Ecommerce – A viable business option or not?

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On Sunday, June 28th, Wheelseye organised its 9th edition of Facebook live. The aim was to help our community understand the difference between ecommerce and non ecommerce business segments, and how building good teams and leveraging ecommerce can help you make the trucking business profitable.

We were honored to interact with Mr. Amit Bajaj, director at Mituj marketing, and Mr. Rajat Nagpal, business head at PAF Logistics.

Every week, Wheelseye organises a live event, where we try and solve some of the problems of fleet owners, through live interaction. To stay updated with our future events, follow us on facebook:

<strong><strong>What changes have been observed in logistics due to coronavirus? What to expect?</strong></strong>

  • Manufacturing sector has seen a slow recovery rate of 40-50%. This has indirectly impacted logistics as well.
  • Shortage of laborers and drivers in godowns and production units has affected the logistic sector.
  • The focus for now is to cover the existing backlog of logistics.
  • Demand for non-essential items is not much. Consequently, fleet owners in this sector are facing problems.
  • Demand for essential goods is steady. Good business opportunities can be expected in this segment. 

<strong><strong>What is the difference between an ecommerce and non ecommerce business?</strong></strong>

  • In an ecommerce business, speed is of the essence. The turnaround time (TAT) must be 97%. Delivery between Delhi-Bangalore should be in 48 hours, while that between Delhi-Bombay should be in 32 hours.
  • Contract is on a daily basis and timely vehicle placement needs to be 100%. You can’t use vehicle breakdown as an excuse for unavailability.
  • Recovery of a vehicle should be in less than 6-7 hours. Focus on cross docking, driver training, technology and building tracking teams.
  • In non ecommerce business, delivery of goods is for inventory replenishment. Speedy delivery is not important. Delivery of goods can take 4 days or even more.

<strong><strong><strong>How to make a  trucking business profitable?</strong></strong></strong>

  • Focus on improving your value chain. The ability to earn profit from different parties is as follows (from least to highest ): Brokers, 3PL, corporates, small companies, SMEs.
  • Focus on increasing per km revenue
  • Maintenance expenses should be managed properly, especially that of tires. Tread depth of a tire should be checked regularly so that it can be retreaded 3-4 at least during its life cycle, thereby saving costs.
  • Focus on building dependability. Create tracking teams for different routes and clients to ensure timely delivery of goods.
  • Focus on having least number of mediators between you and your client to ensure maximum profit from a delivery. 
  • Don’t mistake notional profit for actual profit. Notional profit is actually meant as expenses for the upcoming time period.
  • Focus on having business in different segments rather than in just 1 segment.

<strong><strong>What is dependability in ecommerce? How to improve it? What are its benefits?</strong></strong>

  • Dependability in current scenario means, ability of a fleet owner to deliver goods in specified time period, in hours.
  • If there is any vehicle breakdown or issue in service, a tracking team needs to be there to monitor it. Different clients and traveling routes can have different tracking teams.
  • GPS locks should be installed for added security of goods, vehicle stop points should be fixed and vehicle maintenance should be utmost so that breakdown is negligible.

<strong><strong>How to handle a lot of trucks, especially when one is involved in an ecommerce business?</strong></strong>

  • Tracking teams need to be mapped as per clients and traveling routes to ensure smooth delivery.
  • Proper driver training should be done so that delivery of goods is within the specified time limit. 
  • Hire people who know MS Excel, and can create and analyse tracking sheets to understand delivery patterns.
  • Maintenance should be done on a regular basis. For example, tread depth of a tire should be checked regularly so that it can be retreaded 3-4 at least during its life cycle.
  • Focus should be on technology, especially GPS devices and locks to ensure smooth movement and security.
  • Have employees who can understand the problems of a driver, the concerns of a mechanic and issues of the clients and can adapt accordingly.

<strong><strong>How to prevent accidents and ensure driver safety in an ecommerce business?</strong></strong>

  • The focus needs to be on minimum vehicle stoppage. Break periods for the drivers should be fixed ( 45 mins).
  • There should be 2 drivers in a truck so that the two can take alternate breaks. 
  • Vehicle speed should be in the government defined guidelines. 

<strong><strong>How has the recovery been in different segments of logistics?</strong></strong>

  • Drastic improvement in demand of essential goods, food and medicines has been observed. People have shifted online to buy such products.
  • Demand for non-essential goods including automobiles and car carriers has declined.
  • Open body trucks have seen a recovery rate of 60% due to them being in the food & agriculture business. Closed container trucks have seen a recovery rate of 50%.
  • Truck movement state-wise has improved overall. But, depending on the state, it can still be categorized as slow (red zone), medium (yellow zone) and fast (green zone).

We thank Mr. Amit and Mr. Rajat for gracing us with their presence and for being a part of our webinar. We also hope the above insights will help our trucking community.

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