AI in Logistics: Transforming India with predictability and precision

The movement of goods has always been the quiet backbone of India’s economy. From the coasts of Gujarat to the industrial corridors of Tamil Nadu and deep into the bustling Tier-2 and Tier-3 cities, logistics is not just about trucks, warehouses, and ports anymore. It is now about algorithms and predictive models that can forecast demand or reduce redundant paperwork in the system.

The Indian government has repeatedly emphasised the urgent need to bring down logistics costs from 13–14 per cent of GDP to around 8 per cent, in line with global benchmarks. At the same time, industry leaders are under pressure to ensure faster, more reliable, and more transparent delivery systems to support booming e-commerce, global trade, and the rising demands of manufacturing and MSMEs. Sitting at the centre of this transformation is artificial intelligence, reimagining logistics in ways that India has never seen before.

Intelligence as infrastructure
The most transformative change in Indian logistics today is the recognition that physical assets, fleets of trucks, networks of warehouses, or even aircraft capacity, can only take the industry so far. The missing layer has always been intelligence. Machine learning and predictive analytics are now providing the nervous system that companies lacked for decades.

“India’s logistics costs remain higher than global benchmarks, and the solution lies in technology-led optimisation,” observes Sujit Patel, CEO and Managing Director of SCS Tech India. His team integrates IoT and satellite data with AI-powered forecasting to reduce blind spots, minimise delays, and improve inventory planning. “By unifying fragmented data across multiple stakeholders, we create a transparent and responsive supply chain, empowering decision-makers with actionable insights rather than post-event reports.”

Predictability is particularly important for time-definite and day-definite deliveries, a segment growing fast in India’s B2B ecosystem. Gregory Goba Ble, Head of UPS India and Director of MOVIN Express, points to the importance of proactive intelligence. “AI-driven systems are poised to play a transformative role in strengthening time-definite and day-definite delivery services,” he explains, emphasising predictive analytics, dynamic scheduling, and smarter warehousing as critical levers.

This spirit of AI-as-infrastructure can be seen across contexts. Whether it is tracking containers in a congested port, balancing manpower across thousands of retail delivery nodes, or verifying addresses at the last mile, AI is being layered as a kind of digital control tower above India’s fragmented logistics system.

"India’s logistics costs remain higher than global benchmarks, and the solution lies in technology-led optimisation."
Sujit Patel, SCS Tech India

From festival peaks to port traffic
If there is one place where the Indian logistics machine is tested to its limits, it is during large-scale events. E-commerce sales during festivals like Diwali or sale seasons like Flipkart’s Big Billion Days push networks to breaking point, with millions of orders flooding fulfilment centres at once.

Bharath Chinamanthur, Senior Vice President at Flipkart, explains how AI keeps this chaos in check. “Our Central Planning Platform integrates machine learning-driven demand forecasting with optimisation models to make intelligent, forward-looking decisions across every node of the supply chain,” he says. Forecasts at a pin-code level guide everything from delivery fleet allocation to inventory positioning.

Such predictive ability does not just matter in retail. Vineet Malhotra, co-founder of Kale Logistics, draws attention to cargo operations at ports and airports. “On average, physical documents are consumed at Indian ports and airports, leading to more complexities in trade. AI can reduce the overhead cost by automating documentation, ensuring faster clearance, and enhancing cargo visibility,” he stresses. Container traffic, vessel turnaround times, and customs clearances are increasingly driven by predictive analytics, ensuring bottlenecks can be anticipated before they spiral.

"AI-driven systems are poised to play a transformative role in strengthening time-definite and day-definite delivery services."
Gregory Goba Ble, MOVIN Express

The last-mile labyrinth
While ports and airports represent the lifeblood of trade, the biggest battlefield in Indian logistics still lies at the last mile. With millions of deliveries crisscrossing urban sprawls and rural outposts each day, cost and reliability at the last mile determine service quality.

Ravi Goel, CEO of RapidShyp, highlights one chronic challenge: failed deliveries. “A common issue field executives face is reaching a location only to find the address is incomplete or the buyer no longer wants the product. In such cases, sellers bear both forward and return shipping costs,” he points out. To address this, RapidShyp uses AI to send order confirmation and address verification messages before dispatch, protecting businesses from unnecessary losses.

Flipkart faces a similar challenge at an immense scale but approaches it with orchestration. “Our vendor allocation models optimise load distribution across partners based on their performance metrics, geographic strengths, and cost-effectiveness, ensuring high service levels in regions where we don’t directly operate,” says Chinamanthur. By involving third-party providers and kirana partners, the company creates a distributed network that is stitched together by AI.

One of the more interesting use cases is courier selection for D2C brands. “Our Smart Select courier recommendation engine helps baby care and electronics brands identify the fastest and most reliable delivery partner for each pin code,” says Goel. Speed for baby care is paramount, while electronics benefit from balancing cost and reliability. AI gives companies the precision to tailor logistics to both sectoral needs and consumer expectations.

"AI enables dynamic inventory placement across our fulfilment ecosystem so that fast-moving products are always positioned closer to high-demand zones."
Bharath Chinamanthur, Flipkart

Building trust with visibility
For decades, lack of visibility was perhaps India’s biggest logistics pain point. Everyone knew delays would happen, but no one knew when, where, or why until too late. That is where AI-enabled platforms have begun to create trust.

“AI-led platforms integrate IoT, satellite data, and predictive analytics to enable end-to-end visibility of shipments in real time,” explains Patel. The difference is not just tracking a truck’s current location but predicting what will happen next, whether weather systems, congestion, or demand fluctuations will affect movement.

Kale Logistics has applied similar logic to trade facilitation. Algorithms for HS code classification, duty optimisation, and de minimis compliance help exporters navigate regulatory complexity without errors. “Intelligent algorithms analyse trade data, flag anomalies, and provide real-time guidance, enabling clients to navigate cross-border regulations efficiently while reducing compliance risks and costs,” says Malhotra.

Such visibility is not confined to domestic operations. Port community systems powered by AI are allowing airlines, forwarders, customs agencies, and ground handlers to coordinate on a single platform. “AI in our processes enables end-to-end communication between stakeholders and gives them incredible insights to plan their business decisions effectively,” Malhotra explains.

The result is that businesses no longer have to wait for reports after the fact. Information is actionable in the moment, allowing decisions to be taken well before small issues erupt into major inefficiencies.

"AI can reduce the overhead cost, and it is a boon for nations like India."
Vineet Malhotra, Kale Logistics

Closing India’s cost gap
Underlying all these changes is India’s ambition to bring down logistics costs closer to 8 per cent of GDP. This is no small task given that the country remains almost five percentage points above that benchmark today.

Goba Ble stresses that smarter delivery models are key to cost reduction. With MOVIN blending UPS’s global best practices and InterGlobe’s local market expertise, the company relies on AI-driven scheduling and resource optimisation to minimise waste. Meanwhile, Patel emphasises predictive maintenance of fleets and digital twins of supply routes as a pathway to lower downtime and resource wastage.

Goel sees this challenge most directly through the eyes of small businesses. “Technology-driven logistics can help India move significantly closer to the government’s target. As adoption increases, intelligent systems that optimise routes, reduce empty miles, and enable proactive exception handling can substantially reduce operational costs across the system,” he argues.

Yet challenges persist. Malhotra warns that awareness and reluctance continue to slow digital adoption among operators. “People are not aware of the solution and its benefits. They see digitalisation as a major investment and unnecessary process. But they don’t see the big picture,” he cautions.

"Tech-driven logistics can help India move closer to the government’s target of reducing logistics costs to 8% of GDP."
Ravi Goel, RapidShyp

The road ahead
India’s logistics sector stands at a crossroads. The traditional problems remain, congested roads, limited multimodal integration, hesitant adoption of technology outside metros, but the contours of change are unmistakable.

AI is beginning to link the chain together, from verifying a customer address in Ranchi to predicting container clearance at Nhava Sheva to balancing e-commerce inventories in Bengaluru. The country’s logistics system is moving toward becoming a predictive, connected network defined less by firefighting and more by foresight.

The logistics revolution in India will not be won through infrastructure alone. It will depend on how effectively AI can weave a fractured, diverse, fast-growing ecosystem into an intelligent network. Algorithms, not asphalt, may well prove to be India’s greatest logistic breakthrough.

This article was originally published in the Indian Transport and Logistics News' September-October 2025 issue.