Creating tech-driven logistics networks in India: Role of modern startups

24 Apr 2022 | Karan Shaha

The Indian economy has been growing steadily in today’s digital era. The development of road infrastructure and digitization of logistics operations coupled with initiatives such as ‘Make in India’, and ‘Aatmanirbhar Bharat’ have been driving this growth forward. As per the World Bank rankings, India is at the 46th position on the 155-country strong logistics performance index. It is no secret that logistics is critical to any country’s growth, but in the past, this sector didn’t get adequate attention from either lawmakers or stakeholders as far as enhancement of operational capabilities, tech integration and streamlining of processes was concerned. Considering how almost 90% of the Indian trucking industry comprises small-scale, unregulated transporters, and driver-owners, there is a lot of disconnect they face. Warehousing and transportation jointly make up the logistics process, but barring a small percentage of large transport companies and the logistics arms of e-commerce operators, supply chain integration and digitization has been missing in most smaller logistics players. 

In conventional practices, there is a widespread lack of accountability that has created an environment of distrust which forces transporters and shippers to do business only within their localized and personal circles. While this might give them assurance of safety, it also leads to costs going up and the optimization going down. For instance, a trucker who relies on specific agents and transport companies for getting loads might need to wait for several days before getting a shipment suitable for his lorry or route. Similarly, a shipper might have to depend on the availability of a vehicle in his personal network, and non-availability could delay the shipping, causing customer dissatisfaction and increase in costs. Furthermore, even after a load is shipped, there’s always a chance that the truck driver might not abide by any rules. They might not report at the destination as per the schedule or might not reach the load pickup point despite having committed to it. These types of activities can lead to losses and other problems for both truck drivers and shippers, especially if the goods are perishable or of high value. 

Not only that, there is a major resource crunch in the Indian logistics arena. Qualified drivers, shippers, and other trained personnel are becoming very rare to come by, especially in the wake of the pandemic. Majority of the logistics  operations today are run by poorly skilled or unskilled people, which implies greater need for involvement from the shippers, and business owners, forcing them to divert time and attention away from their core business. 

The combination of so many incremental problems like the lack of infrastructure and organization, and high fuel prices have resulted in the Indian logistics sector being one of the most under-utilized segments despite the incredible potential and demand. This is where technology has come across as the panacea for these problems.  

Today, digital-first logistics startups are rapidly bringing about a transformation by enabling small and big players to work seamlessly. The advancements that the ecommerce operators introduced, are slowly and steadily becoming mainstream especially in the wake of the pandemic. When the Covid disruption struck the Indian trucking industry, operators big and small had no option, but to integrate whatever technology they had to keep going. Now, startups are set to take the industry forward by eliminating the lack of trust through streamlining, standardizing, and creating an integrated logistics ecosystem. End-to-end supply chain solutions that include transportation, warehousing, ecommerce support, and even value-added services like marketing, are becoming the new norm. Logistics platforms that bring lakhs of shippers and truckers one a single digital platform are eliminating distrust and inefficiency. 

Intervention by these digitally-driven transportation startups can enable major productivity enhancement, ensure complete visibility of the supply chains, provide real-time tracking of vehicles, help adhere to delivery timelines, optimize warehouse and vehicle space management, guarantee superior customer experience, and provide faster transportation. In fact, presence on a trucking platform is known to increase a truck’s on-road time from 16-17 days to as many as 25-26 days a month. This helps in generating greater revenue and transportation of more goods than ever before. It is this development of transportation networks which augurs well for all stakeholders. 

As made clear by the failure of the conventional transportation ecosystem during the peak of the pandemic, digitization not only enhances operational efficiency, but also protects the sector from unplanned disruptions. The great thing to note is that the tech-driven logistics sector is catching up fast. Investors are pouring billions of dollars into this arena, and with break-neck speeds of infrastructure development, the day is not far when the Indian logistics sector will become globally competitive!

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