Coming together of physical, digital infra pushing online

Logistics is the backbone of the Indian economy. Tens of thousands of kilometres of railway lines crisscross India allowing goods to be transported to nearly every corner of the country.

Over two lakh km of national and state highways in India make it possible to transport goods by road anywhere in the country. Airports also facilitate the movement of goods. 

Yet, it was only after the introduction of digital technologies that physical infrastructure consisting of railways and roads began to add greater value than before. Digital technologies gave life to physical infrastructure, allowing goods to be shipped safely and to be tracked while in the travel mode.  

Because of digital technologies, e-commerce companies are thriving. A robust logistics network across India permits shoppers in the remotest corner of the country to buy online and be certain that goods they’ve ordered will reach them. 

The coming together of physical with digital infrastructure is leading to the growth of each and encouraging more and more consumers to buy online. This is evident by the fact that the Indian logistics industry is estimated to generate revenues of approximately $225 billion every year and it is growing at 7.8% annually. 

Logistics companies, whose growth is fuelled by new-age technologies, are growing as well. A few technologies that the logistics industry needs to meet its modern requirements, are outlined below.  

Almost every industry is being impacted by automation and logistics is no exception. The logistics industry is using automation to lower costs and serve customers better. Automation allows shippers to remain flexible when faced with peak demand, ship heavier than expected cargo when needed, and easily pick up and pack individual products. 

Gradually, the entire logistics industry will fully embrace automation, meaning there will be warehouses equipped with robots that transport goods within, advanced sorting machines that sort packages and sent them to the right destination and drones that can transport goods directly to customers. Logistics companies that use such warehouses will save as much as 40% in operating costs. 

Data analytics is another new-age technology making waves in a number of industries, including logistics. It is allowing logistics companies to forecast trends and create logistics infrastructure to meet demand. 

Data analytics is also allowing logistics companies to create optimal routes to ship products. By using it, some shippers have lowered the number of inventory they carry by up to a whopping 75%.

Because these shippers can accurately forecast how much they need to ship in the future, they need not carry additional inventory to meet unexpected demand. Using data analytics, some US shippers have cut administrative costs by as much as 80%, reducing warehousing costs by 15% to 30%. 

Automation in India is still at a relatively nascent stage as compared to western countries, yet its potential to revolutionise the logistics industry is vast. 

Data analytics, thanks to the robust domestic software industry and because the technology is less expensive, is better evolved in India. As the domestic logistics industry is required to ship even more products to every corner of the country, it will have to rely on more sophisticated technology to do so. 

This will lead the industry to create a large number of automated warehouses and to use more sophisticated data analytics to predict demand and discover optimal routes to ship goods. 

Autonomous trucks will be on Indian roads in a few decades and when they become commonplace, they will completely revolutionise the logistics industry. Today even in their country of origin, the US, autonomous trucks seen on roads have human drivers behind the wheel ready to take over in case they need to.

By 2027, after a series of progressive steps, it’s likely that autonomous trucks will be sophisticated enough to function without the need for a human driver behind the wheel. When this happens, the merging of automated warehouses, data analytics technology and autonomous trucking will transform the logistics industry so completely that it will bear no resemblance to how it appears today. 

Author is founder LogixGRID