With high hopes pinned to the upcoming festive season in India, logistics companies are looking at increasing the capacities of their warehouses and fulfillment centers by 25-50% in the coming three months.
According to a report by consultancy firm Redseer, the festive season will up the sales by 28% year-on-year for the e-commerce retailers, as they expect to garner sales of $11.8 billion in gross merchandise value (GMV). The first week of the festival season itself is expected to garner sales of $5.9 billion.
Logistics startups and legacy players alike are banking on this high order inflow and prepping their supply chains for the festive rush. Transport Corporation of India (TCI) expects its capacity, resource allocation, and utilization to go up by 20-25% during the upcoming festive season.
To meet peak season demand Godrej Storage Solutions, the intralogistics business of Godrej & Boyce has also prepared itself by offering buffer storage wherein the stocks are palletized before distribution. It is offering a range of systems like shuttle pallet racking that caters to inbound and outbound buffer storage and can accommodate different SKUs at every level to enable easy retrieval of the pallet of choice.
Shiprocket has also increased its capacity by 50% from 30 to 45 warehouses both for the festive season and as part of the normal growth expected.
With this year’s festive season themed around same-day and next-day deliveries, Startups like EasyEcom and Shakedeal are also adding up warehouse capacity and manpower to ramp up their supply chain.
Godrej Interio-another Godrej company in its preparation for the festive season, to meet the rise in demand, has employed innovative technology solutions to manage its backend.
The deployed technology helps the organization plan direct despatches to larger dealers from the central warehouses with visibility and also helps make recommendations for optimizing stock levels and logistic costs.
Expecting a 3x-5x spike in demand during the festive season, Mahindra Logistics is building temporary capacity for a variety of inputs, including labor, space, tools, and vehicles throughout the supply chain. Ankur Singhai, vice president (e-commerce business), Mahindra Logistics said while speaking to financial express, “We are leveraging our range of electric vehicles for last-mile operations. To address the challenge of limited gig workers, we are providing accommodation, transportation, and meal facilities to the workforce, including migrant workers, in some cities.”
FedEx Express, during festive demand, is providing a broader range of shipping solutions and reliability of services, to enable businesses to expand their e-commerce capabilities to new markets and grow their customer base.
According to JLL India, the net demand in 2022 is likely to surpass the demand for warehousing space seen in 2021, with the first six months of 2022 seeing close to 20 million square feet absorbed versus 39.5 million square feet of net demand witnessed in the entire of 2021.
According to rating firm Icra, the overall supply witnessed a CAGR of 17% during 2016-2021 to 258 million square feet with an increase in Grade A supply mix from 30% in 2016 to 45% in 2021.