Increasing demand for third party logistics companies in India

 Logistics is an important sector for a developing country like India as it combines infrastructure, technology, and new types of service providers to facilitate other industries to reduce their costs and provide effective services. Rapid globalization, increasing consumerism, growth in the manufacturing sector, and expanding e-commerce are some of the key factors driving the growth of 3PL logistics companies in India. The ability of third-party logistics companies in India to provide the latest technological advances in logistics and supply chain management has helped many outsource their logistics activities to third-party suppliers. With services like warehouse management, online documentation for domestic and international freight movement, real-time data, tracking of transportation, and more, provided by 3PL, the complexities of handling supply chain management operations becomes the responsibility of the 3PL provider.

 The Indian 3PL market is expected to register a growth rate of over 11.5% during the forecast period of 2020-2025.The eCommerce sector has been a major contributor to the growth of 3PL logistics in India. It involves supply chain management, warehousing, consolidation service, and order fulfillment as the e-commerce companies are accountable for ensuring timely delivery, and if the products are returned, the company has to manage reverse logistics too. Thus, it is a reliable alternative to outsource to the 3PL and enabling companies to concentrate on the marketing and other business operations.

 

Reasons for the increased demand for 3PL companies

 

Companies are outsourcing logistics activities to enhance their operations and cost-effectiveness. With services becoming more customer-centric and focusing on just-in-time delivery, companies are outsourcing their supply chain activities to adapt and expand their geographical reach to increase value and improve customer engagement. 

 

Few reasons for the rising demand for 3PL companies in India

 

·         Greater flexibility to adapt to a new business model

·         Ease in logistics and documentation management

·         Adoption of various software solutions such as SCMs and cloud ERP for logistics applications

·         Implementation of data-driven solutions

·         Effective last-mile delivery solutions

·         Usage of the latest technology with no additional overhead costs to the company

·         Facility to utilize 3PL warehouses for centralized delivery management and new markets

 

A significant proportion of the higher cost in the Indian logistics industry is attributed to the absence of efficient intermodal and multimodal transport systems, poor road infrastructure, higher warehousing costs, and lack of modern technology. The Indian Government has taken a keen initiative to improve the logistics sector by developing the logistics infrastructure with dedicated freight corridors, free trade warehousing zones, logistics parks, and container freight stations, which would lead to improvement in the efficiency of the Indian 3PL market.

 

With multinationals and global supply chains finding India an attractive location to set up their manufacturing base, there is an increasing demand for third party logistics companies in India. Safexpress, one of the largest and fastest logistics companies, is an established 3PL logistics provider in India. They are equipped to handle the varied needs of customers through their well-established country-wide network that enables extensive and flexible logistic operations. With its safe warehousing and inter-modal express distribution services, Safexpress would be an ideal 3PL logistics provider for your company.

 

In Conclusion

 

Adaptability to changing requirements in the logistics industry is the key to bring efficiencies to its supply chain operations. By outsourcing the supply chain operations to a 3PL logistics company in India, a business would be able to utilize the operational expertise and ideas for improvement.