10 Challenges Faced By Logistics Companies

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Challenges Faced By Logistics Companies

Compared to the previous two decades, the importance of logistics in the Indian economy is rapidly rising. About 10% of the Indian economy is now devoted to logistics. A logistics company’s present role in the e-commerce business is to store and package items, as well as transport them to customers’ doorsteps on time.

The logistics industry in India may be referred to as the “backbone” of any supply chain. When it comes to linking businesses to their customers, logistics firms have one of the most crucial responsibilities.

Take a good hard look at what we believe is an issue compared to the actual situation today.

Challenges Faced By Logistics Companies

A Few of the Challenges Faced By Logistics Companies in India Encounter Include the Following:

Transportation Issues

The majority of freight in India is transported by road, accounting for roughly 60 percent of total freight movement, with rail accounting for 32 percent. Since there are too many trains on the network and exorbitant rail fees. Poor road infrastructure, many checks, and traffic congestion make road transit ineffective for moving goods.

Challenges Faced By Logistics Companies

High Order Intensity Ratio

To keep up with the supply-chain timetable, every Indian logistics company has had to deal with getting a large number of orders that would break their backs. With so many orders coming in, it’s becoming more difficult to keep track of what has to be sent when. The problem is exacerbated when the organization is strapped for cash as a result of lengthy payment cycles. As a general rule, festival season is the greatest time to see massive delays in delivery schedules and an overall failure of the ETA system.

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Reducing Transportation Costs

We can confidently state that this is the industry’s most pressing issue. Transportation expenses may account for up to half of a product’s worth in certain situations. Shippers’ needs are increasing, however, at a rate that matches the rise in the cost of gasoline. Even if there is a lot of labor, there does not seem to be enough money for everyone to do it.

It’s very uncommon for merchants and manufacturers to entrust their entire shipping needs to one or two shipping providers. Their rationale is simple: if you ship more with one carrier, you can save money. All of this is true, but you have to put your whole investment in one company’s hands. Imagine what it would be like if there was a week-long wait.

Transportation Roadblocks

Unreliable shipping may occur even if the packing and drops are completed on time. India is a vast nation that encompasses a wide range of landscapes and climates. At the interior of the nation, the roads are in bad condition, while the Ghats are plagued by landslides and accidents.

Logistics firms waste time and money because of traffic jams, several checkpoints, and toll booths. Even after factoring in further delays, there’s still room for more backlog.

Challenges Faced By Logistics Companies

The Shortage of The Drivers

This is the second logistical issue that we’d want to address: driver shortages. It seems that there are not enough drivers to meet the demands of the sector at this time. There are also rules from the government that compel corporations to be more stringent in employing their drivers.

As a result, the hiring process is lengthy and costly, and it will continue to be so for some time. You have no choice but to play by the rules. Alternatively, you may make better use of your drivers’ time by planning better routes. At the very least, you’ll gain some clout from this move.

Challenges Faced By Logistics Companies

Port Sector Issues

India’s logistics firms bear an unfair burden as a result of excessively long turnaround times for ships due to overcrowding at docks and delays in the unloading of goods. It is difficult to employ coastal shipping in India on a wide scale because of inadequate landside and port infrastructure, as well as insufficient depth at ports that deter large boats.

Challenges Faced By Logistics Companies

Improving Supply Chain Visibility

Logistics firms must have complete insight into the supply chain in order to ensure accurate, on-time deliveries every time.

Send warnings and alerts when anything goes wrong with a shipment so that immediate action may be done if the shipment isn’t arriving on time. Customers must be able to monitor their goods online and get reminders about when they will arrive, such as shipping notifications and ETAs.

Logistics firms must be able to track the full process of inventory receiving, storage, order management and fulfilment, and shipping from a single location. Plus, they can see what is coming their way so that they may adjust the size of their personnel.

Tax Structure and Warehousing Problems

Indian logistics firms face a number of difficulties due to the country’s convoluted tax system. Road travel times are slowed significantly due to many state and federal fees. One of the few key issues of this business is the bad condition of storage and its restricted sites.

For low-margin items, storage facilities are highly dispersed, making it difficult to establish a big integrated warehousing facility. Most of the large storage facilities, where food grain is stored, belonged to the government.

Impact of Economy

Product and service demand is affected by political instability, a drop in manufacturing sector performance, a rise in the CPI, inflation, etc. Government spending on infrastructure projects, on the other hand, raises earnings and boosts the demand for goods and services.

Lack Of Skilled And Specialist Personnel

There is a critical shortage of logistics experts and professionals in India. A more efficient procedure is impossible since the workers are overworked and underqualified.

Logistics personnel training and wages are sacrificed in order to economize on capital. High employee turnover, increasing training expenditures, and under-performing human resources are some of the issues these organizations face in the long run.

Adopting New Technologies

As we already mentioned, logistics companies already need to start adopting new and innovative technology solutions. They help you increase productivity and reduce costs in the long run. And we’re already at the stage when things like warehouse management systems are becoming non-negotiable.

However, with so many options available, it’s hard to pick the right one. Don’t rush it, and consider all your unique business operations before you make a decision. 

Challenges Faced By Logistics Companies

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