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Logistics Sector makes a strong re-entry with startups foreseeing tremendous potential

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In what comes as a promising assurance for a sector reeling under the impact of unprecedented crises, the logistics sector has now made a powerful comeback with companies exhibiting immense potential and growth amidst trying times.

As the sector witnesses a rebound, many logistics companies, especially start-ups, are witnessing growth and recovery.

Gurugram-based logistics firm Ecom Express upon witnessing growth during this phase is now planning to expand its reach to 27,000 plus pincodes. It is in the process of adding new facility centres and warehousing spaces.

“COVID-19 has catalysed the growth of the e-commerce industry. Being a tailgating industry, we have also seen a positive effect in our business. This has been a phenomenal year for us. Our entire focus now is on sustaining the momentum that we have generated so far by leveraging technology and talent,” a spokesperson from Ecom Express said.

Saahil Goel, CEO and Co-founder of Shiprocket said, “Logistics for e-commerce has come back roaring during the festive season and we are experiencing strong growth. Strongest opportunities lie in enabling offline retailers to participate in the digital economy by providing turnkey solutions for fulfillment and customer experience. While many companies focus on demand generation, very few companies are helping these new sellers excel in the post order fulfillment and deliver a stellar customer experience”.  

Gurugram-based logistics start-up Pidge recorded speedy growth from business to consumer and D2C brands (Direct to Consumers). During the initial weeks of its formation, the company had 50,000 orders, but Pidge completed the next 50,000 orders in just six weeks following that, and the next 1,00,000 were also completed in the following six weeks. It now plans to expand to Jaipur and Ahmedabad and later to south India soon.

“With the onset of the festive season, we are expecting a surge in demand by 25 times by the end of this year. With the increased demand, we are also looking to add to our delivery staff and to have around 1,500 delivery executives by the end of this year.”

~Ratnesh Verma, Founder and Leader, Pidge

Heightened commercial activity has also led to a growth of the road transportation industry. For a company like Fortigo that was 30 per cent below the pre-pandemic level in August end, the company expects to have a 150 per cent growth by March.

In comparison to the initial stages of the lockdown, there has been a rebound in the logistics segment. During the initial lockdown of 52 days, a recent report by Dun and Bradstreet stated that the daily movement of trucks in India was less than 10 per cent of the normal levels and from April to July 2020 while the Indian railways freight revenue was down 26.4 (year-on year) and in terms of volume, it was down by 17 per cent.

There was a dip in shipping segment and the total traffic (containers, POL etc.) at the major ports had declined by 16 per cent for the period of April to August 2020 when compared to the same period of last year.

The report also states that the logistic companies that cater to e-commerce firms will witness a peak as online purchase of essential and non-essential commodities have increased. Demand will be driven by e-commerce and third party logistic players as cost pressures would lead to increase in outsourcing activities.There is high probability of global supply chains relocating to India and post lockdown, increase in domestic demand is deemed to drive the demand for warehousing and logistics.

The Dun and Bradstreet report states that as the last mile usually constitutes around 30 per cent of the total logistics cost, companies will have to come up with innovative ways for optimising cost for the contactless last mile delivery solutions.

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