In India, the logistics sector is estimated to grow by almost 20% CAGR by the end of 2027. This is driven by a variety of factors – demand and growing commercialisation to name a few – and the accessibility to the logistics sector has also increased in recent years. The largely unorganised and fragmented sector has undergone rapid digitisation and this evolution has been driven by a very simple process – matchmaking.
Newer logistics players have leveraged the latest technologies to improve the visibility between supply and demand. Read to know more about matchmaking in the logistics space.
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The Business Matchmaking Model in Indian Logistics
In the past, matchmaking in logistics was done manually, with shippers (ie, companies that need to transport goods) calling or emailing carriers (ie, companies that provide transportation services) to negotiate prices and schedules. Not only was this tedious and inefficient, but this setup also offered a raw deal to both customers and vehicle owners. The customers were quoted higher prices for services and the vehicles were underutilised. Given that small fleet operators in India fulfil 85% of the country’s logistics needs, optimising the process of matchmaking was crucial.
Technology streamlined the process of matchmaking through data analytics, allowing the demand and supply sides to find one another. Matchmaking in logistics refers to the process of matching shippers with carriers to optimise the transportation of goods. The goal of matchmaking is to find the most efficient and cost-effective way to move goods from one location to another while ensuring timely delivery and maintaining quality standards.
The Impact of Digitised Matchmaking
The digitisation of logistics can be heavily contributed to the pandemic lockdowns, with customers turning to online portals to fulfil their daily needs. In 2020, demand on India’s online grocery-shopping portals surged by up to 80%, just as their operational capacity fell by half. A Redseer report indicated that Tier-II and Tier-III cities will account for 88% of India’s online shoppers by 2030. Without a doubt, this easy matchmaking has led to better services and increased demand.
On the demand side of things, digitisation of matchmaking has led to increased vehicle utilisation, fewer empty miles and better SLA with faster ETAs and higher fulfilment rates. This only benefits the drivers as it leads to higher income.
Creating a Successful Logistics Ecosystem in India Through Matchmaking
Digital matchmaking improves the logistics ecosystem in India in the following ways:
- Increased efficiency: Matchmaking allows for more efficient and optimised transportation of goods, reducing delivery times and increasing reliability.
- Reduced costs: By matching shippers with carriers that have the right capacity, location, and pricing, logistics matchmaking can help to reduce costs for both parties.
- Better communication: Automated matchmaking platforms can improve communication between shippers and carriers, enabling real-time tracking and updates on shipments, which can lead to more effective collaboration and fewer errors.
- Improved sustainability: Logistics matchmaking can help to reduce the number of empty trucks on the road, which can lower greenhouse gas emissions and contribute to a more sustainable logistics ecosystem.
- Greater visibility: Matchmaking platforms can provide better visibility into the entire logistics process, allowing for more accurate forecasting, planning, and decision-making.
Digitisation and Supply Chain Management
Declarations of support for green growth, enhancing multimodal logistics and “Make AI for India” in Budget 2023-24 show that further technological improvements are a priority. Technological self-reliance in the form of the government-backed ONDC is also gaining traction, with India Post soon to be joining its roster. The enormous potential of matchmaking in logistics can be seen clearly as various bodies speed up investments and promote digitisation in the sector.
Digitisation involves using automated systems, such as enterprise resource planning (ERP) components that streamline business processes. Also, integrating technologies, such as radio frequency identification (RFID) and GPS tracking, also exist to enable better control over the supply chain.
Digitisation also includes the use of analytical tools to gain insights about supply chain performance. Last but not least; by digitising the processes, an organisation can improve responsiveness and retain the modern customer base who are subconsciously accustomed to “the Amazon.com effect”.
A Match Made in Heaven
Matchmaking in logistics has become an essential tool for optimising the transportation of goods and for connecting consumers with carriers. Upcoming advances in disciplines such as AI will lead to better and more nuanced algorithms which can further improve matches. Using advanced software and algorithms, shippers can match with carriers based on factors beyond transportation mode, capacity, location, and pricing. Better matches will drive better services and placing another brick on the road down to an improved, efficient logistics ecosystem.
