Urban Logistics – The New Battleground

What is Urban Logistics? Why is it important?

Cities are growing at an unprecedented rate. Currently, 52% of the world’s population is concentrated in cities. By 2050, the figure is expected to reach 67%. As a natural consequence, a similar surge is predicted in goods transportation services. But what is worth highlighting is that the time in which these goods are expected to be delivered is getting shorter.

Earlier when one shopped online, a six to seven-day delivery window was considered normal. This was reduced to 4-5 days and now customers expect delivery within 3-4 days. With the surge in the e-commerce industry and international players like Amazon Prime in the market, very soon people are going to expect goods delivered the next day as the new normal. Mega logistics facilities are on the rise where goods are stored, packed, picked, sorted, and transported to urban and local goods delivery centers. These urban local delivery centers are very important; their primary task is to ensure the last mile delivery is fast and efficient. Understandably, urban and hyper-local logistics are where private investors will be battling it out by tapping into the opportunity created by ever-expanding cities and rapid urbanization.

Let’s look into what this is leading to in the Indian logistics sector.

Perhaps the biggest challenge faced in urban delivery is making last-mile delivery efficient. This is very much needed to meet the rising demands of Tier 1 and Tier 2 cities. As a result, retailers and goods transportation services are always on their toes and required to constantly update their urban logistics services. This includes offering an array of vehicles to transport different quantities of goods both within and intra-city, such as mini trucks for rent, and Tata Ace hire, Also, while investing in the last mile is considered quite expensive, the benefits accruing from it far outweigh the costs.
Rise of local businesses like fresh food supplies, groceries, pharmacies, and electronic parts is on the rise, a result of the growing penetration of e-retail stores and the ease of shopping via one’s mobile phones. One can book a tempo online or hire tempo services for shifting all while sitting at home, choosing from a variety of service providers. These local businesses in turn are trying to build their customer bases.

Land after all is limited and because of rapid industrialization, there is increasing pressure on how land is being used. In such a scenario, urban logistics serves as an entry point for gaining exposure to land in growing cities.

Not surprising to see why private investors are increasingly looking for long-term returns by investing in these urban local facilities. And the key to winning markets has become offering the shortest delivery time, which is very often the next day.

Urban Logistics – The New Battleground

Related articles