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Monday, August 10, 2015

India Post gets off trains

Boom in e-commerce, lack of security cameras prompt move to own vehicles

The surge in business through e-commerce parcels has forced India Post to reduce its traditional dependence on Indian Railways and more on own vehicles for short-haul (200-500 km) routes.

The reason has also to do with their difficulty in getting permission for installing closed-circuit TV for security purposes in an allotted train compartment. This makes it impossible to track the orders from a security point of view. "We need to change our delivery mechanism, which has remained the same over the decades. We have to evolve with the changing dynamics, especially seeing the boom in e-commerce. Shifting to a road network will ensure a secure and quick delivery of parcels," an official from the department of posts (DoP) added.

Also, given that e-commerce is a growth segment for India Post, it is investing to improve services in smaller towns and cities. In the US, too, the US Postal Service has managed to boost revenues by partnering with the Postal Service. Online retailers who have partnered with India Post gets the kind of reach no other logistics firm gives them. Radhika Aggarwal, CMO, at Shopclues, says that 6-8 per cent of their total deliveries happen through India Post thanks to its wide network.

Over time, Aggarwal expects the share of India Post in total deliveries to increase from current levels. Cash on delivery from e-commerce is expected to touch Rs 1,000 crore this financial year (April on), from Rs 500 crore at end-March. The country's e-commerce segment is expected to grow from the current $13 billion to $137 billion by 2020, says Morgan Stanley. That means a steady rise in deliveries. India Post plans to buy 250 new vehicles by the end of this year, apart from the existing 1,300. The routes (cities/states) to be serviced are being identified and deliveries have started on about 12 of these.

There are 150,000 post offices, with 550,000 staffers. The post, had said Samuel Thomas, director, transportation, Amazon India, was one of the "prime carriers we use as a delivery channel". √Āmazon services about 19,000 pincodes through 140,000 post offices. There are around 26,000 pincodes in India.

In fact, India Post is considering a separate entity for e-commerce in the next couple of years. It plans to invest Rs 300 crore in upgrading and setting up new automatic parcel centres to meet the delivery requirements from e-commerce entities. It now has one each in Delhi and Kolkata. New ones will come up in Mumbai, Chennai, Hyderabad and Bengaluru. The data shows the largest number of bookings (in value) from Delhi. Then come Maharashtra, Andhra Pradesh and Tamil Nadu. For e-commerce entities, about 70 per cent of orders come from tier-II and tier-III cities and towns.

India Post aims for revenue of Rs 200 crore in 2015-16 from e-commerce, more than twice as high as the earlier year. The annual expectation after five years is Rs 5,000 crore, an official said

Business Standard