Indian Transport & Logistics

Why do startups in the logistic space have changing needs?

For competitive advantage, the logistics have to strive for interconnected information and optimised time and resources.

Why do startups in the logistic space have changing needs?

Photo by Scott Graham on Unsplash

The fourth industrial revolution is stirring up a wave of disruption in both business models and the supply chains that facilitate them. The advancement is notable by its speed, magnitude, and comprehensiveness. The disruptions are so drastic that they will alter the way we live, collaborate, and interact with one another, affecting nations, enterprises, industries, and society as a whole. These significant trends will undoubtedly have an impact on logistics, which is an essential component of these processes.

In addition, the digitalization of several processes, as well as the mass adoption of technologies such as blockchain, the Internet of Things (IoT), augmented reality, and artificial intelligence (AI), are expected to usher in paradigm shifts in the logistics and international transportation sectors, creating new potentials for those who can leverage these technologies while widening gaps with industries that fail to respond to the changing context in a timely manner. To maintain a competitive advantage, the logistical management system has to strive for interconnected information and optimised time and resources, while also investing heavily in innovation and development.

One of the most significant impediments to the growth of the logistics sector is a lack of infrastructure. It manifests itself in insufficient and poor-quality modal and terminal transport infrastructure, a subpar modal mix, inconsistent and ill-designed cargo and container storage warehouses, unreliable operational and maintenance protocols, and minimal hi-tech implementation. This results in long and unpredictable cargo transit times, inefficient resource use, and limited remote monitoring.

The means of transportation, as well as storage and terminal handling protocols are hardly ever equated with cargo factors (distance of travel, packaging size, density, etc.). As a result, high-cost modes such as roads are overused at the expense of cost-effective and sustainable modes such as inland waterways and railways. The ongoing and prolonged suboptimal system that appears to be in equilibrium must be changed.

Skill development
Although India has a demographic edge, acquiring suitably skilled labour remains a daunting task. This is especially evident in the logistics industry, which is considered a support system and not a full-fledged mainstream industry. Poor training, as well as proper leadership and support, contribute to a shortage of skilled labour. The logistics space must notable boost a pool of professionals that includes truck drivers, seafarers, warehousing supervisors, and quality inspection managers, among others. There are few institutes which have started to provide soft skills, operational and technical training which is a positive sign.

Information technology
Another significant limitation has been the slow adoption of new technologies. The financial benefits of using digital technology are poorly understood, and cooperation among stakeholders is inadequate. As a direct consequence, the logistics ecosystem is riddled with operational bottlenecks and underutilised assets. The pain is exacerbated by a lack of technological systems and technical knowledge. The technological infrastructure has remained inadequate, with slow network speeds, poor performance, and unreliable hardware and software, all of which contribute to high costs and lack of performance.

Regulatory hurdles
The advent of GST could completely alter the logistics sector's contours, but such a disruptive reform necessitates careful implementation. If multiple regulatory agencies are not coordinated and brought under one umbrella, the creation and operation of logistics infrastructure may be slowed. Obstacles in land acquisition and consolidation, as well as changes in land use, remain major impediments. The sector's woes are exacerbated by a lack of transparency in compliance.

Performance standards
With a diverse customer base comes a diverse set of consumer preferences and behaviour. Customers, both individual and corporate, expect personalised services, flexibility, and faster service. Due to these complexities and the prevalence of fragmented suppliers, service integration is required to meet performance standards.

It is obvious that the Indian logistics sector faces challenges, and there is much to be done. Examining the old and constructing a new rational equilibrium is the way to strengthen India's logistics infrastructure. Innovative models, new technological systems, international best practices, research, and an appropriate implementation approach can all serve to strengthen the sector, thereby stimulating growth and job opportunities in the country.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of Indian Transport & Logistics News.

Sidhartha Bhimania

Sidhartha Bhimania

Sidhartha Kumar Bhimania is the co-founder of Omnivio which is an omni-logistics marketplace, between retail enterprises and SaaS and third-party logistics providers.

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