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Indian logistics industry set to take giant leaps

Sejuti Das | June 6, 2017
The increased penetration of e-commerce and the proposed GST regime will change the dynamics of the logistics industry in the years to come.


As a CIO, how are you stepping up your digital game for this year? 
Kumar: Historically, Gati has always been ahead in the game of technology adoption and ramping up its delivery capabilities. This year the company would be focusing on revamping its IT architecture to build a platform for the future. It goes without saying that the focus would clearly be on key areas like mobility, analytics, cloud and internet of things.

Dhumal: By deploying enabling technologies, DHL is now able to leverage automation to perform business better. We have been always aggressive in adopting newer technologies and the hype doesn't scare us. We have deployed a single system across our entire network, which provides us enhanced visibility and real-time tracking of vehicles and shipments.

Deb: The shipping industry is going through a huge revolution. We have developed analytical tools for monitoring weather, and checking engine factors and speed. We have also applied sensor-based performance monitoring system on board ships to enhance fuel efficiency and thus reduce greenhouse gas emission.


How is GST benefitting the logistics sector for this year?
Kumar: The immediate fallout of GST implementation would be the digitization of transactions, which means less physical documentation. The introduction of GST will also cut inventory costs by almost half for enterprises. Warehouses will get consolidated into four to five as against 20-25 across the country. Also, the logistic costs will shrink to 10 percent of GDP from 14 percent at present, with improvement in travel speeds.

Dhumal: With the GST implementation, the location of the warehouse would be more driven by the market forces of demand and supply. Post the GST, the smaller warehouses would be merged together to create larger ones for the customers.

Deb: GST is a welcome move as far as the logistics industry is concerned but it all depends on the rate of taxation. Post GST, the export freight services, taxes on fuel and goods, which are currently exempted, will be available as a credit under GST.


How is e-commerce driving growth for the logistics industry?
Kumar: E-commerce is one of the major drivers of the logistics industry. As the popularity of e-commerce is growing among customers, it is pushing supply chains to adapt to newer businesses models. Therefore, we have set up a dedicated e-commerce logistics arm to stay competitive in the market.

Dhumal: E-commerce is the future of logistics. As customers are becoming more used to digital services, Indian logistics sector needs to offer innovative solutions to satisfy their demands at competitive price levels.

Deb: With the rapid pace of the e-commerce market, and increasing customer demands, the logistics industry is being pushed to adapt in order to satisfy the growing requirements.


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