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Indian Logistics Industry Overview

The size of the logistics industry in India is $215 billion. The logistics industry in India is highly fragmented with a large number of disorganized players. Only 10 to 15 percent of India's $215 billion logistics market is owned by organized players.
Global Logistics Industry : Large logistics companies across the value chain are expected to prioritize operational efficiency, with investments in technology adoption. The slowdown in global trade is expected to affect the volume growth and revenue performance of the air freight market as freight capacity Growth is expected to outpace demand due to weakened consumer confidence.
After COVID-19, the global logistics market is expected to grow from $2,734 billion in 2020 to $3,215 billion in 2021, with a Y-O-Y of 17.6%.
The key drivers of this market are increasing their focus on the continued supply of essential raw materials, creating a supply chain stabilization task force to fight COVID-19, as well as growing demand and distribution of personal protective equipment. The factors limiting the market are labor shortages and shortage of COVID-19 test kits. The 2021 projection is estimated to be more than 10-15% lower than the pre-COVID-19 estimate.
FMCG and healthcare are among the top industries facing major logistical challenges. Most consumers fear the limited availability of fast-moving consumer goods and health products such as disinfectants.
Most countries are experiencing supply pressure from consumer panic buying due to the impact of COVID-19. As a result, FMCG companies are constantly monitoring the current situation and coming up with new strategies to ensure continuous delivery.
The agricultural sector is exempt from the restrictions imposed by countries. This has ensured an adequate supply of food and other daily products. E-messages continue to meet the increasing demand for consumers' daily necessities.
Roads are relatively less affected by the impact of COVID-19 on the logistics sector compared to air and waterways. Freight transportation is seen as a critical mode of transportation during the pandemic. However, the main concern facing the road transport segment is the shortage of drivers and ensuring the health and safety of the available drivers and their infrastructure. Being the preferred mode of transport for essential goods, road transport is heavily relied upon for the continuous delivery of food, medicine and other essential products.
Asia-Pacific is expected to have the largest market size for the logistics industry as the region has implemented rigorous and early measures to contain the pandemic outbreak. China has started to recover from the COVID-19 pandemic faster than any other country. Only a few provinces of the entire country are in lockdown after the second wave of COVID-19. The World Health Organization also appreciates India's control over the spread of the pandemic.
This allowed the logistics and supply chain companies to meet consumer demands during the pandemic situation.
Logistics Industry In India : The logistics industry in India is highly fragmented with a large number of disorganized players. While the highly fragmented Indian logistics market needs to be better organised, it is also necessary to reduce logistics costs to 10 percent by 2022. Now about 14 percent. Only 10 to 15 percent of India's $215 billion logistics market is owned by organized players.
Blue Dart operates in the express logistics industry that focuses on multiple sectors and individual customers by providing time-bound services. Express delivery services are used for various products such as securitized documents, electronic products, auto parts, temperature-controlled shipments, trade samples, life-saving medicines, mobile phones, etc.
The Indian logistics sector has been gaining momentum in recent years and plays a very important role in facilitating trade and thereby boosting the growth of the Indian economy.
Several factors, such as: improving rural infrastructure, opportunities in emerging markets and channel alliances, urbanization, faster adoption of newer technologies and digitalization, increased consumer preference for shorter delivery times and deployment of innovative techniques for rapid product delivery are all playing a role. role. the role of a catalyst in driving the growth of the logistics sector in India.
Considered the lifeblood of the country, the logistics industry in India is of unprecedented importance as it connects diverse markets, suppliers and customers across the country, and is now firmly entrenched as an integral part of the national GDP value chain.
Deeper penetration into Bharat (Tier II, III & IV cities), economy-boosting initiatives, GST implementation and other initiatives such as Make in India, Digital India and the soon-to-be-released National Logistics Policy all hold promise for an efficient and integrated logistics sector in the coming days.
Despite the improvement of the logistics performance index from the 54th rank in 2016 to the 35th rank in 2018, India has significant potential for improvement. India's logistics sector provides livelihoods to more than 22 million people and improving the sector will enable a 10% reduction in indirect logistics costs, leading to a 5-8% growth in exports.
Growth in the logistics sector is expected to be driven by increasing penetration of products into more cities and towns, as well as the growth of economic activity and manufacturing moving to these cities. In addition, consumer demand for value-added services provides opportunities for industry players to elevate themselves from an operational role to a more strategic one.
The logistics industry is highly fragmented and consists of more than 1,000 active players, including large-scale domestic players, leading entities of global players, the express division of the government's postal service, and emerging start-ups specializing in e-commerce deliveries. Infrastructure and technology readiness is expected to be the main growth drivers for the Indian logistics industry.
However, a significant economic impact from the novel coronavirus will slow growth in the country's highly fragmented and disorganized logistics landscape.
Government Policies in the logistics industry : The Ministry of Trade and Industry estimates that the country currently spends about 14% of its GDP on logistics, which is much higher than Japan (11%) and the US (9-10%).
During the Union Budget 2020-21, the Government of India announced that it will soon release a National Logistics Policy clarifying the roles of the Union Government, state governments and key regulators. The policy also talks about reducing logistics costs to less than 10% of GDP by 2022.
With the implementation of GST, the Indian logistics market is expected to reach approximately USD 215 billion by 2020, at a CAGR of 10.5 percent.
What is the future of logistics in India?
The Indian logistics market [logistics in India] is expected to reach approximately USD 255 billion by 2022, at a CAGR of 10.5 percent.
Is the logistics sector growing?
After COVID-19, the global logistics industry market size is expected to grow from $2,734 billion in 2020 to $3,215 billion in 2021, with a Y-O-Y of 17.6%.
 
 
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