– By Hector Patel, Executive Director, Jeena and Company

In April, ICRA estimated that the logistics sector would grow by 7- 9 per cent in FY2023. While this was attributed to a sustained recovery in industrial activities, lower hospitalization rates, lower impact on commercial traffic, and the growth in the FASTag volume in April, in October 2022, we will see a boom in the logistics sector due to the onset of the festive season. Logistics firms are already on a hiring spree in preparation for the higher demand for delivery services. Apart from retail, FMCG, consumer durables, beauty and home care, a large part of logistics movement is for pharma, critical health components that are life saving  and need immediate attention. 3PL warehousing is a growing area. 

To keep up with the higher demand for goods and services during the festive season, logistics companies must ensure an adequate workforce and sufficient packaging material and identify the vendors and suppliers beforehand. Storage and warehousing should also be taken care of to reduce shipping time and delays. A third-party logistics (3PL) partner can help manage all of this. Besides, 3PLs also provide logistics companies with the necessary infrastructure and technology to streamline deliveries. Such timely assistance can help logistics companies focus on sales and orders rather than micro-managing the supply chain issues. 3PL partners also assist in managing the last-mile logistics for reaching tier-II and tier-III cities during the high demand of the festive season, lowering the pressure on logistics companies further.

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The other thing logistics companies need to invest in is technology to support the high influx of orders. Here, Artificial Intelligence (AI) can help. Companies can use AI to manage inventory and reduce stock-related issues. They can also use AI to forecast warehousing demand and route orders efficiently. Besides AI, companies should invest in warehouse automation to make the supply chain efficient, blockchain to enhance information security and first mile and last mile automation to make quick and efficient deliveries during the festive season.

That said, they must also adequately train the workforce to use the technology. Only then can they be assured of smooth operations during high-stress periods. With festivals lined up for the next few months, the logistics sector will undoubtedly be under short-term seasonal stress. But outsourcing tasks and relying on technology to streamline processes can help logistics companies navigate these stresses efficiently.

Based on results from the 26th Annual Third-Party Logistics Study 2022, 89 per cent of shippers report having a successful relationship with their 3PL partners. So, companies struggling with managing deliveries during the festive season should rely on 3PL partners for making deliveries simpler. They should also integrate technology like AI into their workflows to automate tasks and streamline processes. This is the only way they can navigate the delivery upswing during the festive season.

(Hector Patel is the Executive Director of Jeena and Company)