Importance of Logistics in Economic Development

Submitted By : Diganta Sengupta (Department of BBA (Batch : 2017-2020))

University Roll No. : 15205017085

Logistics plays a huge role within today’s economy. It is estimated that the UK Logistics & Posts Sector is worth 55 billion to the economy and comprises 5% of the UK GDP. The industry also employs 1.7m people.

Just imagine a world where nothing was delivered or transported between places. Not only is logistics vitally important to the distribution industry, it has made distribution prompt and efficient. In fact, according to the FTA (Freight Transport Association), in 2014, 139 billion tone km of goods were moved by HGV.In this very competitive market, it is extremely useful that companies no longer have to wait for what they need.

The effects of transportation are not constantly proposed. It is always give a beneficial contribution to the cause of our society. Evaluating the monetary significance of transportation requires a classification of the sorts of effects it passes on.

logistics facilitates in getting products and services when customer needs and wants to fulfill their decrement . It also helps in economic transactions, serving as a major enabler of growth of trade and commerce in an economy.

So, transport system give societal advancement, an innovative ideas effects to the benefit for the economic development. There are lot of innovation idea which open financial, markets development

streams and waterways: Waterway exchange has won through history. The water frameworks were improved with the connection of the mechanical upheaval. This allowed the improvement of simple and compelled inland appropriation frameworks which are utilized today

Railroads:Railroads are the modern phase in this century was connected with the advancement of empowering frameworks which is adaptable always. These kind of things will open up financial and social doors of development

Streets:This century also saw the fast advancement of street transportation. In this time singular transpiration turned out to be generally accessible to mid pay social classes,especially after the Second World War. Streets become much more smoother so that the logistical problems will help out in a quick way. Suburbanization happens with this new advancement of streets.


We can easily understand that every sphere of Human activity is affected by logistics eitherdirectly or indirectly.Logistics costs include transportation costs, costs of owning and operating warehouses, ordering costs, and carrying costs of inventory etc. Business environment are continuously changing. Customer expectation also arises by the time. Thy want their product needs to be available when it needs. Logistics also plays the role to satisfy customer always. Logistics, as a business competence, deals with the attainment of customer satisfaction at the minimum level of (logistic) costs.Strategically Logistic plays an important role because it extends the lead time of supply, intermediate component shipping with some added values etc.


As there is a both side in every coin ,so Logistics have also some challenges Infront of it in present day scenarios. Some of are:

  • It is a big challenge to get good and skilled human resource and what’s more of an effort is to manage and retain them in this section. Managers are sometimes unable to do that.
  • Transportation Cost are increasing day by day as fuel prices are fluctuating in a daily basis. All put together it’s become a growing concern and need of the hour to adopt a strategic approach in order to eliminate all possible bottlenecks that may add up to longer routes and increase in transportation costs.
  • Some of the major duties of any manager are fleet loading, cross-checking of route maps and ensuring the safety of the logistics operations. A ground operation can be formed by these data’s. But Logistic sectors sometimes are quite unable to do that so it have an impact on the logistics.



Conclusion :Logistics plays a huge role in the development of economy and economic indicators. Logistics industry gives a variety of contribution by creating employment, and creating national income. In this time all industries are dependent on the logistic sector. The effect of both transportation industry variables and also the communication industry variables which form the logistical industry on the development of India and India's economy.India have certainly move forward for the improvement on it ,though it has some major limitations but current trends show that Logistics will play an important part in the Indian Economy in upcoming times.


References : 1)

2)The Journal For CMas- The Management Accountant(Integrated Transport Ecosystem: The Way Ahead)