Relevance Of Technology In Cargo Services
Harshal has been associated with Xpressbees for over eight years now, prior to which he has handled key responsibilities across Blue Dart Express, Aramex, Babyoye, and Gati.
The Macro Perspective
India's cumulative energy consumption from freight trans-port between 2020 and 2050 under a Business As Usual (BAU) scenario will be around 5.8 billion tonnes of oil equivalent (TOE). Increasing the share of rail transport, optimizing truck use, and promoting use of fuel-efficient vehicles and alternative fuels will also lead to the following benefits:
·Reduced Logistics Costs India has set a target of reducing the logistics costs as a share of GDP from 14 percent currently to 10 percent by 2022 which can save up to Rs.10 lakh crore.
·Reduced Carbon Emissions & Improved Air QualityIndia can save 10 giga tonnes of CO2, 500 kilo tonnes of particulate matter (PM) and 15 million tonnes of NO2 caused by freight transport by 2050.
·Improved mode share and efficient logistics can reduce the vehicular-freight activity by 48 percent in 2050 over a BAU scenario.
The Cargo Market Key Driving Factors
Cargo industry has a major role in the paradigm shift. Car-go industry is on the verge of vast digital change, driven primarily by the shifts in consumer and supplier demands. Below are the key market requirements and trends –
Individual to Organized Players: Currently, 75 percent of cargo market is unorganized and rest is managed by organized large players. Company and business houses are preferring the organized partners over individuals for service level reliability, scale and cost.
Cost Competitiveness: Apart from hyper competitive market, companies' and Govt. of India's key agenda is to reduce the overall logistics cost to GDP ratio which is high in India (14 percent) as compared to Global Peers (eight percent).
Government Push On Clean Energy, Evs & Transport Infra
Covid has Accelerated the Technology Adoption: Most brands are going D2C, need visibility and are using omni-channel as a strategy to reach to Customer through all possible channels.
The Startup Shakeup: New entrants become significant players and are taking market share from the incumbents through new business models based on data analytics, blockchain, or other technologies. Last-mile delivery becomes more fragmented, with crowd-delivery solutions gaining much of the ground. These startups collaborate with incumbents and complement their service offers.
Technology for Cargo Business: Adopt or Perish
Technology is key pillar to fulfill market requirement to provide service level, cost and visibility across the cargo and related industry.
·Visibility:Complete visibility of shipment tracking across the complete value chain starting from the consignee to the logistics partners across each node.
·Geolocation Capability:Tracking and usage of Maps, GPS, and IoT Technology to provide real time tracking of shipments physically present in an area or across a defined area (Geo Coding) conducting various transactions.
·Improved Safety Using Technology:Based upon sensors and data analytics companies can figureout safe routes, less damages and driver behavior analysis across the route.
·Route Optimization: Optimize complete route to reduce overall cost and avoid roadblocks, thus resulting in mini-mum time to travel.
·Digitization of Documents by means of E-Waybill, EDI, POD, E Copy, Challan and others.
·Transparency in Payment & Billing:To reduce cash handling, speed-up overall cash payment cycle and make it more efficient and automated.
·Vehicle Space Utilization:Selection of appropriate capacity vehicle based upon route volume, destination points, and optimum utilization of space across the route.
·Electric Vehicles:The Indian Electric Vehicle market was valued at $5 billion in 2020, and it is expected to reach $47 billion by 2026. Currently, the major market is towards two-wheelers and passenger segment. However, there has been a significant traction in EV for Cargo, especially in Last Mile, which will ultimately lead to Electrification of LH and larger commercial sized vehicles as well sooner than expected.
As technology continues to evolve and advance, businesses must adapt and change with the times for survival and growth.
The Macro Perspective
India's cumulative energy consumption from freight trans-port between 2020 and 2050 under a Business As Usual (BAU) scenario will be around 5.8 billion tonnes of oil equivalent (TOE). Increasing the share of rail transport, optimizing truck use, and promoting use of fuel-efficient vehicles and alternative fuels will also lead to the following benefits:
·Reduced Logistics Costs India has set a target of reducing the logistics costs as a share of GDP from 14 percent currently to 10 percent by 2022 which can save up to Rs.10 lakh crore.
·Reduced Carbon Emissions & Improved Air QualityIndia can save 10 giga tonnes of CO2, 500 kilo tonnes of particulate matter (PM) and 15 million tonnes of NO2 caused by freight transport by 2050.
·Improved mode share and efficient logistics can reduce the vehicular-freight activity by 48 percent in 2050 over a BAU scenario.
The Cargo Market Key Driving Factors
Cargo industry has a major role in the paradigm shift. Car-go industry is on the verge of vast digital change, driven primarily by the shifts in consumer and supplier demands. Below are the key market requirements and trends –
Individual to Organized Players: Currently, 75 percent of cargo market is unorganized and rest is managed by organized large players. Company and business houses are preferring the organized partners over individuals for service level reliability, scale and cost.
Cost Competitiveness: Apart from hyper competitive market, companies' and Govt. of India's key agenda is to reduce the overall logistics cost to GDP ratio which is high in India (14 percent) as compared to Global Peers (eight percent).
Government Push On Clean Energy, Evs & Transport Infra
Covid has Accelerated the Technology Adoption: Most brands are going D2C, need visibility and are using omni-channel as a strategy to reach to Customer through all possible channels.
The Startup Shakeup: New entrants become significant players and are taking market share from the incumbents through new business models based on data analytics, blockchain, or other technologies. Last-mile delivery becomes more fragmented, with crowd-delivery solutions gaining much of the ground. These startups collaborate with incumbents and complement their service offers.
Cargo industry is on the verge of vast digital change, driven primarily by the shifts in consumer and supplier demands
Technology for Cargo Business: Adopt or Perish
Technology is key pillar to fulfill market requirement to provide service level, cost and visibility across the cargo and related industry.
·Visibility:Complete visibility of shipment tracking across the complete value chain starting from the consignee to the logistics partners across each node.
·Geolocation Capability:Tracking and usage of Maps, GPS, and IoT Technology to provide real time tracking of shipments physically present in an area or across a defined area (Geo Coding) conducting various transactions.
·Improved Safety Using Technology:Based upon sensors and data analytics companies can figureout safe routes, less damages and driver behavior analysis across the route.
·Route Optimization: Optimize complete route to reduce overall cost and avoid roadblocks, thus resulting in mini-mum time to travel.
·Digitization of Documents by means of E-Waybill, EDI, POD, E Copy, Challan and others.
·Transparency in Payment & Billing:To reduce cash handling, speed-up overall cash payment cycle and make it more efficient and automated.
·Vehicle Space Utilization:Selection of appropriate capacity vehicle based upon route volume, destination points, and optimum utilization of space across the route.
·Electric Vehicles:The Indian Electric Vehicle market was valued at $5 billion in 2020, and it is expected to reach $47 billion by 2026. Currently, the major market is towards two-wheelers and passenger segment. However, there has been a significant traction in EV for Cargo, especially in Last Mile, which will ultimately lead to Electrification of LH and larger commercial sized vehicles as well sooner than expected.
As technology continues to evolve and advance, businesses must adapt and change with the times for survival and growth.
