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Future of 3rd Party Logistics in India & The Role Of Technology Aaj Enterprises January 1, 2021

How do Third-Party Logistics(3PL) work in India?

Several companies across India follow a business process called Third-party logistics or 3PL to outsource their supply chain and logistics operations.

But what is 3PL exactly? And How does it help your business grow?

Essentially, 3PL service providers manage, organize, and oversee supply chain. Supply chain management include stocking of inventory, order fulfilment, warehouse infrastructure management, inventory forecasting, freight forwarding, primary and secondary transportation, among others.

A 3PL provider has to meet all the business requirements of the company and fit the structure as companies depend on 3PL providers to function systematically and manage the execution of their orders.

Professional and large 3PL providers are flexible and are capable of not only being able to help businesses reduce the fixed costs associated with their supply chain (because of its large, shared infrastructure), but can also eliminate basic logistics setup hurdles for them.

Essentially helping clients avail benefits of zero minimum billing commitment and setup costs.

In the world of digitization where every company is embracing a tech-driven approach, 3PL providers need to align with the IT needs and requirements of both big MNCs and small organizations.

The big question is, however, how?

Information Technology.

It plays a vital role in the success of the majority of companies and hence they approach third-party logistics providers for IT solutions that will enable them to operate and manage their supply chains more effectively in this ever-changing market environment.

Collaborating with an experienced 3PL and warehouse management organization can help big and small companies with their logistics operations that can lead to a manifold growth and a boost in sales.

What is the future of 3PLs in India post COVID-19?

COVID-19 struck every industry in one way or another. The logistics operations for many businesses, as unorganized as they were before, gained more traction after businesses took note of the fact that 3PLs could reduce their response time and last-mile deliveries by a significant number.

The India Brand Equity Foundation (IBEF) has anticipated that the logistics industry in India is expected to cross a whopping $215 billion by the end of 2021. Also, according to the latest market reports, the 3PL industry is currently employing more than 40 million people across the country and it is being predicted that it will become the biggest job creator in India within 2-3 years.

As per the market analysis, the 3PL market in India is all set to expand at a CAGR of 8.36% by the end of 2022.

Evidently, the growth of the logistics sector in India and the demand for 3PL providers have increased post the COVID-19 scenario, when earlier, due to not being a priority for big enterprises, logistics always remained unorganized and imbalanced which has improved since the pandemic struck the nation.

However, after the pandemic, industry members have realized the importance of 3PLs and how they play a key role in the success of the company. They have understood that it is imperative to have a powerful operational infrastructure and it is necessary to introduce advanced ad tech-driven solutions for systematic operations for an integrated supply chain.

Another factor that leads to the demand for logistics in India is the changing business dynamics that has made multinational corporations move to 3PL experts to handle their operations efficiently. With the changing market trends, corporations have realized that third-party logistic providers can change the face of their business and take their business to greater heights by getting desired results as well as logistics cost reduction.

As a result, several companies are now either using 3PL services or are planning to use them in the future. The reason being, company owners now want to focus more on core business and want to improvise supply chain efficiency and operations management.

How is technology shaping the future of the logistics sector in India?

Technology will play a major role in the growth and expansion of the 3PL industry across India. With the evolving digital age, companies want to focus more on improving productivity and efficiency with systematic management. The best way to make a company prosper is through enhancing IT infrastructure and for this, they need an integrated and digitally connected supply chain.

Focus on digital-age technologies such as Artificial Intelligence (AI) will play a vital role in the current and future generations of supply chains in concern to emergencies.

As the market witnesses a massive switch towards Robotic process automation (RPA), automation will play a crucial part in the logistics sector. This will automatically increase the efficiency and effectiveness in the supply chain process.

One doesn’t have to look far when imagining real-time data analysis changing the routing services and inventory management strategies based on the current intake and outtake of the stored products.

Let’s see what the experts have to say about this:

This(A.I. insertion in 3PL) doesn’t only mean that the company is run on a singular ERP. It goes further, by collecting real-time updates and using that information in decision-making-

Anamika Jain,
Director of Operations, AAJ Enterprises

Which 3PL and Warehousing Management provider is changing the industry trends in India and how?

With the third-party logistics market growing, several 3PL providers are emerging in the market. At such a time, a combination of both expertise and experience of the old and the energy and innovation of the new should be the ask by a company looking for supply chain outsourcing.

AAJ Enterprises, one of the seasoned players in the market, is known for its effective Warehousing Management and Third-party logistics (3PL) services. They have 6 lakh sq. ft. state of the art warehouse infrastructure backed with technology. They have a proven track record and deep understanding of multiple industries & business functions.

AAJ Enterprises is known for specializing in integrated operations of warehousing and transportation along with inventory that is customized to the client’s requirements and scalable at the same time. They conduct thorough market research on the current market conditions and make the best use of technology to transform businesses and their working.

Apart from 3PL and Warehouse Management, AAJ Enterprises also extends its services beyond logistics. These services include returns management, consulting and advisory, printing services, supply chain management, security management, among others. Being in the business for 10 years, AAJ Enterprises is considered be one of the most reliable, cost-effective, and innovative supply chain solutions provider in India.

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