We have been living under the shadow of a pandemic since the last few quarter when COVID-19 started spreading in India, way back in March 2020. Since then, it has impacted each and every area of our lives and businesses.
Initially, we faced stricter lockdown leading to steep decline in demand and supplies followed by process of unlock leading to gradual recovery.As of now, the pandemic is not over but businesses have started with the new normal and the pace of recovery across various industry verticals is different.
Logistics is no exception to it, instead, it has had a direct impact due to fluctuations in demand and supply, along with various movement restrictions across geographies.
For the logistics sector, initial days of lockdown were most challenging when everything came to a complete standstill, which started easing day by day with more clarity and relaxation from the side of policy makers. Logistics of essential products was first to resume.
Now, the first half of the current financial year is over; we have witnessed month over month improvement in logistics activities. As of now, logistics activities are completely back on track, but volumes are still low due to demand constraints. In September, Logistics activities were at the peak ever since the pandemic began.
Some of the key indicators of logistics revival are as follows:
e-way bill: On 30th September, 26.14 lakh e-way bills were generated from GST common portal, which is the highest ever figure of e-waybill in a single day. The month of September registered YOY growth of 9.3% in e-way bill generation with 57.4 Mn mark. It is a clear sign of recovery in logistics activities and economic activities. This number of e-way bill is higher than the pre-COVID months of January and February 2020. Even GST collection for September was up by 4% as compared to September 2019.
Surface Freight: Surface transport is the most common mode of transportation and was severely impacted in initial days of lockdown. In April, surface transport volumes were as low as 30% of pre-Covid days. Part Load (Non time sensitive) and express logistics (Time sensitive) were the most impacted due to first / last mile challenges, and were almost at zero level in April.
But in terms of recovery of volumes, express has responded the best. In September, most of the organised express logistics companies registered highest ever sales revenue, while recovery in Full truck load has been relatively slow and its volumes in September were around 90% compared to same period last year.
This segment however, faces demand side challenge from certain industry verticals. On supply side, working capital issues have some negative impact on small fleet owners. In Part load segment, recovery has been the slowest in surface transport as some of the volumes have shifted from part load to express segment post lockdown. Part load volumes are hovering around 85% of the pre-Covid levels. Driver availability in trucking is back to pre-Covid levels and most of the drivers are back to their driving seats.
Rail Freight: Rail freight has witnessed a good turnaround in last 2 months. Freight loading in September was 102.12 million tonnes against 89.9 million tonnes in the same period last year. Although this number is marginally short against March 2020, yet it indicates speedy recovery from the corona impact. Recovery of coal and fertiliser show revival of power and agri sector volumes.
Ocean Freight: In line with the other modes, ocean has shown good volume in September. JNPT container volume stands at 95% YOY with 380384 TEU against 400365 TEU in September 2019. Indian exporters are currently facing container shortages and it is expected to last for three months. Liquid discharge volumes have registered growth of 10%, thereby reaching 92786 MT.
Air Freight: During the pandemic, we saw a severe gap between demand and supply of air cargo. This gap was not from the demand side alone with sudden short-term surge; instead, grounding of passenger aircraft reduced the air capacity across the globe. In terms of air cargo volumes, we are still significantly behind the benchmark volumes of last year. In August, lodgment from Indian ports was 29% down YOY with 204247 tonnes against 289427 tonnes in August 2019. Situation has further improved in September, but the gap is still large.
The inference from the freight volume recovery is very encouraging for the logistics industry. In spite of rapid increase in the number of COVID-19 cases, recovery of logistics activity is on a fast pace than expected.
Once India is able to control the pandemic, growth of logistics will be at a faster pace than pre-covid days.
This article has been authored by Vikash Khatri, Founder, Aviral Consulting Pvt Ltd.