Current fuel prices in India are a sleeping Kraken for the Indian Logistics Industry
The distress brought on by Covid-19 pandemic not only impacted humankind but also affected major industries, exposing the world to a host of uncertainties and misery. Recovering from the devastation of the dreadful pandemic, various substantial disruptions transpired, of which inflation came out as a prominent one. The rise in inflation ultimately caused the prices of several necessities to soar, but most significantly, the spike in fuel prices left consumers perplexed.
Numerous industries have been negatively impacted by the rising cost of petroleum, with logistics standing out. The industry is currently struggling with the high fuel cost after initially being hit by the pandemic-induced sufferings. As a result of the price increase, logistics firms have been forced to raise their service charges, resulting in a decline in demand.
Logistics, supply chain, and transportation businesses, which suffered a dead halt during the pandemic, are now grappling with sharp increases in fuel costs. Petrol prices in India currently range from 96 to 110 rupees per litre. This has caused transportation costs to soar, which has further influenced the price of goods and affected customer demand.
Logistics Industry: Impact of rising fuel prices
The growing cost of fuel has substantial ramifications for the logistics business, affecting its bottom line. The shipping costs have also gone up in reaction to these rising prices, which has had a significant impact on the transportation sector. This has led to an increase in the price of transportation-dependent goods and services like food, consumer goods, and building materials. Overall, this has affected consumers' ability to buy goods and contributed to rise of inflation.
Beyond shipping costs, logistic firms are fundamentally altering their operations to deal with the rising fuel cost. As a result, they are changing their delivery schedules or grouping shipments in order to increase fuel efficiency, which further reduces delivery quality and degrades the overall customer experience.
As the fuel prices continue to rise, it has led upon the logistics businesses to adopt other technology-aided alternatives in order to ensure consumers nothing short of incredible experiences.
Role of new-age technologies
In response to shifting consumer desires and preferences, industries are predominantly migrating towards a new era of customer engagement in which digital technologies play a critical role, and the logistics business is no exception. Among other technologies, AI has undoubtedly shown to benefit logistic enterprises by improving warehouse management, providing exact forecasting and route planning, and strengthening data management. This has allowed them to execute successful product transportation while focusing on fuel efficiency.
Additionally, gathering and analyzing enormous amounts of data was previously thought to be a difficult challenge for logistics organizations. Big data analytics, however, made it possible for the sector to gather data quickly, gain insights into consumer behaviour and trends, and optimize supply chains, thereby saving fuel. Furthermore, a wide range of cloud-based software programs have made it possible for logistic businesses to obtain real-time information about the location of the shipment and the condition of the transport vehicle, improving operational efficiency.
Alternative choices
With the growing consciousness around environmental preservation, sustainable solutions have become the need of hour, whether it is for humans or industries.
Employing alternative fuels, switching to electric vehicles, and opting for solar power for warehouse operations will greatly assist logistics companies deal with rising fuel prices. Moreover, moving to more advanced cloud-based solutions for managing supply chain logistics will also aid marketers to reduce logistic emissions by automating where possible, incorporating compliance into processes, and simplifying change.
Furthermore, utilizing flexible algorithms to optimize routes through machine learning will assist logistics firms reduce their carbon impact.
All things considered
With fuel prices portraying no indications of lowering down anytime soon, it has become imperative for logistic enterprises to implement other alternative options and cutting-edge technologies in order to increase operational efficiency and customer satisfaction. Moreover, given its current growth trajectory, the logistics industry is poised to grow, making it essential for associated organizations to adopt and promote more sustainable practices in order to establish operational effectiveness.
Author of this article is Arshdeep Singh Mundi (Executive Director, Jujhar)
