Promis­ing av­enue for do­mes­tic freight

Cargo Talk - - Editorial - San­Jeet Edi­tor

the do­mes­tic cargo, es­pe­cially ex­press cargo and lo­gis­tics mar­ket is likely to re­ceive a boost with the fast emer­gence of e-Com­merce in In­dia. It is es­ti­mated that the mar­ket will grow ex­po­nen­tially in the years to come. In 2013 alone, the In­dian e-Com­merce mar­ket is ex­pected to touch US$ 11 bil­lion and an on­line shop­per base around 14.3 mil­lion con­sumers. Both sup­ply and de­mand sides are in­di­cat­ing tremen­dous po­ten­tial for the lo­gis­tics ser­vice-providers who are will­ing to of­fer seam­less sup­ply chain and de­liv­ery sys­tem for e-Com­merce sec­tor. In­dia has nearly 35 mil­lion SMEs who are not able to lever­age the power of the In­ter­net, be­cause they lack the crit­i­cal mass to at­tract cus­tomers on­line. Sig­nif­i­cantly, niche por­tals for on­line shop­ping in In­dia have es­tab­lished their por­tals with an ar­ray of ser­vices cater­ing to cus­tomers wish-lists. Stud­ies show that e-Com­merce com­pa­nies in In­dia re­alised the rea­son why con­sumers hadn’t taken to on­line shop­ping even af­ter a decade. It was be­cause there were se­ri­ous bot­tle­neck is­sues that needed to be solved. Be­cause of the lack of re­li­able lo­gis­tics and de­liv­ery part­ners, most play­ers had set up their own ware­houses across the coun­try, backed by in-house last mile de­liv­ery net­works. To get around cus­tomer’s un­will­ing­ness to trans­act on­line us­ing their credit or debit cards, they in­tro­duced and turned Cash-on-De­liv­ery into the de­fault pay­ment mech­a­nism. To re­duce the time it took to de­liver a prod­uct to a cus­tomer, they de­cided to buy and hold their own in­ven­tory, in­stead of sourc­ing it af­ter a sale had hap­pened. How­ever, dur­ing the last two years most of that with­ered away, ow­ing to es­ca­lat­ing costs to main­tain the re­quired lo­gis­tics in­fra­struc­ture. Many e-Com­merce play­ers have ei­ther closed down or have sold them­selves for peanuts in eq­uity. Re­mark­ably, the im­por­tance of third­party lo­gis­tics ser­vice providers was then re­alised by the or­gan­ised e-Com­merce por­tals. As a re­sult, the lo­gis­tics ser­vice out­sourc­ing mar­ket is cur­rently grow­ing steadily for an ef­fi­cient and spe­cialised sup­ply chain and dis­tri­bu­tion man­age­ment. The costs saved from lo­gis­tics ex­penses are now passed on to price-sen­si­tive end cus­tomers to make an on­line prod­uct com­pet­i­tive. Nev­er­the­less, the im­ped­i­ments still re­main. The com­plex­ity of cross-state bar­ri­ers, poor sur­face trans­port, ab­sent of uni­form tran­sit doc­u­men­ta­tion and mul­ti­ple taxes on in­ter-state goods trans­fers make lo­gis­tics ex­pen­sive and time con­sum­ing. Will the pol­icy mak­ers be se­ri­ous on pro­mot­ing e-trade in re­al­ity to make the cargo and lo­gis­tics in­dus­try has­sle-free, and for the greater in­ter­est of the coun­try’s econ­omy?

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