New-Age Disruptors Redefining Business In Logistics Sector

Data and analytics have transformed businesses, and logistics is not an exception. The dynamic nature of the transport sector makes it a perfect use case for data

The startup ecosystem is flourishing in India and almost every day we are hearing of one unicorn or some significant investment by PE/VC firms and, some of the new-age companies filing the IPOs. The logistics sector is no exception with the latest successful IPO of Delhivery and Rivigo raising pre-IPO funding. The disruptive trends are making their inroads emphasising the fact that it is time to collaborate and compete to drive the progress, of the companies, the sector, and the whole ecosystem.

From celebrating the arrival of a parcel after weeks and sometimes months to express deliveries, the logistics sector has come a long way. According to RedCore's (early-stage research arm of RedSeer) 'Inter-city Logistics Market Study' the road logistics market in India is expected to grow from US$ 209 billion in 2021 to $ 330 billion by 2025 at a CAGR of 8 per cent. The opportunities are enormous with immense thrust on the manufacturing sector of India and booming e-commerce businesses. While the established players are enjoying a certain market, the unorganised and fragmented nature of the sector offers growth opportunities for everyone. By harnessing cutting edge technology, new-age companies offer innovative and more successful business models Bringing efficiency, speed, and cost advantage, especially in the middle and last mile deliveries.

Three Miles Integrated

The fragmented nature of the industry provided many possibilities to bring in cutting-edge technologies to connect all the three delivery miles and also both customers and suppliers. It was with the idea of putting an end to the multi-vendor interface and geographical dependency that we launched TruckBhejo in 2016. Starting with just 12-15 truck drivers and a single order, - we have grown to the present fleet of 4,500+ trucks, shipping over 2 million tonnes and completing over one million deliveries This just shows the number of opportunities that exist and there is enough pie available for everyone in the sector.

Greater Efficiency And Visibility With Digitisation

The digital revolution triggered the idea of a scalable business through a viable amalgamation of logistics and technology. Incorporating the Internet of Things (IoT), advanced algorithms, blockchain, data analytics, Artificial Intelligence (AI), robotics and automation into operations has revolutionised e-commerce supply chains. Data can be used to optimise routes, along with the number of trucks and drivers. This not only increases speed, efficiency, and reliability but also cuts costs enabling the logistics companies to offer competitive rates in their concentrated bid to run to full capacity.

Cloud computing has brought the business online with contactless payment and digital documentation. This helped many logistics players continue with the relentless run even during the pandemic.

Digitisation also ensures complete visibility and transparency across every stage in the supply chain. Customers can live-track their delivery from the time it leaves the warehouse or retail outlet till it reaches its destination. Along with real-time updates, some logistics providers also offer customers the flexibility of changing the time and place of delivery right up to the last hour. This not only results in happy and quite often repeat customers, but even a satisfied transporter by cutting out empty miles and empty trucks.

National Logistics Plan to open a single window in the e-logistics market

Thanks to digitisation and globalisation, many big companies, including multinationals, are outsourcing their supply chain operations to local logistics providers so they can concentrate on their core competence. Such horisontal collaborations, especially in the last-mile delivery, are however hampered by different legislation at the national, regional, and local levels.

There are more than 20 government agencies, 81 authorities, 40 PGAs, 37 export promotion councils, 500 certifications, 10,000 commodities, 36 logistics services, 129 ICDs, 168 CFSs, 50 IT ecosystems, and banks and insurance agencies. But there is no single ministry to regulate the logistics sector with the result that red-tapism slows down the process.

There is another reason for concern. A report by Arthur D Little and the Confederation of Indian Industry (CII) highlights the need to bridge India's high logistics cost, which comprises nearly 14  per cent of the Gross

Domestic Product (GDP) as compared to 8-10 per cent of GDP in the US and Europe. This makes our exports uncompetitive and impedes Prime Minister Narendra Modi's 'Make in India' dream.

To bridge the approximate US$ 180 billion a year competitive gap and halve logistics costs to 7 per cen, Finance Minister, Nirmala Sitharaman, while presenting the 2020-2021 Budget, announced the National Logistics Policy. Formulated by the Commerce and Industry and expected to be released this year, the National Logistics Policy will clarify the roles of the union government, the state governments and other key regulators. It will also create a single-window e-logistics market. This is expected to lead to more jobs in a sector that already employs over 22 million people.

The introduction of GST has reduced the turnaround time of trucks by more than 20  per cent. The National Logistics Policy is expected to up India's global ranking and increase trade competitiveness leading to a growth of 5 to 8  per cent in exports.

National Master Plan Is Highway To The Future

For increased investor interest and growth in global business, it is extremely important to improve infrastructure and connectivity. With this objective in mind the PM Gati Shakti—National Master Plan was launched by PM Narendra Modi. It synchronises all existing and planned initiatives of 16 ministries, bringing them and their concerned departments together on a centralised Geographic Information System (GIS) digital platform. This will help them prioritise and plan their projects better, selecting the most optimum route for dispatching goods. Under this National Plan, Rs 19. 6 lakh crores have been set aside for roads alone.

Along with improving existing roads, the Ministry of Roads, Transport and Highways (MoRTH) has announced that it will also develop 22 greenfield expressways, 23 key infrastructure projects, including other highways, and 35 multi-modal logistics parks.

The idea is to add around 1 lakh km of the road network to double the country's national highways network by the next four years. Additionally, 5,500 km plus of four and six-lane highways will be constructed in the coastal belt.

While the traditional methods of operational excellence, cost efficiency, and better vehicles will always play a role, times such as these demand digitalisation and AI-enabled vehicles that will transform the logistics industry. Digital tools and platforms can help to conserve resources. At TruckBhejo, our robust technology platform is trusted for smart solutions. The tech-enabled platform facilitates real-time tracking, an end-to-end interface for all stakeholders, flexibility in the truckloads to the shippers, visibility in the business, and thus better capacity planning for the truck drivers. In addition, end-to-end transactions are now paperless contributing to the environment.

Data and analytics have transformed businesses, and logistics is not an exception. The dynamic nature of the transport sector makes it a perfect use case for data. The availability of advanced technology has provided the logistics sector with the ability to adapt to recent imperatives such as constant innovations, customer centricity, and agility and the sector is getting redefined with very new tech-led solutions.

(The given article is attributed to Nilesh Ghule, Co-founder and CEO, TruckBhejo and has been exclusively created for BW Disrupt website)

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