Logistics industries play a significant role in the industrial innovation of the country. India is similar to the rest of the world and is open to technological advancements. Among the various industries that are interconnected are technology and logistics. Technology is used to a great extent everywhere. However, it affects our daily lives and has caused the logistics sector to evolve. The flow of goods from producers, merchants, or wholesalers finally to consumers has been modified due to modern-day business techniques and advancements. The logistics industry has been considerably impacted by the switch from manual to automated technologies and communication, as well as information technology developments.
In addition, reaching out to new customers and managing a business is now more accessible, thanks to new technology. Due to the increase in smartphone penetration as a result of the ease of availability of the internet, we now live, work, and shop, thanks to online marketplaces. Moreover, over the past few years, business-to-consumer (B2C) transactions and the demand for various services have increased significantly for Indian logistics companies. The World Bank ranks India as the seventh-largest logistics services and goods market. The Indian logistics market has a value of over $250 billion during the financial year 2021.
According to Statista, in 2025, it is estimated that this industry would reach 380 billion dollars with a 10 to 12 percent CAGR. Compared to the BRICS average of 11 percent, India’s logistics cost as a percentage of GDP is higher at 14 percent.
Paradigm Shift in Logistics Industry
To begin with, the D2C (Direct to Consumer) wave is a significant change encouraging the adoption of tech-aided solutions. Given that the substantial increase in online retails has produced a shift in consumer behavior, the pandemic’s unpredictable effects have increased the demand for D2C in terms of customer preference and the development of a new dimension of retail experience. Hence, it is now essential to monitor the supply chain and the transparency of logistical movement to maintain the required pace and customer satisfaction, as well as to prevent any inefficiencies in the delivery ecosystem.
In addition, India is also becoming a hub for efficient trade. Due to the pandemic’s disruption of the supply chain, rapid commerce - a distinctive business model where products and services are delivered within 10-30 minutes of ordering, emerged. The delivery strategy, also called ‘on-demand delivery,’ is based on the idea that customers should receive quick satisfaction. This has resulted in a shift toward client-centricity and calls for substantial logistical assistance to meet customer demands quickly.
Furthermore, another significant change in the logistics sector has resulted from the realization that the industry is one of the important sources of emissions, given its crucial role throughout all supply chain phases. By 2050, emissions from the logistics industry are projected to be doubled, so it is essential to concentrate on developing strategies to cut these emissions.
Finally, a growing number of people are abandoning their old physical shopping routines in favor of online buying as e-commerce has gained popularity and quick payment solutions like UPI have become more accessible. Along with this comfort comes the change. In order to remain competitive, logistics companies must adapt to the change. In the modern-day world, businesses in the logistics industry increasingly use cutting-edge technology to stay competitive in the changing market.
Some of the significant ways in which technological developments have an impact on the Indian logistics sector are listed below-
Enhanced Supply Chain Management - Technology has significantly changed due to AI’s important role in supply chain management, including the development of predictive optimization, which is expected to become one of the biggest drivers in the logistics industry. Through precise forecasting, predictive optimization helps close the gap between supply and demand, enabling effective last-mile delivery. Smooth operations will also be guaranteed by last-mile delivery intelligence, which includes ETA prediction and route optimization. Augmented intelligence is anticipated to improve the supply chain’s experience, accountability, and flexibility in conjunction with AI. Furthermore, technology-based tailored experiences are becoming increasingly popular. These will significantly improve the shopping experience and encourage customers to purchase online.
Improved Routing - Another significant change brought about by technology in the logistics sector is enhanced routing. Locating the customer’s delivery location has become simple with the assistance of GPS, which has improved consumers’ experiences in receiving their products within the given time frame. Technology can enhance routing so that vehicles take the most efficient routes to their destination. This can be figured out before they leave the location, and, depending on problems like traffic accidents, roadblocks, or other unanticipated delays, they can also get to know a better path to drive through. Enjoying effective routing contributed to cost, time, and energy savings.
Warehouse Automation - Today, the employment of autonomous robots and AI-based management has significantly replaced physical labor, a great driver of warehouse management. The warehouse automation program has dramatically improved the delivery system. Businesses in India are now implementing warehouse technology to prepare for the future and get a competitive advantage over their rivals.
Digital Payments - One of the most common expectations that a customer has in logistics is to pay for the product by any means. In this scenario, digital payments encourage real-time payment liquidation, one of the significant industry-wide solutions for gig workers. Future logistics purchases will also rise as the supply side and consumer use of digital payments increases. Additionally, more Tier I, II, and III markets implementing digital payment solutions will promote industry growth. Another essential requirement for a successful logistics business is increased ease and decreased friction in supply chain transactions.
Streamlining Operations - The Internet of Things (IoT) impacts numerous industries’ businesses. The logistics industry has seen significant changes as a result of IoT-enabled technology. IoT can be used to track the location and temperature of objects. Furthermore, lorries may have sensors installed by the companies to monitor their location and can use IoT to keep track of the temperature and location of goods being transported in lorries. The state of the products and how well they have been handled can also be supervised using IoT. This can help logistics businesses manage inventory levels and streamline their operations. The outcomes are significant cost savings, improved efficacy, greater customer service, and speedier decision-making.
Even if it is required in reimagining the processes, Indian logistics players must invest in modernizing technologies to develop innovative and efficient solutions-growth in the use of robotics and artificial intelligence to automate tasks in warehouse and transportation management. As a result, businesses will be able to rely less on human assistance. Moreover, complex technology solutions are also emerging due to AI-driven automation, Direct to Consumer initiatives and the acceleration of sustainability.
Companies should be prepared and consider how their skills will need to change as more significant technological disruption is anticipated. Instead of limiting themselves to meet present needs, businesses can work on creating services that generate demand. Thus, in order to be at the forefront of influencing the future, logistics industries will need to maintain strong ties with consumers and the market.