LOGISTICS SECTOR TO CREATE 311,000 JOBS IN THE PUNE REGION IN NEXT 4 YEARS – TEAMLEASE

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Pune, June 19, 2018: Various public investment coupled with GST implementation and grant of infrastructure status will positively impact the Logistics sector resulting in 311,000 jobs in Pune and 3 million jobs across the country in the next four years states TeamLease report ’Indian Logistics Revolution – Big Bets, Big Jobs’. According to the report, the positive growth of the industry will boost the CAGR of logistics industry to 10.5% impacting the seven subsectors namely 1) Road Freight 2) Rail Freight 3)Warehousing 4)Waterways 5)Air Freight 6)Packaging and 7)Courier Services.

Economic growth, high infrastructure investment and rising outsourcing will contribute to creating 264,325 incremental jobs in Road Freight. Similarly, the evolving regulations are improving ease of doing business and resulting in growth of cargo, which will further boost the Air Freight subsector creating 22,000 incremental jobs. The report also highlighted that Rail Freight sub-sectors will create 5,000 incremental jobs, over the next 4 years (2018 through 2022).

The warehousing, courier and packaging subsectors will see a major growth with urbanization, growing customer segments, packaging innovations and IT adoption. Warehousing division is set to create 8,000 incremental jobs while the Packaging sub-sector will add 5,000 incremental jobs. The Courier Services sub-sector will see a growth of 7,000 incremental jobs over the next 4 years (2018 through 2022)

KEY FINDINGS OF THE SURVEY

Ø The INR 14,19,000 crore Logistics sector in India is set to create 3 million new jobs, over the next 4 years (2018 – 2022)

o Public investment of INR 6 lac crore is the primary factor driving job growth

o The second most important growth driver is the Infrastructure status accorded to the Logistics sector in 2017. This will improve access to low cost, long term credit

o GST implementation would formalize the sector and bring in operational efficiency

o Introduction of new players is upping the ease of doing business bringing the sector to a more formalized and organized structure with investments in technology

Ø Macro-economic and regulatory factors will transform the Logistics sector and improve its global competitiveness, thereby reducing logistics costs from 14.4% of GDP by about 2%

o Public investments and private investments targeted at reducing logistics costs

o India’s ranking on the Logistics Performance Index (LPI) has risen to 35 (up from 54 in 2014)

o Government initiatives are focused on better utilizing waterways, creating freight corridors, logistics hubs, multimodal logistics parks and logistics clusters

Ø Technology is having a profound impact on the logistics sector making certain skills redundant, forcing the aggregation of some other skills and eliminating certain jobs at the lower end of the hierarchy

o The impact of technology on jobs and skills will vary, primarily, by hierarchy and depending upon the specific nature of disruption there could be skill redundancies or skill deficits and requirements for skill aggregation and re-skilling

o Pune has a very high skill gap amongst all cities (at 106,000 people)

Commenting on the report launch, Mr. Amit Vadera, Assistant Vice President, TeamLease Services, said, “Pune is a key growing market for the Logistics sector. Various public investments coupled with expansion plans like 4 laning of Pune Solapur Section of NH 9, the construction of 128-km eight-lane Ring Road connectivity to the airport and construction of Multimodal Logistics Parks will provide a boost to the job creation by the sector in the Pune region.”

According to the report, a detailed drill down on the factors affecting the sector highlights its struggle with talent acquisition. The perception of the sector as a low skilled sector with outdated work processes, gender bias and poor working conditions are the key deterrents in attracting the right talent. As per the report, employees leave the sector prematurely due to lack of adequate learning and development initiative, low compensation levels, inadequate benefits, hazardous and high-stress working conditions. The report further highlights a dearth of 106,000 skilled people across 7 primary logistics sub sectors in Pune out of which junior levels comprise 61,000 skilled people shortage.

Interestingly enough, the proportion of women employees in this sector has risen to 20% (current) from 5% in 2010. It is expected to move upwards to 26% in the next 4 years. Employers are reorienting themselves for a relatively more egalitarian talent management era, encouraging gender diversity and embracing new technologies. While unhygienic working conditions, incompatible life balance, harassment, bullying and violence were some of the workplace inhibitors, preference for male candidates, biased selection criteria in job role descriptions and entrenched gender norms were a few barriers that limited active women participation in this sector. However, the sector now shows promising numbers for women participation and gender diversity.

Indian Logistics Revolution – Big Bets, Big Jobs is a comprehensive analysis that brings forth the areas that will contribute to job creation. The analysis covers the 7 sub-sectors in the logistics industry, the job profiles that will be created, the supply-demand deficit and the regions that will create these potential jobs.

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