It was not long ago when the word ‘warehouse’ created the image of dilapidated buildings with peeled off plaster, known as godowns. Things have changed drastically since then, and now in its modern, technology-driven form, the ‘warehousing industry’ has become the backbone of the rapidly growing e-commerce industry in India. While the formal consolidation of ‘warehousing’ as an industry has taken place in recent years, the industry has a history that goes far back than what most people assume.

History of Warehousing in India

In the year 1889, the then Secretary of State for India put forward a scheme to introduce grain elevators in India. A few decades later, the Royal Commission on Agriculture in India (1928) recognized the problem and made several suggestions regarding storage and warehousing. This can be considered as the birth of the concept of ‘warehousing’ in India. After independence, efforts were renewed to address the need. In the year 1956, the Parliament passed Agriculture Produce (Development and Warehousing) Corporations Act, 1956, leading to the creation of the National Cooperative Development and Warehousing Board . This board governed the Central Warehousing Corporation and the State Warehousing Corporations.

Warehousing in contemporary India

The growth of the warehousing industry was slow in the pre-globalization era. However, the ubiquitous crumbly structures storing goods and food grains are now being turned into cutting-edge technology-driven storage units. The evolution in technology has empowered the logistics and warehousing industry to transform itself into a high performance and optimally operating sector. The outdated barcode reader technology of the 1950s is being replaced by the modern Quick Response (QR) code technology. Today, it is possible to track shipments and goods in storage in real time and ensure smooth distribution of stock. Modern warehouses rely upon Real Time Locating Systems and Radio Frequency Identification (RFID), enabling the tracking of consignments by mere click of a button.

It is this integration of modern technology that has made it possible for e-commerce companies to thrive in India. The massive warehouse management systems simultaneously process and track hundreds of thousands of orders all over the country. In fact, the warehousing revolution has impacted not only ecommerce, but offline industries as well. It is impossible to ensure customer delight without the role played by warehousing industry. However, the rapid evolution of technology-based warehousing in India is not devoid of challenges.

Some of the key challenges faced by the industry today are as follows.
  • There is a lack of synchronization between the storage capacities and the inflow of goods.
  • There is a severe shortfall of demand and supply regarding quality, modern warehouses which are necessary to keep pace with the demand.
  • There is still underutilization of capacity and infrastructure available
  • Barring some major warehouses operated by big e-commerce chains or corporates, majority of Indian warehouses, still lack in desired automation.
Alongside the challenges, there are also a lot of growth drivers that present a positive outlook for the warehousing industry’s future.
  • There is a great upsurge in the manufacturing and retail industry
  • Rising incomes have led to more purchasing power and domestic consumption of goods
  • International trade is on the rise
  • Government has been simplifying norms leading to ‘ease of doing business’

Conclusion

Retail e-commerce, FMCG, Manufacturing, agriculture or any other sector is today reliant upon warehouses. The entire supply-chain cycle is driven by fulfilment facilitated by seamless storage and movement of goods. Modern technology and conducive policies have given wings to an industry that remained neglected for a long period of time. It is time for warehouses to come out of the shadows and play a pivotal role in Indian economy’s success story!

Written by Sandeep Chadha