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• Logistics is an essential part of supply chain management. It deals with the movement of goods and services from the point of origin to the point of consumption. 

• Transportation is a part of the logistics function, which plays an important role in making goods available at the consignment points.  

• Logistics is defined as a business planning framework for the management of material, service, information, and capital flows. It includes the increasingly complex information, communication, and control systems required in today's business environment.  

• Transportation refers to the movement of a product from one location to another as it makes its way from the beginning of the supply chain to the customer.  Transportation is an important supply chain driver because products are rarely produced and consumed in the same location. It is the process of shipping or moving an item from point A to Point B.  

India now ranks 44th in the latest edition of the World Bank's Logistics Performance Index, a relatively high score compared to other countries at similar income levels. This number matters not just to the logistics sector, but to India's economy as a whole. Indeed, logistics can directly impact the competitiveness of an entire market, as its ability to serve demand is inextricably linked to the efficiency, reliability, and predictability of supply chains.

In India till the recent past, the movement of goods and services largely was implied as TRANSPORT. It is since past decade LOGISTICS is added to transport especially with IT applications. It started being applied and the whole process of dispatch, warehousing, deliveries, order tracking, and optimizing the cost involved in the movement of goods/services became part of transportation. Adding to this the many options now available to transport goods/services with speed have evolved the concept of LOGISTICS & TRANSPORT.

The recent addition of e-commerce has made this segment all the more dynamic and has generated large employment opportunities. 

Though loaded with ample opportunities India's Logistics and Transport sector has not been able to keep pace with the rising demand and is proving to be a drag on the economy.

Major improvements are therefore required to boost the sluggish trends.

Some of the hindrances that block the way for progress are:

ROADS: Though the Indian roads are becoming more efficient in particular the highways most roads are still narrow and congested with poor surface quality.33% of India's village do not have access to all-weather roads. 

RAILWAYS: The railways play an important role in carrying passengers and cargo across the country most of its major corridors have capacity constraints requiring capacity enhancement plans. 

PORTS: Though India has tremendous potential in this sector with 13 major and 199 minor and intermediate ports along its 7500 km coastline the full potential in particular the inland waterway transport is yet not tapped. It is about 14,000 km of navigable rivers and canals.

AVIATION: Though poise at no.9 in the world with 128 airports with 15 international airports and handling more than 142 million passengers and 1.6 million tonnes of cargo (2009/10 statistics)Indian aviation require 30 billion USD Investment in next decade to keep pace with the growing demand.

URBAN TRANSPORT: With roughly 340 million people living in urban areas in 42 cities having a population of above a million the share of public transport is declining owing to people using the personal mode of transport. The traffic jams lack good roads and congestion due to population growth impair the good urban transport system. 

Apart from this, there is always a delicate balance between the public arm, which provides the roads, railways, and waterways, and lays down the rules and regulations, and the private sector, which has responsibility for carrying out logistics operations in a smooth and seamless manner. This fine interplay is further complicated by the globalization of manufacturing which—with many more ports of call in the logistic chain—is putting ever-increasing pressure on the sector. In addition, there are very practical challenges in integrating different modes of transport, in speeding up border crossings, and in dealing with trade protections–all of which impact external trade.

But as difficult as it might be, creating a well-functioning logistics sector is essential to any nation looking to compete in the global economy. India is a case in point. To fuel its global ambitions, the country has taken active steps to up its logistics game:

• The government has made great strides in improving customs and trade facilitation.

• It is also spending more on the railways, roadways, inland waterways, and coastal transportation.

• The recently-introduced Goods and Services Tax (GST) is set to boost the efficient movement of cargo within the country as this movement can now respond to purely economic considerations.

• The creation of a dedicated Department of Logistics is another step in the right direction. Going forward, it will be essential for the new department to focus on regulating services, setting service level assurances and reliability standards, and taking any other measures that can promote better integration of transport infrastructure and services across the whole logistics chain. To make this happen, the department will need a high-level task force with a clear mandate, a consistent work program, seamless coordination among ministries, and constructive dialogue between the public and private sectors.

While the measures described above have the potential to deliver promising results, many other opportunities – yet untapped - can improve the performance of Indian logistics:

• While the government is spending more on the transportation network, the capacity, condition, and predictability of these services, and their seamless integration into a multimodal system will need to be improved, as this will be critical to the smooth functioning of the private sector.

• The “trunk route – feeder network” approach for the development and integration of its logistics infrastructure will need to be used.

• As for the railways, their carrying capacity and reliability will need to be upgraded, especially since the rail is losing market share to roads in overall freight transport operations. The Eastern and Western Dedicated Freight corridors, once complete, will go a long way in developing a separate network of high capacity rail freight infrastructure across the country.

• Roads could be a useful complement to other modes of transport, but the sector will need extensive reform. Apart from the general lack of organization and regulation in the sector, along with low safety standards, the long hours, and less-than-ideal working conditions that most truck drivers have to endure are a significant concern.

• A digital platform for the logistics community will need to be developed. This can then seamlessly integrate information, documentation, and the liability regime of its various components.

• Across the board, the level of service will need to improve dramatically. Currently, the sector is still plagued with unreliability, delays, frequent damage to cargo, and cumbersome processes. In fact, it is almost obligatory for businesses to set up their own in-house logistics departments in order to overcome these deficiencies and connect the dots between the different components of the logistics chain.

None of these challenges are insurmountable. If the Indian logistics sector can continue building on the current momentum while addressing regulation and integration gaps, there is no reason why the country shouldn't be able to experience the tremendous benefits of a well-connected economy, both internally and with the world, and move up in the Logistics Performance Index