How delivery & logistics business has remained resilient amid the pandemic
The delivery and logistics business are witnessing a surge as they recalibrate to operate in the new normal. While the nation battled the first wave of COVID-19 last year, delivery brands became the key aspect during this pandemic and the lockdown also saw people ordering their daily staple via e-commerce platforms, which gave a new rise to all the delivery brands in making an extra engagement with their set of customers more strongly and closely. E-commerce penetration in India is still very low and the lockdowns helped accelerate this to a large extent as people became more dependent on online deliveries in the absence of offline retail.
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Amid the pandemic, Delhivery, a leading Indian supply chain services company, managed to mop up funds. As per media reports, Delhivery has already raised $277 million (over Rs 2,000 crore) from US-based Fidelity and Singapore’s sovereign wealth fund GIC. Now FedEx has invested $100 million in the company. Delhivery is also set to go for an IPO in 2022.
According to a survey by Forbes, around two-thirds of the logistics companies expect technology innovation to deliver significant gains in productivity and performance going forward. Another 54% of the respondents believe bringing technology into the logistics journey will enhance the entire customer journey. Real-time transportation visibility platforms, for example, are enabling consumers to have full tracking of their packages from door to door – something highly valued by e-commerce customers.
Logistics services and growth trends in the pandemic times
Ketan Kulkarni, CMO and Head – Business Development, Blue Dart, remarked, “Facilitating trade and commerce plays a significant role in the success of the economy and, therefore, the demand for logistics services will always be present. With the GDP prediction leaning towards the positive next year, albeit by a few points, the sector is set to only see a higher growth rate and a lower logistics cost, making it more streamlined. Various logistics centric policies devised and executed by the Government will also help the sector take a step in the right direction and get it on par with other developed nations whose logistics cost is a mere 6%-7% of their GDP.”
Mayank Agarwal, Co-founder, Humsafar, added here, “Demand has begun to bounce back. Petrol pumps are seeing better numbers. Oil marketing companies are picking up to compensate for the loss of pace in the 1st quarter. Bowser fabrication has started to pick up. Customers are paying up dues and picking up bowsers. New orders are happening. On Diesel sales, traction is taking early steps.”
The main challenge of any logistics company is to deal with a spike in demand for their services while implementing necessary health and safety protocols for COVID-19. While the nation battled the first wave of COVID-19 last year, brands are still struggling to rework on their strategies, especially in terms of communication and brand message and thus, creativity has played a huge role here. Kulkarni informed, “Our strategy is our focused team, leveraging the first-mover advantage that we have had with our air and ground express network, thereby getting acknowledged as the trade facilitator for the nation. Our market leadership in technology and digitisation has only enhanced our service quality to have it become a benchmark for the industry.”
“From pioneering the contact less delivery service to launching our very own mobile application, ‘My Blue Dart’, we have diversified and individualised our customer care solutions. Taking this one step further, Blue Dart, as a part of the Government of Telangana’s ‘Medicines from the sky initiative’, has launched the ‘Blue Dart Med-Express Consortium’. Leveraging the use of drone technology, we intend on providing a more robust last mile delivery for health care products to regions that are difficult to access. Post the trial phase, we intend on extending these services to other states and helping everyone, including people in the most crowded cities and people in the most remote villages, reap the benefits of logistics in the new normal,” Kulkarni added.
Saahil Goel, CEO and Co-founder, Shiprocket, said, “Our GTM has always focused on providing a platform that fills the current gaps in the market and has a strong customer demand as a result. A large portion of our customers are acquired organically as they have either heard of the platform from friends or colleagues or they see our brand presence online. In addition to our great content and performance marketing initiatives, we are now also strongly focusing on brand and vernacular marketing as we look to expand our brand presence further in Tier 2 and 3 cities across the country.”
Being empathetic towards the employees has been the need of an hour. As the current scenario has been demanding for contactless delivery to keep their employees as well as clients safe in these unprecedented times, it has also led towards a digital shift from cash on delivery to online transactions.
According to Goel, “The increased demand for contactless deliveries due to the pandemic is a positive trend for the industry as a whole as the percentage of successful deliveries is increasing since there is a shift towards prepaid methods of payment and away from cash on delivery. This reduces RTO (failed deliveries) and is positive for online sellers as it increases the profitability of their business. This is also positive for us long term as more sellers become successful and look to grow their business with Shiprocket.”
Commenting on the key learnings from the lockdown period, Rhitiman Majumder, Co-Founder & CEO, Pickrr, said, “Our major learnings from the last year’s lockdown phase and subsequent unlock period is that sometimes technology-based selection of a logistics provider is better than manual selection as it ultimately improves the delivery performance. Try to engage your customer with real-time updates especially in these unprecedented times where everything should be seamless. Logistics is now entering into a new era, where customers are expecting products to move out much faster in 1-2 days from their own warehouse (similar to the Amazon Prime model).”
Speaking about the rollout of the vaccination process and the impact on the business, Humsafar’s Agarwal said, “The rollout of vaccines at a macro level would only drive the demand and also give confidence to everyone to carry out commercial activity, which is the core driver. At the micro level, unless people feel safe there is a natural inhibition to connect, work. But now with a slow and gradual increase in rollout of vaccines, things will slowly open up and we can get into business in full swing. It has already started. We all need to be disciplined nonetheless.”
Shiprocket’s Goel, too, said that the rollout of vaccines is a huge positive not just for the country, but also for the business as it is enabling more and more delivery partners to come back to work safely. “This is leading to optimisation of the supply chain and things are going back towards normalcy,” he concluded on a positive note.
(Edited by Shanta Saikia.)