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Faster, Greener & Smarter: The Keywords Defining India's Logistics Sector In 2023 In 2022, India's logistics sector continued to recover from post-pandemic losses and set the course for a new era in logistics

By Nikhil Suresh

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The pandemic saw a paradigm shift in consumer habits across the eCommerce spectrum in India. At first, doorstep delivery of essential goods was the need of the hour. While the dread of the disaster waned out, the habits stayed on. Urban consumers were not ready to give up on the comfort of getting A to Z delivered superfast to their homes.

As a result, eCommerce witnessed an unprecedented boom. Hundreds of Direct to Consumers (D2C) brands in particular, including MSMEs and homegrown entrepreneurs started emerging into the scene. Facebook marketplace, Instagram Shop and even Amazon seller portal for that matter offered them easy, virtual avenues to sell. In fact, the India's Retail and E-commerce Trends Report 2022 reveals D2C and digital-first brands clocked over 80.4% growth in order volume this year alone. Tier-II and Tier-III cities contributed to 61.3% of the market share in the eCommerce sales, which in itself grew over 20% in FY 2022, according to Unicommerce Data.

As new brands sprouted, the need for faster fulfillment also grew simultaneously, something local courier services were failing to achieve. The gap was and continues to be bridged by 3PL logistics startups like us, who offer tech-powered efficiency tailored for the modern entrepreneur.

The push from the government

In 2022, India's logistics sector continued to recover from post-pandemic losses and set the course for a new era in logistics. This was boosted by the unveiling of the National Logistics Policy, which is expected to bring in standardization in traffic management, liberation from time consuming paperwork and modern transportation infrastructure. The NLP even hints at plans to promote drone deliveries as part of sustainable & fast last mile logistics — an option we players like us have been toying with as well.

Additionally, initiatives such as Open Network Digital Commerce (ONDC) will further accelerate the eCommerce boom in India, bringing small businesses to the forefront of the Indian commercial economy. The need for last mile & hyperlocal services will increase automatically.

It is also a great step in the direction that allows players like ours to increase our merchant base in the process of bringing all the partners under one roof.

Limelight on the last mile

The wave of growth has already started, but 2023 will see more focus on last mile logistics in tandem with the quick commerce revolution. ECommerce giants and logistics players are leveraging the customer's need for ultra-fast deliveries with a razor sharp focus on covering the last mile. Brands are in a relentless

competition to reach customers faster than ever. The trend is visible in suburbs as well with increased internet penetration and rising eCommerce.

In 2023, we expect to see logistics players adopting further measures to optimize the last mile logistics. This includes the emergence of micro-fulfillment centers, the concept that we pioneered. These are small-sized warehouses located near customer's locations, each of which manages orders for a particular Pincode or radius making a stronger case of shortened delivery times.

Smarter routes, shorter times

Integrating advanced technology with supply chain operations will continue to be a driving force for the growing popularity of 3PL fulfillment companies. A variety of modern technologies, including AI, ML and blockchain, can be deployed categorically to optimize each stage of the supply chain.

For instance, we are using AI-powered route optimization software to map out the shortest and most convenient delivery routes, reducing the delivery time by hours. We hope to see increased finesse in this department as Artificial Intelligence continues to get more and more foolproof. On the other hand, IoT is finding use in creating warehouse automation softwares, that lets one manage their inventory from anywhere in the world.

Blockchain is another underrated technology that has the potential to bring forth a revolution in last mile logistics. It can be used effectively to track high value inventory, improve supply chain transparency, secure payment methods, resolve delivery disputes and even foster a fair freight marketplace.

The primary goal of using technology in logistics is simple — to make fulfillment easier, faster and smarter than ever before. However, businesses still prefer to procure free technology while only paying for the fulfillment services and we see this changing as players start to offer bundled AI/ML features with no additional cost.

Clean, green and lean logistics

The increased focus on sustainability was another defining factor for the Indian logistics sector in 2022. We hope to see continuation of this trend, as India plans to bring down the carbon footprint from the transportation sector. We can already see logistics companies relying on EV fleets. Fulfillment companies are now setting sustainability goals, with adoption of eco-friendly packaging, paperless supply chain operations and green logistics practices like milk run or micro-warehousing. Adoption of drone deliveries to fast-track last mile growth in an environment-friendly way is also on the cards.

All in all, 2023 holds the potential to disrupt the logistics sector yet again and chalk out a new path for the next decade in the supply chain. At the end of the day, the ultimate goal remains the same — to bring down the cost of logistics while optimizing the operations.

Nikhil Suresh

Co-founder and Director of Operations, Blowhorn

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