Logistics Firms See Impressive Growth Driven by Online Sales, E-commerce

Amit Singh
Amit Singh Jan 06 2021 - 5 min read
Logistics Firms See Impressive Growth Driven by Online Sales, E-commerce
The shift to online buying and home deliveries due to the pandemic has contributed to the impressive growth of the logistics segment

As the country enters into 2021 with gradual growth in economic indicators and businesses across verticals resuming operations, one thing is clearly evident – the logistics industry is the cornerstone for businesses and individuals across the world.

The pandemic has underscored the significance of logistics as the sector to instill a semblance of normalcy by ensuring that the delivery of goods doesn’t take a backseat even during the crisis. However, in the last 9-10 months, e-commerce and online sales have bolstered the logistics businesses when the contribution from other verticals was minuscule. Experts opine that the future of logistics will be driven by e-commerce.

E-commerce Boost

While at the beginning of the lockdown, the logistics businesses were impacted due to broken supply chains and restrictions, they soon recuperated with the unprecedented demand for essential items and grocery supplies. “We never shut down for a single day during the lockdown. In fact, in April and May, we delivered over 10,000 tons and 22,000 tons of essential items, respectively. By December end we delivered over 1 lakh ton of essential items across the country,” shares Abhishek Chakraborty, Executive Director, DTDC Express.

As people are avoiding community contact as much as possible, logistics firms are playing a crucial role in last-mile deliveries for e-commerce firms. With changing customer behavior and their preference for home deliveries from hyper-local and e-commerce players or local stores equipped with delivery options, there is a sudden thrust in the logistics segment.

In fact, logistics players have seen a significant spike in business led by deliveries for e-commerce firms and large offline retail brands moving online.

“Over the last few months, we have seen a huge boost in our revenues coming from deliveries for e-commerce firms and retail brands which are coming into the online deliveries. In fact, we were able to achieve 100 percent of our pre-Covid revenues in July. As the manufacturing sector resumes full-fledged operations, we are witnessing robust MoM growth over the last few months. For us, hyper-local deliveries are also going to be a huge space,” discloses Chakraborty.

Another logistics firm Ecom Express is also seeing aggressive growth driven by the changing consumer buying behavior. “We are seeing 60-70 percent increased shipment volumes from pre-Covid levels. The reason for this growth can be attributed to an influx of customers buying through online medium regularly and formal retail brands starting to execute their long-awaited digital strategies," informs a spokesperson from Ecom Express, which works as a logistics partner with various e-commerce firms.

Innovations Galore

Amid the rush for the last-mile deliveries, logistics players credit technology as the single major factor which enabled the businesses to run seamlessly. “Robust and end-to-end technology penetration enabled us to run our business smoothly. With our technology platform we are able to raise invoices, book shipments, track shipments, and collect payments from a single console. In fact, our platform offers ‘office everywhere’ facility to our partners, who can manage their business from any location,” says Chakraborty of DTDC.

The company also introduced the industry-first zero contact delivery mechanism during the lockdown. In addition, it launched MyDTDC App as a convenient way to send shipments across the world. “With over 4 lakh downloads so far, MyDTDC is all set to rewrite how parcels are booked and shipped with safety and convenience,” he adds.

Further, DTDC collaborated with a large bank to introduce a wallet for its partners in order to make the cash collection from cash-on-deliveries hassle-free. The e-wallet allows the partners to collect cash from the clients and deposit money, which gets adjusted against their outstanding payments for transshipment fee. “We are also enabling partners to collect payments in any means i.e., cash, UPI, debit/credit cards, etc, and deposit the amount into the wallet directly to enable end-to-end contact-less transactions. Over 80 percent of our partners are collecting digital payments from their clients,” details Chakraborty.

Moreover, with the delivery ecosystem growing larger and demands increasing by leaps and bounds, logistics players are electrifying the last mile delivery. To this effect, many hyper-local delivery startups like BigBasket, Grofers, Swiggy, and Zomato are slowly and steadily switching to electric mobility. The same is the case with e-commerce players like Amazon and Flipkart which are slowly moving towards an electric-enabled fleet from ICE vehicles. These players are partnering with e-mobility startups and suppliers to convert their fleet into an e-fleet. An important factor contributing to the growth of the e-mobility led last-mile delivery ecosystem is the cash factor. The cost to rent and maintain e-vehicles like e-scooters and e-carts is exponentially lower in comparison to their ICE counterparts.

Time-Definite Delivery will be the Future

Experts say that the future of the logistics and express delivery business will stride on the growth of the e-commerce sector. There will be an upsurge in the demand for time-definite delivery and the future will be positive for the logistics business.

As the sector moves towards digitization and in sync with the changing technology to ensure innovative solutions for the customers, the e-commerce sector will pave the road for a bright and active future for express logistics where the market requirements will be met at express timelines.

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