Several companies that deliver shipments for online retailers are bearing the brunt of the upheaval in India's aviation
sector, as cancellation of dozens of flights by beleaguered airline
SpiceJet and a decline in air cargo space for commercial shipments
throws delivery schedules into disarray.
These logistics companies — many of which focus solely on India's booming ecommerce sector— are afraid the situation will only worsen in the coming year, as airlines battling rough weather offer first preference to passengers over cargo in the crowded holiday season.
"The trouble with an aviation player (SpiceJet) has aggravated the situation," said Sanjiv Kathuria, chief executive officer and co-founder of Bengaluru-based DotZot, the e-commerce shipment arm of logistics firm DTDC Ltd. "It has hit shipments especially to parts of Northeast where shipments are being delayed."
Other affected logistics firms include Ecom Express, Delhivery and Gojavas. SpiceJet cancelled about 100 flights last week. This has disrupted ecommerce shipments to cities like Chennai and Hyderabad where SpiceJet offered good air connectivity from Delhi and Mumbai. Analysts estimate that the boom in online retail this year-fuelled by deep discounts and speedy delivery-with retailers, particularly fashion portals competing to deliver in one day and sometimes on the same day, has increased demand for shipments by air. Ecommerce shipments account for about a tenth of the overall logistics market in India estimated at Rs 12,000 crore. "About 80% of the e-commerce shipments in India now travel by air," said Harminder Sahani, managing director of retail consultancy Wazir Advisors who estimates that logistics companies delivering online retail shipments don't use road or rail often.
"Due to the shrinking air cargo hold, larger players will have to get together to buy dedicated aircraft for e-commerce shipments," he said. This month, shipments have also been delayed due to fog and increase in passenger luggage which is mostly composed of winter wear, thus reducing air cargo space.
"The industry was already under pressure after Kingfisher downed shutters. With SpiceJet also under trouble, there will be delay in shipments out of Delhi," said TA Krishnan, CEO of Ecom Express, a Gurgaon based e-commerce logistics player. Ecommerce firms, whose major warehouses are based in Delhi are the worst hit. "Majority of our goods, nearly 80%, moves from Delhi and sectors such as Nagpur and Hyderabad have become difficult to handle," said Vijay Ghadge, chief operating officer at Gojavas, which handles shipments for online retailers such as Healthkart, Lenskart and fashion portal Jabong. Ghadge expects prices to go up for shipments in the New Year.
Online retailers said they are firming up plans to deal with the issue by increasing sellers within a city. "We pick up and drop in same city to optimise operational efficiency," said Arun Sideshmukh, co-founder and CEO of fashion portal Fashionara. The portal has opened hubs in six cities to deal with logistical bottlenecks. Consumers, who have been flocking to online websites in search of deep discounts, could now find prices shooting up as portals pass-on the increase in delivery costs.
"In case an airline goes down completely we might see prices going up," Sirdeshmukh said. At present airlines charge about Rs 90 per shipment from ecommerce players. Industry estimates indicate that airlines transported about 2.12 lakh tonnes of freight generated by the ecommerce industry this year compared to 1.96 lakh tonnes in fiscal 2013.
These logistics companies — many of which focus solely on India's booming ecommerce sector— are afraid the situation will only worsen in the coming year, as airlines battling rough weather offer first preference to passengers over cargo in the crowded holiday season.
"The trouble with an aviation player (SpiceJet) has aggravated the situation," said Sanjiv Kathuria, chief executive officer and co-founder of Bengaluru-based DotZot, the e-commerce shipment arm of logistics firm DTDC Ltd. "It has hit shipments especially to parts of Northeast where shipments are being delayed."
Other affected logistics firms include Ecom Express, Delhivery and Gojavas. SpiceJet cancelled about 100 flights last week. This has disrupted ecommerce shipments to cities like Chennai and Hyderabad where SpiceJet offered good air connectivity from Delhi and Mumbai. Analysts estimate that the boom in online retail this year-fuelled by deep discounts and speedy delivery-with retailers, particularly fashion portals competing to deliver in one day and sometimes on the same day, has increased demand for shipments by air. Ecommerce shipments account for about a tenth of the overall logistics market in India estimated at Rs 12,000 crore. "About 80% of the e-commerce shipments in India now travel by air," said Harminder Sahani, managing director of retail consultancy Wazir Advisors who estimates that logistics companies delivering online retail shipments don't use road or rail often.
"Due to the shrinking air cargo hold, larger players will have to get together to buy dedicated aircraft for e-commerce shipments," he said. This month, shipments have also been delayed due to fog and increase in passenger luggage which is mostly composed of winter wear, thus reducing air cargo space.
"The industry was already under pressure after Kingfisher downed shutters. With SpiceJet also under trouble, there will be delay in shipments out of Delhi," said TA Krishnan, CEO of Ecom Express, a Gurgaon based e-commerce logistics player. Ecommerce firms, whose major warehouses are based in Delhi are the worst hit. "Majority of our goods, nearly 80%, moves from Delhi and sectors such as Nagpur and Hyderabad have become difficult to handle," said Vijay Ghadge, chief operating officer at Gojavas, which handles shipments for online retailers such as Healthkart, Lenskart and fashion portal Jabong. Ghadge expects prices to go up for shipments in the New Year.
Online retailers said they are firming up plans to deal with the issue by increasing sellers within a city. "We pick up and drop in same city to optimise operational efficiency," said Arun Sideshmukh, co-founder and CEO of fashion portal Fashionara. The portal has opened hubs in six cities to deal with logistical bottlenecks. Consumers, who have been flocking to online websites in search of deep discounts, could now find prices shooting up as portals pass-on the increase in delivery costs.
"In case an airline goes down completely we might see prices going up," Sirdeshmukh said. At present airlines charge about Rs 90 per shipment from ecommerce players. Industry estimates indicate that airlines transported about 2.12 lakh tonnes of freight generated by the ecommerce industry this year compared to 1.96 lakh tonnes in fiscal 2013.
Several
companies that deliver shipments for online retailers are bearing the
brunt of the upheaval in India's aviation sector, as cancellation of
dozens of flights by beleaguered airline SpiceJet and a decline in air
cargo space for commercial shipments throws delivery schedules into
disarray.
These logistics companies — many of which focus solely on India's booming ecommerce sector— are afraid the situation will only worsen in the coming year, as airlines battling rough weather offe ..
These logistics companies — many of which focus solely on India's booming ecommerce sector— are afraid the situation will only worsen in the coming year, as airlines battling rough weather offe ..
Read more at:
http://economictimes.indiatimes.com/articleshow/45623668.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
http://economictimes.indiatimes.com/articleshow/45623668.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Several
companies that deliver shipments for online retailers are bearing the
brunt of the upheaval in India's aviation sector, as cancellation of
dozens of flights by beleaguered airline SpiceJet and a decline in air
cargo space for commercial shipments throws delivery schedules into
disarray.
These logistics companies — many of which focus solely on India's booming ecommerce sector— are afraid the situation will only worsen in the coming year, as airlines battling rough weather offe ..
These logistics companies — many of which focus solely on India's booming ecommerce sector— are afraid the situation will only worsen in the coming year, as airlines battling rough weather offe ..
Read more at:
http://economictimes.indiatimes.com/articleshow/45623668.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
http://economictimes.indiatimes.com/articleshow/45623668.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Several
companies that deliver shipments for online retailers are bearing the
brunt of the upheaval in India's aviation sector, as cancellation of
dozens of flights by beleaguered airline SpiceJet and a decline in air
cargo space for commercial shipments throws delivery schedules into
disarray.
These logistics companies — many of which focus solely on India's booming ecommerce sector— are afraid the situation will only worsen in the coming year, as airlines battling rough weather offe ..
These logistics companies — many of which focus solely on India's booming ecommerce sector— are afraid the situation will only worsen in the coming year, as airlines battling rough weather offe ..
Read more at:
http://economictimes.indiatimes.com/articleshow/45623668.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
http://economictimes.indiatimes.com/articleshow/45623668.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
Several
companies that deliver shipments for online retailers are bearing the
brunt of the upheaval in India's aviation sector, as cancellation of
dozens of flights by beleaguered airline SpiceJet and a decline in air
cargo space for commercial shipments throws delivery schedules into
disarray.
These logistics companies — many of which focus solely on India's booming ecommerce sector— are afraid the situation will only worsen in the coming year, as airlines battling rough weather offe ..
These logistics companies — many of which focus solely on India's booming ecommerce sector— are afraid the situation will only worsen in the coming year, as airlines battling rough weather offe ..
Several
companies that deliver shipments for online retailers are bearing the
brunt of the upheaval in India's aviation sector, as cancellation of
dozens of flights by beleaguered airline SpiceJet and a decline in air
cargo space for commercial shipments throws delivery schedules into
disarray.
These logistics companies — many of which focus solely on India's booming ecommerce sector— are afraid the situation will only worsen in the coming year, as airlines battling rough weather offe ..
These logistics companies — many of which focus solely on India's booming ecommerce sector— are afraid the situation will only worsen in the coming year, as airlines battling rough weather offe ..
Several
companies that deliver shipments for online retailers are bearing the
brunt of the upheaval in India's aviation sector, as cancellation of
dozens of flights by beleaguered airline SpiceJet and a decline in air
cargo space for commercial shipments throws delivery schedules into
disarray.
These logistics companies — many of which focus solely on India's booming ecommerce sector— are afraid the situation will only worsen in the coming year, as airlines battling rough weather offe ..
These logistics companies — many of which focus solely on India's booming ecommerce sector— are afraid the situation will only worsen in the coming year, as airlines battling rough weather offe ..
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