The logistics sector in India is experiencing rapid growth. The country’s expanding economy, growing foreign trade, and startup innovation fuelled the growth. The Indian logistics market was estimated to be valued at USD 435.43 billion in 2023. The e-commerce, retail, and automobile sectors primarily drive the growth. Logistics expenses in India are estimated to be approximately 14 per cent of the country’s Gross Domestic Product (GDP).
The Indian government hopes to bring this down to 8 per cent by 2030 through policy initiatives. The aim is to enhance the efficiency of the Indian logistics industry and make the sector competitive. The future of Indian logistics will be driven by technology startups focusing on improving the end-user experience.
Enhancing Customer Experience Through Innovative Startups
With the evolution of technology, businesses worldwide are changing how they operate, and the logistics industry is no exception. Today, customers expect everything to be available online and at their fingertips.
From pioneers like Amazon, who offer fast-paced delivery services, to startups using advanced technologies, these developments are revolutionizing the logistics industry. These advancements benefit all areas of logistics, across supply chain management and shipment tracking, all focusing on improving the customer experience.
Transforming Consumer Behaviour with D2C
The emergence of the Direct-to-Consumer (D2C) segment has driven startups’ adoption of innovative technology-based solutions. The surge in online retail has led to a shift in consumer behaviour. The impact of the pandemic has further accelerated the demand for D2C, resulting in the development of a new dimension of retail experience driven by customer preferences.
Take the case of Exprs, a last-mile logistics startup that assists e-commerce brands, delivery companies and D2C players in making their last-mile operations efficient. It also significantly reduces the entry of strangers into gated communities and allows customers to access various logistics services, such as delivery, courier, and on-demand services. The app enables customers to track their parcels in real time.
Another such startup is Shipmantra, a super-app for logistics services across India. The startup aims to address the lack of technology penetration presently plaguing the Indian logistics sector and has a keen focus on customer experience.
Revolutionizing Customer Satisfaction With IoT
The impact of the Internet of Things (IoT) has been felt across various business sectors, including logistics. The logistics industry has undergone significant changes due to adopting IoT-enabled technologies.
By leveraging IoT, companies can track the location and temperature of goods in transit. IoT sensors can be installed in trucks to monitor their location, while businesses can use IoT to track the condition of goods and ensure safe handling. These capabilities can help optimize logistics processes, manage inventory levels, and reduce costs while improving efficiency, customer service, and decision-making speed.
Tagbox, a Bengaluru-based startup, has created a cloud-based solution to monitor shipments while they are in transit. The solution employs IoT-based sensors to capture real-time information on crucial parameters like temperature. It uses machine learning and AI algorithms to send alerts about potential risks and anomalies. It enables stakeholders to take corrective measures and prevent the shipping of damaged products.
Another Bengaluru-based startup, Blowhorn, aims to provide last-mile logistics services with a commitment to same-day delivery. The startup leverages cutting-edge technologies such as AI/Ml-optimized routes and re-evaluates shipping practices. The startup believes reducing delivery time can be instrumental in meeting customer expectations in today’s fiercely competitive market.
Redefining the Logistics Landscape with Drones
The idea of a computer taking over the steering wheel and driving you to your destination or receiving a package delivered by an uncrewed aerial vehicle may seem like a scene from a futuristic movie, but it’s becoming a reality.
Autonomous cars are already in use, and self-driving trucks are on the horizon. Amazon has also introduced a new concept of drone delivery service called Amazon Prime Air. Although regulations and costs may delay drone deliveries for a few years, the prospect of not waiting hours for package delivery is quite enticing. For now, Indian drone startups are sticking to the field of healthcare.
Earlier this year, the drone startup Skye Air Mobility, based in Delhi, partnered with Redcliffe Labs to conduct drone flights transporting diagnostic test samples from Uttarkashi to Sahastradhara (Dehradun) in Uttarakhand within a 90-minute timeframe. By road, the same distance can take six to eight hours and up to 12 hours during landslides. The Telangana government launched a comparable initiative called “Medicine from the Sky” in 2021 to use drones to deliver medication to remote areas.
Earlier in February, T-Hub selected ten startups for India’s first-ever accelerator program dedicated to drone technology, the AWS-Intel Innovation Pod for the Drone-tech Accelerator program. The Telangana State Innovation Cell (TSIC), with support from Amazon Web Services (AWS) and Intel, the program empowers startups by providing them with the necessary tools and skills to promote the adoption of drone technology in India. The key focus areas in the use case of drones are transportation and logistics, which ultimately improve customer experience.
3D Modelling For Drones
Some startups are even combining the capabilities of drones with 3D modelling technologies to create digital twins. The underlying technology of digital twins offers enterprises the potential to enhance their supply chain processes by creating their digital replicas using sensors and IoTs.
Such disruptive innovations can provide enterprises with insights that can assist with cost management, improving availability, and reducing lead time in operations. Improvement in these metrics can help increase the resilience of supply chains in the future.
By adopting digital twins, companies operating in the logistics and manufacturing sectors can embrace a comprehensive and integrated approach to managing warehouses, inventory, and products throughout the supply chain. Startups like Paninian are working closely with the defence sector to create a digital twin of Aero-Engines for cruise missiles and large UAVs.
Driving Sustainable Logistics with Tech
The global transportation industry is a big polluter; the passenger and freight transport sector accounted for 37 per cent of CO2 emissions globally from end‐use sectors in 2021. This is without considering the emissions from warehouses and ports. A substantial change is required to promote sustainability in the logistics sector. Customer expectations, too, have changed; a McKinsey survey suggests that consumers care about sustainability and are willing to support it in their purchasing decisions.
Startups are leading the way in promoting sustainability and undertaking green initiatives in the logistics sector with their innovative technology solutions. Some of the significant innovative solutions in Electric vehicles (EVs) and autonomous delivery vehicles to improve battery efficiency and reduce vehicle emissions have come from startups. They are utilizing data analytics and machine learning to optimize last-mile delivery routes; the technology improves supply chain transparency and traceability.
Startups are also working on sustainable packaging solutions to minimize waste generated during shipping and handling. Several startups are innovating in waste management and recycling, and their solutions are applicable in the logistics sector.
To conclude, the Indian logistics industry is witnessing a significant digital transformation led by startups and the trend is set to continue. Startups have emerged as critical players in this sector, providing innovative solutions that enhance customer experience and optimize supply chain and logistics processes. As technology evolves, the logistics industry will undoubtedly experience further changes. Startups will play a crucial role in using technology to drive these advancements sustainably.
