Opportunities and challenges in road logistics and Indian trucking industry

By Mr. Gurdeep Singh, Chairman and Founder of Jujhar Group

India’s growing e-commerce sector is revolutionizing the logistics landscape, creating fertile ground for the development of road logistics. The Indian road logistics market is expected to reach USD 11.5 billion by 2027. E-commerce giants and retailers are increasingly partnering with third-party logistics providers (3PLs) and logistics aggregators to streamline operations and reduce costs. A significant portion of the logistics demand, around 85%, is met by road transport, making it the backbone of the Indian logistics sector.

However, despite its promising growth trajectory, the Indian trucking industry faces many challenges that need to be overcome to unlock its full potential.

Challenges of the Indian Truck Industry

Barriers to entry

The Indian logistics market is highly disaggregated and trucking dominates. About 85 percent of the sector is made up of more than 30 million small fleet owners who own one to five trucks. These small operators face some of the following challenges: network connectivity, irregular transportation, communication, lack of trust and visibility. This is due to the lack of a strong ecosystem to counteract these problems.

Truck drivers often struggle to secure cargo, relying heavily on a small network of agents, carriers and forwarders. This manual offline method leads to cash payments that are often delayed or less than agreed. Such payment disputes foster distrust and financial instability among truck drivers. There is an urgent need for online payment systems with escrow functionality to ensure fair and timely payments.

Infrastructure needs

Another significant obstacle is infrastructure challenges. While the government has made commendable efforts by allocating significant funds to the transport sector and launching initiatives such as the Pradhan Mantra Gait Shakti scheme, the specific needs of commercial vehicle drivers remain unaddressed. The lack of well-planned stops, rest areas with hygienic facilities, vehicle maintenance services and decent wages significantly affects drivers’ well-being. Long working hours, months away from family and difficulties securing return cargo place additional strain on their physical and mental health.

The aim of the National Logistics Policy is to increase the visibility and efficiency of logistics through the development of a network of Logistics Parks. However, it is crucial that these changes are tailored to the needs of commercial vehicle drivers to ensure their overall well-being.

Human rights issues

The National Human Rights Commission focused on the problem of truck drivers, stating that despite many difficulties, these drivers constitute a key part of the economy. The

The informal and disintegrated structure of the trucking industry results in the denial of rights that should be available to truck drivers. As the National Logistics Policy aims to develop capacity and establish a human capital agenda in logistics, it is extremely important to take into account the requirements of drivers and SMEs in the transport industry.

Digitizing Indian logistics

To achieve its goal of becoming a $5 trillion economy by 2026 and supporting a growing e-commerce sector, India needs to develop a robust road transport 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 transportation community that can significantly increase efficiency and convenience for road transportation players.

Digital marketplaces offer solutions to many operational challenges. They provide 24/7 booking capabilities with verified sites, enabling truck drivers to have greater visibility and route optimization. This leads to reduced fuel consumption and increased profits. Freight forwarders can register on these platforms, submit load details and receive competitive quotes from truck drivers, ensuring they get the best price insight. These platforms also offer secure payment systems, GPS tracking and real-time communication tools, simplifying the entire logistics process.

Digitization has revolutionized documentation by introducing e-copies of bills, notices and permits, saving truck drivers valuable time. Thanks to digital transportation community platforms, truck drivers can now operate more efficiently, increasing vehicle utilization and earnings. They can operate 25-26 days a month compared to 15-16 days earlier, while choosing routes as they see fit.

Future prospects

The future of the Indian trucking industry lies in fully integrated, digital and trusted ecosystems that prioritize the needs of the trucking community. As omnichannel retailing transforms e-commerce, technology platforms that focus digitalization efforts for the road transport sector will be crucial. These platforms will enable road transport operators to adapt to the competitive landscape, manage surges in demand during peak seasons and improve coverage in rural areas.

A well-developed digital logistics ecosystem will also help reduce logistics costs in India and increase the ease of doing business. The success of India’s e-commerce boom will depend largely on moving from a fragmented, unorganized and small-scale trucking sector to an efficient, community-led, digitally enabled transportation ecosystem.