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Sep, 2021     

What’s next for intracity logistics players?

Intracity represents approx 13% of the road logistics, of which 60% is on-demand.


There was once a time when the logistics services available in the market weren’t standardized and didn’t have the capabilities to solve the new-age problems or support the innovative offerings that other sector players were bringing in the Indian market.

However, today the scenario is a different ball game. It has turned out to be a key enabler for most of the other consumer sectors and is a major factor to continue customer delight. Among the various logistics channels, road logistics is the largest and represents the lion’s share with 75% of the overall market size.

1. Road logistics will likely grow with CAGR 7-8% to touch $372 billion by FY26

Note(s): Intracity/Intercity road does not include further segments i.e. warehousing, Railway, Airways and Seaway

Post Covid, road logistics saw an accelerated demand which was a result of the increasing online adoption. The overall road logistics market is expected to grow at a CAGR of 7-8% to become $372 billion by FY26. Of this, 86% will be driven by intercity and 14% will be intracity logistics.

2. Intracity represents approx 13% of the road logistics, of which 60% is on-demand

60% of the intracity logistics will be driven by on-demand business. On-demand economy has been disrupting all sectors and intra-city logistics is no different. Some of the players in this segment include Blowhorn, Porter, LetsTransport among others.

3. Also, despite inhouse fleets, there is a demand for outsourcing logistics

Note(s): WA represents weighted average

As a common trend in this industry, we have seen that although the bigger players have inhouse fleets, many prefer to opt for logistics services. The reasons could be the affordable pricing, availability, superlative and reliable services and the reach of these new-age placeys across the various parts of the country.

4. Availability & pricing are key reasons to identify the right logistics partner

Note(s): Each cell represents the relative weight of each parameter among the voted responses – a 21% element is twice as important as an 6% element; for readability, parameters with <5% weight have been clubbed under others such as “Proof of delivery” and “Multiple vehicle category”

While choosing a logistics partner, some of the key factors that play a key role include availability, pricing apart from brand reputation, existing relationships, financial factors among others. As this industry has largely remained unorganised, reputation and pricing remains a driving factor while selecting the logistics partner.

5. Today, intracity marketplace represents 1% of the on-demand logistics which shows the significant scope ahead

Currently, 99% of the market is unorganized which means intracity marketplaces have only scratched the tip of the iceberg. This shows the significant scope of headroom which lies ahead for these players. Starting from entreprises, SMEs and the growing startup ecosystem, these players have a huge horizon that they can cover, going forward.