Logistics as a sector of any economy is like the veins in the human body, various body parts will start suffering if the veins are affected in one way or the other. Now, considering the logistics sector then it has certainly been hit hard by the pandemic. The resultant butterfly effect is certainly visible in the form of the performance of the Indian economy amidst the pandemic. The conclusion for the same can be drawn from two different reports.
First, there was a survey by McKinsey Global Institute (MGI) in 2019 which predicted the expansion of the Indian Logistics sector at a CAGR of above 10% from 2020 to 2025, but post-pandemic the situation seems to be unfavorably changing for the sector, which as per a recent report by UK-based research firm Technavio is almost 8%. Amidst all this, the need of the hour is a complete overhaul with the digital transformation of the Indian logistics industry. The next question that arises then is, where does the Indian industry stand when it comes to digital transformation in the logistics market in the country? To understand it first, we need to understand the sector status in detail.
So, let us consider in detail the Indian Logistics sector in terms of its present situation and the road ahead.
The present state of Warehousing & Transportation
Warehousing and Transportation are two crucial functions of the logistics sector and pandemics have impacted both on a large scale. This has created major hurdles and challenges in forecasting the demand, assigning specific capacity, and allocating products across various sectors and regions.
When it comes to warehousing then decisions related to inventory management need to be well planned and sophisticated even on good or normal days. In the present times maintaining and ordering proper quantities has become more difficult because the conventional estimating techniques of the process are now proving to be of no use. As even decisions of experienced buyers of purchasing raw material may turn out to be of less worth in the completely altered world scenario. Amidst all these major obstacles most of the organizations are mainly working on trimming their product list to make some space in their warehouses. The situation does vary as per the essentialness of the product in short, every producer needs to be before time or have leisure time for when it comes to keeping inventories.
