Third Party Logistics becoming the linchpin of Ecommerce growth


Logistics which was traditionally considered as the procurement, maintenance, and transportation of military equipment and personnel has now evolved as the backbone of business entities. Logistics being extensive and exhaustive in nature require adept knowledge and management, has paved way for third party logistics in Logistics industry in past times.

With the speedy growth of Ecommerce industry, Third-party logistics is up-and-coming as pivotal factor in growth for ecommerce players like Flipkart, Snapdeal and various other e-tailers which are focusing to augment their core competencies as retailers and prefer outsourcing their logistical requirements. To cater the online retail company’s demands, many new logistics companies targeting on e-commerce shipments have formed a new business segment acknowledged as ‘e-Commerce logistics service provider’.

The mushrooming e-commerce sector has put significant pressure on logistic companies so that they can guarantee the right product delivery in the shortest time at the lowest possible cost. India’s largest online marketplace, Flipkart has broadened its horizons into logistics with Ekart and partnerships with MapmyIndia and Blackbuck. Snapdeal has acquired a Delhi based logistics company Gojavas and Amazon works with support of BASIX. Mr. Nagesh Rao, Director of projects and Real estate Flipkart, believes for breaking the “Hindu rate of Growth” the ecommerce companies need to increase their investment towards warehousing and first- and last-mile connectivity. Speaking on the sidelines of the CII-CBRE conference on industry and logistics, Mr. Rao further adds that the biggest loophole with infrastructure is that it has not registered desired augmentation in terms of warehouses in the country. He believes that the growth rate of ecommerce and infrastructure should be in equilibrium. He even alleges that many logistic companies started as ecommerce companies but due to challenging multi facets of present day ecommerce they had to orient themselves as warehousing and logistics.

Ram Chandnani, MD, advisory and transaction services, CBRE, shares his opinion saying that the primary goal of online portal is selling but without the adequate support of logistics and infrastructure last-mile connectivity is not possible thus they diversified into it. He also revealed that ecommerce companies are seeking opportunities towards partnerships and outsourcing logistical support to third parties and thereby ensuring an integrated and efficient supply chain.

The third party logistics companies are evolving as a requisite element in the Indian digital market giving facilities of Storage, maintenance and delivery, Risk mitigation, Multi-mode transportation , facilitating cash on delivery and promoting their overall growth.

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