In budget 2018, a public investment of Rs 6 lakh crore has been promised to infrastructure, of which 50 percent, i.e., Rs. 3 lakh crore will be utilized to build a world-class road, rail freight, waterways infrastructure and multimodal logistics park. This considerable investment will directly impact the growth and development of the industry which will further drive job growth. As per, 'Indian Logistics Revolution - Big Bets, Big Jobs,' a report by TeamLease, this investment along with GST implementation will help logistics sector grow at 10.5 percent CAGR.
As an impact of this growth, about 3 Mn new jobs will be created, upping the employment numbers in the sector from 10.9 Mn to 13.9 Mn by 2022.
Further deep diving into the seven sub-sectors of logistics, the report highlights the number of incremental jobs that will be created within these sectors over the next four years (2018 to 2022).
- Economic growth, evolving regulation, rising outsourcing and high infrastructure investment are expected to create 1.89 million incremental jobs in the Road Freight.
- While in the Rail Freight it will create 40K incremental jobs, over the next four years.
- Air Freight will create 400K incremental jobs.
- Waterways will create 450K incremental jobs due to the growth of cargo in ports and ease of doing business which is making India a leading emerging market.
- The Warehousing sub-sector will create 120K incremental jobs.
- And the Packaging sub-sector is set to create 40K incremental jobs.
- Lastly, the Courier Services sub-sector will see a growth of 60K incremental jobs.
The report suggests that this job creation is spread across the country, with significant jobs being created in cities like Delhi, Mumbai, and Bangalore, among others. While Delhi-NCR, Mumbai, Chennai, and Bangalore will generate 1.74 million incremental and Kolkata, Hyderabad, and Pune, together, will contribute 682K additional jobs.
Commenting on the report, Ms. Rituparna Chakraborty, Co-founder & EVP, TeamLease Services, said, “Logistics sector is going through an exciting phase with a number of public investments in line. There will be an enormous shift in demand management between transportation modes – the overburdened road network is set to share significant oncoming demand with dedicated railway freight corridors that have superior freight handling capacity. New national waterways being built, a plethora of sophisticated 3PL and 4PL players revolutionizing the warehousing sub-sector, increasing consumption and consumer maturity is providing a big fillip to the packaging sub-sector."
All of these changes alongside the interplay of sector demand – from Manufacturing, FMCG / FMCD Retail and E-commerce – and technology will not only create many jobs but also metamorphose the skills landscape for logistics."
The study further delves deep into the skill requirements in the Logistics sector and suggests that technology and the industry knowledge will transform potentially every role in a logistics organization. As per the survey, there is a dearth of 950K jobs across primary logistics sub-sectors. The study further indicates severe short supply and lack of junior level talent in the sector.
While in Ahmedabad, Kolkata and Chennai junior levels comprise 50 percent or less of the total skill gap, Bangalore, Delhi and Hyderabad have surplus senior talent. The reports hope that with the creation of 3 Mn jobs spread across the country; this demand-supply ratio is likely to be met.