Rowing through transformation
Frost & Sullivan report, ‘Strategic Insights on the Logistics Industry 2016’, states that government reform initiatives, promotion of manufacturing and trade, is improving investment climate and shall transform the industry.
The Indian logistics Industry is expected to grow at a CAGR of 8.6 percent between 2015 and 2020, which grew at a CAGR of 9.7 percent during 2010-2015. Transportation and communication accounted for seven percent of the nation’s GDP in 2015, accounting for around US $130.44 billion. The key drivers of this growth are infrastructure investment associated with ports, airports, and other logistics development plans. Sea freight in India is expected to grow by 5.7 per cent driven by the demand from Asia, Europe, and Africa. Containerised cargo tonnage is likely to cross 123 million tonne in 2016 and is likely to grow by four per cent driven by port modernisation and expansion plans.The road freight volume in India is forecasted to be 2211.24 billion freight tonne kilometre growing at 4.7 per cent. The Frost & Sullivan analysis finds that the logistics industry is expected to increase by over eight per cent during the forecast period. The factors that can drive this growth include, high costs of maintaining in-house logistic activities, rising complexity in supply chains due to growth in global sourcing and distribution practices, among others.