Despite lockdown relaxations, courier industry stares at bleak future

The courier industry in India is made up of varied players starting from large multinational firms such as DHL, United Parcel Service (UPS) and FedEx India to domestic firms comprising Blue Dart, DTDC

With about 60 per cent of the domestic courier industry being fragmented and unorganised, it is staring at a bleak future despite the latest set of relaxation norms from the Ministry of Home Affairs.
 

“Almost 80 per cent of this industry runs on credit and is largely made up of mid- and small-sized players. With inter-state lockdowns continuing and major consuming areas marked as Red zone, business is dead today. Nothing is moving for courier industry players,” Manoj Kale, secretary at Couriers Association of India (CAI) told Business Standard.
 

CAI is formed to promote and protect the interest of the small- or medium-sized Indian courier companies operating both in the domestic and international sectors. “With international flights, too, not operating, even overseas business is nil for domestic courier companies. Currently, nearly 95 per cent of domestic courier business has halted. Only those working as franchise of large players and the big players themselves are ruling the market,” Kale added.

 

The courier industry in India is made up of varied players starting from large multinational firms such as DHL, United Parcel Service (UPS) and FedEx India to domestic companies comprising Blue Dart, DTDC Courier and Gati among others.
 

“Traditional transportesrs, with low-digital technology deployment for operations, will suffer on account of inability of all office staff to reach office or be functional at the same time,” said Anjani Mandal, chief executive officer (CEO) at Fortigo Networks and Logistics.
 

Bengaluru-based Fortigo, which provides services across India, is a truck network funded by Nandan Nilekani and Accel Partners.

“Due to zone-wise restrictions, we cannot commit to customers. Moreover, current cash flow do not have the ability to carry the overheads of pre-lockdown days as it would take time for demand to get back to normal. After lockdown, we may be forced to downsize operations,” said a senior official with Mumbai-based Professional Couriers on condition of anonymity.

 

Some of the organised players are better equipped to tackle the ongoing lockdown related issues. “Thanks to our investment in other technologies we were able to move all our non-operational processes, which depend on administrative and managerial resources, including sales, finance, IT, customer service to completely operate in remote locations, with all the key resources working from home,” said Abhishek Chakraborty, executive director of DTDC Courier.
 

The company has handled more than 10,000 tonnes of essential goods during the lockdown, including PPE kits, Covid-19 test kits, life-saving drugs and other equipment. With revenues of over Rs 200 crore, DTDC has grown its presence over the year through both the organic and inorganic growth routes.

 

Along with DTDC, large player Blue Dart, too, has implemented contactless delivery system. Services of Blue Dart Express have been operational even during the lockdown.

“We have been delivering prescribed medicines within India and have offered 25 per cent discount on domestic retail tariff for a hassle-free experience. Recently, the company extended door-to-door service of shipping prescribed medicines for NRIs,” Ketan Kulkarni, chief marketing officer and head-business development at Blue Dart Express. Besides, the company has gradually started delivering non-essential commodities in permissible pin codes by the health ministry.