Last-mile deliveries surge in a socially distanced world

INDUSTRY OPINION

There has never been a time of greater demand for last-mile transport than the present scenario of lockdown amidst the infamous pandemic. Supply chain impediments eventually translated into challenges that citizens faced in getting their basic needs. explores the impact and way forward for the global supply chain.

The COVID-19 pandemic has put an incredible strain on global supply chain, be it, medical supplies or household goods. The pandemic is putting pressure on deliveries and local logistics and an important question which has emerged amidst the nationwide lockdown is how to maintain the flow of essential supplies. Here is a look at how COVID-19 has impacted the

last-mile deliveries. Explaining the challenges being dealt at the local level during last-mile delivery, L.R. Sridhar, Founder & Chairman, Connect India E-Commerce Services, says, “The biggest challenge is movement. The other major challenge is traditionally many of the last-mile delivery boys are not from local location, hence, they have all gone back to their home towns and it has created huge gaps in terms of manpower. However, we are able to manage the last-mile delivery in some locations because of our partnership model of delivery through local brick and mortar stores.”

Adding to the issue of shortage

of trained manpower, Rajiv Bhattacharya, COO, V Xpress, says, “Initially the biggest challenge was getting the clarity at the local enforcement agency level. However, as days passed the situation improves.”

According to Ajay Khosla, General Manager, Scorpion Group, “Despite the nationwide lockdown, the government ensures that supply of essential goods remains uninterrupted. Although, government has allowed production or movement of pharmaceutical, groceries and other hygiene products under essential category products but things are different in reality. We have witnessed various loopholes within few days of lockdown; smooth deliveries of essential goods will take few more days to get stable as logistics service providers are fronting dearth of manpower and roaring cost of hiring due to severe scarcity of trucks and significant paucity of truck drivers even after authorities approval and availability of shipment, pushing LSPs to scale down their operations. Present scenario with lockdown condition and lack of transportation movement, inventories are piling up in their current warehouses.”

Sharing the supplier point of view, Bhupendra Kumar, Head – Logistics, IOL Chemicals & Pharmaceuticals, says, “The prime objective of lastmile delivery is on-time, accurate and precision of the product when it reaches to customer. In current scenario, especially in developing countries like India main constraints are poor infrastructure, inefficient trade routes and inefficient transportation technology. We still do not have efficient consolidated trucking options. Specially, the smaller cargo loads that require LTL service face delays, in-transit damage due to multiple handling and higher cost. Commodities that require special handling such as pharma, dangerous goods, fragile goods etc. call for more planning and there are only few players equipped in handling such materials.”

IMPACT

Hence, the government has permitted the supply of essential commodities, but what about the other products that are taking space in the warehouses. On this, Bhattacharya adds, “As we can only deliver essential items, all other shipments are held up and taking the entire transit warehousing space. Cost has definitely shot up and normal routing optimisation is not working as deliveries are less and scattered and there is unpredictability of the operating areas due to frequent changing of zone’s classifications. Vehicle passes still remains a challenge and opening of warehouses are bigger problem and are strictly being monitored by local bodies for good of all of us though.”

“Rising risk of COVID-19 has created serious menace to SCM. Even after authorisation of movement of goods, service providers with lack of manpower and shortage of trucks limits the ease in complete supply chain of good. Another issue is consumers are not accepting good under doubt of getting contaminated that too when managing show with limited resources,” shares Khosla.

L.R. Sridhar Founder & Chairman

Connect India E-Commerce Services

Online buying will increase over a period of time and that will demand huge distribution network in the lastmile delivery

Kumar believes that COVID-19 pandemic has made business tougher. He continues, “With lockdowns and restrictions imposed all over world, there is shortage of carriers, service providers and manpower. Part loads specially came to stand still with labour shortage being the biggest challenge across India. Even the essential commodity delivery getting delayed due to many check points in transit. A high demand and less supply has resulted in higher cost levels than usual.”

The impact can be seen everywhere, the question remains how has the industry prepared itself for the current scenario. On this, Bhattacharya says, “We have used this time on retrospection of our entire operation and have identified various areas of enhancement which includes even the technology capability building aspect. We continue to deliver essential goods and for other nonessential consignments, our routing and prioritisation are ready and as and when the permissions are granted and customers are ready, we should be able to clear the pendency at the earliest.”

Explaining his business model of delivery, Sridhar adds, “Since the government has allowed the last-mile delivery using the brick-and-mortar stores as source of distribution point, it would create great opportunity for brick-and-mortar stores network that Connect India has already built across the country.”

SHIPPER’S PERSPECTIVE

The industry is facing several operational and logistical challenges. Sanjay Bhutani, Managing Director – India & SAARC, Bausch + Lomb explains how this nationwide lockdown has inadvertently disrupted the supply of essential services including medical devices; however, it has been imposed to prevent the community spread to a large extent. He says, “We are facing limited availability of courier services to deliver medical devices especially in the Tier 2 and 3 cities. Some courier/freight forwarding agencies are offering only airport to airport delivery in select cities. Even if we are able to locate any last-mile delivery logistics partner, they are charging surge prices. The several directives issued by the central government have not been correctly interpreted at the local administration level which has resulted in lock jam and has impacted the manufacturing, warehousing and distribution activities. There have also been instances of workforce being manhandled by police in some areas.”

Sharing the brighter side, Chand Tiwari, Regional Head – Buying and Merchandising, Big Basket, says, “For e-grocers, the surge has come despite shuttered warehouses in the early days of the lockdown. If I talk about Big Basket, we have witnessed two to three times more traffic during the pandemic. I am sure, the traffic will sustain even after post COVID-19 scenario.”

Commenting on how to ensure quality especially purchasing products online, Tiwari notes, “Despite such situation, right quality is important to us. 100 per cent quality measures are been taken at our centres.” He explains, “For staples and fruits and vegetables, we have our own collection centres at various places from where we collect the goods from farmers and all the quality parametre are been checked at these centres. From collection centres, all the material moves to warehouses overnight and we start distributing to our customers in the morning.”

Rajiv Bhattacharya COO V Xpress

As we can only deliver essential items, all other shipments are taking the entire transit warehousing space. Cost has shot up and routing optimisation is not working

Ajay Khosla General Manager Scorpion Group

Even after authorisation of movement, service providers with lack of manpower and shortage of trucks limits the ease in complete supply chain

Bhupendra Kumar Head – Logistics

IOL Chemicals & Pharmaceuticals

Logistics service providers need to increase efficiency in seamless handling. They should think for real-time tracking systems of the vehicle

Tiwari shares this piece of information at PHD webinar.

HIGH HOPES

The way forward is not clear to anyone as of now but our priority in this scenario is first to ensure safety of our entire team and secondly to ensure that we play our role of shipping the essential and necessary goods as much as we can, while being abided with law and regulations and permitted limits. We were skewed on digitisation and have further coagulated our strategy to be more of a digital workplace.

According to Sridhar, “There will be a shift in the buying habits of many households due to COVID-19 and over a period of time online buying will increase and that will demand huge distribution network in the last-mile delivery.” Explaining how it will benefit his business, he informs, “We are looking forward to expand our brick-and-mortar stores network aggressively from current 10,000 stores which would facilitate the local distribution and also identify local youth to participate as entrepreneurs in the last-mile delivery mechanism.” service providers need to increase efficiency in seamless handling. Technology could be the key to it. Scanning and online tracking systems need to be in place at every step. Service providers should think for real-time tracking systems of the vehicles which will solve major issues of transit time and handling of third-party drivers etc. This will give complete visibility of goods till end point. A digital proof of delivery that could be obtained the same moment goods are delivered will ensure against lost or mishandling issues. Extending geographical scale, route optimisation and resource sharing between the big players could help in profit maximisation and on-time deliveries. World is moving towards technology driven deliveries such as commercial drones and self-driven lockers. It’s high time that we should also think of increasing our boundaries.”

Bhutani shares the ways that could be taken to ease the pressure. He points, “Ensuring the uninterrupted supply of medical devices becomes even more important since in the absence of a vaccine or proven drug against the COVID-19, it is the medical devices industry that is shouldering the war against this pandemic. Another way of easing the pressure could be segregation of healthcare centres into COVID-19 and non-COVID-19 units. In the nonCOVID-19 hospitals, through the adequate use of PPEs and ensuring stringent safety protocols, the important surgeries could continue. This will enable the healthcare sector maintain cash liquidity, which at the moment has been greatly affected due to the pandemic.

Sanjay Bhutani Managing Director – India & SAARC, Bausch + Lomb

We are facing limited availability of courier services to deliver medical devices in the Tier 2 and 3 cities as courier agencies are offering only airport to airport delivery

Chand Tiwari Regional Head – Buying and Merchandising, Big Basket

We have witnessed two to three times more traffic during the pandemic. I am sure, the traffic will sustain even after post COVID-19 scenario