Logistics service providers struggle to balance festive season hiring with last-mile delivery enhancements

Ahead of the festive season, logistics providers are struggling to balance the need to hire workers to boost sales while keeping costs in check – all while striving to enhance last-mile delivery following two sluggish quarters. The initial two quarters were challenging due to unseasonal rainfall. However, now, to cash in on the upcoming festive season, companies are looking to bring in contract workers at minimal wages while also bringing in a slew of measures to boost logistics, delivery, and order fulfillment capacity.

Logistics players are under immense pressure to ensure swift deliveries, especially during the festive season. Expectations for same-day, next-day, and express deliveries have become standard, and any delays in delivery times can result in higher instances of shopping cart abandonment. However, the challenge lies in balancing these speedy deliveries with potential increases in shipping costs, particularly when e-commerce warehouses are located far from the customer’s destination. To address the issues companies are not only hiring manpower but also enhancing their supply chain capabilities.

In preparation for the same, e-commerce platforms are taking various measures. For instance, Flipkart has announced its commitment to generate over 100,000 direct and indirect job opportunities across its extensive supply chain network including fulfillment centers, sortation centers, and delivery hubs. Expected to handle 40% more shipment demand, Flipkart has also been continuously expanding its supply chain infrastructure by establishing last-mile distribution hubs and large-scale fulfillment centers. Flipkart has added a substantial 1.9 million square feet of operational space in various states including Uttar Pradesh, Gujarat, Bihar, Punjab, Rajasthan, and Telangana.

On the other hand, Mahindra Logistics has also scaled up operations to meet the festive season demand by ramping up hiring and expanding capacity. It plans on hiring more than 14,000 employees on a seasonal basis adding to its third-party workforce. The company is expanding its services by establishing pop-up facilities in eight major Indian cities, totaling 1.1 million square feet in area. These new additions cater to e-commerce customers and encompass fulfillment centers, sort centers, and returns processing centers, all aimed at enhancing the efficiency and punctuality of customer deliveries. Additionally, the company has extended its reach to the last mile by launching multiple last-mile delivery centers throughout the nation.

E-commerce giant Amazon has also been gearing up for the upcoming festive season by taking initiatives like strengthening collaboration with Indian Railways, deepening partnerships with mom-and-pop stores, and an agreement with India Post for smooth international delivery.

The festive season, spanning from September to December, intensifies the competition between traditional brick-and-mortar stores and online platforms, both vying for a larger share of sales. However, managing the shortage of manpower alongside enhanced last-mile delivery has been a persistent issue.