"Transforming the Last Mile: Reflections on 2023's Logistics Innovations in India"
As we bid farewell to 2023, it's undeniable that the landscape of last-mile logistics in India
has undergone a revolutionary transformation, with key advancements reshaping the way
goods are delivered to our doorsteps. In this 2023 reflection, we delve into the key themes
that defined the evolution of last-mile logistics, setting the stage for a dynamic 2024.
1. Speed and Customer Experience: A Quantum Leap
The year 2023 witnessed a quantum leap in the speed and customer experience realm, as
Same Day and Next Day delivery models took centre stage, especially for Direct-to-
Consumer (D2C) commerce companies. Higher delivery speed has always led to improved
revenue realisation due to a higher percentage of successful deliveries but typically have had
the burden of a very high cost of logistics. This year however, the race for efficiency saw
emergence of cost-efficient speed models challenging industry giants like Amazon. In
hyperlocal as well, Quick Commerce and less than 15 minute delivery models settled down
and now appear to be here to stay with last mile efficiencies seeing huge benefit in metros
due to high densities. What truly makes this game-changing is that you now do not need to
spend millions into building such a capability from scratch – several players from the third
party logistics industry have made giant strides in providing best in class speeds at very
competitive costs.
Given above, we can expect adoption to these models grow multifold in the coming year,
eventually reshaping the competitive landscape in 2024. The end consumer is sure to have a
lot to look forward to.
2. Artificial Intelligence Redefining Last-Mile Dynamics
In 2023, artificial intelligence transitioned from a mere experiment to a driving force in last-
mile logistics. Innovations in AI found practical applications, particularly in customer address
intelligence and fraud detection. In the current landscape, numerous leading logistics players
utilize in-house address correction algorithms, highlighting how precise customer addresses
significantly enhance delivery success rates. We've moved beyond the era when shipments
would mistakenly reach the wrong destination due to address or pin code errors – today, we
can predict the correct address and rectify it at the source, saving not only time and money
but, most importantly, enhancing the overall customer experience. Commerce companies that
recognized and acted on this trend early have reaped substantial benefits, directly impacting
their bottom line.
As the industry continues to leverage the power of AI, the year 2024 holds promise for
further innovations, poised to elevate the precision and efficiency of last-mile logistics.
3. Electric Revolution Gains Momentum
After years of trials and tests, 2023 witnessed the electric revolution gaining substantial
momentum, with electric vehicles (EVs) securing over 20% market share in last-mile
delivery. Last-mile delivery partners in India embraced this transformative shift,
acknowledging the economic and environmental benefits associated with transitioning to
electric. The impact was especially pronounced in metropolitan areas, where it became
noticeably easier to spot delivery partners operating electric two-wheelers compared to
previous years. This shift aligns seamlessly with the Government of India's vision of
achieving 100% electric last-mile logistics by 2030, a goal that not only seems plausible but
also imminent. State governments such as Delhi, actively contributed to this movement
through initiatives such as the 'Delhi Motor Vehicle Aggregator and Delivery Service
Provider Scheme,' which outlines firm timelines to achieve 100% electric vehicles in the city.
The steadfast commitment to sustainable practices is fostering positive change within the
industry, setting the stage for a greener and more efficient future.
Anticipating Strides in Drone Delivery and Gender Diversity
As we look forward to 2024, two areas with significant potential are drone delivery and the
increased involvement of women in last-mile logistics. Advancements in technology are
making the feasibility of drone delivery systems more apparent, promising quicker and more
cost-effective deliveries. This is particularly evident in remote areas, where the delivery of
critical goods, such as medicine, stands out as a prime use case. As practical tests continue to
succeed, we anticipate drone technology gradually integrating into various stages of the
supply chain – especially at legs where it is easier to control both the source and destination
dynamics. Moreover, fostering gender diversity in the industry is not just a social imperative
but also a strategic move. It allows tapping into a broader talent pool, thereby enhancing
overall efficiency and inclusivity in last-mile logistics. We firmly believe that this will play a
pivotal role in facilitating the expansion of supply chain capacity in India.
As we celebrate the successes and innovations of 2023, the future of last-mile logistics in
India looks promising. The momentum gained this year sets the stage for continued
advancements, creating a more efficient, sustainable, democratized and inclusive last-mile
delivery ecosystem.
