Opportunities and Challenges in Road Logistics & Indian Trucking Industry
By Mr. Gurdeep Singh, Chairman & Founder, Jujhar Group
India’s burgeoning e-commerce sector is revolutionizing the logistics landscape, creating a fertile ground for the growth of road logistics. By 2027, the Indian road logistics market is expected to reach US$ 11.5 billion. E-commerce giants and retailers are increasingly partnering with third-party logistics (3PL) providers and logistics aggregators to streamline operations and reduce costs. A significant portion of this logistics demand, around 85%, is catered to by road transportation, making it the backbone of the Indian logistics sector.
However, despite the promising growth trajectory, the Indian trucking industry faces numerous challenges that need to be addressed to unlock its full potential.
Challenges in the Indian Trucking Industry
Barriers to Entry
The Indian logistics market is highly disaggregated, and truck transportation dominates. About 85 percent of the sector is made up of over 30 million small fleet owners who have between one and five trucks. These small-scale operators experience some of the following challenges: network connectivity, irregular freight, communication, lack of trust, and visibility. This is due to the lack of a strong ecosystem that would counter these problems.
Truck drivers often struggle to secure loads, relying heavily on a small network of agents, transporters, and shippers. This manual, offline method leads to cash payments, which are often delayed or less than agreed upon. Such payment disputes foster distrust and financial instability among truckers. There is a pressing need for online payment systems with escrow functionalities to ensure fair and timely payments.
Infrastructure Needs
Infrastructure challenges pose another significant hurdle. While the government has made commendable efforts by allocating substantial funds to the transportation sector and launching initiatives like the Pradhan Mantra Gait Shakti scheme, the specific needs of commercial vehicle drivers remain unaddressed. The absence of well-planned pit stops, rest areas with hygienic facilities, vehicle maintenance services, and fair wages significantly impacts drivers’ well-being. Long working hours, months away from family, and difficulty in securing return loads further strain their physical and mental health.
The National Logistics Policy aims to enhance visibility and logistics efficiency through the development of a network of Logistics Parks. However, it is crucial to align these developments with the needs of commercial vehicle drivers to ensure their holistic well-being.
Human Rights Issues
The National Human Rights Commission has focused on the problem of commercial truck drivers, stating that despite the many difficulties, these drivers are a crucial part of the economy. The
informal and disintegrated structure of the trucking industry results in the denial of the rights that truck drivers should be accorded. Since the National Logistics Policy aims at capacity development and establishing a logistics human capital plan, it is crucial to address the requirements of the drivers and transport SMEs.
Digitising Indian Logistics
To achieve the goal of becoming a $ 5 trillion economy by 2026 and supporting the growing e-commerce sector, India must develop a robust road transportation logistics ecosystem. The government’s initiative to create an integrated digital logistics system is a step in the right direction. Additionally, there is a need for a trusted online transport community that can significantly enhance efficiency and convenience for road transportation sector players.
Digital marketplaces offer solutions to many operational challenges. They provide round-the-clock booking facilities with verified parties, enabling truckers to have greater visibility and optimise their routes. This leads to reduced fuel consumption and increased profits. Shippers can register on these platforms, upload load details, and receive competitive bids from truckers, ensuring the best price discovery. These platforms also offer secure payment systems, GPS tracking, and real-time communication tools, simplifying the entire logistics process.
Digitisation has revolutionised documentation, introducing e-copies of bills, challans, and permits, saving truck drivers valuable time. With the help of digital transport community platforms, truck drivers can now operate more efficiently, increasing their truck utilisation and earnings. They can run operations for 25-26 days per month, compared to 15-16 days earlier, while also selecting routes as per their convenience.
Future Outlook
The future of the Indian trucking industry lies in fully integrated, digital, and trusted ecosystems that prioritise the needs of the trucking community. As omnichannel retail reshapes e-commerce operations, technology platforms with focused digitisation efforts for the road transportation sector will be crucial. These platforms will enable road transport players to adapt to competitive landscapes, manage demand spurts during peak seasons, and improve coverage in rural areas.
A well-developed digital logistics ecosystem will also contribute to reducing India’s logistics costs and enhancing the ease of doing business. The success of India’s e-commerce boom will depend significantly on the transition from a fragmented, unorganised, and small-scale trucking industry to a community-driven, digitally enabled, efficient transport ecosystem.