Potential in road logistics attracting startups: Report

Challenges in India's road logistics sector such as fragmentation in the ecosystem is attracting start-ups to work in this segment, according to a report.

India's road logistics sector is plagued by quite a few challenges, such as fragmentation in the ecosystem and information asymmetry due to multiple intermediaries that leads to low asset utilisation, the report by Deloitte said.

"Given this scenario, a host of start-ups have taken on the challenge of organising this largely unorganised sector to serve the owner-operator community," the report titled A time of reckoning: Road logistics in India' said.

In the process, the budding entrepreneurs are carving new channels, and meeting both existing and new needs of the historically under-served truck owner community, it added.

Further changes in the macro-environment around data affordability, unified tax regime, and emergence of digital payments have increased the attractiveness of this sector, it said.

"In addition to providing loads to truckers, start-ups in this space have been able to add value-added products and services, such as fuel cards, fast tags, and insurance. These start-ups are laying the building blocks of an ecosystem," the report said.

Commenting on the report, Harsh Kapoor, Director, Deloitte India, said that the research has shown that key customer needs (of loads and loans) are starting to be met interestingly by out-of-industry players, typically start-ups.