2016 denoted a drought for new businesses, particularly those identified with offering tech solutions in logistics and the buzz which devoured nerds, industry heirs and college friends to join over a logistics startup in India is fading.
Atleast six new businesses, to be specific, TheKarrier, Truckmandi, Trucksumo, Loadkhoj, Zaicus and Sastabhada, all managing truck conglomerating for intra and inter-city transport have pulled the plug on their operations. The difficulties are numerous and it significantly comes down to the fracture of the Indian logistics sector and the powerlessness of technology alone to make the physical business happen.
Since the vast majority of these new companies look to benefit from the on-demand component for trucks, time turns into a vital player and on account of intra-city logistics that involve for the most part mini trucks for organizations and individuals, a worthy delay does not look good.
Since the appearance of Ola and Uber in the Indian startup commercial center, yearning business people have all discovered innovation total appealing to add to their plans of action and catch investors attention. Yet, the quantity of such new companies closing shops proposes that is insufficient.
“Various such new companies fizzled in light of the fact that they didn’t take a full stack perspective of the Indian logistics segment. Simply including a thin layer of technology does not tackle the profound issues, for example, nonavailability of drivers and divided truck ownerships. We are extremely bullish about putting resources into logistics sector in the future however we’ll take a gander at organizations that have a full-stack view before they venture,” Mukul Arora, overseeing chief, SAIF Partners said to Economic Times.
It is extensively assessed that the Indian logistics market will be worth $ 307 billion by 2020. Nonetheless, expanding overheads like stock holding expenses and transaction costs and the fact that India spends around 14-15 percent of its GDP on logistcs and transportation when contrasted with under 8-9 percent costs brought about by other developing nations have guaranteed that domestic logistics players don’t have a competitive edge over their global peers.
A divided and immature framework has stalled the potencies of the sector. Substandard physical and communication infrastructure has hampered the operational transmission capacity of logistics service providers (LSPs) in India.
In spite of the fact that exemplary initiatives have been embraced by the government for boosting infrastructure development with the fast-tracking of projects like the golden quadrilateral venture, setting up of Free Trade Warehousing Zones (FTWZs) alongside Special Economic Zones (SEZs), infrastructural development in the nation has not kept pace with the fabulous development of the logistics division.
With a specific end goal to boost infrastructure organizations to give world-class comforts, the government ought to remove Minimum Alternate Tax (MAT) that the organizations are required to pay on their book profit. This will pull in tremendously required subsidizes in the infrastructure segment and lift the skills of the logistics sector.
With IT platforms driving the operational rules for the logistics sector, there is an urgent need to shape a data cell which would relay demand and supply figures of container racks at several ports and Inland Container Depots (ICDs) across the nation.
With the nation’s economy developing at a marvellous rate and the logistics division playing a salient role in managing and exciting the development force, there is an earnest need to figure a world-class multimodal logistics system in the nation.
The government needs to embrace an all encompassing review for beating the difficulties and propelling the capabilities of the logistics sector as opposed to adopting a piecemeal strategy to individual difficulties.