The traditional logistics industry, which was pretty unorganised until half a decade back, is
slowly transforming itself to a high impact sector which is tech driven and globally
integrated. Furthermore, the robust growth witnessed in e-commerce is one of the leading
drivers for this industry in the country. Over the last one and a half years due to the
pandemic-induced lockdown, technology-driven logistics startups, which include last-mile
delivery players, truck aggregators and warehousing firms, have been rewriting their
business models by bridging the gap in the industry.
According to the Economic Survey 2017-18, Indian logistics sector, which is currently worth $160 billion, is expected to grow at a CAGR of 10.5% to reach $215 billion by 2020, owing to the implementation of GST and other factors. With the evolution of the logistics industry, many new firms are embracing advanced technologies to meet higher consumer expectations. To keep pace with digital commerce, technological disruptions are
revolutionizing the e-commerce supply chain industry. Some of the cutting-edge
technologies such as Internet of Things (IoT), advanced algorithms, data analytics, Artificial Intelligence (AI), Robotics and Automation are increasingly being employed by companies to streamline their operations.
For instance, Locus, a startup which operates in ecommerce, third-party logistics, fast-
moving consumer goods and retail, and human movement sectors, employs proprietary
algorithms and deep learning to provide route optimisation, real-time tracking, insights and analytics, dynamic sales journey plans, efficient warehouse management, and vehicle
allocation and utilisation. As a result, the company has seen nearly 3X growth y-o-y since
2016.
Krishna Khandelwal, Chief Business Officer, Locus asserts, “The Indian logistics market is pegged around Rs. 13,500 billion to Rs. 14,000 billion, largely dominated by unorganized players, with organized players expected to gain market share going forward. Some key growth drivers for India will be hyperlocal deliveries, e-commerce, and e-grocery; and the emergence of D2C brands.”
Similarly, Freightwalla, a technology-enabled freight forwarding company, was able to save
100,000 papers in 2020 through digitalization and is looking forward to increasing it to 20% – 30% in 2021.
“When it comes to visibility across supply chains, most of India’s logistics providers continue to operate in the traditional paper-based way. Therefore, there is an imperative need to reshape existing supply chains to make them customer-centric, resilient, agile, responsive and transparent. Exporters who shift to more modern, tech-savvy logistics providers will offer their clients end-to-end visibility, thereby enabling them to make well-informed decisions rapidly. Besides driving transparency in the system, this will also help them build an edge vis-à-vis competition as preferred suppliers to the overseas buyers,” reveals Sanjay Bhatia is the Co-Founder and CEO of Freightwalla.
Another startup Blowhorn, a same-day intra-city last-mile logistics provider headquartered
in Bangalore, has seen tangible improvement in the performance during the pandemic with volumes increasing by 50%+ compared to the pre-COVID era. The company provides seamless transportation, warehousing, and a fully technologically integrated system to manage the end-to-end supply chain process.
“The pandemic brought with it an opportunity to augment Hyperlocal deliveries from
businesses to consumers. By 2020, we entered the hyperlocal logistics market. Today,
Blowhorn has an established presence in 75+ cities covering 25% of Indian pincodes
servicing 50 million + deliveries. Our ambition is to power the growth of all India businesses with digitised logistics chains. Be it a fast growing direct to consumer brand or a large e- commerce giant, our flexible solutions can be customized for everyone,” reveals Mithun Srivatsa, CEO, Blowhorn.
As per a recent report by Arthur D. Little India in collaboration with the CII, India’s Logistics and supply chain costs currently amount to a staggering US$400 billion, up to 14% of the GDP, compared to the global average of 8%, raising a competitiveness gap of approximately US$ 180 billion. Interestingly, World Economic Forum (2016) had claimed that the digital transformation of the global logistics sector could translate into a value of US$ 1.5 trillion for the participants and an additional US$ 2.4 trillion worth of societal benefits by 2025.
“A US$2.4 trillion manufacturing industry is going to move from one country (China) to
another because of the geopolitical situation globally. Out of that, 25% is likely to move into India, which means as good as billions of dollars’ worth of additional business will be added to the Indian economy from the manufacturing sector, “reveals Anjani Mandal, CEO & Co-Founder Fortigo Network Logistics (4TiGO).
Funded by Accel Partners and Nandan Nilekani, 4TiGO was founded in April 2015 by two IITians, Anjani Mandal and Vivek Malhotra. The Bangalore-based startup offers fleet
management services to over 25,000 truck operators countrywide on its platform.
With current and future government policies, financial support from the investors, and
continuous innovations from new-age logistics businesses, the industry is expected to
experience much-needed process standardisation, technological upgradation, and digital
transformation.
