Technology helps revamp logistics

Anjani Mandal, CEO and Co-founder, Fortigo Network Logistics, shares his opinion on how logistics is keeping the wheels of the economy running smoothly, thereby facilitating trade and commerce.

The government has been playing its part with the development of infrastructure to ensure better connectivity and creating the environment for maximised economic growth. Additionally, the opening up of the logistics sector has also unleashed a greater growth potential for investors, encouraging start-ups to venture into the sector and build their stature by leveraging technology in these processes. The interplay of infrastructure, technology, and new-age service providers has gradually been taking the sector to greater heights. The aim is to help evolve an ecosystem that realises that technological innovations can help get the sector move from the predominantly unorganised state to an organised one, bring in transparency, infuse cost efficiency, and ensure faster mobility which would ultimately lead to customer satisfaction and retention.

ROLE OF START-UPS

Start-ups have leveraged cloud computing, IoT, mobile computing, digital authentication and payments, as well as blockchainlike technologies to build solutions that solve the challenges of tracking instant and roundthe-clock payments, and enable large-scale interaction and even cooperation amongst each other through these platforms. Furthermore, these start-ups have helped eliminate legacy, cash-heavy and expensive transactions in the ecosystem, thereby building a more robust and organised sector. As a consequence, the end customer benefits with supply chain visibility and higher levels of efficiency resulting in lower costs. These developments have brought in greater attention from investors who are embarking into the sector.

GOVERNMENT INITIATIVES

The aim is to reduce the overall cost of logistics to 10 per cent of the GDP by 2022, from the current 14 per cent. To achieve this, the government has introduced several initiatives, which include the use of technology in collaboration with start-ups. During the Budget session of 2018, the government discussed the National Logistics Portal (NLP). This digital platform aims to bring all stakeholders to a common platform and is expected to bring in greater clarity and visibility to the sector. This can help in cutting down on the cost of transactions and the time for business as well. The introduction of the e-way bill has helped in easy documentation as well as faster transportation of goods across the country.

THE WAY FORWARD

The future of the sector looks bright. As per Economic Survey 2017-18, the Indian logistics sector, which currently employs more than 22 million people, has already shown a CAGR of seven to eight per cent in the last five years. It is also expected that through further improvements in the logistics sector and through the role of technology, we can create a huge impact on exports and the industry is expected to grow on a par with the logistics sector in the West. With a 10 per cent decrease in the cost of indirect logistics, the cost could translate into a gain of five to eight per cent on the export front, making India one of the key participants in the global supply chain.

The aim is to build an ecosystem where technological innovations can make the sector an organised one