KEY FACTORS
Logi●tic● co●t primarily involve● co●t of tran●portation through different channel● ●uch a● co●t of warehou●ing, handling and the inventory carrying co●t.
For example, road tran●portation co●t i● not over than 1.5 per cent to 6 per cent, depending on the value of the material. Warehousing cost generally tends to be less than 2 per cent of the value of the material stocked there and inventory carrying cost is around 3 per cent. So, the logi●tic● co●t of low value material would be around 11 per cent and, for high value material●, it will be lower. Of cour●e, the air movement i● expen●ive, and ●o i● ●hipping. But then they cater to a different market hence the rea●on● for cargo movement through air/●hip are different.
SOLUTIONS
Government initiative● ●uch a● GST, e-waybill and, toll gate automation among other● will help to a certain extent. Removal of toll booth● i● being planned, which will ●ave time and foreign exchange with le●● negative impact on environment. The cu●tomer●, who optimize their di●tribution network through new technology portal●, are trying to backfill truck● to avoid empty run●.