2020 has been full of uncertainties for the surface segment. With the sudden announcement of the nationwide lockdown, the sector witnessed the abandonment of loaded trucks, lack of drivers/workforce due to reverse migration, increased freight, and fuel rates, etc.
Upon entering 2021, it is only fair for the segment to overcome the uncertainties and make 2021 the year of growth and recovery.
The uncertainties that will make way for change in the segment in 2021 are:
Customer Behaviour:
Consumer behaviour over the years has changed manifold. Both individuals and businesses expect to get goods faster, more flexibly and in the case of consumers at low or no delivery cost. The pandemic has further changed the consumers’ shopping patterns; now, consumers give more preference to online shopping than they do to bricks & mortar model. This change of preference has given a boom to the e-commerce segment and has accelerated the demand for transportation and fulfilment logistics including sort centers, fulfilment centers, return processing, and last-mile delivery.
Aditya Shah, Executive Director – V Xpress (A division of V Trans India) says, “At the end of the year, things are becoming better with several express companies posing all-time high business figures, including V-Xpress.”
“Post outbreak, there has been a perceptible growth in demand for essential products. We have also seen a shift in strong demand from Tier-2 and Tier-3 cities and towns accelerating in the last six months and again same patterns we should expect to continue in 2021.”
~Sushil Rathi, Chief Executive Officer, Lords Freight Limited & Chief Operating Officer – Transportation & Procurement, Mahindra Logistics
Hygiene Practices and Social Distancing:
Amid the outbreak of the pandemic, hygiene and Social Distancing became the mantra of every organisation/individual to contain the virus and at the same time keep their operations going.
Vivek Juneja, MD-Varuna Group underlines that while it has become a necessity it has also caused issues for the service provider to meet consumer satisfaction while keeping a check of safety measures.
“The consumer is getting more demanding with time and this becomes even more challenging in Covid times since there is a set of safety protocols to be followed. The deliveries are taking longer resulting in delays in product availability and this is going to stay in the first half of 2021 at least.”
~Vivek Juneja, MD-Varuna Group
Mr Shah speaking on the same says that this will surely impact the activities moving forward. He says, “We all have maintained social distance for close to 10 months now it certainly has become a new norm and is going to be there for some time now. And this will impact many activities and bring forward digitisation at an accelerated pace,” says Mr Shah.
Although social distancing will be practiced in the first half of 2021 and extra safety measure will be required, we expect that amid the rollout of the vaccine the small difficulties and issues faced will be eliminated as the vaccine will eliminate the fear and digitalization will be the core for every business model.
Relooking at the Supply chain:
The pandemic failed all the forecasts and predictions of businesses as it brought the whole world to a standstill. Companies struggled to keep themselves afloat and meet the market’s demand, which “made brands rethink their supply chain resilience and many have gone back to the drawing board redesigning for not just a costefficient but pandemic resistant supply chain,” says Mr Juneja.
“We expect the customers will revisit & redesign their supply chain in 2021. The government is also trying to woo many international corporates, who want to de-risk by moving their manufacturing from China, to set their base in India. This will lead to many new opportunities in the New Year for organised players like Mahindra Logistics. We also believe that the industry will see consolidation,”says Mr Rathi.
We expect to see supply chains making 2021 into a year of growth backed by digitalization and Big data. 2021 will be the year of growth. COVID worked as a catalyst for the companies/sectors which were not very focused on digitisation but now have been bound to do so, digital adoption is going to result in fast-tracked, more than expected growth in the sector, says Pushkar Singh, CEO and CoFounder of Lets Transport
While talking about the segments that will witness the most M&As, Chirag Katira, Director, SNGT and Secretary General, AIMTC says, “In Parcel & Part load, we will see more Mergers & Acquisitions.”
“Horizontal collaboration is already happening, especially in last-mile delivery, but it’s hampered by inconsistencies. Higher levels of efficiency could be achieved by more consistent standards, defined through the Physical Internet and increased collaboration, whether in the form of alliances, joint ventures or M&A.”
~Chirag Katira, Director, SNGT and Secretary General, AIMTC
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