Indian Logistics Sector – Emerging Trends

The Indian Logistics market is poised to gather greater momentum with the emergence of India as a manufacturing hub and improving multimodal transportation infrastructure. India is seeing much growth in the manufacturing sector recently which is highly significant for the growth of the logistics sector. This trend is likely to gather momentum with the gradual revival of the global economy and India emerging as one of the earliest major economies to recover from downturn.  cargo delivery services

The rapidly growing industrial sector, coupled with the healthy progress of the agricultural sector, has led to the rise of extensive supply chains across the country to facilitate sourcing and distribution of production. The distribution network in India comprises of multiple level of intermediaries. Organizations find it increasingly difficult to work in such an intricate market. This is encouraging many LSPs, who are experienced in complex logistics operations, to enter and gain a strong foothold in the market.

Moreover the trend of outsourcing logistic activities to organized third-party logistics (3PLs) is finding favor among domestic companies as it leaves them free to focus on their core competencies. Foreign companies doing business in India prefer to outsource all their major logistics requirements due to the unfamiliarity with the local policies, regulations and market.

Logistics companies are taking to expanding across geographical boundaries, a trend that is expected to gain much importance in the years to come. 3PL is anticipated to increase in future as collaborating efficiently and strengthening alliances are two factors, which are expected to look up in the logistics industry. It is notable that companies with specializations have excelled to a considerable extent in the logistics sector. However, the success of these companies will be determined how effectively these companies make use of the opportunities available to them. Studies reveal that logistics capability is related to a firm performance in the market, and is not affected by logistics outsourcing. The transportation sector is evolving with multimodal transportation solutions being setup and the development of inter-modal transportation infrastructure facilities

Dedicated freight corridors by the railways and improvements in coastal shipping facilities along with the construction of massive state-of-the-art logistics parks at key distribution hubs are helping to meet the specialized warehousing needs of freight forwarders and industry players. The non-major ports are driving the traffic growth with the traffic at these ports growing at a very healthy rate. This strong growth is expected to continue, with the share of the non-major ports increasing further.

Technologies such RFID etc. are helping manage the logistics and inventory problems faced by companies. Not only do these technologies provide benefits for the firm in its internal operations; its greatest contribution lies in its ability to improve information and materials flows throughout the entire supply chain. Visibility and improved accuracy of the information shared is greatly enhanced apart from the development of more collaborative relations across the supply chain.

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