India needs an agriculture digital supply chain and agri logistics is next wave for innovation.
India’s logistics cost is estimated to account for somewhere between 13-14 per cent of the GDP. Out of which 60% is contributed by Agri sector. 90% of the 60% market functions on-spot and fragmented demand from shippers.
One of the key trends for the future growth of logistics will be the emergence of agriculture logistics. Agri logistics is different from e-commerce and FMCG distribution, Agri works on different economics and altogether has a different set of problems.
Digital adoption across industries is increasing, and so is logistics. There is no going back and the $2 trillion logistics industry is going digital. There is a huge behavioural shift in Agri stakeholders from offline to adopting digital-first approach.
Traditionally commodity traders, millers and industries connect with brokers via phone call, for negotiating and managing transit vehicle. The current setup is inefficient, uncertain, and required manual efforts. The Agri logistics industry links 2.5 million millers, and 10 million traders with 60 lakh individual fleet owners and railway network (wagon aggregators. Most of the stakeholders are working in a confined network, they have a huge dependency on brokers, overall running operations in limited lanes. Their entire operation works on minimal data, fewer insights, obscure freight prices, huge cuts in margins and high commissions. On the other hand fleet owners struggling with empty miles and high waiting times.
The above story is not limited to agri traders and millers, same is the case with farmers. Even at the farm gate level, they are struggling on the logistics end , they are paying hefty prices for short distance logistics needs.
The gap needs to be fixed on priority for both perishable and non-perishable commodities. India needs a robust supply chain. Startups need to develop AI-based business decision making models for stakeholders. India has no dearth of marketplaces but still, it lags inefficient market linkage. Startups need to focus on providing end to end solutions for efficient market linkage, not limited to farmers but also for mandi (market yards) traders, local mills, processors, and exporters.
We at aggregator feels, the starting point is logistics, so we decided to solve the agri pipeline first. Our platform helps customers to have better price recovery, optimised logistics at the best rates, reduced turnaround time and a platform with lots of data points for business insights.