Page 27 - Indian Transport & Logistics News July - August 2024 Issue for Website

Amazon have developed their own
logistics networks, often leaving
traditional logistics companies with
low-margin services.
7. Seasonal demand fluctuations:
E-commerce demand is highly
seasonal, peaking during events like
Christmas and Singles' Day. Logistics
companies must build significant spare
capacity to handle these peaks, which
can lead to underutilised resources for
much of the year. If they fail to meet
peak demand, e-commerce companies
will likely develop their own logistics
solutions, reducing the market for
traditional logistics providers.
Shiprocket's Goel discussed the
challenges that logistics in India
encounter when integrating automation
into their supply chains, such as
high initial investment, technological
complexities, and a shortage of skilled
workers. However, he also suggested
that companies can surmount these
obstacles by investing in training
and upskilling programmes for
compatibility with current infrastructure their workforce, taking advantage
and seamless communication with of government incentives, and
supply chain components. progressively implementing automation
4. Hesitation due to market dynamics: technologies to control costs effectively.
Despite the potential benefits of "E-commerce enablement
automation, logistics companies platforms also effectively help them
are hesitant to make significant overcome the challenges associated
investments. According to McKinsey's with integrating automation into their
research, the growth of investment in supply chains through cost-effective,
warehouse automation in logistics is scalable, and easy-to-integrate
expected to slow down. This cautious solutions that enhance operational
approach is attributed to various efficiency and drive growth in the
factors, such as uncertain returns and logistics sector," added Goel.
the competitive challenges posed by
influential e-commerce companies. Integrating AI into The way ahead
5. Technological uncertainty: processes within Jeena The logistics industry is rapidly
With over 50 emerging technologies has reduced internal transforming through automation,
that could further automate parts of offering benefits such as improved
the supply chain, logistics companies process time by efficiency and cost reduction.
face the challenge of determining around 30%. However, implementation comes
which technologies will provide the best Prediman Koul with challenges, including high costs,
return on investment. The rapid pace Jeena & Company job displacement, and technological
of technological advancement makes it uncertainty. Companies can adopt
difficult to predict which innovations will strategies like WMS, TMS, autonomous
become industry standards. have significant buying power vehicles, predictive analytics, and RPA
6. Frenemies and 'Coopetition': and can switch to competitors if to stay competitive. Staying informed
The logistics companies' relationship unsatisfied, keeping prices low and about the latest automation trends and
with major e-commerce players is discouraging heavy investment in technologies is essential for success
complex. E-commerce companies automation. Additionally, giants like as the industry evolves.
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