Building Logistics in India

Logistics infrastructure is a critical enabler of India’s agenda for economic development and urbanisation. Recognising its pivotal role, the Indian government has tripled annual spending on logistics infrastructure over the past seven years.

Despite this increase, the country’s network of roads, rail, and waterways will be insufficient to accommodate a threefold increase in freight movement over the coming decade. This shortfall in logistics infrastructure will put India’s growth at risk. Though the government’s new initiative on projects like Dedicated Freight Corridors (DFCs), ‘Sagarmala’ and ‘Bharat Mala’ would further enable seamless multimodal logistics services, a large part of the logistics network that India needs has yet to be built, and the country has a chance to add infrastructure optimally to meet the growing demand. To achieve this goal, India must pursue an integrated and coordinated approach that not only closely aligns the development of each mode ù railways, roads, and waterways ù with the country’s needs, but also makes better use of existing assets.

This will require increasing the railways’ share of logistics infrastructure investments from about 40 per cent currently to 50 per cent. Building a logistics infrastructure capable of handling rising freight traffic more efficiently presents opportunities for user industries and for infrastructure developers and construction companies, among others.

In particular, India must expand its use of rail and realise the potential of its waterways.

The transport landscape in India today is largely fragmented. Small individual truck operators and fleet owners provide cargo services. Then there are industries and other institutions that use the services of these truckers for last mile deliveries. When we talk of ‘Uberisation’, it is about connecting a network ecosystem between those who own trucks for hire and those who need a ride. The logistics industry will benefit from having a mobile transportation app serve its needs. It will decrease expenses, improve visibility across a company’s entire supply chain and importantly, prevent trucks from having to drive empty.

The transportation sector is evolving with multimodal transportation solutions being set up and the development of intermodal 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 specialised warehousing needs of industries. The non-major ports are driving the traffic growth with traffic growing at a very healthy rate. This strong growth is expected to continue, with the share of the non-major ports increasing further.

The rise of online retail transactions is due to mobile technology and ready Internet availability. The profile of the Indian consumer is changing. According to research, mobile platforms have emerged as a major gateway for customer purchases as smartphones are increasingly replacing PCs for online shopping.

Competition is heating up among online retailers. Historically, companies have tended to measure their performance in an ad-hoc manner. But as technology becomes simpler, more affordable and more accessible, associations are realising the vital role technology plays in lowering operating costs, increasing revenue and improving operational efficiency. IT has a big role to play in improving the efficiency of the supply chain and also meeting the ever-rising expectations of the user community.

Though the penetration of IT in the Indian transportation & logistics sector has been quite low, there are huge opportunities to leverage it for the benefit of not only the logistics companies but also the consumer. In a technology-driven environment, transportation and logistics companies need to adopt solutions that not only align themselves to the organisation’s business needs but also help them achieve growth and efficiencies. TCI has a world class IT infrastructure which includes EDI-ERP, bar-coding, WMS, EMS, CIS, GPS, GPRS, VTS, online payment, an app for logistics focus (in-house publication), a TCIL app for employees, brand building through social media, etc., that enables clear-cut information flow for both our staff and our customers.