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In the complete logistics value chain, warehousing forms a very important link. Warehousing, which forms 20% of the total logistics market, was traditionally used as godowns to store goods from the time of production till the time of consumption. Over time and with the changing role of the sector, traditional warehouses have transformed into highly sophisticated and technologically advanced collection and storage points, where raw material, intermediate, and manufactured goods are collected, assorted, stored, and distributed to the point of consumption/sale. 

Today in the Indian logistics industry, the warehousing sector is witnessing a great boom. Warehousing companies in India are increasing their capacity, expanding their network, adapting new concepts to match up with international standards.

As India evolves as an economy, sophisticated logistics and warehousing systems would be a key trigger for the manufacturing sector and the entire gamut of trade activities. A warehouse is a fulcrum for procurement, manufacturing, and distribution services, which collectively build robust economies.

A few decades ago, what we now call warehouses used to be dilapidated buildings called godowns. The industry has come a long way from those days, to become the backbone of the manufacturing and burgeoning e-commerce industry. The sector is evolving fast, with both the nature of the business and technology driving it, and undergoing dynamic changes.

Earlier, warehousing in India was a synonym for basic four-walled structures, called godowns, with sub-optimal sizes, inadequate ventilation and lighting, lack of racking system, poor hygiene conditions, and lack of inventory management or technology solutions such as Warehouse Management Systems (WMS). This warehousing sector in India is now progressively transforming from the traditional concept of 'godowns' to modern-day automated set-ups.

The formerly concrete or low-grade steel godowns are now increasingly being replaced by pre-engineered, factory-produced steel structures which are often assembled at a location. These modern warehouses are insulated, ventilated and climate-proof with round the clock surveillance and standard quality and safety procedures. In short, warehousing in India has evolved into a complete logistics friendly infrastructure system.

Modern warehousing forms an integral part of the supply chain where goods are not only stored for safekeeping, but several value-advance processes like packaging, bundling, labeling, cross-docking, etc. are implemented to process inventories, thereby minimizing obsolescence and reducing wastage.

The main transformation taking place in the warehousing industry is the building process of warehouse construction. The traditional building process of a warehouse with brick and mortar is now increasingly being replaced by Pre-Engineered Steel Buildings (PEB). 

In the current market scenario, more than 80 percent of warehouses are being built with PEB which has taken over the conventional mode of construction mainly because of its various advantages such as cost savings, faster return on investment, quicker delivery, faster installation, single-source responsibility, low maintenance, flexibility in expansion, earthquake resistant, superior quality, etc. which have become vital for any type of warehouse construction.

Warehouses constructed with PEB technology are capable of fulfilling customers' specific requirements such as offering bare storage, storage with crane facilities, food storage, storage with multi-level stacking, and open storage. 

Today, the demands of warehousing companies are multiple – ranging from modern construction, low maintenance, fast construction, to ease of future expansion. Pre Engineered Buildings are the only solution that has all of these.

In terms of technological advancements, warehousing in India currently witnesses automatic identification and data capture or AIDC technology that helps in consignment tracking and seamless cargo distribution. While old methods like barcode readers are still at play, new processes like Quick Response or QR Code are also readily being used to encode data into digital data and thereby accelerate the shipment flow among the beneficiaries.

Other IT solutions include Real-Time Location Systems and Radio Frequency Identification or RFID for automated data collection and stock identification that warehouse operators use for ease in operations. These Warehouse Management Systems or WMS and other IT-driven solutions go a long way in upgrading the warehousing industry. Today, WMS includes integration with automatic material handling equipment, cross-docking, yard management, labor management, billing and invoicing, etc.

Growth Drivers

The growth of the Indian warehousing sector is primarily driven by the industrial growth of the country. While the Indian economy is predominantly driven by the service-based industry, manufacturing also acts as a key growth driver for economic activity. Both services and manufacturing have thus far been the key demand generators for the warehousing space in India.

Several major logistics parks have been developed and some are currently under development across the country around the major logistics hubs of metro and sub metro cities. Specialty logistics parks catering to industries such as agriculture, automotive, electronic hardware, and aero-industry are under various phases of development across the country. Various rail-linked and multi-modal logistics parks are also being constructed.

The government's initiatives to promote the growth of warehouses in the country, through measures such as the enactment of the Warehousing Act, 2007, establishment of logistic parks, Free trade warehouse zones (FTWZs) and Make in India together with the introduction of Goods & Service Tax (GST) regime augurs well for the industry's growth.

The government has also announced significant policy measures and made budgetary allocations towards the improvement of rail, road, and water connectivity which is expected to translate into improving the overall logistics and transportation around the country. This will augment and thereby add to the growth story of the warehousing segment.

This industry has been seeing steady growth since 2017 when the sector acquired infrastructure status. Easing of government regulations and structured reforms like implementation of GST, setting up a logistics department in the ministry of commerce, and other policy changes have motivated further confidence in this segment. Growing manufacturing activity, rising domestic consumption, increasing international trade, the emergence of organized retail in the country, logistics outsourcing, increasing private and foreign investments in logistics, and other infrastructure developments such as dedicated freight corridors along with e-commerce boom will keep this robust development activity for the next few years to com