How far have we come from Godowns

Indian Warehousing market is undergoing a tectonic shift, moving from mere brick-and-mortar dilapidated godowns to state-of-the-art warehouses, equipped with technologically-enabled amenities, quality infrastructure and robust storage mechanisms. With e-commerce boom and digital revolution underway, there is a huge demand by consumers for goods of all types to be delivered at their doorsteps using affordable, competitive pricing models. Businesses have better control over their product inventories in a warehousing model over the traditional godown model, ensures timely delivery model and contributes towards establishing a positive RoI over the longer horizon. Timely order processing results in better shipment rates and exquisite user experience, which is indispensable to sustain and provide a sustainable and tangible business value to the consumers.  Warehousing services, hence is a key block towards establishing a profitable supply chain ecosystem.

Varying weather conditions and different types of merchandise goods makes it absolutely imperative for businesses to invest in robust, all-weather warehousing systems at strategic locations. Efficient and seamless goods delivery has necessitated establishment of modern warehousing systems, with the ability to store, move, package and process orders quickly, customized according to customer’s needs. E-commerce logistics has upped the ante for businesses to adopt the warehousing model to successfully cater to aggressive buying behaviour from consumers located geographically far apart. The warehousing industry has emerged as a significant enabler for the burgeoning manufacturing industry, and is to play a critical role in the years to come. Emerging technological disruptions and dynamic business headwinds pose the biggest challenges, but at the same time offers ripe opportunities for the warehousing market to pounce upon and establish an indelible mark on the industrial and manufacturing landscape.

With the implementation of GST, there is a semblance of uniformity in the taxation across states which is used advantageously by businesses by constructing huge warehouses at strategic locations. This has propelled the warehousing market in the positive trajectory. This is evident from the fact that average warehouse sizes have increased over the past decade, from about 20,000 sq ft in 2000s to 2-3 lakh sq ft. in 2019. This bodes well for lean manufacturing models in vogue -  only core manufacturing activities is being undertaken by businesses with third party logistics (3PL) providers taking care of post-production and dispatch activities through optimized distribution and near error- free order fulfillment process. This provides safe storage for perishable products also.

According to E&Y and CII Institute of Logistics, warehousing industry is growing at an annual rate of 10%, currently valued at 560 billion INR. With regulatory and infrastructural challenges, warehousing industry should be dynamic enough to adapt itself to the changing market requirements and business needs in order to stay relevant and support the overall economic framework in bringing down the overall logistics cost from current 15%. Recently the logistics industry was accorded infrastructure status which is a step in the right direction. The E-commerce fuelled business models make warehousing industry an important fulcrum for seamless product procurement and distribution.