2022 Wrapped: Here Are Top 10 Logistics Trends That Defined The Year

2022 has been a year of new beginnings for the Indian logistics industry. It is the year logistics companies bounced back from the post-pandemic slump and set out to recover from their losses. The year also witnessed steady growth in eCommerce, with the spotlight on quick commerce and last-mile logistics. The latter part of 2022 saw the government extending generous support to digital commerce and logistics, through initiatives like Open Network for Digital Commerce (ONDC) and National Logistics Policy (NLP).

Looking back, we can confidently assert that 2022 has been a good year for India’s logistics sector. From the increased focus on supply chain sustainability to extensive experimentation with drone deliveries, here are the top trends that defined logistics this year.

1. Greener transportation and supply chain

The amount of greenhouse gases generated by India’s transportation sector has nearly tripled since the 1990s, accounting for over 14% of our total energy emissions. The problem is quite severe if we take into account the massive carbon footprint left by India’s booming supply chain.

In 2022, there was a rise in awareness around cleaner and greener logistics practices, with a nudge on electrifying India’s cargo transportation. Logistics and transportation startups unveiled their fleet of electric (EV) and clean energy vehicles. At Blowhorn, we converted 30% of our fleet to clean fuels and took the pledge of running 100% of our fleet on clean energy by 2025.

In addition, other green practices like solar-powered warehousing, eco-friendly packaging, and paperless invoicing were also adopted widely.

2. Third-party logistics

The concept of third-party logistics (3PL) took off in India only a few years back. In 2022, India’s 3PL market reached a staggering $58.4 Bn in valuation, with a projected annual growth of 7.42%. By 2027, the market is estimated to reach more than $83.53 Bn.

The 3PL market is primarily driven by manufacturing, FMCG, retail, and eCommerce sectors — all of which experienced commendable growth this year. Keeping in mind the needs of the modern Indian entrepreneur, 3PL service providers are also improving their operational speed with the incorporation of technology.

In the coming days, the development of infrastructures like logistics parks, dedicated freight corridors, free trade warehousing zones, and container freight stations are expected to improve the efficiency of the Indian 3PL market.

3. Higher investment in technology

With technology seeping into eCommerce, retail, education, hospitality, finance, and all other sectors, why should logistics be left behind? With increasing market demand for superfast delivery, Indian logistics startups invested more in modern technology to boost their operations.

Experts believe that India is headed towards a technological revolution in logistics. Techs like Artificial Intelligence (AI), Machine Learning (ML), Internet of Things (IoT) are optimally benefitting the supply chain in terms of seamless management, improved route planning, warehouse automation, digital payments, and much more.

At Blowhorn, we are already speeding up our deliveries with AI-powered route optimization software. Our automated warehouse management system helps in the seamless handling of stored inventory and order dispatch, while we offer a real-time tracking system for all our orders. We have also adopted novel technologies like geo-fencing to reduce the menace of fake delivery attempts.

4. LaaS (Logistics as a Service)

We are well-acquainted with Software as a Service (SaaS) companies. This year saw the emergence of companies following a similar model in fulfillment, offering Logistics as a Service (LaaS). Ideally, this presents a plug and play model for your business’s logistics needs, which you can avail of via simple integration with your 3PL partner.

Blowhorn has set the ball rolling for LaaS in India, offering end-to-end logistics solutions with warehousing, transportation, and hyperlocal delivery.

5. Greater supply chain transparency

With rising consumer concerns, logistics stakeholders worked towards improving supply chain visibility and transparency in 2022. Companies are striving to become more transparent about the sustainability of their supply chains. Globally, 2022 saw more companies offering insights on their labor practices, job creation, sourcing methods, and compliance with regulatory requirements — in a bid to enhance their brand image among the conscious modern consumer.

6. Blockchain in last-mile logistics

While AI is helping to improve speed and efficiency, blockchain has been deemed as a viable solution for more transparency and visibility in last-mile logistics. In India and abroad, companies have started incorporating blockchain to optimize last-mile deliveries. The technology has found best use in high-value inventory tracking, secure invoicing and payments, fraud detection, improved supply chain transparency, dispute resolution, and creating a fair freight marketplace.

With the launch of the Open Network for Digital Commerce (ONDC) by the Indian government, there is hope that we will witness further adoption of blockchain in the digital commerce and logistics space. ONDC itself is a blockchain-based protocol that aims to create a fair and transparent marketplace for small and medium-sized businesses across India. With Blowhorn being one of the early participants of ONDC, we too are waiting and watching the best use case for blockchain in our fulfillment services in the near future to help our customers.

7. Micro-fulfillment > Traditional Warehousing

2022 saw a rise in demand for same-day delivery, which is quite difficult to fulfill if your inventory is stocked in a warehouse far away from the customer's location. The longer the delivery distance, the more the delivery time — a simple thumb rule to keep in mind.

This is why top eCommerce fulfillment services in 2022 opted for micro-fulfillment centers or micro-warehouses. The concept of micro-warehousing follows a just-in-time inventory management approach, with goods never staying here for more than a day. The limited inventory is stocked in a network of collocated storehouses at high-demand pin codes. Not only does the process help in reducing a brand’s capital spend on inventory, but it also improves efficiency and decreases resource wastage.

Much before the pandemic, we launched India’s first micro-warehouses or micro-fulfillment centers as an experiment in 2018. Now we maintain an expansive network of micro-warehouses across 28 cities in India. Read this article to find out why more eCommerce startups are choosing micro-fulfillment in 2022-23.

8. Automation in shipping

When it comes to automation in shipping, the process works on a predefined pathway involving packaging, warehousing, material handling, and security. In India, the adoption of automation in logistics and shipping has been steadily increasing since the pandemic.

In 2022, 3PL fulfillment companies like Blowhorn incorporated automated solutions to boost efficiency by** reducing overhead costs** and time, streamlining the supply chain and minimizing the chances of manual errors.

9. Extensive focus on hyperlocal logistics

2022 saw high growth in the hyperlocal space with the emergence of newer players in the quick commerce sector. Meanwhile, eCommerce giants and existing logistics players focused more on faster deliveries to not miss out on their customer needs.

Improved internet penetration led to the growth of fast fulfillment in suburbs and rural belts, thus creating a need for hyperlocal elements like dark stores, and micro-fulfillment centers along with local delivery jobs.

At Blowhorn, we have developed a platform-agnostic technology to be able to integrate with a wide range of businesses ranging from D2C to marketplaces, and Omni channel players. Our hyperlocal strategy is defined by AI-based dynamic route planning, real-time order clubbing, automated warehousing, blockchain, and even drone deliveries. We are aiming to build a sustainable hyperlocal delivery system to tackle small profit margins, high overhead costs, and ever-evolving consumer expectations.

10. Experimentation with Drone Deliveries

Delivery by drones is not new. The idea has been widely explored by logistics providers across India but is yet to be adopted at scale. The idea of mapping a three-dimensional delivery route via drones holds immense potential and has excited the Indian government authorities as well. Jyotiraditya Scindia, the Union Minister for Civil Aviation, has stated the administration’s objective is to turn India into a major drone hub by 2030.

Leading logistics players like Blowhorn and others are already chalking out the blueprint to make drone delivery an everyday reality. Gartner predicts that by 2026, more than one million drones will be carrying out retail deliveries, up from 20,000 today. Last year, the Indian government also released the draft of The Drone Rules, 2021, aiming to liberalize drone delivery while fulfilling safety regulations. Autonomous last-mile delivery via these mini-flying machines will significantly determine the growth trajectory of Indian logistics in the upcoming future.

All in all, 2022 presented a year of great opportunities and achievements for Indian logistics. It remains to be seen how the sector performs in the coming year with the emergence of ONDC, NLP, and other factors into the mainstream of India’s commercial canvas.