– By Yash Jain
India’s supply chain and logistics efficiency have increased significantly in recent years. Today, technology-driven, integrated solutions and structural reforms are poised to completely change the country’s largely unorganised industry. The logistics sector was always a significant economic pillar and has now emerged as a crucial aspect for the advancement of the nation on a global level. However, to spur the sector’s growth, continuous advancements, cutting-edge technological adoption, and policy adjustments are necessary.
The government is anticipated to announce policies to maintain India’s growth momentum and to introduce additional frameworks to enhance the logistics sector when Budget 2023 is presented in a few days. As the budget countdown begins, the industry has some high hopes for the budget, which is projected to strengthen supply chains and enhance India’s logistics ecosystem.
Industry expectations from the budget
The national logistics policy (NLP), which was introduced in September 2022 by the Prime Minister, aims to reduce the cost of logistics from 4 per cent to 8 per cent of GDP and to move India up to the 25th position on the Logistics Performance Index. It is anticipated that the budget will put special emphasis on measures for accelerating this process and achieving a seamless integration of the policy’s vision. This would ensure that the logistics sector serves as a growth engine and a significant contributor to raising India’s economy to USD 5 trillion.
Technology has played a crucial role in bringing the logistics and supply chain sectors to their greatest potential. Today, the logistics industry is in dire need of shorter turnaround times (TAT), which can be achieved via the adoption of cutting-edge technologies. Therefore, the technology available at economic rates can further help SMEs, as well as large-scale enterprises by offering an unprecedented logistics experience. Furthermore, as delivery handling incurs a lot of expenses for logistics firms, it is anticipated that in this budget, the government might focus on reducing these expenses to propel the growth of this sector.
The government must also focus its attention on improving warehouse and transportation infrastructure. Furthermore, there is a pressing need to fill skill gaps, which is possible through the quick implementation of a national logistics workforce strategy. When world-class infrastructure is available, along with proper roads, established ports, affordable fuel prices, and increased warehousing capacity, several issues can be reduced. The government has already established 35 MMLPs as part of Bharatmala Phase I; however, more logistics parks are required for future growth and development. Additionally, it’s anticipated that the budget will emphasize tech integration, the use of electric vehicles in logistics, drone deliveries, and making government policies transparent.
Owing to a number of factors, including technology, shifting markets, budget constraints, and global disruptions, 2023 is predicted to be an innovative year for logistics and supply chain management. With constant developments and improvements, many emerging technologies and trends will change the industry.
Six logistics and supply chain trends for 2023
Retail and distribution supply chains can get complex
More complex mechanisms and channels are expected than ever before because of the close relationship between the complex manufacturing challenge and the difficulty of getting goods into the hands of an increasingly demanding consumer. Furthermore, costs are also not showing any signs of abating. As a result, global and local retailers may need to continuously check their inventory distribution network. They are expected to also have a unified commerce approach due to the prevalence of last-mile delivery challenges and their reliance on suppliers, who frequently have problems as well.
Rising investments in technology
There has never been more demand from businesses for cutting-edge technological solutions to support cross-organizational visibility and make better decisions based on data. Businesses will invest in technologies like blockchain because the industry badly needs transparency to cut down on expensive delays, material waste, theft, and the distribution of subpar goods. Additionally, real-time data analytics will receive more attention in order to control supply and demand, reduce operational volatility, spot new market opportunities, and combat inflationary pressures and economic stagnation.
More focus on risk management and agility
Unwanted disruptions in logistics can impact businesses and reduce their ability to compete because of the complex market and business environment. Today’s organisations are required to identify and manage potential risks before they develop into significant problems. This can only happen if they are armed with adaptable and agile strategies to handle unforeseen changes and interruptions. Businesses will want tools and methods to identify potential risks, predict outcomes, and adapt their operations and plans to the changing circumstances.
EVs for last-mile delivery
A paradigm shift in logistics and transportation models is being influenced by the upgraded service model, which includes last-mile delivery, location tracking, and hyperlocal delivery. However, in order to meet demands, serve a reasonably large consumer base, and address climate change, it is urgent to choose progressive last-mile solutions. Many companies are thinking about implementing sustainable, eco-friendly technologies based on electric mobility. Electric vehicles designed specifically for the logistics industry can significantly lower overall operational costs, reduce carbon emissions, and provide an unrestricted reach.
In order to reduce Scope 3 emissions in 2023, market participants and stakeholders will all place a greater focus on sustainable sourcing by changing their ways of doing business. By increasing accountability and traceability across HR, IT, operations, commerce, and finance, the companies hope to lower their greenhouse gas emissions while also tracking ESG data in real-time and accurately. According to a KPMG report from 2022, 53 per cent of organisations intend to increase their focus on sustainable sourcing.
More cross-border opportunities
For Indian logistics players, the opportunity for cross-border logistics is lucrative as India’s competitiveness on the world stage for exports is strengthening. A smooth freight forwarding process, up-to-date technologies for surface transportation, container movement, and organisational diversity are all necessary for effective cross-border logistics. Indian logistics companies need to develop and work with the global players’ synergies to build a network that can be used to deliver goods with quality if they want to succeed in this market.
(Yash Jain is the Co-Founder and CEO at NimbusPost)