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Logistics moving forward

The size of logistics industry in India is $215billion

Logistics moving forward
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Logistics moving forward

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The size of logistics industry in India is $215billion. The logistics industry in India is highly fragmented with a large number of unorganized players. Only 10-15 per cent of the $215-billion Indian logistics market is owned by organised players. At present, the industry employs over 22 million people in India.

Post-Covid-19, the global logistics market size is projected to grow from $2,734 billion in 2020 to $3,215 billion by 2021, at a Y-o-Y of 17.6 per cent. All major industry players maintain that the pandemic had accelerated transformation and digitisation of the manufacturing industry. The way ahead is to integrate technology into logistics. Supply chain is no longer just about moving packages. It has become a part of key business strategy, to be discussed at board meetings. Logistics now dictates production, sales and marketing plans.

The projection for 2021 is estimated to be down by over 10-15 per cent as compared to the pre Covid-19 estimation. It was the cargo divisions of airlines that saved the day for airlines with their revenues accounting for the operational costs of airlines.

Top 10 logistics companies in India: Adani Logistics Company; Future Supply Chain Solutions Ltd.; Gateway Distriparks Limited.; TCI Express Ltd. VRL Logistics Ltd. Transport Corporation of India Ltd.; Mahindra Logistics Ltd. and Aegis Logistics Ltd. Blue Dart and DHL are among the biggest courier companies.

The logistics industry in India is highly fragmented and consists of over 1,000 active players with a large number of unorganized players. While there is a need for the highly fragmented Indian logistics market to get more organised, there is also a need to reduce logistics cost to 10 per cent by 2022 from about 14 per cent now. Only 10-15 per cent of the $215-billion Indian logistics market is owned by organised players.Several factors such as – improving infrastructure nationwide, opportunities in emerging markets and channel alliances, urbanisation, faster adoption of newer technologies and digitalization, increased consumer preference for the reduced delivery time, and deployment of innovative techniques for a fast delivery of products are all playing the role of a catalyst in fuelling the growth of the logistics industry in India.

The Ministry of Commerce & Industry estimates that presently the country spends about 14 per cent of its GDP on logistics which is much higher than Japan (11 per cent) and the USA (9-10 per cent).

The CII Logistics and Supply Chain Leadership Conclave 2020 stressed on re-engineering processes, paperless and contactless documentation, capacity enhancement and multi-modal transport for growth.

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