By Rahul Mehra
The logistics sector in India, a cornerstone of the nation’s economic structure, is experiencing unprecedented growth. As of 2021, this sector accounted for 14.4% of India’s GDP, a testament to its vital role in the country’s economy.
Aiding in its further growth, AI has emerged as a critical driving force in the logistics industry. The complexities of modern supply chains along with the sheer volume of goods being transported, have made manual management processes obsolete. This is where AI steps in to revolutionise the way logistics operates. Amidst this rapid expansion, the Indian logistics industry is struggling with age-old challenges that demand innovative solutions.
AI offers not only solutions to these challenges but also opens the door to exciting new opportunities.
Many challenges hinder the seamless movement of goods and services across the nation. Foremost among these challenges is the state of infrastructure, where the condition of roads, ports, and warehousing facilities often falls short of the required standards. A notable statistic from 2021 reveals that a mere 60% of India’s extensive road network is paved. This issue not only causes delays but also exposes goods to damage during transit.
Another bottleneck is the highly fragmented nature of India’s logistics sector. There are numerous intermediaries within the supply chain, leading to a complex network of logistics providers. This makes coordination difficult. It not only increases operational costs but also diminishes transparency, posing substantial challenges for companies seeking efficient and cost-effective logistics solutions.
Inventory management inefficiencies represent yet another hurdle. The burgeoning demand for warehousing solutions in India, as indicated by a Deloitte report forecasting a 13-15% CAGR in the warehousing market between 2020 and 2025, shares the critical need for advanced inventory management systems. Many logistics firms struggle with maintaining optimal inventory levels, often resulting in overstocking or stockouts, which can be financially draining.
Lastly, the last-mile delivery challenges persist as a substantial challenge. Navigating congested urban areas, inadequate addressing systems and the variability of consumer preferences, make the final leg of the delivery journey a logistical puzzle that requires innovative solutions.
These challenges, however, also provide opportunities for effective integration of AI-based solutions. AI can address these bottlenecks, enhance efficiency, and revolutionise last-mile delivery while optimising inventory management and transparency.
AI-powered dashcams are ushering in a new era of driver safety. These advanced systems use computer vision and machine learning to monitor road conditions, detect potential hazards, and provide real-time alerts to drivers. AI Dash Cam is offering a comprehensive solution for capturing critical footage on the road. The AI Dash Cam offers driver behaviour analysis such as speed, acceleration, and braking patterns, ensuring safer driving practises and optimised fleet management. By enhancing situational awareness and promoting safer driving practices, AI dashcams are instrumental in preventing accidents and ensuring road safety.
AI’s prowess in route optimisation cannot be understated. By harnessing historical data, analysing traffic patterns, and considering weather conditions, AI enables logistics companies to chart the most efficient routes. This not only reduces fuel consumption but also ensures timely deliveries, translating into substantial savings of up to 15% on logistics costs, as reported by IBM.
In addition to this, AI-powered sensors are adept at monitoring the health of vehicles and machinery, providing real-time insights. This capability empowers logistics companies to implement predictive maintenance measures, minimising downtime and yielding significant cost savings.
Furthermore, AI-based solutions offer enhanced visibility throughout the supply chain. Through real-time tracking and monitoring of shipments, logistics companies gain transparency, enabling them to mitigate risks effectively and provide enhanced customer service.
India’s logistics industry is embracing AI, with an estimated AI market value of $3.5 billion by 2025, as reported by NASSCOM. This surge is substantiated by substantial investments, reflecting the sector’s commitment to expansion and technological advancement. The Indian government also recognises logistics’ pivotal role and is spearheading initiatives, including a National Logistics Policy, Digital India for infrastructure enhancement, and startup support via programs like Startup India and Atmanirbhar Bharat.
As AI continues to evolve and integrate into the logistics sector, it has the potential to transform the industry, reducing costs, increasing efficiency, and driving economic growth in India. The key to success lies in addressing challenges proactively and fostering a collaborative ecosystem where technology and innovation flourish.
The author is Co-Founder at Roadcast.
Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited.
