Logistics/Goods movement is a broad term which encompasses various categories of businesses which are primarily responsible for the movement of goods; however, they differ in their operational mechanisms and service levels. Some key categories would be FTL Transportation, LTL movement, Air and Rail Cargo, Ocean Cargo, First mile and Last mile Service and many more.
The Indian transportation/logistics industry has witnessed a huge growth in the past few years and is continually growing annually at an average rate of 15 per cent. With over seven million goods vehicles moving around the country, the freight volume has reached 1,325 billion ton-km, a figure that is supposed to double by 2025. We spend almost 14 percent of our GDP on transportation and logistics, whereas in developed countries the spend is around six to eight per cent. The Indian logistics /transportation industry remains heavily unorganised, fragmented and very traditional in its operating ways.
The recent shift in the industry domain is showing signs of positive changes and a step towards rebuilding logistics as an organised sector. The technology aid and management vertical in this industry will create nearly a million job opportunities for tech-experts, trained workforce, and support individuals. Although, there has been a flurry of start-ups who are working on the myriad problems that exist in this space and are providing solutions such as to optimise fleet management, improve vehicle tracking, aggregating service providers, optimising last mile delivery and automating the day-today operations by taking a technology-driven approach.
However, the market and the opportunity that has a long way ahead before the industry adopts tech-driven ways and means in its core functioning.
Some key areas where technology has made a substantial impact are:
Asset tracking: Be it tracking of a small shipment or a container carrying a heavy load or tracking personnel delivery, this is one aspect of the logistics business which gauges a lot of interest and is the need of the hour. It is not only an elementary need of the customer but is also a key magnifier which gives a logistics company visibility in its own network. Businesses involved in the movement of critical shipments such as artillery/missiles, medical instruments have also forayed into sensory based tracking, which gives visibility into the condition of the goods such as temperature, pressure, route mapping etc. while they are in transit. Although there have been numerous solutions to track assets, the real game changer would be, if the data generated by the tracking devices can provide some insights about the routes and the turnaround times across a timeframe. The whole setup will create demand for a new set of tech experts and the adroit youth should be ready to grab the opportunities.
Aggregation of service providers: Several tech start-ups have forayed into the aggregation business model wherein the demand and the supply are intelligently matched and business can happen over a click of a button through a mobile app. Such businesses have broken the technology adoption barrier and many industry players are using such applications to grow their business. They have also linked their services with payment gateways so that the money transfer is seamless and have also gotten into auxiliary services such as insurance, petrol cards, repair, and maintenance etc. The amalgamation of tech companies, payment gateways, financial service providers and facilitators will have more expansion in coming time.
Process automation: Logistics industry suffers heavily due to pretransit and post-transit activities such as heavy paper-work, loading /unloading delays, which add to the delays and the costs. (Remember: a truck makes money while it is moving). A lot of start-ups are working on digitising and automating the day-today mundane tasks. Moreover, the logistics industry is extremely nontransparent in its ways of working and technology makes the entire operations audit-proof and saves on a lot of un-necessary man hours.
Accounting management: Believe it or not, accounting and invoice matching remains to be a major pain-point of the logistics industry. Prior to de-monetisation, the cash handling was a major pain point, however, post demonetisation era the cash component has reduced by a large extent. A truck driver still needs cash to eat food, and plan for emergencies such as on-route repair and maintenance. Accounting/invoice matching is one area where technology has definitely made good strides and, processes such as consignment note creation and weighment data of vehicle are linked to accounting so that there is no discrepancy in accounting.
Regulatory/compliance adherence: The goods and services tax (GST) has altered the day-to-day operations of businesses across India and the dynamics have changed in the logistics domain with the introduction of e-waybill. However, the e-waybill system is very primitive in nature and a lot of start-ups are working on solutions which can integrate with government portals. Once that happens a lot of key regulatory functions can become seamless and make life easy for everyone. There are multiple instances one can recount wherein the solutions developed by tech service providers are liked by senior executives, however, the actual implementation fails as its usability is very complex. One has to understand that we are dealing with people who are not very tech savvy and one has to consider this factor that while designing systems. India is a land of diversities, and in my personal journey, I have encountered issues wherein the users were not well equipped to understand English and needed local language support in the application. This ground-zero deployment and usage of the application is one aspect where a lot of start-ups face challenges and one has to go down and sit with the actual user of the system and understand the grievances so that the solution becomes a part of their daily life.
What the industry experts speculate is that the coming reshuffle and re-organising in the logistics industry will create space for startups catering different services whether it is tech support, app development, data analysis, management systems, auditing and accounting, and manpower resources. This is a huge market and will take years of patience and hard work before some substantial impact can be brought into the industry.
The writer is CEO, SuperProcur