a robust pace, thereby driving the demand for integrated logistics solutions. The bottlenecks Various studies on the logistics sector point to a number of issues that service providers have to address, such as high operation costs, lack of investments, attracting and retaining talent, pressure from clients to broaden the range of service offerings and internationalising operations. Other factors such as demand for better customised solutions and more value-added services, besides infrastructural bottlenecks and government regulations also greatly affect the logistics sector. Low penetration of IT and lack of proper communications infrastructure also result in lack of visibility, real-time tracking ability and delay in delivery. IT services and capabilities of the logistics players are considered as driving forces for the growth of the sector; however, clients are often disappointed with the actual capabilities of the service providers. Due to shortcomings in the IT infrastructure, clients are denied inputs such as key performance indicators (KPIs), alerts and visibility required to run effective supply chains. Need of the hour With supply chains getting more and more complex, the Indian logistics sector needs to realise that optimisation of their resources through strategic alliances and partnerships will help to reduce overheads, costs and improve efficiency and service delivery. The Indian Government should continue to focus on developing infrastructure and encourage private investments. A uniform tax structure without multiple check points and documentation requirements would lead to speedier delivery of cargo. A thrust on increased awareness through seminars, workshops and exhibitions, among others will help in bringing together the logistics service providers, clients and the government on the same platform. Granting of industry status to the logistics sector will help to bring in more investments, thereby providing a much needed fillip to the sector. Concerted efforts The Indian logistics sector is waking up to the urgent need for upgrading IT and communications infrastructure. Integrated logistics solutions, Enterprise Resource Planning (ERP) and such other technologies are being deployed by even mid-sized companies in face of the stiff competition posed by multinationals. The logistics sector is striving to attract the best talents to its fold and create the right environment for nurturing talent. Doors are opening up for creation of greater awareness in the industry as well as dissemination and sharing of knowledge. The logistics sector is lobbying with the government for greater investments from both public and private sectors, apart from being granted an industry status. Amit Maheshwari, CEO and managing director of Softlink Logistic Systems Private Limited, a big-sized software product company headquartered in Mumbai |
