If there was any effect during the pandemic, which is unavoidable, the logistics and warehousing sector’s post-pandemic future appears to be quite bright and optimistic, points out Vijay Vashisht, AVP-Business, Safexpress.
How has the sudden rise in demand of e-Commerce industry enhanced the scope of warehousing?
The online retail market in India is moving towards a phase of stability now. Many of projects that bloomed during the ensuing period but died young were launched into the market with very little inventory-led investment. This has diversified now and more investment is coming in hybrid or inventory-led processes, including B2B e-Commerce. Need for more warehouses and processing centres emanates from that but this is not the entire story. With the intense hedging in the capital market amidst the collapse of supply in the face of rising demand for essentials and discretionary products throughout this year, regionalization, if not localisation, of manufacturing and/or storage was a calling to be made. So, e-Commerce is definitely one of the reasons, but it is much more than that.
How do you see the demand of Grade-A warehouses in tier-II and III cities in future?
Much of the investment in warehousing and logistics is coming from third-party logistics and distribution companies. E-Commerce again is going through a phase of consolidation and giving way to a more sustainable inventory-led decentralised model is something to occur in the due course. There is ample opportunity for businesses to decentralise, especially of suitable segments. End-to-end logistics develop around manufacturing and trading hubs and, in any case, third-party logistics and distribution firms would always need to invest in tier-II and III cities, and semi-urban areas to make them an efficient structure.