Logistics - the key to winning consumer loyalty

Pushkar Singh, CEO & co-founder, LetsTransport, writes about the government initiatives changing the dynamics of the logistics industry and the technology disrupting the sector.

Logistics is more than just transportation. It is an important step between a brand and its customers. No matter how good the product is, if it doesn’t reach the customer on time, the brand can’t sustain its loyalty. Cognizant of this, the past year saw many FMCG, retail and pharma companies focusing on enhancing customer experience by reducing product delivery cycles. More efficient and transparent supply chains provided by logistics providers, have become the need of the hour, positioning the logistics industry to reach the $215 billion mark by 2020.

However, the sector continues to be high on expenses, draining almost 14 percent of the GDP. Lack of integrated transport networks, information technology and warehousing facilities continue to plague the fragmented sector. Furthermore, different regulations imposed by national, regional and local authorities hinder the smooth functioning of national networks. In a bid to reduce logistics costs, the Indian government has implemented many policies and infrastructure measures to sustain the industry’s growth.

Government becomes a benefactor to the logistics sector
Policy interventions like the Goods and Services Tax (GST) has changed the dynamics of the industry. With uniform tax liabilities and e-billing, GST has facilitated seamless movement of goods between states. It has also encouraged logistics companies to set up big warehouses instead of small ones across multiple cities.

With almost 60 percent of Indian logistics vested in road transportation, key infrastructure development projects like Bharatmala and high-speed, freight-only corridors have tackled many of the industry bottlenecks by improving and decongesting road connectivity. These initiatives have also enabled partner companies to tap into formerly inaccessible markets.

Yet, India still ranks 35th in the World Bank’s Logistics Performance Index (LPI). In order to compete more effectively with countries like the US, China and Japan, India needs to tackle the low efficiency of trade logistics, by adopting tech-enabled processes to streamline the sector.

Technology disrupts conventions holding back the logistics sector
Historically, the logistics sector has been mired in manual processes. Planning was relegated to phone calls and travel routes were spontaneously made by truckers on the go, resulting in multiple delays. Furthermore, these practices weren’t robust enough to scale operations beyond hyperlocal deliveries. Today, technology has become an inextricable part of the supply chain, disrupting these archaic conventions. Artificial Intelligence (AI), Internet of Things (IoT), and Big Data analytics have enhanced productivity across the supply chain spectrum, by reducing cycle times, facilitating efficient documentation and above all by offering greater control over the vehicles transporting goods.

Delay can spell death for businesses
In the age of empowered customers, who can access information at the click of a button and choose between multiple options, delay can spell death for businesses. Cognizant of the need to fulfill the demands of the customers for instant ownership of their purchases, companies have started outsourcing their logistics operations.

Logistics providers have the ability to scale the three key features of logistics – transportation, labour and space – according to the company’s needs. Tech-savvy drivers, GPS-enabled trucks and real time tracking offered by them has enabled companies reach their customers on time, reducing churn rates and fostering brand love. Furthermore, they help in optimising costs and administrative resources, by reducing downtimes, and planning delivery routes more efficiently. They operate good warehouse management systems, to reduce the chances of theft, embezzlement and other forms of "merchandise loss". In addition to streamlining the distribution processes, logistics providers also engage in training the labour force associated with them. This has consequently empowered the community of truck drivers, improving the overall service quality of the sector, transforming logistics into a capability rather than a commodity.

Pushkar Singh is the co-founder of LetsTransport, a series-B funded, last-mile tech-logistics solution provider for intra-city deliveries based in Bangalore. It was founded in 2015 by IIT-Kharagpur alumni Singh, Sudarshan Ravi and Ankit Parasher. LetsTransport aggregates light commercial vehicles for urban logistics and have 35,000+ truckers on its platform.