Decoding the logic in the logistics sector


When we wrote letters on blue envelopes or sent new year greeting cards, the post office was the only way to send them far and near. Postman, our link to our world, was a much-awaited man. Growing up in small towns, my father would explain how our post would go from our small town to the nearest big town, then the big city, to be sent to the big city closest to the destination, then to the nearest big town, further to the closest post office before it is finally hand-delivered by the postman. I later learned that this model is called the hub and spoke that ensures a certain level of efficiency in the system and gives some method to the madness of posts wanting to go from anywhere to everywhere.

Logic in LogisticsSometime in the 90s, courier services came to challenge the postal network. They used better modes of transportation and offered superior services to users albeit at a cost, but they more or less followed the same hub and spoke model. With the advent of e-commerce, logistics became a key function. What was the location and real estate to physical stores, logistics was to e-commerce companies, as they promised to deliver everything to your doorstep! With tracking screens accessible, we could trace the movement of our order from some remote corner of the country to our homes. A variation of the hub and spoke model started emerging as the hubs moved away from big cities to smaller centers and closer to big sourcing points. Let’s say it now had slightly more distributed hubs than the traditional model.

As we started shopping online, it created space for many more niche and generic e-commerce companies. Logistics emerged as a subsidiary support eco-system for these companies. You could start an e-commerce venture as soon as you had a product and platform without investing in logistics. Companies like Delhivery emerged providing services to a vast variety of e-commerce companies. The reach improved, but still, the last mile connectivity remained an issue in low-volume remote regions that are still primarily serviced by post offices.

When hyper-local delivery platforms like the ones for buying groceries started a few years ago, they used to deliver the following day in well-defined time slots. It gave the companies some breathing space to plan their sourcing as well as deliveries. At the same time, it demanded at least a 24-hour cycle of planning from the customers.

Delivery apps brought in the era of everything last minute at your doorstep—be it food, medicines, groceries, or a packet from your friend in the next block. Their imprint is most visible on our roads full of delivery boys on two-wheelers of all kinds, wearing branded T-shirts, rushing to deliver within the committed time, negotiating red lights and traffic jams. My recent move to Bengaluru introduced me to 19-minute delivery apps, and while I was still trying to understand the ‘how’ of it, a 10-minute delivery was announced. It takes me more than that to deliver a dosa from my kitchen to the dining table, even after every ingredient is available. Well, the Tawa takes three to five minutes to reach the right temperature. Enough debates are taking place on the merits and demerits of this promise, but what I am looking at is the totally disrupted hub and spoke model.

Now every order is a complete cycle in itself. Every time you place an order, a delivery guy gets into action to pick up the order from a restaurant or a store and then rushes towards your door.  Customers need not plan anything. You can start cooking and if midway you realize that some ingredients are missing, you just place an order on the promised 10-minute delivery. No wonder our roads are full of delivery boys, yes this is one place where I do not recall any delivery women. This is a habit-changing time. We are being told that you need not plan anything at all as the businesses will deliver whatever, whenever, and wherever you want it. Can they do it sustainably is a question only time will answer?

There are some questions that we need to think about—Have these instant deliveries led to an overall better life for society? Has anyone calculated the ecological impact of the traffic added on our roads? Does no planning really make us more productive in life? Does planning need to be restricted only to corporate cabins and government offices? Can we really outsource planning in our personal lives? From a commercial perspective, has it brought better business to the suppliers?—does not look like it. We have just added a layer that is selling us the idea of convenience at the cost of many factors, a cost that would eventually be borne by us. I am not even getting into how they have killed many local delivery networks at the altar of generously funded probable unicorns.

Having said that, we as customers finally dictate what survives and thrives, and let us not forget that the next time we place an order.

First published in The New Indian Express on April 12, 2022

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