Logistics—moving goods and connecting producers with consumers—is a critical part of the modern economy. In India, this sector comprises 14% of gross domestic product (GDP), much higher than in the US or Europe, where it is 8-9%, according to McKinsey research. That matters; High logistics costs hurt Indian competitiveness, “Live mint” reports.
The government’s various initiatives, such as setting up a division in the Union ministry of commerce, introducing a national goods and services tax and giving infrastructure status to logistics, may help reduce inefficiencies. This new sense of urgency is welcome, but in order to find the right solutions, it’s important to establish what the real problems are. In a recent study, we found that much of the conventional wisdom on the subject is simply wrong. Here are four examples.