Exactly, How Broken is India’s Last Mile Logistics?
Vaibhav’s interview, with an international broadcaster last week, provided an opportunity to reflect on this question
Speaking with Deutsche Welle, Vaibhav commented, “I would say, these problems can only be solved with technology. In the long term, yes, the government needs to take actions according to it, but in the short term, technology is the only thing that can help businesses move faster.”
Watch the full clip here:
Speed and efficiency are two key performance indicators in the logistics sector. They grow even more important at the last mile, which is often referred to as ‘The Moment That Matters’.
The speed and efficiency of the delivery at customer’s doorstep directly impacts the customer satisfaction for a retailer. Naturally, it is an imperative for a company like Shadowfax to solve the challenges and make it easy for its partner retailers to manage deliveries, as well as returns, seamlessly.
Broadly, the last mile intra-city logistics sector has 5 main challenges that are unique to the sector. Shadowfax’s attempts to solve these challenges are also mentioned alongside.
Growing E-commerce Demand
E-commerce is growing 30% every year for the last few years now. The 3 cities of Bengaluru, Mumbai and Delhi are responsible for ~40% of all e-commerce orders. This translates into a large number of shipments which affects delivery efficiency, especially without a technological system in place.
Since bringing the Nuvo Ex team on board, Shadowfax has expanded its capacity to manage 90,000 shipments daily across 75 cities, which includes everything from grocery to electronics to foods and clothes. An average Shadowfax delivery partners managing e-commerce shipments manages 10–15 pickups or deliveries every day. In the city of Mumbai, delivery partners manage 20–30% higher than this on a regular basis.
Crowded City Streets
Delhi and Mumbai have 12,000 and 30,000 people, respectively in every square kilometre. I find this fact horrific in and of itself. However, the problem assumes an even larger consequence when you factor in for the mode of transport people use inside the city.
We have, what experts regard, as heterogenous traffic conditions in Indian cities. Next time you’re in a cab, take a panorama shot from your smartphone. It’ll show you bikes, cars, buses, bicycles, rickshaws, animal-drawn vehicles, and pedestrians in the same shot.
What this means is that the vehicles are frequently logged on city roads and register a measly average speed within the cities. Ola recently shared that the average speed has dropped to 17.2 kmph from 20.4 kmph last year.
Shadowfax tackles this challenge with technology, crunching traffic and location data for the delivery partners on a regular basis. This allows Shadowfax to use artificial intelligence and predictive analysis to optimise delivery paths and times for the delivery partners.
Skill Development Gap
The digital skills aren’t exactly native to the delivery partners and can easily overwhelm them in absence of training and on-boarding.
Shadowfax pays an undivided attention to the user experience for its delivery partners. Also, the training and on-boarding programs are designed for its audience. These initiatives have helped the company build a trust-based network that brings in quality partners shows the lowest month-on-month attrition.
Inaccurate or Confusing Addresses
Kabir Rustogi has written about decoding the problem of unstructured indian addresses. He notes that the median area covered by a pin-code is 90 sq km and may contain upto a million households.
Shadowfax delivery partners also report pin codes, house numbers and landmarks that are either inaccurate or confusing. In an 8 hour shift, involving 40+ deliveries, this problem wastes valuable time for the delivery partners. Besides, confirming addresses isn’t exactly a source of delight for the customers either.
A failure to locate address correctly, also breeds inefficiencies in related processes like route planning, locating the nearest fulfilment centre and delivery partners. Shadowfax is solving this problem with technology in its on-demand solution. Shadowfax delivery partners are currently able to deliver 98% of food orders and 85% of e-commerce orders in the first attempt.
Poor Vehicle Utilisation
70% of the last mile logistics sector is made up of small vendors and driver-cum-owners. A survey conducted by Shadowfax shows that this unorganized market is plagued by supply chain inefficiencies keeping the average utilization of the ecosystem at a lowly 35%. These inefficiencies can be grouped under three broad heads: Ineffective route planning, improper space utilization and concentrated demand at the peak times.
Last July, Shadowfax launched InstaHulk, India’s first mini-truck network completely driven by technology. Shadowfax’s technology has helped the delivery partners utilise their vehicles 75% of the time they spend on the road.
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Is there a unique challenge you see that I missed out on the list? Let me know in comments and responses.
