The logistics industry in India has recorded exponential growth over the last few years. This is largely due to India’s increasing openness to trade and investment in the recent years, which has led to a proportional rise in the demand for logistics services. Though the industry is still in its development stage, the logistics industry presently comprises around 13% of India’s GDP that is more than USD 300 billion. Serving as a backbone to the Indian economy, it is set to witness boundless growth and undergo a paradigm shift.

However, the logistics industry in India has faced numerous challenges in the application of new technologies which encompass automation, safety and security. Business costs are increased due to bottlenecks in the smooth functioning of inter-state trade and logistics, due to the lack of sound inland transport infrastructure, the poor state of national and state highways, as well as the insufficient integration of IT in transport networks, warehousing and distribution processes. Even established delivery companies are unable to address pain points such as efficient last-mile delivery for e-commerce.

To cater to the need for efficient and reliable logistics solutions inclusive of timely deliveries, logistics companies that provide powerful back-end technology, hyper-local delivery services, and truck aggregators have experienced increasing traction.

Here are 5 innovative technologies which are addressing the pain points in India’s logistics sector:

1) Enterprise Resource Planning (ERP): ERP is one of the first solutions adopted by the logistics industry for the automation of backend operations and the facilitation of seamless communication across offices/departments. It provides an integrated and continuously updated view of core business processes and tracks business resources (cash, raw materials etc.) and commitments (purchase orders, payroll etc.). By facilitating information flow and data management across business functions/departments in the logistics sector, it has played a major role in ensuring efficient supply chain management and synchronizing supply with demand to bolster the capabilities of the logistics domain.

2) Electronic Data Interchange (EDI): EDI facilitates electronic exchange of business information/documents in a standardized format across logistics companies. The EDI software eliminates the manual steps involved in the exchange of purchase orders and invoices by creating an electronic version of the purchase order and automating its transfer to the supplier overnight. This enables transportation and logistics companies which are EDI compliant to indulge in seamless electronic communications with all the parties in the supply chain process.   

3) Application Programming Interface (API): APIs offer managed and controlled access to an organization’s assets such as its data and services. Tracking APIs ensure that all stakeholders in the shipment are informed about the real time location of the cargo. In the logistics sector, shipment tracking APIs have made it possible to track the carrier in real time through the driver’s smartphone or tablet. By eliminating the additional steps of integration of tracking or communication devices, APIs have facilitated greater operational efficiency, visibility and mobility in the logistics industry.

4) GPS-enabled fleet management system: Satellite global positioning system or GPS enables fleet management professionals to effectively manage their vehicles, personnel and equipment. With fleet tracking, a fleet manager can get real time updates on all its vehicles, get an estimate of traffic on the route, and calculate delivery time accurately. Its ability to revise routing based on real-time information of traffic patterns and weather has reduced maintenance costs and delivery time, thereby increasing the efficiency of logistics companies. It ensures that products safely reach the right place at the right time in the most cost-effective way, which is essential in today’s competitive business landscape.

5) Mobile Applications: Various logistics and supply chain mobile applications are helping companies achieve operational excellence by helping them track inventory, shipments, tasks and projects for improvement in supply chain functionality.

The future path for India’s logistics sector

Innovative technological solutions coupled with increasing smartphone and internet penetration are enabling the logistics sector in India to overcome some of the most prevalent operational challenges. Various tech-integrated start-ups are thus emerging to cater to the booming on-demand consumer logistics space in India. Tech-aggregation models are successfully addressing pain points in the supply chain in India by enabling optimum utilization of assets for fleet operators. Additionally, GPS-based vehicle tracking along with numerous mobile applications are reforming the logistics sector by securing it with greater transparency, visibility and profitability. In line with its current growth curve, the logistics industry is India is set to witness boundless growth in the coming years.