How the Government is planning to ease logistics woes

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The government plans to develop a dashboard where industries including retail can report and flag off issues related to logistics for faster resolution

By Anurima Das

The commerce and industry ministry announced that it is developing a dashboard to help the industry flag issues or give suggestions to the government on matters related to logistics services. The announcement came a couple of months back. The dashboard is expected to be launched for all authorised industry associations soon. To streamline inter-ministerial coordination of service-related issues in logistics, an institutional mechanism, such as the Network Planning Group under PM GatiShakti, is also under consideration.

The government also notified that the creation of a user-interactive dashboard will allow authorized user associations to log in and lodge issues or suggestions for the government to track and resolve them in a transparent manner. It will not only allow the division to address issues related to a single ministry/ department but also multiple ministries/departments.

Logistics has been an ongoing sector of worry for the retail and e-commerce industry since the pandemic. Thus, in order to understand how this initiative can be a hopeful scenario for the industry, we spoke to two prominent brands operating within the e-commerce space to hear how they feel the initiatives can shape the trade in the future.

Push for growth 

Speaking about the new initiative Pradeep Krishnakumar, co-founder and COO of Zouk said, “Online purchase is now a common practice and is moving in scale. Democratizing services is going to ensure the success of online commerce. The excellent initiatives already taken by the government and more such new initiatives coming in today, are going to bring a larger set of products and brands to consumers across every pin code of India as well  as reduce overall costs for fulfilling orders, the benefits of which will be passed on to the Indian consumer.”

He felt that while the policy is still new and will be implemented shortly, it is definitely a step in the right direction and is in line with our honorable Prime Minister’s push for both vocal for local and local to glocal.

“Logistics cost today is still pretty high and given the objective is to bring it down to a  single-digit percentage of GDP, we expect both reduction in logistics costs as well as increased ease of doing logistics,” he added.

Krishnakumar acknowledged that the entire logistics sector is completely transformed and has made it easier for brands like his to operate from India and fulfill orders to all pin codes, although challenges remain across multiple fronts.

Highlighting the challenges, he said, “The first one is the cost, which can come down considerably with more scale and more skill.  Secondly, there is still uncertainty in last mile logistics where even today, with the technology-backed service solutions wrongful returns to origin (RTOs) and wrong packages get delivered to customers. These result in increased cost of operating the business and requires further improvements as e-commerce becomes more and more mainstream.”

He hoped that the new implementation will help resolve some of these problems.

The New Normal

Logistics from Pre-Covid to today has seen an exponential shift. The space now has a large publicly listed company, multiple aggregators, and new players. All this has resulted in improved service levels from courier partners, larger volumes, and hence, unlocking efficiencies.

Moving forward, Krishnakumar expects further investments to be made by large companies and the cost of delivery to decline sharply as online packages increase.

“Without the power of technology, I don’t think logistics could have reached the level it has reached. Today, every last mile person from a logistics company knows exactly where to deliver what. The companies are well aware of how many packages can be delivered and how many packages can be picked up,” he said.

All of these are the backbone of the scale-up that’s happening in logistics. “It is a given that man-power will be necessary to operate in the logistics space given that is critical to both the first mile and last mile but efficiencies and the transparency that technology has brought to the sector are massive and its impact will continue to grow as logistics as a segment grows further and further,” Krishnakumar said.

Steadfast approaches 

Sharing her views about the government’s new logistics initiative Anika Parashar, founder, and CEO of The Woman’s Company said, “The D2C sector will get the boost and support it requires. D2C is essentially a model that finds a problem and offers a solution.”

Speaking about the impact, she added, “The initiatives by the government will help startups reach a wider audience and make a mark. These initiatives will enhance the accessibility of technology to help D2C companies, especially startups. It will also help streamline delivery services and standardize the sector.”

When highlighting the challenges, she stated that there is immense pressure on D2C brands to stay ahead of the curve. Every online order fulfilment has to be backed by timely delivery and an effective CRM structure. Logistics especially for e-commerce must be seamless.

A seamless and enhanced shopping experience for the customers must be a priority. The business needs to be tech-savvy while staying cost and time-effective. “Hyperlocal, same day deliveries and seamless last-mile deliveries are the buzzwords. Since COVID-19, the sector has become more agile and robust owing to end-to-end visibility, real time insights and advanced data analytics. India has a strong positioning when it comes to manpower, with the technological advancements to support it, we can be a commerce haven for not just our domestic market but also for overseas brands,” she concluded.

The article was first published in the September – October 2022 issue of Phygital Magazine.

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