Growth of Grade A Warehousing in India, 2023

12 Jun, 2023 6:15:54 PM / by Transport Corporation of India Ltd


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Role of warehousing and logistics is moving beyond the traditional scope. The pandemic has necessitated a shift towards digitization and contactless operations. As consumers went from traditional to online shopping, D2C & quick commerce brands started revolutionizing the concept of doorstep deliveries. With ever shortening delivery timelines, the need for easy storage & retrieval based dark warehouses & PODs (points of distribution) increased. Hence, the rise in demand for state-of-the-art warehouses near to the point of consumption in the urban cities. This phenomenon is now also spreading to tier 2 cities. Many e-commerce categories such as retail, grocery, pharmacy, and food delivery are expected to grow even further.


Currently, top 8 urban cities in India have the highest number of Smart, Automated and Grade-A warehouses. However, soon there will be a surge in demand of these smart facilities in tier 2 and 3 cities due to internet penetration, which has led to e-commerce boom, D2C, food delivery, etc. From retail, electronics, agriculture products to pharma — Grade A facilities in tier 2 and 3 cities, in the coming years, will cater to the increased demand.


As India pushes for becoming a USD 5 Trillion economy, volumes of production and manufacturing will grow. The support ecosystem around cargo clusters, distribution parks and the inherent operational efficiencies due to economies of scale will drive many more companies to opt for larger warehouses.


Customers are now making a behavioral shift of moving from “just in time” to “just in case” system of inventory management. Thus, warehousing capacity discussions with buyers are also evolving from per square feet capacities to per cubic feet based metrics – again leading to larger warehouses.


The urgent need for reduction in carbon footprint has also increased adoption of green warehousing, thereby adding to the demand for Grade A warehouses in the country.


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Topics: Supply Chain, Everything Logistics