The logistics sector is largely consumer-driven and the Indian logistics segment is an extensive market. Considered as the backbone of our economy, it enables swift and efficient distribution as well as transportation of goods and services. Hence, it becomes all the more essential for the supply chain models to be robust, connected, and effective.
When the pandemic outbreak created havoc last year, every industry suffered major setbacks. Then how could the logistics sector be left behind? Being one of the unorganized markets, the logistics ecosystem faced various road bumps to the extent that its meager survival was under threat. Be it small players, vendors, or the driver community, the sector was one of the worst impacted markets and was not able to function optimally. The shift in consumers’ behaviors and preferences towards online shopping further added to the woes.
However, when the pandemic pushed digital adoption across industries, the logistics segment was prompt enough to embrace technological advancements. The industry players realized that treading on the path of digital transformation was the dire need of the hour in order to survive and thrive in the market and also to manage their operations smoothly and efficiently.
Despite all the silver linings, the sector faces its fair share of struggles as well. One of the major challenges that the logistics value chain faces is the lack of penetration of technology. This implies that the pace of technology adoption is relatively slow. This limitation is being witnessed both from the vendors' and consumers’ sides. Adding to it, since the market isn’t consolidated with big players, there are inefficiencies throughout the logistics landscape with reference to operations and skillset.
This is where new-age players step in as a saving grace. These tech-enabled firms are working with the sole aim to reduce inefficiencies in the logistics segment. They strive to offer state-of-the-art solutions so as to enhance the entire supply chain models of businesses and are further driving the growth of the logistics sector.
Sharing his views on the same, Sumit Sharma, Co-Founder, GoBOLT, said, “Supply Chain and Logistics sector is fast embracing technologies built on IoT (Internet of Things), AI (Artificial Intelligence) / ML (Machine Learning), Big Data Analytics and process automation. These new-age technologies have a very strong use case for the supply chain and logistics sector, where all the sub-processes have benefited from the digital revolution.
Be it smart freight procurement, vendor management, warehousing automation, asset tracking, route and load optimizations, financial reconciliations, dispatch planning, or last-mile efficiencies, technology has been able to overhaul the entire sector and bring it on the path to match efficiencies seen in advanced economies.
The biggest challenge faced by the supply chain and logistics sector to date in terms of technology adoption has been the willingness of the involved stakeholders (customers, transporters, drivers, etc) to embrace the benefits of using technology in critical processes. But the boom of the e-commerce sector in India has been the torchbearer for the adoption of agile and technology-enabled supply chain models, where even the traditional industries have opened doors for this wave of change. Digital transformation will play a pivotal role in improving the overall customer experience and will indeed revolutionize the entire supply chain and logistics sector in the future.“
Industry experts estimate that new-age technologies can be the ideal solution to resolve these issues. They also state that technologies such as the Internet of Things, Artificial Intelligence, Machine Learning, Big Data Analytics, and automation will rule the logistics sector in the times ahead. On the whole, digital disruption will be the pivot in enhancing the customer experiences as well as boosting the growth of the market.
A recent report by Expert Market Research points out a similar trend and states that the global logistics market size was valued at $4,967 billion in 2020. It is expected to grow at a CAGR of 5 percent from 2021 to 2026 and is anticipated to hit the $6,563.3 billion mark by the end of 2026. The report further highlights that the Asia Pacific region is the leading logistics market across the globe. The study also states that technology advancements are the major contributory factors giving the requisite push to the growth of the sector.
Commenting upon the pandemic’s impact on the logistics market and its future Lalit Das, Founder, and CEO, 3SC Solutions, said, “Covid-19 made us realize the need for adaptive supply chain technology, that are quick to absorb disruptions in the market and minimize its impact. applications like supply planning, RPA, demand planning, process automation and digital twins that will help to propel the digital transformation journey by achieving industry-leading business outcomes in operational excellence, cost leadership, sustainability measures Leveraging and productivity gains."
For the last 5 years, the logistics sector has exhibited an amalgamation of both hardware and software technologies. However, over the years, there has been a shift and with supply chain companies entering into the picture, the logistics market has upscaled and will continue to progress at a significant pace in the times ahead as well.