How Logistics Works in India: Process Explained Step by Step

What Is Logistics?

Logistics is the process of planning, implementing, and controlling the efficient movement and storage of goods, services, and information from the point of origin to the final customer.

In India, logistics includes:

• Transportation (road, rail, air, sea)
• Warehousing & storage
• Inventory management
• Packaging & labeling
• Customs clearance
• Last-mile delivery

 

Step-by-Step Logistics Process in India

Step 1: Order Placement & Demand Planning

The logistics cycle begins when:

• A customer places an order, or
• A business forecasts demand for products

Companies use ERP and supply chain software to:

• Analyze demand
• Plan inventory levels
• Schedule shipments

This helps avoid stockouts and overstocking.

 

Step 2: Procurement & Supplier Coordination

Once demand is confirmed:

• Raw materials or finished goods are sourced from suppliers
• Purchase orders are issued
• Pickup schedules are finalized

For imports, this step includes:

• Supplier documentation
• Export packing lists
• Commercial invoices

 

Step 3: Packaging & Labeling

Goods are prepared for safe transportation:

• Protective packaging
• Palletization or containerization
• Barcoding and labeling
• Compliance with regulatory standards (especially for food, pharma, and chemicals)

Proper packaging reduces damage, theft, and transit delays.

 

Step 4: Transportation Planning

This is one of the most critical stages.

Businesses or logistics providers select:

• Mode of transport (road, rail, air, sea)
• Route optimization
• Carrier selection
• Delivery timeline

In India:

• Road transport dominates domestic logistics
• Rail is used for bulk cargo
• Air is preferred for urgent shipments
• Sea freight is common for international trade

 

Step 5: Documentation & Compliance

Accurate documentation is mandatory for smooth movement of goods.

Key documents include:

• Invoice
• E-way bill
• LR (Lorry Receipt)
• Packing list
• GST documents
• Customs documents (for imports/exports)

Errors here can cause major delays and penalties.

 

Step 6: Warehousing & Storage

Goods may be stored temporarily in:

• Distribution centers
• Fulfillment warehouses
• Cold storage facilities

Warehousing activities include:

• Receiving goods
• Quality inspection
• Inventory tracking
• Order picking and packing

Modern warehouses use WMS (Warehouse Management Systems) for efficiency.

 

Step 7: Customs Clearance (For International Shipments)

For import/export shipments:

• Goods are assessed by customs authorities
• Duties and taxes are paid
• Regulatory approvals are obtained

A customs broker or freight forwarder usually handles this process.

 

Step 8: Last-Mile Delivery

This is the final step where goods reach:

• Retail stores
• Factories
• Warehouses
• End customers

Last-mile delivery is the most expensive and complex stage due to:

• Traffic
• Remote locations
• Customer availability
• Delivery time commitments

 

Step 9: Proof of Delivery & Payment Settlement

After successful delivery:

• Proof of delivery (POD) is collected
• Invoices are closed
• Payments are processed
• Customer feedback is recorded

This completes the logistics cycle.

 

Key Players in India’s Logistics Ecosystem

• Logistics companies
• Freight forwarders
• Transporters
• Warehouse operators
• Customs brokers
• Shipping lines
• Government authorities
• Technology providers

 

Technologies Used in Indian Logistics Today

Modern logistics companies in India use:

• GPS fleet tracking
• AI-based route optimization
• Warehouse automation
• RFID & barcode systems
• Cloud-based logistics software
• Digital documentation

These technologies improve speed, transparency, and cost efficiency.

 

Challenges in the Indian Logistics Process

Despite growth, challenges remain:

• Infrastructure gaps
• Traffic congestion
• Port delays
• High logistics cost (13–14% of GDP)
• Regulatory complexity
• Fragmented transport sector

Government initiatives like Gati Shakti, Make in India, and Digital India are helping improve the ecosystem.

 

Why Efficient Logistics Is Important for India

Efficient logistics:

• Reduces business costs
• Improves customer satisfaction
• Boosts exports
• Supports e-commerce growth
• Strengthens manufacturing sector
• Increases global competitiveness