Logistics in Indian ecommerce in huge demand, roadblocks aplenty

That logistics is the lifeline of ecommerce is an accepted fact. Ecommerce companies are also spending a large chunk of their earnings (nearly 30%) on logistics. Some companies offer their buyers speedy delivery in order to remain on top of the game. The fulfilment of these promises depends on the logistics companies that are growing in popularity.

Some companies opt to create their own logistics arm to avoid a dependency on third party service providers. Flipkart has eKart, Snapdeal has its recently acquired GoJavas (which originally belonged to Jabong), and Amazon has recently entered the fray by launching Amazon Transportation Services.

Logistics – a multi-stop journey

It is a long journey for a consignment from the point of origin till the customer. T. A. Krishnan, founder of Ecom Express says that delegating this task to a logistics company frees up the company to focus on other things.

He says, “The challenge of logistics is difficult and needs to be handled by a dedicated player. Things like regulatory frameworks, airports, road networks, highways are all hindrances to growth in India. These are huge challenges that need to be tackled by a smart solution.”

Sahil Barua, CEO of logistics firm Delhivery, feels that India needs a solution specific to its problems.

Speaking of a two pronged approach to the logistics scene, he says, “The first is to think about creating the largest possible logistics company for a specific vertical, like auto parts, where you figure out everything out from sourcing to delivery. The other is to take each of these verticals and create a common, flexible stack that can handle multiple demands. We focus on the latter.”

Issues that hinder a smooth run

Baura opines that there are many problems in the logistics field. “Take warehousing, for example. There are barely any large-scale warehouses in this country. I can’t walk up to someone and say ‘give us 5 million feet of warehousing in the next five years’ and expect it to get done. I don’t like the word disruption, but it’s inevitable that a whole bunch of interesting players will come up to solve these problems. We’re looking forward to working with them.”

Smart solutions need to be thought out to ensure that consignments have a hassle-free journey. Networking is an essential link in the chain. Logistics companies have to set up an intricate network of contacts across their area of operation, particularly with local courier companies. A mutually beneficial arrangement will certainly work in the greater common good of all parties in the transaction.