Logistics Service Market in India, 2024

The increasing number of e-commerce sites actively selling products in India as well as internationally has contributed to increasing the revenues of the logistics sector. The efficient handling of cargo by the logistics industry has enabled Indian exporters to gain a competitive edge in international markets. Growing awareness of logistics automation benefits, including cost reduction, time efficiency, and error prevention, is driving market growth. Companies are also investing in employee training to enhance productivity.

The market based on type of transportation is segmented into roadways logistic service, waterways logistic service, railways logistic service, and airways logistic service.

India logistic cost and logistics performance indicator analysis:

Reduced logistic costs play a crucial role in boosting the country's exports, thereby contributing to economic growth. India stands as a major global exporter of textiles, pharmaceuticals, and agricultural products. The nation's growing road and rail infrastructure is anticipated to lead to a decline in logistics costs. The expansion of National Highways, from 91,000 to 1.46 lakh kilometers by 2023, contributes to this favorable trend.

Market segment:

The airways logistic service segment is expected to witness a marginal increase in 2023 owing to the increasing e-commerce demand from tier II and III cities along with the trend of one-day delivery. The segment growth is restrained by the complicated procedure of cargo clearance, infrastructure blockage, and congestion at the cargo terminal.

Market driver:

The rise of e-commerce in India has boosted supply and logistics businesses utilizing data science for shipment tracking. The surge in online shopping, driven by the demand for quick delivery, has prompted e-commerce firms to expedite customer reach. To address the growing need for essential goods, wholesalers and offline retailers are investing in logistics, and express delivery services from some e-commerce providers are fueling demand for 3PL, benefiting the overall logistics market.

Third-Party Logistics(3PL) Market:

The market is highly fragmented with an intensive competitive environment due to the large number of international as well as domestic players operating in the Indian market. The high cost of logistics in India as compared to the rest of the countries, augments the demand for 3PL and 4PL service providers in the logistics market.

Key market trends:

A growing trend in the nation that has gained popularity in recent years is sustainability in warehousing practices. Market players are actively attempting to reduce their carbon footprint by including green energy practices to fulfill warehouse energy requirements, including solar panels or LED lights, incorporating electric vehicles (EVs) for transportation, and by using recyclable packing materials such as cardboard instead of plastic packaging materials.