Last Mile Logistics Software in India – Key Market Trends, Challenges, and Benefits


Last Mile Logistics Software in India – Key Market Trends, Challenges, and Benefits

With more than 10% market penetration and USD 27.1 bn market size in 2022, trends in the Indian last mile segment are more promising than ever. Studies project that the Indian last mile delivery market size will be USD 6-7 billion by 2024. Further, the market is expected to grow at a CAGR of 15.62% from 2022 to 2027 and experience an increase of USD 165.6 billion. 

As the internet continues penetrating deeper into the masses, surpassing the cities, reaching the rural areas and hinterland, the last mile delivery landscape is in for a huge transformation and growth. The average spending power of the masses is increasing, budget buying options are booming, and the type of commodities people can buy online are increasing manifolds. 

However, this growth spurt is not without challenges, as businesses struggle with balancing delivery costs, overcoming delivery inefficiencies, and getting started with the right automation. 

Here we discuss the key market trends and challenges in last mile, and how last mile logistics software can help businesses overcome these challenges.

#1 – eCommerce Surge 

Statista estimates the eCommerce revenue to reach USD 71.29 bn in 2023 and the market to grow at a CAGR of 13.90% till 2027. As eCommerce grows, so do the customer expectations. Empowered with smartphones and high-speed internet, they are seeking more convenience on multiple levels – product customization, quicker and easier check-outs, mobile-optimized search, hassle-free deliveries, and more.

This is driving extremely high and cost-intensive competition among eCommerce players. Customer loyalty toward brands and stores is decreasing, and the cart abandonment rate is high. Hence, businesses are looking for ways to stay profitable while delivering across diverse customer demands, market call for rapid and reliable deliveries, and technological disruptions. 

#2 – Supply Chain Disruptions

At a time when digitization and online financial services were still in the nascent phase in India, the COVID-19 pandemic hit with huge ramifications for a supply chain with largely physical components. Market segments like FMCG, retail, healthcare, and eCommerce were left wondering about delivering truly no-contact delivery experiences, on-demand deliveries, and less than 30-minute delivery windows. 

This catalyzed the need for supply chain digitization and automation of last mile logistics, which resonated well with the customers. Now that the customers know that less than 30-minute deliveries are possible, they are seeking cherries on the top for an even sweeter deal. They seek free deliveries, white glove delivery experiences, and same-day delivery and installation for categories such as appliances, furniture, etc.

#3 – Sustainability Has Become Crucial 

Although the national freight activity in India is predicted to increase by around five times by 2050, the emissions per delivery in the last mile in India currently stand at 285 gCO2, which is significantly higher than the global weighted average of 204 gCO2. Also, India’s last mile emissions in 5 metro cities exceed Canada and France combined. 

As eCommerce grows and internet penetration increases, the need for a clear vision for a cost-effective, efficient, and eco-friendly last mile delivery system is becoming increasingly urgent. This is where smart last mile logistics software in India becomes crucial, as it helps reduce miles traveled and fuel consumption and makes deliveries more efficient.

#4 – Returns Management

While eCommerce and online retail are growing, the returns are also following them closely, and the market size for reverse logistics is expected to be USD 39.81 Bn by 2027. This incurs higher operational costs to businesses as they end up paying for delivery and return services without selling anything. 

This is also driving the need for smart and scalable last mile logistics software in India that can help businesses automate returns management, reduce returns management costs, and cut-down logistics inefficiencies.

#5 – Address Accuracy

Address accuracy is crucial for last mile delivery excellence, as it ensures faster and more accurate deliveries. However, in residential areas with high-rise apartments located out of the city, navigating thickly populated areas with no accurate location markers and no specific house numbers, leads to longer delivery times. This affects the overall accuracy of the operations and makes it impossible to complete deliveries with minimal rider and customer communication. 

On the other hand, AI-powered software for last mile logistics can help businesses overcome this challenge by automatically converting the delivery locations into geo-coordinates. Thus, the system can generate highly reliable and accurate delivery routes and ensure faster and more accurate deliveries.

Now that we have had a detailed look at the different trends and challenges in the Indian last mile segment, let us move on to find how last mile logistics software can help businesses overcome these challenges.

Last Mile Logistics Software in India – Benefits 

#1 – Route Planning and Optimization

By utilizing AI-based route planning and optimization, businesses can set routing constraints to ensure highly efficient and optimal delivery routes. The software for last mile logistics planning and delivery orchestration includes in-built algorithms for en-route order clubbing, dynamic routing, and delivery scheduling, which help reduce costs.

#2 – Smart Automation Workflows

Last mile logistics software with intelligent automation workflows allows for efficient allocation of orders and tracking of tasks and processes from a centralized dashboard. This customizable solution can be scaled up or down as needed, based on constraints such as delivery type, distance, vehicle make, weight, volume, and order SLAs.

#3 – Real-Time Tracking

Real-time tracking enables businesses to monitor all shipments, orders, riders, and vehicles from a single, user-friendly dashboard. Businesses can provide customers with timely and accurate information about their orders and efficiently manage their logistics operations.

Benefits of last mile logistics software in India

#4 – Intelligent Delivery Orchestration

Last mile logistics management software comes with intelligent routines and algorithms to help businesses manage all operations, business components, and deliveries from a single dashboard. This solution can efficiently manage sudden peaks in deliveries and includes features such as intelligent trip scheduling, automated driver payout and incentive management, and smart rider onboarding.

#5 – Improved Resource Utilization

Asset optimization routines enable businesses to enhance logistics components, including vehicle capacity, vehicle and rider costs, and more. By setting specific parameters, businesses can streamline their logistics operations and drive significant cost savings while ensuring optimal performance.

#6 – Data Analytics and Reporting

AI/ML-powered last mile logistics software offers data analytics and comprehensible data visualizations, allowing businesses to quickly identify trends, patterns, and outliers. These insights can be utilized to optimize delivery routes, enhance warehouse management, and improve customer service, among other critical areas.

Shipsy – Best Last Mile Logistics Software in India

Shipsy provides a comprehensive AI-powered logistics management solution that facilitates end-to-end logistics management and automation of all significant logistics operations. The software’s intuitive user interface and advanced functionalities offer highly intelligent features, including first, middle, and last mile delivery process automation, as well as intelligent route planning and optimization. 

The software further offers real-time tracking, dynamic route planning, freight procurement, shipment tracking, returns management, and multiple third-party logistics management capabilities, making it a valuable tool for businesses seeking to streamline their logistics operations.

Shipsy’s logistics software employs AI/ML-based algorithms to provide data analytics that enables businesses to refine their logistics management strategies, gain insights into consumer behavior, enhance overall profitability, and unlock:

  • 14% decrease in last mile delivery costs
  • 28% reduction in customer complaints
  • 26% increase in delivery NPS

For more information on Shipsy’s last mile logistics software, or to get started with our offerings, please get in touch with our experts and schedule a personalized demo.


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