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According to the recent Frost & Sullivan report, an increase in manufacturing activities has aided the Indian logistics sector to increase its activities with the sector expected to touch US$120.42 billion in 2014.
The report titled ‘Strategic Analysis of Indian Logistics Market’ informs that the Indian logistics sector is likely to touch US$120.42 billion in 2014. As per the report, the logistics sector notched up revenues worth US$75.19 billion in 2009, thanks to the spur in the manufacturing sector.
According to a director of a leading Logistics firm, strong growth in the manufacturing sector has led to increase in flow of consignments to logistics operators. Transportation business that was lying inactive for many months has been witnessing a recovery in the last few months. And increase in manufacturing activities in the coming months will further enhance the growth of the logistics sector. For the uninitiated, transportation accounts for nearly 62 percent of the logistics business in India.
The report also talks about the involvement of the agricultural sector towards the logistics business of the country. The extensive transportation and storing activities with regards to the agro products, agriculture today forms a prominent part of the total logistics market in India.
The Indian logistics market has also gained from the MNCs having Indian operations, given that they have to employ the services of domestic logistics firm since they are unaware about the policies and the distribution process in the country.
Apart from agriculture sector, even industries such as FMCG, pharma and food processing have large requirements for integrated logistics parks because of significant need for warehousing activity.
However, both manufacturers and logistics companies are apparently bearing the brunt of poor infrastructure connectivity in rural areas.
The report also discusses on putting in place logistics parks for industry verticals such as Fast Moving Consumer Goods (FMCG) and pharma looking at their need for good quality warehousing facilities. However, bad infrastructure is still a major drawback for the sector with the report suggesting to develop the inland waterways, railway freight corridors and road network.
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