THE RATH YATRA | INDIA’S LOGISTICS CHARIOT – CAN IT BE ALL INCLUSIVE?

It’s funny how we are shrinking as a country. The eight tier1 cities see different zones trickle into one hub, and constitute a small ecosystem that flourishes on the diversity.
When I landed up in Hyderabad, I taught myself some Telugu – “Chipandi” (vaguely, in slang it means Say what), “Cheruvu”,( a lake), “Mundu In- Orbit mall” – Infront of Inorbit mall (That’s where my office is!). But when I stepped on a pooja room parapet with slippers, I heard my help exclaim – “Kan Korochu”(What are you doing?) pointing to my feet. I stepped back and was taken aback because I couldn’t put a finger, on the origin. It wasn’t Telugu. It didn’t sound like ‘Bangla’ and it didn’t sound like Gujarati and it was definitely not one of the many adapted versions of Hindi.

‘Odia’ dawned like an epiphany. I learned, that much like me, a lot of my colleagues, the people I met in Hyderabad and interacted with on a daily basis were from all over the place, within the state, outside of it, and a lot of people from Orissa. A friend from Orissa went back to see the annual procession of Juggernauts at the ‘Rath Yatra’. My help did not ask for a leave. (I have seen it twenty times since I was a child, was her reply.)

Rath yatra in Puri, India
The Demographic Juggernauts – the festivities in progress

‘Gajja’ – a variety from the prasada, was relished over a quick exchange of pleasantries and tea, when my friend returned. To my surprise, my help also came in with the same prasada in a basket. “My relatives had gone, I had told them to bring prasada. Also, saris, will get them cheaper there.”  We have all known this Jugaad our entire lives. 

Indians migrating or emigrating have relied heavily on the ‘I have space’ model to  deliver parcels to near and dear ones. Now when we are traveling more than ever,  settling out of our homes more than ever and going in and out of the remotest areas, can we actually organize this sector?  How is the parcel industry fairing and who has adapted the Jugaad into a strategic weapon – Read On –

AMAZON CRACKS THE INDIA SPECIFIC LOGISTICS –

In 2016 Amazon came up with the first FC (Fulfilment Centre). How do you crack logistics with sophisticated address locators if you have landmarks such as  ‘The Tiny Tea Stall’.  Amazon was about to launch ‘Prime Delivery’ and to break into this model, they did something as simple as replicating hyperlocal delivery with ‘Amazon Certified Packages‘. The idea was that if you had space/storage, some time and if you had any inclination of earning an extra buck, you could deliver Amazon packages for the last mile, in a radius of two to four kilometers. Now, Amazon delivers in Andaman as well.

Another local player in the organized sector, DTDC actually ferries parcels on a boat that starts every 24 hours for Andaman. They hardly use by-air shipping.

In September 2017 Amazon had 17,500 stores across 225 cities.

IS INDIA ACTUALLY DELIVERING PARCELS?

India’s shipping market is fragmented.  A large number of unorganized players contribute to 53 percent of the total shipping market in terms of spending. Among organized players, DTDC is the largest player.

In 2017 a press release stated that Mail delivery accounted for about 70% of DTDC’s deliveries, 5 years ago. Now it has come down to 20 %. 80% of their deliveries are parcels. The eCommerce boom and festive bookings account for the majority of these shipments.

All is well so far – But how does #MiddleIndia deliver? Not all of them can go prime .

Infographic on migrants and middle India
Infographic – The Numbers – Download here

THE UNORGANIZED SECTOR  – 

So what did my help do to get her Prasad and Saris? She asked a friend/relative to pick and deliver the same.
What if a Puri fisherman wanted to deliver some documents in a day, to his daughter studying in Hyderabad?
How many bottles of ‘ghar ka aachar’ can be sent to the urban daughter in law in Gurgaon from Jalandhar without a DTDC involved?

Here is something to think about – In a New Yorker article. The hotel industry blames the Millenials for Air BnBing their way to a socialist market – killing all symbolism of capitalist economies and taking out the cash flow from the specific industry but still adding it to the system. The concept of an Air BnB started as unorganized sub-letting, three young people in San Francisco wanted to make a quick buck and they saw that hotels were running short of services, so they enterprised.

The unorganized shipping industry stakes 53% of the revenue. Can there be a way to club them under a co-operative, smoothen out functions and pool resources to cut costs? Something, that doesn’t burn a small hole in the pockets with  $2 to $10 per day income?
A network of logistic firms? Who is to say that they don’t already operate the same way? For starters, we would have liked better-designed cost calculators –

The official page on the DTDC website says, that it would take Rs. 480 to deliver a parcel that weighs 2 Kg, inclusive of fuel costs and service taxes.  There could be a separate package for non-express options, customized to deliver non-perishable goods. Next, we tried looking at the Indian Mail system – Speed Post – 4 to 5 days. Package Insurance included –

Not bad, but the prasadam will definitely go bad in 4 days! The achar will survive. The documents still need an urgent delivery.
The eCommerce industry profusely bleeds money in India. Amazon manages to cut some cost with Easy Ship and ‘I Have Space’ and is replicating these models in Brazil,( LATAM). In fact, Easy Ship is being taken to the UK.

Digital Optimization is not far off, with advanced logistics involving Machine Learning models coming up. Locus.sh, is a startup that’s trying to solve logistics with GPS Data, A decision-making engine and Predictive ML works on tracking and deviation. Ultimately it automates decision making based on cost optimization. They picked the second round of investment for  $2.5 Million. The ecosystem has always been aware of the supply chain pains. However, we have all been negligent of the 10 Cr segment of migrants that could be included as a problem statement and a solution.

What we have is a real challenge, of designing affordable logistics services for at least 600 MN people.  Will it take an app that connects people to people updating the directions they are headed saying ‘I have space’ and earning some kind of credits for the same?  Or an Ola or Uber pulling a – ‘we deliver at minimal charges’ – We don’t know(Picking parcels is actually more difficult than picking people as logistics managers would tell you). Will it take a ‘Deliver On Demand’ Start-Up that doesn’t undercharge but figures out the volumes and cost ratio, maybe yes.

For starters, building an easy to use logistics calculator, comparative and including the 53% unorganized sector would be super helpful! That’s giving people an option to conveniently find their needs and delivery mechanisms. Solved on digital, infrastructure wise, logistics will need to see the unorganized sector coming up with an Amazon-like model.

The challenge is building trust and compliance and having people, subscribe to the model. Here’s a fun fact – people do trust the unorganized sector with their money. 40,000 crore in rural remittance lies with the unorganized sector( Not pay wallets). Can compliances ever get to that and what if people are actually trying to evade it?

While we may be far from solving logistics as a problem, we hope we get there before an Amazon parcel!

We will be back with more, oh and   26th July is Kargil Diwas. Stay tuned.
Also, Digital Desh Drives begin on the 15th of August. We would love to have you on board for our surveys and stories, join us as a fellow.  Fill in this form.

 

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