Getting ready for e-commerce 2.0: Seeing a change in type of vehicles purchased to cater to growing sector

Published: May 16, 2019 12:20:30 AM

The number of intraregional and last-mile truck trips has increased, while the average length of haul has declined. Motor carriers must operate with faster turnaround times

Trucks manufactured for the e-commerce sector must now accommodate each shipment’s weight, dimensions, distance to destination, delivery requirements, special handling needs, and other direct-to-customer variables. (Representational image)Trucks manufactured for the e-commerce sector must now accommodate each shipment’s weight, dimensions, distance to destination, delivery requirements, special handling needs, and other direct-to-customer variables. (Representational image)

By RT Wasan

The online retail market in India has grown by leaps and bounds from a nascent state in the mid-2000s, to its current size of $19.5 billion worth of transactions at a gross level. Along with it, consumer behaviour has also evolved, wherein e-commerce initially was more of a heavily discounted marketplace, to today where many users are seeking convenience of ordering products from the comfort of their homes, rather than visit physical stores.

With this growth trajectory of the e-commerce retail industry, the logistics sector has witnessed an upward trend. The e-commerce retail logistics market, valued at $1.35 billion in 2018, is projected to witness a growth of about 36% in the coming five years.

As the demand is consistently increasing, the delivery points are also on a rise, and so are time-bound deliveries. The number of intraregional and last-mile truck trips has increased, while the average length of haul has declined. Motor carriers must operate with faster turnaround times, and contend with external factors such as weather, traffic congestion and warehouse delays.

As the trucking industry evolves to accommodate omni-channel retailing, both in terms of shorter trip lengths and the types of products being shipped, we’re also seeing a change in the type of trucks purchased to cater to the growing e-commerce sector.

Trucks manufactured for the e-commerce sector must now accommodate each shipment’s weight, dimensions, distance to destination, delivery requirements, special handling needs, and other direct-to-customer variables. This is besides the driver comfort and safety, which also plays an integral part in customising vehicle design. Both motor carriers and equipment manufacturers are experimenting with a variety of new technologies to address the challenges created by urban package deliveries, including drones, delivery robots, smart cargo compartments and even autonomous delivery vans.

In the Indian scenario, here’s what could make us future-ready:
Trucks are running at high speeds, carrying high loads. Warehouses are going out of the city and the wait time is increasing. Hence, trucks needs to be more powerful and need to be re-engineered to increase fuel efficiency.
Goods worth lakhs are carried every day. For increased visibility and security, cargo bodies need to be built with cameras, OTP lock, CCTV in the cabin and anti-theft sensors.
Driver availability is a huge concern today and, therefore, there needs to be higher stress on reducing driver fatigue through AMT technology, power steering, AC cabins and comfortable seats.
Small commercial vehicles need to be built shorter in size with moveable multiple partitions inside the container and with higher payload for convenient door-to-door deliveries.
Intermediate and light commercial vehicles (ILCV) and medium and heavy commercial vehicles (MHCV) need sleeper cabins for non-stop running in long hauls.
The demand of electric/hybrid vehicles may come up in the near future.

Going forward, the growth of this sector will also depend on the growth of other sectors, including steel, cement, agricultural products and petroleum. Improved road connectivity to villages and better road conditions will help the e-commerce industry to penetrate the deep ends of the country very soon. With the introduction of GST, e-commerce players have better governance with the government creating a level-playing field for the industry, giving a fair chance to all the retailers and also upholding business growth. In the near term, expanded use of electric vehicles seems to be a natural extension of alternative energy-based e-commerce deliveries as part of efforts to address issues such as air quality and noise pollution.

For commercial vehicle players, the credit lies in offering sophisticated solutions to simplify customer requirements while also valuing driver comfort and well-being. India’s logistics market is different and hence the need is different. We need to think out of the box to resolve the pain points of logistics and its traditional ways. It’s entirely possible to out-compete the market as the industry is yet quite untouched.

Author is vice-president, Sales & Marketing, CVBU, Tata Motors. Views are personal

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