Positive changes are occurring in the Indian logistics sector as a result of advanced product developments and technology advancements. Recent technologies and AI have a significant impact on the business environment, prompting organizations including India's traditional logistics sector to reevaluate their approaches in order to remain competitive and satisfy changing customer demands. The logistics sector has profited immensely from the crucial transition to contactless operations and digitization. The logistics sector in India is among the biggest in the world, with an approximate valuation of $215 billion, and is growing at a rate of 10.5% per year.

               Intra-city logistics/Moving nearby accounts for 15-20% of the road transport industry in India. Surprisingly, around 80% of small businesses in the country are not yet offering online services, indicating untapped potential and opportunities in the logistics sector. However, there is a growing demand for last-mile delivery in India, particularly from Tier-2 and Tier-3 cities that are increasingly focusing on intra-city logistics. Additionally, e-commerce is thriving in these cities compared to Tier-1 cities. Furthermore, the government's "Make In India" initiative encourages Direct-To-Consumer (D2C) brands to seamlessly deliver their products to customers' doorsteps. However, many small D2C sellers face challenges in managing end-to-end operations, maintaining a variety of vehicles, and ensuring fast delivery. 

According to a report, the Intra-City Logistics Market in India is projected to register a compound annual growth rate (CAGR) of over 5.3% between 2022 and 2027. Another report suggests that organized players currently own only 10-15% of the estimated size of the Indian logistics market ($215 billion), with the online vertical estimated to be between $20 and $30 billion by 2025. (Source: ResearchAndMarkets.com)

          Road logistics accounts for the largest share, approximately 75%, of the overall market size. Within this segment, intra-city logistics service providers focus on quick and on-demand delivery, aiming to ensure same-day delivery services. In the coming years, the willingness and ability of businesses to adopt advanced technologies will be crucial for survival in this fast-paced industry.

Important Developments in the Indian On-Demand Intra-City Logistics Sector:

 1. Growth potential at a CAGR of 7-8%: The COVID-19 pandemic has led to increased internet usage, driving digitization and demand in the logistics industry. As a result, the logistics market is expected to grow faster. According to a RedSeer article, road logistics, including intra-city logistics, is projected to become a $372 billion industry by FY26, growing at a CAGR of 7-8%.

 2. 60% of intra-city logistics are driven by on-demand services: While larger players may have in-house fleets, many small businesses prefer to outsource their delivery requirements to dedicated delivery platforms. The demand for such service providers is expected to rise due to the benefits they offer. Over 50% of enterprises have outsourced more than 80% of their business to logistics partners.

 3. Availability and price as key factors for outsourcing: With numerous players in the logistics space, the availability of delivery vehicles and cost-effective solutions remain top priorities when choosing a service provider. Reputation also plays a part for customer to notice the brand.

 4. Both digital competence and D2C sales are growing. The foundation of the logistics sector is D2Cs. Smaller direct-to-consumer retailers may not always have the resources available to them to handle end-to-end operations independently. As a result, businesses are now depending on outside logistics firms to provide a satisfactory delivery experience during the last phase of delivery. Intra-city logistics will have a huge boost in the future as a result of the expanding D2C sector, which is opening up a variety of delivery chain challenges.

 5. Numerous government initiatives and legislation have given the logistics sector the much-needed boost. Among these are the PM Gati Shakti National Master Plan, Digital India, Made In India, and the Logistic Efficient Enhancement Program (LEEP).

The industry's future trajectory is remarkably promising, guaranteeing remarkable expansion and advancement in the years to come. The development of the intra-city logistics sector depends on greater engagement from the public and commercial sectors. The evolution of automation technologies, cloud computing, big data analytics, machine learning, robots, artificial intelligence, infrastructural readiness, evolving customer tastes, and product improvements and advancements will shape Indian intra-city logistics in the future. The industry is moving away from its extremely dispersed traditional approaches and toward more intelligent solutions that address various delivery requirements.