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AI is playing a crucial role in creating optimal routes and unearthing deep inefficiencies in last-mile operations

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Founded in 2015, Locus embarked on a mission to redefine last-mile logistics strategies for enterprises navigating the challenges of a rapidly evolving market. Over the last couple of years, Locus has not only witnessed unprecedented growth but also played a pivotal role in shaping the technological landscape of India’s logistics sector. The company’s journey mirrors the broader technological revolution that has been sweeping through the country’s logistics industry. India, with its status as one of the fastest-growing economies and a burgeoning e-commerce market, has seen a paradigm shift in the way logistics and supply chains are managed.

Some edited excerpts from an interview with Nishith Rastogi, CEO of Locus.sh

How has Locus evolved and transformed in the last couple of years?
When we started Locus back in 2015, we intended to help enterprises optimise their Last-Mile logistics strategies in ways that could set them apart from the competition and strengthen their brand loyalty amid high-stakes consumer demands. Since then, our team has been empowering businesses with innovation and helping them solve today’s and tomorrow’s most challenging last-mile logistics problems.

Locus has continued to experience tremendous growth and momentum with its expansion in markets like Mexico and the Middle East. It has also further deepened its existing foothold in the U.S., India and Indonesian markets. We also developed relevant solutions based on industry needs and requirements through an outside-in approach. Looking at the growing demand for same-day and next-day delivery to enterprises, we have recently launched a Multicarrier Parcel Management platform called Shipflex that provides businesses with the flexibility to fully outsource their deliveries to a wide range of delivery carriers. The platform helps companies to address barriers like inefficient carrier selection, capacity management, lack of real-time order visibility, etc., by automating entire carrier workflows for the optimal price and service levels. All while enabling end-to-end visibility of order-to-doorstep deliveries across in-house, contracted, and outsourced fleets on a single dashboard. This can enable them to expand their reach and achieve ever-shortening delivery timeframe, even in new geographies. ShipFlex also gives businesses access to Locus’ global carrier partners, such as FedEx, RPX Logistics, Loomis Express, Shadowfax, SPL, etc., helping them with their delivery orchestration much more efficiently and cost-effectively.

We even rolled out an industry-first Last-Mile Maturity assessment tool for enterprises to help them understand precisely where they are in their last-mile maturity journey and what are some of the gaps and opportunities they have in front of them. After completing the assessment, they also receive

Through our dispatch management platform, powered by cutting-edge technologies such as AI, ML, advanced algorithms, etc., we have empowered enterprises to plan, route, dispatch orders, and track hybrid fleets on a single intuitive window. Last year, the platform was upgraded with a Delivery Linked Checkout feature that enabled retailers to ease their delivery load by incentivising the end-customer to choose specific delivery slots. This helped businesses to achieve better customer delight and profitability.

What is your key differentiator?

At Locus, we firmly believe that in delivering real-world growth to all our stakeholders. We enable organizational growth across five key pillars. The first is last-mile excellence. It all boils down to making each delivery better than the last. In the end, this is what drives us to deliver value to all our stakeholders, whether it is our clients, their fulfillment staff, or the customers whom they deliver to. The advanced algorithms that power our solutions work to this end. They can learn from each delivery made to improve the quality of the next one. Our solutions focus moving past challenges of attaining last-mile excellence such as manual fulfillment operations, poor end-to-end visibility, and no data-backed insights driving decision-making.

The next is Advanced Analytics. In today’s age where data is considered the new oil, simply gathering data is not enough. Only by analyzing it can uncover hidden inefficiencies and new growth opportunities for insights that can give them the competitive advantage is equally crucial. Many of our clients actively seek customized reports, basis which they make very targeted, data-led decisions. It is this data-led approach that makes it possible to enable real-world growth .

Workforcement Empowerment, which is about providing the conditions they need to make the optimal number of deliveries, is an often-overlooked aspect. When drivers are dissatisfied and underproductive, they fail to provide a delightful delivery experience for customers. This leads to loss of customer trust and cuts down business growth. We believing in driving value to all the stakeholders, whether it is supervisor managing operations or the driver hard at work making round-the-clock deliveries. This is where we

In today’s times, we cannot ignore the social and business necessities of ensuring sustainable operations. When it comes to supply chains, one of the sessions noted that reducing emissions is the first point of focus, but many find it quite a challenge. Sustainability has always been one of our core values at Locus, and we’ve worked with leading enterprises across the world to give them visibility on emissions on shipments fulfilled. By doing so, they were able to Minimize emissions from distance travelled, fleet utilized, and even planning time.

Finally enabling organizational growth is also about providing consumer experiences. While a large part of it is matching up to consumer expectations around speed, convenience, and flexibility, the other crucial aspect is predictability, or delivering on what you promise every single time. .

Why Green Mobility is the Need of the hour?

In India, green mobility has become a pressing issue for various reasons. The country’s status as one of the largest and rapidly expanding automobile markets has led to a surge in the number of vehicles. This surge has triggered severe air pollution, particularly in urban regions, leading to detrimental health consequences for the population. To ensure sustainable mobility, industries are shifting towards environment-friendly alternatives. In the logistics space, businesses are taking initiatives to minimise the overall ecological impact of logistical activities, and reduce carbon footprint and ecological wastage in all activities of forward and reverse flows of products.
At Locus, we have been directing our efforts towards helping our clients achieve sustainability goals using deep technology.

Retailers primarily operate in the dark, with little visibility and insight into their operations. This increases costs and empty miles on the road. By adding route optimisation to their digital transformation strategy, retailers can plan their daily dispatches and smartly assign orders to the best-suited and available vehicles and drivers to effectively utilise resources and avoid extra miles driven, and fuel usage.

Reverse logistics at the last mile is one of the main reasons for empty miles and excessive carbon emissions. Retailers can adopt a single route plan combining forward and reverse logistics, leading to fewer empty miles, more equitable workload distribution alongside greater efficiency and lower CO2 emissions. Our solution calculates an optimally-sized fleet for delivery/distribution operations as well as the number of vehicles required on the ground for businesses to ensure that all vehicles are adequately utilised.

Having completed more than 850 million successful deliveries for 300 enterprises across the globe, we have managed to save over 70 million km and 17 million kg in greenhouse gas emissions to date. The company’s impact has increased significantly since 2021, given the unprecedented rise in online shoppers across the globe and businesses realising the value of digitising their logistics operations at scale, especially the last mile, to deliver delightful customer experiences.

Since last-mile logistics have become a priority for many companies more than ever before, Locus has been able to help them successfully and strategically improve their operations in impactful ways. The company has maintained 99.5% on-time last-mile deliveries across all its operating geographies since 2021 without increasing carbon production. In fact, regardless of enterprises increasing their vehicle utilisation by 10% through Locus’ platform, greenhouse gas emissions equivalent to 25 thousand acres of forest were reduced per year.

How is AI transforming the Logistic & Supply chain space

AI plays a significant role in transforming the logistics and supply chain sector. The large flow of data coming from the supply chain is now commonly being utilised and analysed to spot trends in the supply chain, so logistics firms can make necessary changes in their organisations. When used in warehouse management, AI can reduce human error and simplify the planning process by speeding up analysis time. The technology can solve some of the most complex issues in logistics, like last-mile logistics analysis and optimisation, supplier selection, and workforce planning. At Locus, AI plays a crucial role in creating optimal routes and helps unearth deep inefficiencies in last-mile operations.

As a LogiTech expert, what are the major concerns in the industry

Ensuring a consistent customer experience across channels has proved to be our major concern. Implementing an omnichannel strategy is crucial in today’s business environment, as failing to do so can impede business growth. To address the growing customer expectations, deliver a consistent experience, and stay ahead of the competition, e-commerce brands must prioritise enhancing delivery control, speed, flexibility, cost-efficiency, and other relevant factors. A viable solution to overcome this hurdle is implementing a technology-driven platform that automates and optimises last-mile fulfillment procedures.

Empowering drivers, particularly those operating in the last-mile delivery sector, has emerged as another significant challenge. As households demand more parcel deliveries, drivers face increasing challenges in meeting expectations. This demand is only expected to grow in 2023. In countries like India, drivers face challenges such as poor road infrastructure, unclear addresses, traffic jams, and a lack of detailed maps. A Boston Consulting Group survey reported that road congestion in just four Indian cities: Delhi, Mumbai, Kolkata, and Bengaluru, added to a colossal $22 billion in congestion costs. This situation worsens when drivers cannot provide timely deliveries, leading to frustrated customers constantly seeking updates on the status of orders. This can lead to a loss of customer trust, ultimately hurting business growth.

At Locus, we have managed to solve both of these challenges.
– Through our dispatch management platform, which is powered by advanced algorithms, etc., enterprises can plan, route, dispatch orders, and track hybrid fleets on a single intuitive window. Recently, we launched the Delivery Linked Checkout feature that allows retailers to ease their delivery load by incentivising the end customer to choose specific delivery slots. This helped businesses to achieve better customer delight and profitability.

– To improve drivers’ lives, we focus on increasing their tenures with predictable daily routes and schedules with real-time performance reports and accurate payouts. This enhances driver retention and on-ground productivity for retail businesses.

What are some of the top logistic trends in 2023?
As consumers are expected to continue making purchases from the comfort of their homes, the future growth of every successful brand depends on how it shapes its last-mile delivery. Here are some of the key logistic trends that will contribute to the growth of businesses this year:

● Driver empowerment: In India, delivery personnel across major cities like Delhi, Mumbai, Kolkata and Bengaluru are usually unhappy or dissatisfied from the immense pressure of making on-time deliveries daily amid crowded streets, traffic jams, and unclear addresses. Even though delivery personnel constitute a significant part of the gig economy, they struggle with extended working hours, job insecurity, dismal pay, and inadequate facilities. When drivers are dissatisfied and underproductive, they fail to provide a delightful delivery experience for customers. This leads to a loss of customer trust and cuts down business growth. Today, businesses are actively investing in a delivery route planning software for an equitable workload of drivers. Its cost-effective routes give drivers enough time to complete their deliveries and take sufficient breaks. Hence, the focus in 2023 will be to make drivers happy and empower them.

● Sustainability in last-mile delivery: Sustainability in last-mile delivery cuts or minimises the ecological footprint in deliveries like carbon or greenhouse gas emissions. In India, last-mile emissions are increasing every passing year. A Stand.earth Research group report of 2022 mentioned that Indian cities like Delhi, Mumbai, Bengaluru, Kolkata, and Chennai emit more CO2 from last-mile delivery than the last-mile emissions from France or Canada. In 2023, there will be a rising need for businesses to automate and digitalise last-mile logistics operations in India.

Electric Vehicles (EV) are an active contributor towards minimising the carbon emissions in the last-mile delivery. An article mentions that 15-20% of last-mile e-commerce cargo fleets have been electrified globally. Another report states that with mandated adoption, EVs can reduce carbon emissions in the last mile by 60% and in the chosen scenario, it can minimise carbon emissions by 24%. As EVs minimise fuel consumption and carbon emissions, they are the perfect urban delivery vehicle for a cost-efficient and sustainable last mile.

Investing in a multi-stop route planner is another way to reduce the last-mile carbon emissions. It helps businesses plan optimal routes based on customer-preferred time slots and delivery zones. Also, it ensures drivers’ delivery and pickup parcels on the same route. This helps reduce the number of delivery vehicles on a route, thereby minimising carbon emissions.

Clearly, in 2023, sustainability will not be a luxury for businesses but a mandatory need to win customers, and for which they will take incremental steps to achieve it.
● Wave of Omnichannel retailing: Traditional retail fulfillment was predominantly limited to online ordering or in-store purchases. However, the landscape has drastically transformed with the advent of omnichannel retailing. It is a process where businesses integrate all the channels to provide seamless shopping experiences to their consumers. Businesses in India are keen to capitalise on the shopping boom of omnichannel. However, their biggest concern in making a mark in omnichannel retailing is logistics. Increasing logistics costs make it difficult for businesses to minimise their turnaround times. By investing in omnichannel capabilities, businesses can improve delivery control, speed, flexibility and cost. It cuts unnecessary time for the product to move across intermediaries like the brand’s warehouse and makes last-mile logistics more efficient. In 2023 and coming years, we will witness a connected physical and digital, or phygital world in retail.

● Robust investments in last-mile logistics solutions: From this year, businesses will start focusing on exploiting future growth opportunities. They will move from the “survive” mindset to “growth” mindset, which will help them solve problems in a crucial component of their supply chains – last-mile delivery. The number of packages consumers order will continue to rise, along with investments in logistics technology that will allow businesses to make quick and informed decisions and differentiate their last-mile fulfillment experience. A Gartner study mentioned that by 2024, 50% of supply chain organisations will invest in applications that support advanced analytics and AI capabilities. In India, the penetration of last-mile delivery is more than 10%. Infact, the country’s last-mile delivery market will reach $6-7 billion by 2024. The shipments ordered online will grow to 5 billion by 2025, up from 1.36 billion shipments in 2020. More than half of the businesses mention delivery cost as their primary challenge in providing last-mile delivery services. To make last-mile cost-efficient and generate more revenues from it, businesses are looking to increase their investments in AI technologies. As businesses rethink and redefine their last-mile tech capabilities to improve their competitiveness, we expect to continue to witness a flurry of investments in last-mile logistics solutions.

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