Can India Save Lakhs Of Crores By Optimizing The Monthly Truck Rental Market?

In 2022, the demand for monthly truck rental services in India is at an all-time high. With the post-pandemic eCommerce boom, more brands are relying on trucks to carry larger loads in a shorter time.

A report by Avendus Capital suggests that monthly truck rental services make up 85% of the Indian logistics sector. Trucking is the preferred mode of goods transportation in India, over railways, waterways, or air. Only 17% of India’s freight is transported via railways, while more than 71% is shipped by road.

A 2021 survey report by NITI Aayog revealed why Indian logistics industry should focus more on optimizing monthly truck rental services. Making our truck rental sector more cost-efficient will help save up to INR 1.3 lakh crore in 2030 and INR 7 lakh crore in 2050. At the same time, implementing energy-efficient measures in truck transportation can bring down India’s CO2 emissions by a whopping 185 Million Tonnes in the next 3 decades.

The Problem With Monthly Truck Rental Services

Despite heavy dependence, the Indian logistics industry is yet to optimize truck transportation with regards to cost and energy efficiency. The logistics costs in India attribute to 14% of the GDP, which is shockingly higher than that in the US or Europe. A lot of factors are responsible for the same:

• Low carrying capacity: Most of the local truck rental services operate with low-capacity trucks, which ply at lower speed and generate more pollution due to repeat trips.

• Vehicle age: Over 34% of India’s truck fleet comprises old, poorly maintained vehicles more than ten years old. Needless to say, these hardly conform to the environmental guidelines.

• Poor road infrastructure: Sub-par road infrastructure offer a major roadblock to planned truck transportation in India.

• Lack of automation and digitization: A majority of monthly truck rental services use old-school methods for load planning or vehicle routing. This, in turn, brings down operational efficiency and shoots up costs.

• Fragmented market: Almost 75% of India’s trucking market is still unorganized and dominated by local players with a fleet of 5-20 trucks. Small players are unable to optimize driving patterns and this leads to overloaded trucks with lower asset utilization.

In order to improve and optimize truck usage in India, changes have to be implemented in both transportation and warehousing practices. Some of the most common ways suggested by experts are detailed below:

Ways To Optimize Monthly Truck Rental Services in India

Improve load matching: In general terms, load matching is the process of matching unassigned loads to carriers with available capacity. Most of the load matching in India is still done manually, often leading to expensive oversights.

This is why logistics startups today use load-matching software to optimize the process and move cargo in a much faster and cost-effective manner.

• Maximize vehicle productivity: Efficient packaging and loading, ideally with the help of automation, can maximize productivity for monthly truck rental services. For instance, many inter-city logistics companies are carrying less-than-container loads for different vendors together, thus reducing the delivery time, cost as well as carbon emissions.

• Switch to Sustainable Fuels: With the rising threat of climate change, Indian logistics firms are unwilling to leave behind a trail of toxic greenhouse emissions with every delivery. This is why electric trucks are gradually becoming mainstream in road transportation.

At Blowhorn, we have pledged to operate 100% of our fleet on electricity and sustainable fuels by 2025. Presently, 30% of our nationwide fleet comprises electric vehicles and CNG trucks.

• Improve operational efficiency: Transportation can incur heavy expenses on your company coffer, if not streamlined properly. When it comes to choosing a monthly truck rental service for your brand, opt for renowned service providers with better operational efficiency. Spending a few extra bucks on a good transportation service can end up saving lakhs in wasted trips or return orders.

At Blowhorn, we have incorporated the power of technology to optimize our fulfillment operations. All our vehicles can be monitored via a Transportation Management System (TMS), which helps with route optimization, real-time tracking and automatically alerting the end customer. In addition, our drivers are provided with rigorous training to ensure safe and secure transportation of your goods.

• Better siting for warehouses: Improvement of warehouse and inventory management is another key step to optimizing monthly truck rental services in India. Gone are the days when large warehouses on the outskirts of a city would dock the entire inventory for a company(s). Intra-city transportation from such suburban warehouses would always be a hassle.

This is why Blowhorn and other logistics companies are opting for micro-warehouses. These are small-scale fulfillment centers located at prime locations within a city, closer to the end customers. It is now much easier and faster for truck rental services to manage doorstep delivery of all goods.

Adopting such optimization practices for monthly truck rental services can positively impact India’s logistics sector in the coming future. According to the survey by NITI Aayog, widespread implementation of these practices can reduce VKT (Vehicle-Kilometers of Travel) by 81 billion km and 450 billion km in 2030 and 2050 respectively.

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