Vague lockdown regulations heighten logistics and e-commerce players’ woes

Post By : Abhilash Shrivastava
Post Date : April 26, 2021
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Vague lockdown regulations and restrictions have hampered the operations of various logistics and e-commerce companies as they can be seen grappling with challenges helplessly. The problem has only aggravated further as a partial or complete blanket ban on a certain class of products has led to a major downfall in the order volumes.

As the uncertainty coupled with despair looms large, these companies have to cope with piled up orders which are gathering dust in numerous warehouses dispersed across various states. And growing caseloads are raising suspicion over the early restoration of normalcy anytime soon.

“Though Delhi and Maharashtra have permitted outbound mobility of carriers hauling shipments yet there are certain categories of products which can neither move out nor enter in these states,” says an executive at a logistics company.

The most affected are those cities and towns which are not placed under the lockdown but still have to suffer because of these states as these regions boast presence of large number of orders fulfillment centers. Moreover, these twin regions are estimated to contribute around 40 percent of shipments nation-wide.  

Series of announcements in a run-up to lockdowns and restricted shutdowns at some places followed by successive amendments in them have baffled these players to a great extent.

“We are still puzzled over whether inter-district movement within Maharashtra is prohibited or not,” says Praharsh Chandra, co-founder and COO, Shadowfax.

“It‘s proving to be an uphill task to ensure availability of products from sellers in Delhi due to strong restrictions on the transit of goods,” said an executive in a major e-commerce firm.

“Oxygen concentrators have been categorised as a non-essential item. However, in today’s trying times, it requires to be classified as essential commodity. Besides this, we can only source them from offline sellers,” he explains. 

Outbound and inbound movement of products out of Chhattigarh has posed yet another challenge to logistics companies as a number of cities had already announced lockdown in the beginning of the month itself.

“Not only inter-state but also inter-city movement is hindered,” says Chandra of Shadowfax.

States like Delhi and Maharashtra including few others are only allowing delivery of essential products. On one hand, e-commerce companies have registered a spike in the sales of essential items like groceries but on the other hand, the order volumes of non-essentials like mobile phones, clothing and other gadgets have dropped alarmingly by over 50%, as per industry sources. 

In their resolve to fight the resurgent Corona wave, states like Delhi had clamped a six-day lockdown (followed by another week) while Maharashtra imposed a curfew (April 14- May 1). Several other states have resorted to weekend curfews, while other states like Karnataka, Kerala, Telangana, Goa have placed night curfews.

However, most players feel that the situation is way better than before as there exists more awareness among local administrations, nonetheless, lack of homogeneity is impeding the smoothness of operations.

“Some states have weekend curfews, others have night curfews, while some have week-long lockdowns. Furthermore, rules are changing frequently resulting in more confusion and lack of clarity,” said Saahil Goel, Co-founder and CEO, Shiprocket. To resolve this issue, the company has mapped state-wise real-time information on lockdowns and curfews. In addition to this, sellers are being kept in the loop on any new developments.

Picking holes in the guidelines, Goel said that the guidelines do not provide them with the understanding or insights on whether they should ship the products or not in a specific state.

Industry experts opine that this causes the pile up of orders in warehouses and the situation has rendered resources unutilised, capacity under-tapped and manpower underworked. “Though, most companies are unwilling to retrench people as of now but all of this could compel them to downsize,” says Manish Saigal, managing director, Alvarez and Marsal.

However, companies and experts remain optimistic that industry would bounce back like it did last year when e-commerce and logistics companies had posted humongous growth just after the reopening of the economy backed up by huge cache of orders.  

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