India
Post plans dedicated road routes and trains to bolster e-commerce delivery
India Post has tasted blood and now is in a mission mode.
After collecting Rs.1,500
crore at the end of March 2016 in cash for delivering parcels for various
e-commerce portals, including Amazon and Flipkart, the postal department now
plans to have dedicated road routes for short distances and dedicated trains
for longer routes to deliver parcels.
A senior department of posts (DoP) official, requesting
anonymity, said B.V. Sudhakar, secretary of DoP, met officials from the
ministry of railways earlier this month to explore areas to increase parcel
delivery capacity, especially from e-commerce firms, through the railways.
“We are exploring various modes to deliver e-commerce parcels.
We plan to buy our own vehicles for delivery through roads. Currently, we
outsource and have few vehicles. Besides, we are looking towards increasing
association with the railways and are in discussion with them for dedicated
trains for parcels,” the official said.
The boom in the e-commerce sector has come as a lifeline for the
postal department. The cash collected from e-commerce deliveries by DoP was Rs.500 crore in 2014-15, and a
meagre Rs100 crore in 2013-14.The e-commerce sector in India is expected to
grow to $119 billion by 2020 with a total of 320 million shoppers, according to
a report released in February by Morgan Stanley.To be sure, India Post already
has tie-up with the railways for transporting parcels and the plan is to
increase the capacity in the trains to manage the load which is increasing day
by day.The postal department plans to buy 250-300 new vehicles this year and
have a fleet of around 1,300 vehicles for inter-city transport and short
distances outside cities.
A senior official at the ministry of railways, who also did not
want to be named, said, “We have made extra parcel vans and we plan to have
full parcel trains. It is under consideration but it is at an exploratory
stage. We have an old association with the DoP and have a railway mail service
as well. The DoP and the railways are together exploring the possibility.”The
cash-crunched Indian Railways is exploring all possible ways to increase its
fare and non-fare revenues, and is also exploring external financing options to
execute various projects.
In the budget of 2016, railway minister Suresh Prabhu had said
that the ministry will look at liberalising parcel policies to increase
non-fare revenue and it will expand its service offerings especially to cater
to sectors such as e-commerce. Prabhu also had said that soon time-tabled
parcel trains will be introduced.
As per the Indian Railways Statistical Publications 2014-15, the
revenue from parcels and other coaching in financial year 2014-15 was Rs.3,997.89 crore.Queries emailed
to the spokespersons of the ministry of railways and the DoP on 11 August
remained unanswered.According to experts, the coming together of Indian Railways
and India Post has the potential of creating a formidable logistics ecosystem.
“The big picture is that we are living in a digital age and once
we have a digital platform, you can do a lot of things. It could be e-commerce,
education, healthcare, etc. So in India, this is an amazing
combination—the post office has last mile connectivity right to the villages
and the Indian Railways has a wonderful network,” said Hemant Joshi, partner,
Deloitte Haskins & Sells LLP.Both are government departments and it is an
absolutely fantastic combination as it can only create value for the people of
India, added Joshi.
The postal department has set up 48 processing centres to handle
parcels for handling the e-commerce load. Besides, it is also setting up
automatic parcel centres at Mumbai, Chennai, Hyderabad and Bengaluru. The
department already has such centres in New Delhi and Kolkata.
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