A frank assessment of where the industry stands and the structural moves that can no longer wait.
By Rajkiran Kanagala, President & Chief Business Officer, TCI
When you move roughly 2% of India’s GDP annually, energy shocks are part of regular business transactions, we have to face it,help customers navigate the same, face the reality that’s the bottom line. The Strait of Hormuz crisis has produced what the World Bank calls the largest global energy price surge since 2022, oil up 45%, immediate impact on diesel, petrol and high speed diesel.The road network carrying 65% of India’s goods remains deeply fossil-fuel dependent, and there is no short-term fix for that structural reality.
India has brought logistics costs to 7.97% of GDP (as per the DPIIT–NCAER Assessment of Logistics Cost in India*, 2024) down from the long-cited 13–14% through GST, FASTag, and PM Gati Shakti.*One geopolitical event now threatens to reverse years of that progress. The industry’s response cannot be limited to surcharge revisions and cost-cutting. This moment demands structural decisions ones that reduce our dependence on fossil fuels and build resilience into the supply chain architecture itself.
Below are the eight priorities the Indian logistics industry must act on. Some are well underway. None can afford to wait.
1.Multimodal Integration – Coastal Shipping as the Strategic Backbone
India’s 7,500 km coastline remains one of the most underutilized assets in our logistics network. Coastal shipping costs significantly less per tonne-km than road and is structurally insulated from diesel price movements. The shift to multimodal coordinating road,coastal, and inland water legs as a single integrated flow must move from a stated ambition to an operating model. This is the theme that should define the industry’s strategic direction in the years ahead.
2.Containerization and Rail: Capturing the 31-Tonne Advantage
The increase to 31-tonne axle loading per container on Indian Railways is a meaningful structural efficiency, more freight per move on the same energy. Containerization also enables genuine multimodal integration: one box, moving by road, rail, and coastal vessel without repacking. The industry must design supply chains to capture this advantage. The economics are compelling; the constraint is intent and execution.
3.Dedicated Freight Corridors: Deploying Infrastructure Already Built
The Eastern and Western Dedicated Freight Corridors represent a generational investment in logistics infrastructure, freight trains running at twice the speed of the shared network, with significantly lower fuel cost per tonne-km. The DFC changes the competitive position of rail as a primary freight mode. The industry must now align logistics park development, warehouse location strategy, and freight flows to maximize corridor utilization. The infrastructure is ready. The urgency to use it is greater than ever.
4.Fleet Electrification: Breaking the Diesel Dependency
A logistics sector built entirely on diesel; means as a sector aways victim to fuel price fluctuation and every fuel price revision reinforces that reality. Hence adoption of alternate fuels, especially electric vehicles is an imperative change. Fleet electrification changes this equation fundamentally. Electric trucks eliminate fuel cost volatility on the corridors where they operate, reduce lifecycle operating costs significantly, and position operators well ahead of the carbon pricing that will inevitably follow today’s crisis. The barrier has never been the technology or the long-term economics, both of which are well established. It has been the upfront capital required to transition a fleet, which has kept most operators anchored to diesel by financial inertia rather than commercial logic. This is precisely the gap that risk-sharing financing mechanisms are designed to close, and it is where TCI is taking a concrete position. Through the ZPPP project, a structured risk-sharing facility that distributes the capital burden of EV fleet adoption across stakeholders, TCI is working to make electrification commercially viable at scale for Indian logistics operators. It is the kind of structural enabler that turns a widely acknowledged imperative into an actionable transition.
5.Return Haulage: Closing the Utilization Gap
An estimated 30–40% of India’s trucks travel empty on return legs. The entire ecosystem is paying for that inefficiency, invisibly, in every freight rate. The solution real-time digital freight matching across carriers and corridors is technically available. The gap is adoption. Improving vehicle utilization by even a few percentage points delivers a direct reduction in effective fuel cost per tone km across the network. This is one of the highest-return operational priorities in the sector right now.
6.ULIP: Treating Visibility as a Margin Strategy
The Unified Logistics Interface Platform integrates data across Indian Railways, NHAI, customs and ports, the digital infrastructure that makes multimodal logistics operationally efficient. Invisible inefficiencies – border delays, documentation errors, port dwell time are estimated to add 3–5% to logistics costs. In a margin-compressed environment, that is not an acceptable waste. ULIP adoption must be treated as a margin recovery priority, not a regulatory obligation.
7.Biofuels: Raising Ambition beyond the Blending Target
Brazil’s RenovaBio policy has produced freight corridors running on near-100% biofuels structurally decoupling logistics costs from global crude cycles through feedstock development, blending mandates, and carbon pricing. India is moving faster than most expected. The E20 target was achieved by July 2025, five years ahead of schedule. And on 6 June 2026, India launched E85 an 85% ethanol blend at the pump, with flex-fuel vehicles from Hero MotoCorp and Maruti Suzuki already in the market to receive it. E100 now has formal regulatory recognition. The feedstock diversity is real: sugarcane, broken grains, agricultural waste, bamboo, seaweed, India is not dependent on a single crop.
The ambition must now move from the fuel pump to the freight corridor. 100% biofuel capability on specific routes particularly agricultural freight corridors where feedstock is locally available is achievable within this decade. The economics are already visible:
E85 is priced approximately ₹20 per litre below petrol. Operators who build feedstock partnerships and infrastructure now will carry a structural cost advantage not a marginal one into the next fuel shock.
8.Truck Payload Reform: A Structural Lever the Industry Must Champion
Brazil’s freight sector operates at significantly higher average truck payloads than India producing lower cost per tonne-km and greater insulation from fuel volatility. Can we take a cue from it?
The Imperative
The failure modes in a crisis are well known: reactive surcharge adjustments that address symptoms, or strategic paralysis waiting for clarity that will not come. Neither is leadership.
The eight priorities above form a coherent agenda – coastal integration, DFC deployment, corridor electrification, utilization optimization, digital visibility, biofuel scale-up, and payload reform. Individually, each reduces fossil-fuel dependency. Together, they constitute a logistics model that is structurally resilient to the next shock, whatever its origin.
The horizon is on fire. That is not a reason to manage the present carefully. It is a reason to build the future deliberately. The organizations that do so now will not merely survive this cycle, they will define the next one.
Bibliography
The following sources informed this article:
- World Bank Group. (April 2026). Commodity Markets Outlook: Energy Price Surge Driven by West Asia Conflict.Washington, D.C.: World Bank.
- United Nations ESCAP. (March 2026). Middle East Shockwaves Ripple Through Asia-Pacific Fuel and Supply Chains. UN News.
- BW Businessworld. (May 2026). Fuel Price Shock Puts India’s Logistics Sector Under Pressure. Mumbai.
- Maritime Gateway. (May 2026). Fuel Crisis Squeezes India’s Transport and Logistics Sector.
- Flexport. (May 2026). Middle East Escalation Disrupts Global Ocean and Air Freight Networks.
- KPMG India. (January 2026). Logistics Costs to GDP: Can Budget 2026 Finally Move the Needle?
- Ministry of Ports, Shipping and Waterways, GoI. Sagarmala Programme – Coastal Shipping Policy Framework.
- Dedicated Freight Corridor Corporation of India. Annual Operations Report, 2025–26.
- Ministry of Petroleum and Natural Gas, GoI. National Biofuel Policy 2018 and 2024 Amendments.
- US EPA. SmartWay Transport Partnership – Programme Overview and Carrier Certification Standards.
- Agencia Nacional do Petroleo (ANP), Brazil. RenovaBio Implementation Report, 2025.
- Crisis24. (April 2026). Asia-Pacific: Middle East-Linked Fuel Shortages Disrupt Transport and Energy Security.
- Down to Earth. (April 2026). UAE Exits OPEC as World Bank Warns of Biggest Energy Price Surge Since 2022.
