Background:
The economy is booming at 8.2% in 2023-24, the manufacturing sector registered a growth of 9.9%, and merchandise exports are surging at $437.1 billion because road connectivity has expanded by 60% in the last ten years and 18 kms railways were electrified every day. These data underline the fact that the logistics sector in India is growing at a rapid pace and contributing significantly to the country’s growth.
Nonetheless, the profit margins of the prominent logistics businesses contracted by 11.2% in 2024 due to a lack of technological innovations, increasing operational costs as well as pressure on realizations. ICRA believes that the road transport sector’s profit margins will remain as low as 10.5% until 2025.
Synopsis:
The Indian logistics sector is the backbone of the Indian economy, as 89% of the domestic supply chain relies on the road and rail network. Despite its critical role, the return on investment is low. This blog addresses the issue of low ROI in the logistics sector and how logistics businesses can adapt to technological innovation to streamline their logistics operations, automate workflows, and improve visibility to strengthen their position and realize improvements in the revenue bottom line.
The Significance of Land Transport
The logistics industry contributes around 7.5% of India’s total GDP, including both rail and road transport. India is the largest vehicle producer in the world, ranking #6. One of the main reasons India relies so heavily on land transport is its cost-effectiveness. Compared to waterways and air transport, road transport requires less investment. Therefore, 60% of total freight is moved on roads.
Notwithstanding the significance, the logistics sector faces many challenges. One of the major bottlenecks is the need for technology to improve business conditions. Manual processes, untrained workforce, urbanization, absence of sufficient road safety measures, and financial sustainability are other risk factors that keep Indian logistics businesses in the Stone Age.
Challenges of Traditional Land Transport
The communication deficit, diffidence toward technology, nonchalance toward customers, manual processes, and negligence towards compliances are some of the ailing factors that adversely impact the efficiency, productivity, transparency, and profitability of logistics businesses in India. Let’s break down the challenges to understand the need for technological solutions., such as the transport management system and customer relationship management solutions.
Inefficient Customer Management:
From quote to order to delivery, the entire process is manually managed. As a result, there is no streamlined workflow, concrete data, or interaction trail to provide personalized services and track performance.
Information Silos and Invisibility:
Scattered information and paper-based documentation not only resist visibility but are also prone to errors. Hidenrences don’t allow the system to track shipments, schedule deliveries, and optimize routes.
Unforeseen Delays and Cost Overruns:
Lack of real-time traffic information, vehicular breakdown, and resource unavailability delay delivery and increase operational costs. Having no technological solutions unfavorably impacts customers’ satisfaction.
Fragmented Documentation and Errors:
Every department generates separate documents with no central repository. Manual documentation increases errors and misinformation and slows down the clearance process, increasing delivery time and data inaccuracies.
Limited Scalability and Growth:
Traditional land transport can’t cope with the increased business activities. Manual processes consume enormous amounts of time, impacting order fulfillment, customer satisfaction, and business expansion.
Poor Driver Management:
The biggest disadvantage of not having technological solutions to logistics woes is poor resource management, which raises regulatory and safety concerns and increases fuel and operational costs exponentially.
How Logistics Tech Can Drive Change
Technological innovation is the answer to all logistics problems. To empower logistics businesses, Rish Info Logistics combines a suite of technological solutions that strengthen customer communication, improve visibility, optimize load management, and reduce costs.
Streamlining Communication with CRM
CRM is specially designed software for customer communication and engagement. It collects customer data centrally, easing quote management and order history. Logistics businesses can streamline customer interactions and keep track of engagement, documentation, and clearances. Automation can alienate customers’ doubts and provide real-time insights into shipments.
Connecting Shippers and Carriers
Rish Info’s digital freight forwarding solution eliminates manual career search and negotiation by efficiently collaborating with shippers and careers. Consequently, logistics businesses can provide competitive rates by removing intermediaries from the system. Digital freight forwarding software allows access to a vast network of careers for route optimization and cost efficiency.
Real-time Shipment Tracking
The transport management system is designed to keep stakeholders updated on the status of real-time shipments. It enhances cargo visibility to improve customer service. The TMS identifies delays and empowers logistics businesses to eliminate hurdles for faster delivery and customer satisfaction. Moreover, gathered data helps businesses gain insight into business to improve performance.
Fleet Management with Telematics
Fleet management is crucial to optimize resource allocation, reduce fuel expenses, and monitor vehicular health. Rish Info leverages telematics and automation to observe drivers’ behavior, comply with regulations, and provide safety to drivers and goods. Our tech innovation ensures efficient and cost-effective last-mile delivery, precise driver allocation, and route optimization.
Conclusion
No economy can grow faster without efficient supply chain management. Hence, the logistics sector plays a pivotal role in the nation’s growth. Therefore, it is incumbent on us to empower logistics businesses with digital logistics solutions to improve efficiency, reduce costs, improve transparency, and enhance customer satisfaction. Thus, logistics businesses can improve ROI and profitability without transferring additional costs to customers. Contact us at +91 for a free consultation on digital logistics solutions.
