Thanks to the e-commerce driven turnaround in sales during the festival season, Indian logistics companies have transitioned from being just transport and manpower facilitators to focusing on optimising sales, storekeeping and product delivery for clients.
According to experts, this has been made possible due to the adoption of AI-backed solutions and cloud platforms.
Enhancing logistics operations with technology has also dramatically increased investments in the sector.
“The Indian logistics space is anticipated to be worth $215 billion by 2020, and tech solutions will play a major part as more and more traditional companies opt for technology in their operations. In the first five months of 2019 alone, the logistics sector has already witnessed a capital infusion of $6.25 billion across just eight deals. That’s more than a six-fold increase from the amount it raised across 20 deals last year,” Shantanu S Bhattacharyya, a data scientist at Locus.sh said.
Locus automates logistics operations for several e-commerce companies. Major e-tailers like Flipkart and Amazon, and even vertical-focused players like an Urban ladder, Myntra and BigBasket have begun counting on logistics firms to ensure safe and timely delivery of products, especially when demand surges two and three-fold during the festival season.
But, the adoption of new-age technology has transformed the operations of not just conventional firms, but also helped start-ups explore opportunities in the segment.
Mahindra Logistics Limited, one of the largest third-party logistics players in India, has automated its conventional warehouse management system, transport and control tower to streamline processes: from storekeeping and transportation to keeping track of deliveries.
Despite MLL’s long presence in the sector, executives say that the adoption of AI and cloud-based platforms has only helped manage its operations in a faster and more transparent manner and the firm hopes for increased revenues this season.
“One of the challenges faced during this time is the spike (three- to five-fold) across categories in a very short span of time.
Rapid scale-down, post-peak, only adds to the complexity. The key to manage peaks is meticulous planning. Logistics companies create temporary capacity across the supply chain for various inputs like manpower, space, equipment, vehicles, etc,” said Rampraveen Swaminathan, Chief Executive Officer Designate, MLL.
“In a nutshell, most end-use sectors are hoping for a revival of demand due to the upcoming festive season,” he pointed out.
E-retailers rely on 3PL companies
Major e-tailers like Flipkart and Amazon have begun counting on logistics firms to deal with sharp surges in deliveries during the festive season