How Does India Increase Efficiency in Road Logistics?
The logistics sector is of critical importance in the sustainability of the Indian economy. It can be said that logistics feeds the whole country like capillaries. When the conditions of developing countries such as India, where e-commerce structures are increasing, are added to this, the logistics sector is growing by opening up more space for itself than ever before.
The growing market with the increase in retail sales points and the high demands of customers creates the conditions for the rapid rise of logistics in the economy. Despite these positive conditions, it is not possible to say that the sector still realizes its own potential. The main reason for this is that the logistics industry expenses in India are still high compared to global values. While the ratio of logistics expenses to the total cost is 5% worldwide, this ratio is around 6% to 10% in India.
Research on the Indian logistics industry shows that one of the most important reasons for high costs is that the industry is managed far from rational and modern methods. When the fragmented and scattered infrastructure of the sector is added to this management structure, yield losses are much higher than the estimates. Considering the loss of efficiency in the Indian logistics sector, which carries approximately 6 million vehicles and has a total value of 130 billion USD, even a small improvement in the sector has the potential to turn into big gains.
Seeing this opportunity, Delhivery, BlackBuck, Moovo, The Porter, Blownhorn etc. Startups have rolled up their sleeves to bring the Indian logistics industry to the level of the global economy. StartUps see the solution to increase efficiency in “Digitalization of Logistics”. The accelerating information exchange with digital infrastructure brings the benefits of a network that includes the actors of the sector, from Truckers to Loaders, to the entire economy.
Startups that correctly evaluate the potential and solution in the market have attracted the attention of both local and global investors. For example, Delhivery made news in the global logistics world with the latest investment of USD 100 million from Carlyle Asia Partners and USD 70 million in BlackBuck from Sands Capital, Accel and Flipkart.