Covid-19 put a lock on the logistics industry


The covid-19 has made the entire world to a halt and is most affected by the transport and logistics industry. The Indian transport industry transmits goods worth around $150 billion annually. The truck transport increased to 85% in March and then declined to 70%. This article features the insights of Anjani Mandal (CEO of Nandan Nilekani-backed startup 4TiGO Networks and Logistics), on the impact of covid-19 on the Indian infrastructure and logistics industry.

According to Anjani Mandal, the previous year has been the most challenging for the logistics industry. The beginning of 2020 marked a decrease in the growth of the auto sector. Many of them have not transformed their business from unorganized to organized sector even though the regulatory has given priority to organized sector. The epidemic has depressed the small-scale business sector. The final decision to extend the moratorium for EMIs & Licenses in October and few months helped them a little. Most motorcade owners sold their trucks or returned to financiers eventually. By December 2020, the supply-demand situation has been completely changed. Traditional vehicles opt out of the market. Freights are increased to 30% and rail transport has been increased to 50% during covid-19 from 30% before that. The protest of farmers in Punjab / Haryana had a significant impact on the first quarter of 2021. There is a slight recovery shown in January 2021 by organized business outside the NCR region, however, there is a sharp decrease in the middle of March 2021as the disease becomes uncontrollable in Kerala and Maharashtra. During the second wave of covid-19, the industry is ready to face a shortage of labor and an increase of infected inside factories as the symptoms are known. Despite that, the sudden outburst of the disease has changed everything. Employee safety should be the priority and even drivers are reluctant to travel due to safety concerns and frequent lockdowns. 

Fortigo being a digital logistics had little impact on the first wave of covid-19 crisis as compared to the second wave. The company was being into 2.5x growth in the middle of 2019, but the frequent lockdowns and reduced performance of the auto sector affected the pace. Most of the customers accepted the adoption of digital technologies such as eInvoices, eGCN & ePoDs. Many trucks are kept idle and there is an extreme shortage of drivers across the country. There is a 20% decrease usually in April compared to March but this time it is 30% and May will record a 50% of March.

Fortigo is a technology-oriented service provider. The 2 additional features that have been added during the covid-19 crisis are (a) Technology enabled in the high volume industry, (b) an entity to provide tech solutions to consumers. It is expected that the present situation will continue till monsoon and will be at the peak during this month and then slowly decline.

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