Logistics & transportation sector in India is growing at a very fast speed. The recent growth of the Indian economy has resulted in a big rise in freight traffic. This high volume of traffic has provided various growth opportunities in a different sector of logistics including warehousing & storage, transportation, express cargo delivery, shipping services etc. The current growth of the logistics sector is a clear indication of the healthy economic condition of the country.
Major challenges in the logistics Industry of India
Challenges In The Transport Sector – Road transport has become a major medium of freight cargo. More than half of the cargo is moved by the road, a one third is moved by railway and the remaining portion by the coastal medium.
Some of the major reasons why the road transport is preferred over the railways are as follows.
- In demand railway network between major cities are already very saturated.
- Rail freight charges are still very high as compared to road transport.
- Long transit time with uncertainty because some time transport route is assigned to passenger network, causing a delay in the total time.
- Less flexibility in transporting different type of products.
Technology and Skills Related Challenges – These are the second most important challenges faced by the Indian logistics sector. Poor technology adaptation & low-quality skill sets make things poorer. But now the industry has started to use technology since the last ten years with the use of vehicle tracking systems to automatic scanning and many more.
Other than the technology level issues, the other major issues are poor skill sets in this sector. Still, not the majority of the young professional is looking for a high-level job in this industry because the industry is behind in the skill utilization. Major skill sets which are in demand in this sector are technical skills, multi-operating skills, high-class driving skills, and most importantly time management skills.
Tax Structure Related Challenges – With the recent changes in the tax systems, the logistics industry is facing a lot of issues in this front. Transition time increased due to paying of different type of tax on highways and other toll plazas.
Different type of warehouse tax should be decided upon the usage of the warehouse, means the type of products they are storing. This will allows the logistics companies to balance their monetary values as well. The current government has introduced the GST bill, which will hopefully meet the requirements of the industry and make the things easy for the companies.
Storage Infrastructures Related Challenges – There are so many challenges against the storage facilities.
Many of the older storage warehouses are now falling in the city boundary and in the daytime, you can enter in the city areas.
– The poor quality & conditions of connecting & approach roads making evacuation of cargo difficult.
Majority of the operators of these warehouses are small to mid-sized business persons with a limited sum of the investment budget. They cannot afford to set up warehouses at prime location.
So above all the challenges in the logistics industry and they must be solved asap so that the logistics industry can grow with the speed of e-commerce industry.
