Logistics sector – A potential employment generator

Logistics

According to Teamlease, logistics sector will be the flagbearer when it comes to generating employment. It is estimated that at least 3 million people will be part of the logistics sector by the year 2022. Road freight industry alone will be having 63% or 1.9 million new jobs. From the current 10.9 million employees, the whole logistics sector (road, air and waterways) will expand to 13.9 million.

Why is this important

E-commerce logistics alone is forecasted to generate ~1 million jobs. ~43% of these new jobs are thought to be in the tier-2, tier-3 cities and rural areas. Around 66% of the jobs will be coming in from the big metropolitan cities. Cities like Vijayawada, Allahabad, Guwahati and Raipur will see the fastest growth in job creation. Robust investment in rail and road infrastructure, inland waterways development and multimodal logistics parks are some of the key drivers for the logistics sector.

While job creation will be a great boost for the nation, the workforce in India needs to be upgraded and better their skills in order to remain relevant in the fast-evolving technology-driven job market. Automation and machine learning are already making certain skills redundant and eliminating jobs at the lower spectrum of the hierarchy. Along with small cities, big ones like Mumbai, Chennai, Delhi, Hyderabad and Pune also display some big skill gaps.

Unemployment Rate Chart

Stocks to be positively impacted

AllCargo Logistics Ltd. (CMP: Rs. 125, Market Capitalisation: Rs. 3087 crores, FY2020 P/E: 10.45)

Future Supply Chain Solutions Ltd. (CMP: Rs. 654, Market Capitalisation: Rs. 2,622 crores, FY2020 P/E:19.9)

Tiger Logistics Ltd. (CMP: Rs. 199, Market Capitalisation: Rs. 211 crores, FY2019 P/E: 16.9)

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