The cost for logistics is relatively high because of poor communication and physical infrastructure, low containerization levels, and high lodging time at ports, leading to significant delay at the crossing point of the border. The efficiency of the logistics system is expected to improve with the increase in free trade warehousing, logistics parks, container freight stations, and dedicated freight corridors. Key reform initiatives from the government, improvement of the investment climate, and promotion of trade and manufacturing are expected to drive growth and transform the industry in the medium to long term. The future depiction of the industry is shown below with the help of block diagram.
The next breakthrough for automotive logistics will be to create an ability to connect trains through hub-and-spoke networks, with the last miles covered by trucks. This will increase the efficiency of the Indian Logistics industry.
In order to increase efficiency, it is a must for trucking companies to embrace digitization. This will further enable the data flow in real time, increase the transparency across the value chain, and further help in making efficient decisions.
The land-based logistics industry in India is highly fragmented, with the total earning of the top five players estimated to be less than 20%. The integral network is formed by the brokerage firm for the proper utilization of current assets. The main value proposition for the brokerage firm is to connect the two individuals or companies in the ecosystem; one who wants to ship its product and the others who help ship the products to the destination. At present, the brokerage firm takes advantage of the opaqueness and demands a higher commission. The Internet will help create a marketplace for the shippers to identify the exact match for their load carrying capacity.
The three factors that act as the drivers for the on-demand freight solutions are advancements in the connectivity technologies, penetration of high-performance smartphones, and success of Uber. Even though the matching solution is not always necessary to be mobile-based, the mobile-centric approach is very easy to use and is a feasible option in today’s scenario. This provides data transparency and allows shippers to ship their products at an affordable cost. All the processes such as insurance, agreement, load/capacity matching, track and trace, and price negotiations can be performed with the help of a mobile platform. These advantages can be achieved with full transparency in the ecosystem.
How we can help
The mobile freight management business is here to stay and has huge growth potential. The complications in compliance will be the major challenge faced by the industry. Automo helps its partner client to identify the solution with respect to cost reduction and efficient transportation, which further helps the automakers to offer their products at a competitive price.