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FASTag will save Rs.12,000 Crores every year. Is that enough for the Logistics industry?

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FASTag will save Rs.12,000 Crores every year. Is that enough for the Logistics industry?

The size of the Logistics industry in India is $215 billion. However, it is largely unorganized with only 10%-15% of the players being a part of the organized sector. Does this pose a threat to the adoption of technology and digital transformation for the sector?

Challenges to the adoption of Technology and Digital Transformation?

If we take the Indian logistics industry, the front-line workers such as truck drivers are not always well-educated and hence lag in terms of adoption to technology.

The other challenge is the availability of internet and connectivity across the routes that the goods navigate through trucks, rail, etc.

Digital Transformation in the Logistics Sector


As per a survey conducted by BullsEye Technologies, FASTag will enable to save Rs. 12,000 Crores in terms of Fuel and manpower. The research found waiting times to be around 10-20 minutes on average at toll booths which leads to a fuel wastage of around Rs.22,000 crores. The carbon emissions and pollution also add to the menace. With FasTag becoming mandatory from 2021 onwards for all vehicles, huge cost savings and efficiency augmentation in the logistics sector is anticipated.


IoT can be leveraged by the logistics industry for both vehicle/ fleet tracking and management as well as for collecting data on maintenance.

Vehicle/ Fleet tracking: With advanced tracking of the movement of vehicles through IoT and a back-end technology support team to guide them, Logistics companies can constantly update customers of the best routes to take, and virtually navigate them well to ensure that they optimize time and fuel consumption while also ensuring timely delivery.


Also Read: Airtel Drives Digital Transformation in MSMEs, Here’s How You Can Benefit


Vehicle/Fleet Maintenance: With IoT, logistics companies can constantly measure vital statistics such as tyre pressure, fuel, and oil levels, maintenance schedules, etc. This reduces wear and tear across the fleet and a well-maintained vehicle or fleet can yield more RoI. The data collected also enables the logistics company to take strategic decisions in areas such as fleet replenishment, procurement, etc.

Package Tracking using RFID and Barcodes:  

In a huge warehouse, locating packages and sorting it could also take time. With RFID technology, the scanning and searching across warehouses can be seamless. This saves the time spent on loading and unloading and essentially reduces the wait time spent by the vehicle – be it a truck, or even air cargo.

With Barcodes and QR codes, the easy to implement technology can now enable tracking of the package right from its origin. This reassures customers about their order, builds trust, and creates a positive perception about the product as well as the logistics service provider.

Communication and Messaging:

With Communication and Messaging apps such as WhatsApp and with the penetration of the internet across the country, it is always possible to be in constant touch with the drivers of trucks and carriers. This enables logistics companies to keep communicating with them and virtually guide them through the journey. If there is a problem such as a riot, or strike leading to a roadblock along the way, the company could guide its drivers to take alternate routes. They may also guide the drivers through shorter and better roads to ensure that they save time and effort.

Augmented Access to Credit:

Since the sector is largely unorganized, truck drivers may not have a steady income stream and may not be generating sufficient data for financial services providers to offer them credit. With technology systems generating ample data about their vehicles, it provides great fodder for underwriting and subsequently lending to such people.

The Logistics sector is set to undergo a huge boom with technology adoption. Not only will they become efficient at managing fuel, delivery times, the safety of the consignment, etc. but will also contribute to helping our nation become carbon neutral by bringing down pollution levels. It will also open a plethora of opportunities for truck drivers etc. in terms of availing credit, insurance, etc., and in tapping avenues for investment and growth.

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