Promising avenue for domestic freight
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?