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Opportunity Vs Risks
India’s interest and curiosity in the e-commerce retail logistics is on
a rise.
The e-commerce retail market is among India’s fastest-growing
markets and is expected to grow at a CAGR of 52 per cent to touch
USD36.7 billion by 2020.
Source - KPMG
• Erratic Buying Pattern / Consumer behaviour
• High Sales Skew during Festivity
• Surge on BIG Sales Day
• Consumer Returns
• Very High Logistics Cost
• Customer Retention
• Huge Marketing / Advertisement spent
Projection of Indian Online Line retail to
be 3 % of Total Business, need huge
investment in Logistics Infrastructure.
Air and Rail to be Critical Mode as both
are YET to be Optimized on LOAD
CONSOLIDATION
Logistics Spent of 7 % is an average mark, however the real
essence lies in managing the highest spent, which are Fragment
Freight and Courier mode.
Air and Rail- Still shows high index % on Value % terms
Customer will be lured, FAST and Pleasurable Delivery Experience,
Logistics spent
Big Question : What will make companies to reduce freight spent
below 7 %
Customer
Service
Cost of
Delivery
Suggested Way forward - Consolidation of Fastest and Highest
Spent mode
1. 72 % of Air Cargo Shipments are not Fully Consolidated
2. 16 % of Rail Cargo lacks Load Balancing between Weight &
Volume
3. Priority Shipments lead to increase in freight spent by 22 %
4. 3PL is more focused in Placing Load on Plane than Consolidating
5. Volume Based Freight Matrix is not giving opportunity for to have
Tie ups with multiple AIR LINES
6. Outer Carton Damaged Shipments are returned 99 % of the time
Commitment to Reduce the Total Freight Spent by 2 % in First Year
and Another 1 % by Next Year
Assumed Freight
Spent %
Reduction
Committed in Year
1
Reduction
Committed in Year
2
7 to 8 % 2% 1%
Committed to Reduce the % Spent by 3 % over current freight spent
Air Load
Consolidation
•Warehouse to
Warehouse
Load
•Target is to
save atleast
6-10 % on
Current air
spent through
Load
Consolidation
Managing
Priority Shipment
• Segregate
• Remove from
Bulk Cargo
which is going
under
consolidation
• Handle them
Separately
Optimize Air Vs
Rail Vs Road
• Most of 3PL
use Railway
against
claimed AIR
delivery
• 3rd Party
Vigilance will
eliminate
manipulation
and will get
Freight right
1. Data of Last one Year Air Shipment at Category , Location and
3rd party Level
2. List of unsorted issues
3. Your rating on existing 3rd Party Service Provider
4. Cost of Return Logistics and Disposal Mechanism
Data Analysis – 1 Month
Test Pilot and Recommendation
3 Months Trial
3 Year
Contract

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Logistics cost consolidation opportunity (1)

  • 2. India’s interest and curiosity in the e-commerce retail logistics is on a rise. The e-commerce retail market is among India’s fastest-growing markets and is expected to grow at a CAGR of 52 per cent to touch USD36.7 billion by 2020. Source - KPMG
  • 3. • Erratic Buying Pattern / Consumer behaviour • High Sales Skew during Festivity • Surge on BIG Sales Day • Consumer Returns • Very High Logistics Cost • Customer Retention • Huge Marketing / Advertisement spent
  • 4. Projection of Indian Online Line retail to be 3 % of Total Business, need huge investment in Logistics Infrastructure. Air and Rail to be Critical Mode as both are YET to be Optimized on LOAD CONSOLIDATION
  • 5. Logistics Spent of 7 % is an average mark, however the real essence lies in managing the highest spent, which are Fragment Freight and Courier mode. Air and Rail- Still shows high index % on Value % terms
  • 6. Customer will be lured, FAST and Pleasurable Delivery Experience, Logistics spent Big Question : What will make companies to reduce freight spent below 7 %
  • 7. Customer Service Cost of Delivery Suggested Way forward - Consolidation of Fastest and Highest Spent mode
  • 8. 1. 72 % of Air Cargo Shipments are not Fully Consolidated 2. 16 % of Rail Cargo lacks Load Balancing between Weight & Volume 3. Priority Shipments lead to increase in freight spent by 22 % 4. 3PL is more focused in Placing Load on Plane than Consolidating 5. Volume Based Freight Matrix is not giving opportunity for to have Tie ups with multiple AIR LINES 6. Outer Carton Damaged Shipments are returned 99 % of the time
  • 9. Commitment to Reduce the Total Freight Spent by 2 % in First Year and Another 1 % by Next Year Assumed Freight Spent % Reduction Committed in Year 1 Reduction Committed in Year 2 7 to 8 % 2% 1% Committed to Reduce the % Spent by 3 % over current freight spent
  • 10. Air Load Consolidation •Warehouse to Warehouse Load •Target is to save atleast 6-10 % on Current air spent through Load Consolidation Managing Priority Shipment • Segregate • Remove from Bulk Cargo which is going under consolidation • Handle them Separately Optimize Air Vs Rail Vs Road • Most of 3PL use Railway against claimed AIR delivery • 3rd Party Vigilance will eliminate manipulation and will get Freight right
  • 11. 1. Data of Last one Year Air Shipment at Category , Location and 3rd party Level 2. List of unsorted issues 3. Your rating on existing 3rd Party Service Provider 4. Cost of Return Logistics and Disposal Mechanism Data Analysis – 1 Month Test Pilot and Recommendation 3 Months Trial 3 Year Contract