Intracity Logistics – What’s the big deal?

SDASAS

Did you ever get struck with an idea which you felt would create a lot of value for the consumers and other stakeholders but then you rejected it because logistically, it did not make sense. To put it differently, the logistics services available in the market at that point of time weren’t up to the mark to support the disruption you had in mind.

Meet Mr. Bhavik. Bhavik wants to set up a business of selling furniture online. Bhavik has a good experience in the industry. He knows the market, understands the customers, understands the supply side and has a strong network of carpenters and a solid design team on-board with him. Still Bhavik is not able to start because he is not sure how he is going to deliver the furniture to the end customers. He tried contacting standard logistics providers but couldn’t find a suitable solution for himself. Then he turned to 3PL agencies but no one is interested in working with Bhavik because the scale of operation is too small for them to consider. He then investigated the case with local transporters but got scared of their way of functioning and poor service levels. Now, Bhavik has no choice but to start a logistics company along with a furniture business.

Logistics in India is at a very nascent stage and intracity logistics is still taking shape. Intracity logistics is not just about delivering parcels in 30 minutes. It is about solving the actual business challenges such as faced by Mr. Bhavik or any other business for that matter. It is about building capabilities to seamlessly execute any sort of goods movement irrespective of its scale and size. Intra-city logistics is $ 30 Billion market and organized players (all the new age start-ups combined) has lesser than 1% of representation in this big pie.

Looking at the current scenario, majority of intracity logistics industry is ruled by local transporters.  There is literally no technological intervention, no standard process, no transparent pricing and no quality service. Big organizations have the bandwidth to dive into the last mile logistics operations or at least they have enough bargain to enforce their service standards on transporters they appoint for the job, But small and medium enterprises has no choice but to kill there expectations. There is a strong need for comprehensive, hassle-free and cost-effective intracity goods movement service which is free of the constraints of size, shape and volume of the goods.

If every other retailer/trader/manufacturer is not able to grow his business because of the logistics problems, then it is a big dent on the Nation’s economy. Recent few years has marked the beginning of evolution of intracity logistics. There is so much that this industry is yet to see. It will not happen overnight. But every step taken in this direction will have a strong positive effect on business environment and nation’s economy.

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