Technology adoption drives third-party logistics growth, but a shortage of skilled manpower remains a challenge. Cyrus Guzder said, "Manufacturing cannot really do without a logistics operation." The sector employs 95 lakh people and needs 43 lakh more by 2030. Many companies now use AI to train workers for new roles.
Technology adoption drives third-party logistics growth, but shortage of skilled manpower remains a challenge
Logistics companies are increasingly becoming specialised and technologically competent, enabling manufacturers and e-commerce businesses to outsource transportation, warehousing and distribution services, but the shortage of skilled manpower is a rising concern in the sector, says Cyrus Guzder, Chairman of the Logistics Sector Skill Council (LSC) and CMD of AFL Private Ltd.
"Manufacturing cannot really do without a logistics operation -- both to bring parts from all over the country into the plant before manufacturing and for the distribution of the finished goods," he says.
Third-party and fourth-party logistics providers are growing rapidly, supported by technology adoption and improved integration with customers, he says. Companies that earlier managed their transportation and distribution needs on their own now increasingly turn to specialised logistics service providers, freeing them to focus on their core businesses, he adds.
While the business opportunity is huge, there is also a huge demand for manpower in the sector, which currently employs 95 lakh people in the freight segment, and will require 43 lakh more by 2030, according to a skill gap study conducted early this year by LSC, in collaboration with the Confederation of Indian Industry (CII).
Ravikanth Yamarthy, CEO of LSC, says the assessment covered 12 sub-sectors, including warehousing, transportation, e-commerce, courier and express services, freight forwarding, customs clearance, inland container depots and container freight stations.
Worker training must be more industry-specific and aligned with an individual customer's requirements, Guzder says.
LSC trains and certifies workers across job categories, including warehouse assistants, truck drivers, courier delivery personnel and forklift operators, working with industry to identify skill gaps and improve employability.
AI reshapes job roles
Artificial intelligence is transforming logistics operations, automating some traditional functions while creating demand for new capabilities. Guzder cites cargo booking and tracking as examples of activities increasingly handled by AI-enabled systems.
"Your job will not be taken because you don't know AI. Your job will be taken by somebody who knows AI," he says, emphasising the need to equip workers with technology skills.
Nearly 50 per cent of the courses offered by LSC either focus on AI or include a substantial AI component, Yamarthy says. The council also provides upskilling programmes for existing employees, with companies nominating staff for training in AI and related capabilities.
Logistics and e-commerce companies, including Swiggy, Zomato and Zepto, are recruiting trained candidates, he says. While industry participation in skilling has improved in recent years, Guzder says companies need to do more to support training and apprenticeships.
Government funding
At around ₹50 crore annually, government funding for logistics skilling supports fresh training, short-term courses, employment-oriented programmes and reskilling of existing workers, Yamarthy says.
Private-sector expenditure on training is difficult to quantify, Guzder says, because many companies conduct programmes internally through their human resources departments. He urges companies to outsource entry-level training to specialised institutions and focus their internal resources on higher-level management development.
Apprenticeship is another area in need of greater industry participation. While Germany offers an established model, Guzder says India is yet to achieve comparable penetration across the logistics and manufacturing segments.
LSC's apprenticeship programme, which began with a few thousand participants, currently has around 50,000 trainees, Yamarthy says.
Stronger industry participation, sustained investment in skilling and the integration of AI into training programmes can help bridge the yawning workforce gap in the logistics sector, he adds.