E-commerce logistics: How delivering millions of orders daily will take more than just capital to scale

In the past decade, shopping has evolved greatly for consumers over the years as the online experience has gone through several stages of improvements.  India’s e-commerce growth has soared and continues to do so, at an annual rate of 51 per cent, which is also the highest for any region in the world. The market will stand at $200 billion by 2026, and the pandemic outbreak has accelerated it. The massive growth of e-commerce, new consumption patterns, and retail models have impacted businesses in an unprecedented way. Faster and shorter demand cycles create a strong need for flexibility and agility in e-commerce logistics.

Same or next-day delivery or even four-hour express delivery options are business as usual today. This complexity and need for real-time fulfillment call for greater efficiency, speed, and accuracy, and on a larger scale. While e-commerce has made the life of consumers extremely convenient, the competition to deliver goods to consumers at a quicker pace has grown immensely. While it’s economical to transport cargo, the cost of operation tends to shoot up to fulfill such express deliveries every day across a million destinations. Conditioned to use traditional systems, responding to such changes will then be a challenge for e-commerce players. This further means high capital investments and long gestation periods while the operations continued to grapple with the onslaught of the parcel growth.

The current scenario has put a spotlight to improve last-mile logistics and modify supply chains to cater to these complexities. E-commerce companies have realized this and have developed a targeted approach to compete effectively. They are now deploying advanced technologies to strike the right balance between customers’ delivery expectations and sustaining their own profitability.

In the last few years, e-commerce logistics has evolved. Companies across the globe have seen a massive demand in these technologies, to match the dramatic evolution – in terms of volumes and value. Whether it is autonomous vehicles, drones, or GPS-monitored robots that are being developed for last-mile deliveries in the cities or inhouse robotics and automation making warehouse hubs advanced, the scenario is changing. There is the use of inbuilt RFID, GPS, and IoT, and telematics is being used for tracking inventory on the move. With the continual growth of e-commerce and deliveries becoming the norm, the pressure on supply chains is propelling the e-commerce logistics managers to adopt new solutions to enhance business agility and growth.

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Ecommerce logistics will emerge as a massive market opportunity, for new innovation and growth. As the pandemic has made it more evident, our dependence on e-commerce will only grow, and the avenues in this space will expand. If e-commerce needs to grow in India, the successful businesses of the future will need to be swift and agile enough to take advantage of technologies –to the accelerated change to help deliver millions of parcels every day.

When we talk about the future of logistics, it is all pertains to the speed of responding to market changes and staying ahead of the demand curve by leveraging operational responsiveness. To exploit market responsiveness as a strategy, it will become imperative to optimize logistics and supply chain mechanisms. With the backdrop of Industry 4.0, digitization and evolution of customer behavior, e-commerce, and supply chain evolution have a long way to go. With the infiltration of technology, e-commerce logistics will transform from what it is today. It is already transforming and the next decade. Technology will play this role – to drive more agility, productivity, and the best customer experience. It is only onwards and upwards for everyone to witness how our home deliveries become innovative!

Abhik Mitra is the MD & CEO of Spoton Logistics. Views expressed are the author’s own.