Varun Gada, an adept supply chain management professional, serves as Director at LP Logiscience, the warehousing arm of the esteemed Liladhar Pasoo brand. Leveraging 11+ years of experience, he spearheads transformative strategies within contract logistics. Under his stewardship, LP Logiscience emerged as the preferred partner for global brands venturing into India, marking a remarkable journey in revolutionizing logistics on both national and international scales.
The Indian warehousing sector has witnessed remarkable transformations, setting the stage for a dynamic future in 2024. In 2023, the Indian warehousing sector registered a significant increase in transaction volumes, reduced vacancy rates, and a shift towards third-party logistics providers (3PL). According to the detailed Knight Frank Report, a total of 51.3 million square feet of warehouse space was transacted during FY 2022–23, where third-party logistics (3PL) players captured a substantial 54% share of warehousing volumes. As of 2022, the Indian warehouse market size reached INR 1,248 Billion and according to analysts, it is expected to reach INR 2,271 Billion by 2028, exhibiting a CAGR of 10.49% during 2022–2028. Building upon these milestones and a series of factors, including supportive policy structures, technological advancements, and a focus on sustainability, the Indian warehousing and logistics sector is poised for major advancement in 2024.
Listed here are some key trends to look out for:
Technology Integration and Automation:
The year 2024 is expected to witness a significant surge in technology adoption within the 3PL and warehousing sectors. Automation, data analytics, and artificial intelligence will be leveraged to optimize supply chain processes, improve accuracy, and enhance overall efficiency. This technological leap will contribute to reducing turnaround times, minimizing errors, and ultimately lowering operational costs.
Adoption of Sustainable Practices:
Sustainability is becoming an increasingly integral aspect of logistics and warehousing. In 2024, we foresee a greater emphasis on environmentally friendly practices, including the use of eco-friendly packaging, energy-efficient warehouses, and the incorporation of green technologies. There has also been a steady shift to EVs for short-distance distribution, helping create carbon-neutral deliveries. As global supply chains evolve, environmentally sustainable practices will not only align with international expectations but also position India as a responsible and forward-thinking logistics hub.
Expansion into Tier 2 and Tier 3 Markets:
Traditionally, logistics and warehousing hubs have been concentrated in major urban centers. However, with the rise of manufacturing and e-commerce, there has been an increasing demand for rapid deliveries, making strategic tier 2 and tier 3 storage solutions crucial in 2024. Expansion to strategic, non-urban locations is also driven by cost-effective rental and labor opportunities and the need to decentralize distribution networks, reduce transit times, and tap into the burgeoning consumer markets in non-metropolitan cities. This expansion not only enhances accessibility to a broader customer base but also contributes to the overall economic development of these regions.
Increase in Grade A Warehouses:
In 2024, the logistics and warehousing landscape in India is set to witness a significant shift towards Grade A warehouses. These facilities adhere to international standards, offering advanced infrastructure, superior safety measures, and state-of-the-art technology. The growing demand for Grade A warehouses is propelled by the need for heightened efficiency, increased storage capacity, and compliance with global supply chain standards. As India positions itself as a global logistics hub, Grade A warehouses will play a crucial role in meeting the evolving needs of both domestic and international businesses.
Skilled Labor and Training Initiatives:
In the post-COVID era and now with the nation’s focus on building a resilient global supply chain that is also tech-empowered, there has been a renewed focus on the significance of a skilled workforce. The success of the 3PL and warehousing sectors is heavily reliant on not just technology and innovation but also manpower. As a result, 2024 is set to see a lot more industry players investing in training programs and skill development initiatives, along with specialized training in warehouse management, inventory control, the operation of automated systems, etc., among others. As the industry aims to boost productivity, reduce errors, and ensure the seamless integration of advanced technologies, this focus on skilled labor is also going to accelerate efforts for India's commitment to nurturing a competent and globally competitive workforce.
Focus on Value-Added Services:
Beyond traditional storage and distribution, 3PL providers are increasingly focusing on offering value-added services. In 2024, there is set to be a surge in services such as packaging customization, order fulfillment solutions, and even product assembly within warehouse premises. This diversification allows businesses to leverage the expertise of 3PL providers for more than just storage, creating a more integrated and comprehensive logistics ecosystem. As supply chains become more complex, the ability to provide value-added services will be a key differentiator for warehousing providers in India.
Way Forward:
As the Indian 3PL and warehousing sector evolves in 2024, the rise of the above-mentioned trends not only reflects the changing dynamics of the global supply chain but also positions India as a competitive player in the international logistics landscape. In line with the PM’s vision of India emerging as a key player in the global supply chain, 2024 will also witness a fast-track implementation of several key initiatives highlighted in the National Logistic Policy 2020, while also helping 3PL service providers leverage the benefits of ease of business, including access to foreign investment in warehousing. The confluence of policy support, global alignment, and sustainable practices paints a vibrant picture of the future, where Indian warehouses not only keep pace with international norms but also set new benchmarks in efficiency and environmental stewardship.
