Role of Logistics Industry in Revival of Post-Covid Economy
The Covid-19 pandemic has brought the business world to a standstill. The virulent disease has spread across the world at a rapid pace, disrupting and debilitating entire industries in its wake. India too is witnessing its share of the viral onslaught and has since effectively imposed a nationwide lockdown to arrest the further dissemination of the lethal disease.
The logistics industry has been on the frontline since the
start of the unprecedented crisis, ensuring that the availability chains remain
intact. Since the manufacturing industries were severely hit thanks to the
shortage of labor and therefore the restrictions being imposed on the movement
of products and businesses, the availability has been disrupted.
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The logistics industry provides significant macro contributions to the economy by creating employment and generating foreign investment influx. It currently contributes quite $200 billion to the economy and employs quite 40 million people. Thus, it holds critical importance because it connects various markets, suppliers, and business areas like material handling, warehousing, packaging, supply chain management, procurement, and the Bureau of Customs dotted across the country.
Impact of lockdown on
the logistics sector
The immediate impact of the pandemic on the logistic sector
has been a pointy fall in freight availability thanks to restrictions on the
assembly of non-essential goods, and lack of fleet for movement of products due
to the dearth of drivers and a consequent spike in truck rentals and air
freight prices.
According to the Indian Chamber of Commerce (ICC), the
lockdown logistics sector has lost about? 50,000 crores which has also
disrupted the business cycles and provide chains. Quite 9 percent of the
shipments were stuck, 21 percent of the orders were delayed and therefore the
delivery percentage has seen a transparent decline of 19 percent, forcing the
logistics sector to face the brunt of the crisis.
During the first stage, customers begin to ship more goods in
anticipation of stronger business conditions. The rapid decrease in logistics
demand signals the start of an economic slump. Also, logistics features a
strong role because it is that the key economic indicators including GDP and
Unemployment. When the lockdown is lifted gradually and muted the recovery in
industrial activity, the logistic sector, including warehousing, is probably
going to witness sharp demand contraction within the near term.
Role of the logistics
sector to revive the economy
According to the reports of the Economic Survey, the
country’s logistics industry is predicted to touch $215 billion by the top of
2020, growing at a CAGR of 10.5 percent. It provides employment to quite 22
million people.
Rapid and technological advancements in digital technologies,
changing consumer preferences thanks to e-commerce, government reforms, and
shift in commission sourcing strategies are expected to steer the
transformation of the Indian logistics ecosystem. Within the new normal,
technology has proven its utility and adaptableness. Strong market trends
towards the e-commerce segment still transform how brands and consumers
interact.
The pandemic has brought a rise in the demand for essential
items like groceries, food, and pharmaceuticals. Many logistics companies cater
to the present demand whilst adhering to safety protocols with OTP-based
contactless delivery of things. Leveraging state-of-the-art technology,
logistics aggregators should specialize in increasing the efficiency of
services and optimizing cost.
Another method adopted by logistics aggregator brands is to
assist the MSMEs and align with the Government’s self-reliant movement. For
small-sellers who want to require their business online and increase their
customer base, logistics aggregators became the one-stop fulfillment solution.
With automated warehousing and packaging services, they ought to make sure that
there are minimal weight discrepancies and a seamless post-order experience.
According to the National Skill Development Corporation
(NSDC), the logistics sector has emerged because of the top
employment-generating sectors in India within the aftermath of the corona virus
disease. Logistics companies should design a strategic decision to prove their
resilience and dynamism by helping the exporters and SMEs to showcase their
products overseas.
This will help the MSMEs to revive production fully swing
which can turbocharge them to shift to e-commerce completely. This is often the
time when companies shall assess their supply chain risks and proactively
develop mitigation plans like exploring alternate channels of transportation or
a combination of small trucks, three-wheelers, two-wheelers, etc. for last-mile
essential goods delivery.
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