India road logistics market to reach $330 bn by 2025

New Delhi, Dec 6: With rising income levels, higher exports, growing e-commerce and retail sectors, the Indian road logistics market is expected to reach $330 billion by 2025, a new report showed on Monday.

India handles 4 billion tonnes of goods each year and trucks and other vehicles handle most of the movement of these goods.

Railways, coastal and inland waterways, pipelines, and airways account for the rest.

According to Bengaluru-based market research firm RedSeer, the road logistics market is expected to grow with a compound annual growth rate (CAGR) of 7-8 per cent in the next five years.

"Given the massive economic opportunity, a slew of start-ups are disrupting this sector with innovative business models that solve most of the industry pain-points from the supply side," the report by RedCore, Redseer's research arm, noted.

Intercity logistics is the movement of goods for more than 200 kms (one side), with a round trip greater than 24 hours.

Nearly 33 per cent of intercity logistics spend is on intermediate and finished goods transport.

"On demand market accounts for 63 per cent of the total long-haul logistics market," the findings showed.

On-demand freight transport is movement of goods on an immediate basis with prompt payment.

"It helps in satisfying unfulfilled and urgent demands. Shipments are tendered one at a time on a load-by-load basis and price is high in comparison to price offered by contract market," said the report.

According to the report, the time is ripe for the open marketplace to succeed as factors such as heavy investments in road and transport infrastructure, rapid technology adoption among suppliers, India's digital push, macro drivers for fleet owners, and India's massive on-demand/spot market will drive its growth in the near future.