Indian logistics market moving up-stairs

Indian logistics sector remains highly segregated
S.K Goel

S.K Goel

S.K Goel discusses how the demand for logistics services in India has been largely driven by the remarkable growth of the economy and other co-related sectors.

The uncertainty in the global and Indian economy affects all sectors, including the logistics market in India. Conversely the government has to give impetus to the imperative sectors by implementing various reforms.

Today, the Indian logistics industry is demonstrating august role in economical escalation. The industry has been scattering its footprint across the country as well as the growth in international trade is providing huge impetus to the demand for the logistics services. Countless corporations associated with logistics are the troops of this sector that the main datum of its frequent progress.

For the era 2010-2020, the Indian logistics market is expected to see consistent annual growth of around nine per cent and achieve to the revenue level of about $190-200 billion by 2020. This target will be reached with the help of steady growth of the economy and major industries like engineering, pharmaceuticals, automotive, food processing and others. Expected growth in the Indian consumer market is one of major factors for the Road Transportation is one of the significant links that facilitates productivity and competitive efficiency, leading to rapid economic expansion of the country. However despite of its apparent importance the transport sector in India has received scant attention. The inadequacy of transport infrastructure and lack of funding from government have been the crux of problems confronting the road freight sector.

Indian logistics sector is segregated in four major sectors i.e. Air Transportation, Rail Transportation, Sea Transportation and Road Transportation. In India road has become the prime mode of transportation of freight cargo thus nearly 61% of the cargo is moved by road In India, and rest by rail, airway, and pipelines.

Road Transportation is one of the significant links that facilitates productivity and competitive efficiency, leading to rapid economic expansion of the country. However despite of its apparent importance the transport sector in India has received scant attention. The inadequacy of transport infrastructure and lack of funding from government have been the crux of problems confronting the road freight sector.

The domestic cargo is still at a very initial stage in India. Further rising fuel prices is making road transport uneconomical over a long haul. At present the share of the railways is a reflection of the economic value offered by road transport. Rail cargo in India is need to reduce the time taken in design, development and deployment of new auto, wagons to make fright competitive and constant.

The air and sea freight segment presently accounts small pie of India’s freight market but it is growing at a fast pace. Globally, more than one-third of the value of goods traded worldwide is transported by air. India’s global Air Trade to GDP ratio has doubled from 4% to 8% in the last 20 years.

At present, the logistics industry in India is rising rapidly due to the growing demand for logistics services, remarkable growth of the Indian economy and superior industrialization endeavors over the country. Logistics spend in India is estimated to be around 13% of the GDP, which is comparatively higher than other developed countries. The increased participation of both public and private sector is crucial for developing logistics and improving supply chain management.

  • Nearly 61% of the cargo is moved by road In India, and rest by rail, airway, and pipelines.

 

  • The inadequacy of transport infrastructure and lack of funding from government have been the crux of problems confronting the road freight sector.

 

  • Rising fuel prices is making road transport uneconomical over a long haul.

 

  • India’s international Air Trade to GDP ratio has doubled from 4% to 8% in the last 20 years.
  • Logistics spend in India is estimated to be around 13% of the GDP, which is comparatively

 

(The author is Vice President, Om Logistics Ltd, a group initiated in the early 1980s as a company offering logistics and supply chain management services.)

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