Logistics Automation: Benefits, Systems & Examples

Global e-commerce sales are expected to be ₹714 lakh crore/ $8.5 trillion by the year 2026. In India alone, the market revenue by 2030 will be ₹9,717 crore/ USD 1,156.8 million, which was just ₹2,483 crore/ USD 295.6 million in 2023, as per Grandview Research.

This much growth in the e-commerce industry is tremendous. Every day, businesses have to do a lot of operations, either in sales or management. That's why, to handle the growing demands of customers and to maintain operations efficiently, businesses are shifting towards automation.

And one such automation in the industry is logistics automation.

According to a report, the global logistics automation market is projected to be at ₹13.48 lakh crore/ $160.55 billion by the year 2030, showing an annual growth rate of 12.4% from 2022.

In this blog, we will talk about "Logistics Automation: Benefits, Systems & Examples" and why it is necessary to have automated logistics solutions for your brand.

What Is Logistics Automation?

Logistics automation is an activity that uses technology in handling all the supply chain operations efficiently. It uses systems and software that help in carrying out normal day-to-day supply chain operations across the entire logistics network. This is used to reduce human dependency on such tasks

And when manual intervention decreases, it helps to reduce errors, saves time and labour, reduces costs, and mainly helps in improving operational efficiency.

In short, logistics automation makes use of technology and multiple systems to streamline all operations in the logistics process, from warehouse management to final delivery.

Logistics management mainly comprises three major systems:

Warehouse Management Systems (WMS)

It is a type of system that helps in handling all the warehousing operations, such as tracking inventory, optimising storage, and improving accuracy and efficiency in the storage and movement of goods.

With Pragma, D2C brands can manage their warehouse operations smoothly and efficiently. It helps in tracking everything, inventory, orders, shipments, returns, and warehouse workflow, which makes it easy for brands to run their business.

Transportation Management Systems (TMS)

It is a software that helps businesses plan, manage, execute, and optimise the movement of goods from one location to another. It is widely used in logistics, supply chain, e-commerce, retail, manufacturing, and 3PL operations.

Enterprise Resource Planning (ERP)

It is a centralised system that helps to manage all the operations of the business under one platform. Some of the popular ERP systems include Pragma, Zoho Books, and Tally ERP.

The above are the core systems that logistics management comprises. But also, it uses technologies like artificial intelligence, robotics, and IoT sensors to create intelligent systems that can adapt to the changing conditions in real-time. 

What are The Benefits of Automation in Logistics?

There are several benefits of automation in logistics to the business in the supply chain, including the following:

1. Increased Operational Efficiency

Whenever something is handled with the help of technologies or systems, it is obvious that it will help to save time by reducing errors, compared to manual efforts.

When automations are used in the logistics industry, they reduce processing times across all logistics operations. A McKinsey Global Institute report found that logistics automation can boost productivity by 20-30% within the first year. This happens because:

• Automated systems work 24/7 without having any breaks.
• They eliminate time wasted on manual searches and data entry.
• Tasks that took hours can be completed within minutes with the help of systems.

ShipAxis by Pragma also helps brands in increasing operational efficiencies through better selection of courier partners for logistics. It helps D2C brands to understand which courier partner will suit them well based on the location or the type of business they are doing.

It not only tells brands which courier partner is best for them, but also says why they are best. With the data from 150+ logistics partners, Pragma defines the fulfilment rate of every courier partner and aligns with the brand that works well for them.

2. Cost Reduction

It is obvious that when things are managed through automated systems, it will definitely reduce costs and save a lot of money for brands.

Logistics automation will help in reducing labour costs, decreasing errors, human dependencies, optimising transportation costs, reducing inventory holds, etc.

According to a report, logistics efficiency can help reduce transportation costs by 10-15% while improving delivery timeframes. The research shows that:

• Each failed delivery adds ₹300-400 to operational costs
• Over ₹16,000 crore is lost annually due to RTO and cart abandonment losses in India
• Warehousing costs have increased by 30% in metropolitan areas

But when things are managed through systems, these costs can be decreased to a good level. Pragma RTO Suite has helped 1000+ brands in reducing their RTOs by 60%. It helps to flag impulse buyers, fake orders, and orders made by bots.

3. Improved Delivery

Automation helps make sure the right product goes to the right customer. It reduces mistakes in picking, packing, and addressing. With the help of automations, more orders get delivered correctly the first time.

A Gartner Supply Chain Research study found that automated logistics systems achieve:

• 99.5% order accuracy rates
• 50% reduction in shipping errors
• 65% decrease in customer complaints

With ShipAxis by Pragma, brands can choose the best logistics partners for themselves. And working with the right one will help in improving delivery accuracy.

4. Enhanced Scalability

When any business grows, the need to manage operations efficiently also grows. Traditional logistics operations struggle during peak seasons like Diwali or Black Friday.

But automations help to handle every operation smoothly without any requirement to increase labour and costs. According to a survey, Indian logistics companies using automation handled 400% more orders during the 2023 festive season compared to non-automated competitors.

5. Data-Driven Decision Making

When things are managed by systems, brands can get real-time data and insights for each and every operation. And this helps in making the right data-driven decision. They can get insights for:

• Which products sell fastest in which locations?
• Optimal inventory levels for each season
• Most efficient delivery routes
• Customer behaviour patterns

Key Technologies Driving Logistics Automation

Robotics and Automated Machinery

Use of robotics is transforming the logistics industry. Robots help move goods inside warehouses. They can aid in picking items, loading boxes, or sorting parcels.

As per the Report by the International Federation of Robotics, use of warehouse robotics installations increased by 65% globally in 2023.

Artificial Intelligence and Machine Learning

The use of AI has increased in various industries. It studies delivery data and patterns that took place in the past. Analysing data helps to find the best routes, predict delays, reduce errors, and speed up the entire logistics process.

IoT and Real-Time Tracking

IoT refers to the Internet of Things. These devices are like having sensors everywhere that constantly monitor and report on your logistics operations.

According to the IoT Analytics Global IoT Market Report 2024, the IoT in logistics market will reach₹5.35 lakh crore/ $63.7 billion by 2026.

Predictive Analytics and RPA

Predictive analytics can forecast future needs, like demand spikes or possible delays. RPA (Robotic Process Automation) handles repetitive logistics tasks.

Pragma makes use of AI and machine learning to provide predictive analytics that help businesses anticipate demand fluctuations and optimise inventory levels, reducing stockouts by up to 40% while minimising excess inventory.

Cloud-Based Automation Platforms

All logistics data, orders, shipments, and delivery statuses are stored online in one system. With the help of these cloud-based systems, brands can access them anytime from any location. This allows them to manage deliveries smoothly and quickly.

What are the Challenges in Implementing Logistics Automation?

Implementing automated logistics solutions can come up with the following challenges:

1. High Costs of Investment

The biggest challenge in implementing automated logistics solutions is the high costs. These automation systems can cost brands a lot.

2. Difficulty in Integrating with Existing Systems

Some of the automation solutions can be difficult to integrate with the existing systems that brands already have. To solve this, businesses should look for such software that integrates easily with all the platforms.

Pragma's automated system helps brands connect with their existing systems easily, providing real-time insights and data to handle all operations efficiently.

3. Fragmented Supply Chain

The Indian logistics ecosystem presents unique challenges:

• High Cash on Delivery (COD) preference (60-65% of orders)
• Significant return rates (25-30% for COD orders)
• Complex address systems and delivery locations
• Varied customer behaviour across regions

But with Pragma RTO Suite, brands can significantly decrease their return rates by approximately 60%.

4. Training of Employees

Every time a brand adopts a new automation system, whether it is in the logistics industry or any other department, they have to train its team well. And it is not always easy to make all the employees understand it promptly.

5. Resistance to Change

People often prefer old methods. Some team members may feel uncomfortable or worried about using new technology.

6. Job Banishment

When the business is shifting towards automation, the tasks that are carried out by people will now be replaced by tools. And this replacement can sometimes lead to layoffs or a change of work. This situation is not easy for the people and the businesses to handle.

Real-World Examples of Automated Logistics Solutions

1. Amazon – Warehouse Robots

Amazon has deployed over 1 million robots in its fulfilment centres. Instead of workers walking long distances to find items, the robots bring the items to them promptly.

And what results do they get?

• Items reach workers faster, reducing picking time.
• There are fewer errors.
• Amazon fulfils more orders per hour due to an increase in speed and efficiency.
• Better customer delivery times, due to fast picking, which leads to fast shipping.

DHL – Smart Glasses for Picking

DHL gives workers special smart glasses that show them exactly where each product is kept and what to pick next.

The glasses guide them step-by-step, so they don't have to search manually.

And what results do they get?

• 25% increase in picking efficiency
• Large reduction in errors

The Future of Logistics Automation in India

We can see a tremendous growth in logistics automation in the coming years. The Economic Times reported that India's logistics automation market is expected to grow at a 15% CAGR through 2027.

Also, in the past years, we have seen many government schemes supporting the logistics industry, including PM Gati Shakti and the National Logistics Policy, and a ₹4,560 crore allocation for the logistics sector under PLI schemes. The digital India push has increased the adoption of digital technologies.

Not only this, but in the future, there could be several logistics automation tools that can do far better than those in the present.

To Wrap It Up

To conclude here, we want to say that logistics automation is not a helpful asset but is a necessity that every major brand should have. In order to get things done efficiently, by reducing errors and human dependencies, businesses can save a lot from automated logistics systems.

Businesses implementing automation see 20-30% efficiency improvements, 25-35% cost reductions, and significantly better customer satisfaction scores.

And to support this, Pragma is here for all D2C e-commerce brands to rule out the market. 

FAQs (Frequently Asked Questions on Logistics Automation: Benefits, Systems & Examples)

1. What does “logistics automation” mean in e-commerce?

Logistics automation refers to using software, integrated systems, and smart workflows to streamline fulfilment tasks such as order processing, picking, packing, courier allocation, inventory updates, and delivery tracking. It reduces manual effort and errors while improving speed and accuracy.

2. Why is logistics automation important for e-commerce brands in India?

Because order volumes fluctuate heavily, last-mile delivery is complex, and customers expect fast dispatch. Automation helps brands handle spikes (festivals, sales), reduce operational mistakes, improve delivery success, and maintain real-time visibility across warehouses and courier partners.

3. Which parts of e-commerce operations can be automated?

Common areas include:

• Order routing to the correct warehouse
• Courier allocation based on pincode performance
• Inventory synchronisation across sales channels
• Automated pick-lists and packing slips
• NDR (Non-Delivery Report) follow-ups
• Delivery notifications and tracking updates
• Returns initiation and refund triggers

4. What are the main benefits of logistics automation?

• Faster order processing
• Lower operational costs due to reduced manual work
• Fewer fulfilment errors, improving customer satisfaction
• Higher delivery success rates via smart courier routing
• Real-time inventory accuracy, reducing overselling or stockouts
• Improved scalability during peak seasons

5. Do small or early-stage D2C brands need logistics automation?

Yes. Even smaller brands benefit from basic automation such as automated labels, courier integration, and inventory sync. As order volumes grow, adding more advanced layers prevents bottlenecks and reduces dependency on manual spreadsheets.

6. What are common systems used in logistics automation?

• OMS (Order Management System) – centralises orders, stock, routing, and updates.
• WMS (Warehouse Management System) – manages picking, packing, put-away, bin locations, and audits.
• Courier Aggregators – generate labels, allocate partners, and track deliveries.
• NDR Management Systems – automate customer follow-ups for failed deliveries.
• Returns Management Systems – automate RMA, pick-ups, QC, and refunds.

7. How does logistics automation improve delivery success?

Through:

• Intelligent courier selection based on pincode performance
• Address validation and correction before dispatch
• Automated NDR communication to resolve “customer not reachable/incorrect address” issues
• Real-time visibility of delays to take corrective action quickly

8. What are real examples of logistics automation in practice?

Examples include:

• Automatic warehouse assignment matching customer location to nearest fulfilment centre
• Auto-generated shipping labels and GST invoices
• QR-code-based returns
• Automated stock alerts when items fall below threshold
• Delivery tracking links sent via WhatsApp or SMS

9. Can logistics automation reduce operational workload?

Yes. Many manual tasks such as updating inventory, checking courier performance, generating labels, and coordinating NDR follow-ups become automated, saving teams several hours per week and reducing reliance on spreadsheets.

10. What challenges should brands expect when implementing logistics automation?

• Integrating multiple systems (OMS, WMS, courier partners)
• Cleaning historical data for accurate routing
• Training warehouse staff to adopt new processes
• Ensuring API reliability across partners
• Managing exceptions that still require human oversight