North Pole before Chimneys – Deliveries and First Things First

By : |January 6, 2016 0 We are so inured to hearing the word last-mile when it comes to logistics that we forget there is a starting mile to the big road of delivery marathons too. Parcelled preferred to remember that. And then?

Pratima H

BANGALORE, INDIA: Chuck Nolan could not have been a more dedicated courier-service stork; but his story, adventure, experience and perhaps, even the if-and-how-and-where of being stranded could have taken a new shore had he been a first-mile delivery man.

Now that’s a not so familiar word – first mile.

                                 

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When someone utters that word, you conjure up images of a delivery service giving you a push-button (phone as well as at-your-door-bell) pick-up service in addition to going the whole hog of the delivery road. You start imagining a uniformed fellow smiling at your doorstep at the time you prefer him to, hands open to not just pick but also pack and conveniently-price any item lying comfortably on your doormat, leaving you to wave away all errands and headaches about a delivery along with that item.

Sounds too imagination-propelled and what-are-you-talking-about may be. Not to folks at Parcelled who are trying to re-write the way the supply chain diagram is usually drawn. And they have every reason and spur to do so.

After all, why not bring in something new and utterly unusual (but a latent need nevertheless) to a market terrain which has just started turning over thanks to e-tail haboobs and automation/mobility-led tornadoes?

The logistics market throws up new concepts and bubble-wrap-bursting paradigms every day. From Amazon’s holiday season cargo shipping jump, DHL’s ‘Packstations’, drone-driven inventory management, new warehousing formats, the industry has also swiftly changed lanes between last mile failures like grocery logistics player Webvan to new names like Postmates, first mile companies like Beltmann Logistics, Shypp (a San Francisco start-up), Sendd (right here in India from alumni of IIT Mumbai) and more.

Some peg it as a $120 billion space, some ballpark it to a $300 billion market by 2020, some size it up to be worth 13 to 14 per cent of the country’s GDP pie, and yet factors like inefficiencies, capacity underutilization, infrastructure detritus, lack of proper organized sector play (just one or two per cent so far in India), supply chain snags, scale-margin puzzles and labor jigsaws continue to ship in unannounced.

“From First Mile to Last Mile” issued by Colliers International talks of rise of multi-stories first mile distribution centres, and pegs huge annual logistics space requirements between 2015 and 2020 where India comes up with a 43 to 135 million sq ft to accommodate growth in both fast- and slow-moving consumer goods. Think of 1.1 trillion more parcels a year or 350 million more pallets a year till 2020, and it’s easy to see how much the industry will expand in all directions.

Ensconced and sitting un-stranded so far in this interesting cardboard of possibilities and challenges alike; Xitij Kothi, Founder and CEO, Parcelled, a first-mile logistics company; has his own views and vantage point. We try to glue together what he and his team is doing and why it matters in this short-haul chat. Let’s suss out why is he ferrying sherwanis and ladoos and forgotten laundry at all?

Tell us about your venture first. What made the wheels of this idea turn in your mind?

It started with some personal bad experiences with deliveries in India when I moved back some time back. It gave me a first-hand glimpse of how much time and inconvenience can it take for a layman or a house-wife to pack, decide, locate a service, weigh, pay and track a simple item when it comes to something as seemingly simple as sending a personal laptop somewhere. With a stint in e-commerce supply chain, it made me ask myself – what if someone could come to one’s door, pick, package and ship regular and not-so-regular stuff at ease and affordability? So we started with a small website in November and soon after some friends tried a few items, the business grew to anything and everything from cookies, entrepreneurs shipping their parcels, handmade items etc. We have found that while there are many players in the last-mile space, the first-mile is not given that much attention and packs a huge need hierarchy.

How’s it working out so far?

In short, we are an online C2C couriering service which picks up, inspects, packs and delivers user’s essential items for an end-to-end delivery. We cover quality courier services at a minimal cost, from the comfort of the users’ home. The company aims to provide everyone the easiest way to ship absolutely anything. It was founded in January 2015 and in June 2015, we received an undisclosed funding from established companies, Delhivery and Tracxn. These funds are being focused on expanding services to eight-10 cities in India and focuses on increasing the workforce.

What nuances make the first-mile player different from regular ones?

At the back-end we have to take care of full-service availability of many pincodes, versatility of packing all sorts of items from hairclips to mobiles and a technology layer that can do clever aggregation, demand-routing, optimal planning etc. There are ten to fifteen partners at the back-end for flexibility.

Have you encountered any not-so-regular customer needs also?

Yes and it has been both a fun and learning experience. In Metros, people would approach us if they want to deliver a borrowed book back to a friend or pick clothes if they are running late for a flight from work, or ladoos made from a Mom or make-up items forgotten at home or a sherwani forgotten by a groom after he had travelled to the wedding destination in a different city.

Has it been easy then finding that elusive balance between a post-office credibility/affordability and a private-player’s convenience and speed? Also, would e-tailers be a competition or otherwise?

Our price points try to be near major players and we have been working hard on balancing services with quality and speed. We are actually helping expand the market. We use the same networks that online players do. Tomorrow an e-commerce player need not integrate with ten different partners but with just one which works across the chain. We are working towards that also.

Do you also give more options or convenience to customers who are usually caught starved with an ever-growing list of blacklisted items? How much room do regulation or security needs allow for this big gap?

A good back-end service or balanced use of surface vs. air channels where aggregation can marry security concerns and customer needs is the key for that. The end goal is of course to have no blacklist at all, but that’s something that may happen in the future somewhere.

Is yours an app-only platform?

No we get approached through app, calls and website and we feel that many customers still use web mode a lot. The app route will depend on the nature of demand.

What next? How much role does technology play? Would you ever use drones?

We are in 13 cities with over 800 pincodes covered and we have also started international categories. We are trying aggressively to drive more efficiencies, innovation and next we are looking at APIs, all-channel payment convenience etc.

The back-end of the technology side is crazy as we have to balance value, category, packaging and price of an item optimally. The person has to decide on the partner, channel and pricing without sacrificing service quality when an item is being picked. Routing, data and paper work also come in to the back-end. At the front-end, on-demand technology has to ensure that pick-up, packaging etc can be accomplished within ten to 30 minutes.

Use of drones would depend on regulation but automation to an extent is already happening. Cost and reach will play a big factor in use of drones in our industry. Even if increasing congestion in our cities could make more room for them, I would still say it is a far-away proposition and not so practical currently.

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