CARGOCONNECT-AUGUST 2025 - Flipbook - Page 33
NEW URBAN EQUATION : COVER STORY
Singh reinforces the idea that strategic proximity
yields multifaceted bene昀椀ts. He points out that ful昀椀lment
centres located close to high-density consumption
zones minimise transit time and shrink delivery
windows. Reportedly, this approach reduces fuel
usage, lowers the chance of failed deliveries, and allows
for faster returns processing—directly supporting
higher customer satisfaction and retention. Singh also
notes that by reducing the number of touchpoints in
the supply chain, these strategically placed centres
improve inventory turnover and create a more seamless
last-mile experience, which is crucial for time-bound
delivery commitments.
Singhal o昀昀ers a granular view on the cost dynamics
tied to last-mile delivery. According to him, last-mile
operations alone account for 40–50% of total transportation costs in Q-com. “To meet service-level agreements
that promise delivery within 20 minutes, ful昀椀lment
centres must be located within a 1–2 km radius of
the customer, especially for dark stores and Q-com
operators,” he suggests.
Adding to this, Virat Sharma, Sr VP– Expansions
at Zepto, notes that “the customer is at the centre
of everything we do. When we talk about last-mile
e昀케ciency, the key question is: how fast can we deliver
to the customer?” Sharma explains that while speed is
crucial, it's also about how many customer needs can
be ful昀椀lled from a single location. Zepto has expanded
its SKU count from 3,000–4,000 to up to 15,000 in dark
stores, and even up to 50,000 in superstores, driven by
customer demand. He adds, “placing a store just 500
meters from the customer can be great for delivery speed,
but it may not be cost-e昀昀ective.” Sharma highlights
the importance of balancing speed with cost, using
detailed analysis of service areas, expected demand,
and rent-versus-bene昀椀t trade-o昀昀s to guide ful昀椀lment
centre placement.
Additionally, Singhal stresses that in-city ful昀椀lment
centres embedded within mixed-use logistics parks or
urban distribution hubs provide a dual advantage—they
ensure operational e昀케ciency while o昀昀ering scalability
in high-demand catchment areas. “These centres not
only improve inventory turnover and order 昀椀ll rates
but also reduce reliance on third-party aggregators.
Additionally, they support plug-and-play deployment
models, allowing platforms to go live faster in new
locations and respond quickly to demand shifts,” he adds.
Sharma echoes this need for 昀氀exibility and scalability,
noting that Zepto has moved from serving 7 to 8 sq
km areas—which led to longer delivery times—to much
smaller, concentrated delivery zones. This shift has
improved speed and may reduce certain costs, but as
he cautions, “we still need to check if the savings from
faster delivery offset the costs of rent and inventory
storage.” According to him, optimising last-mile delivery
requires constant recalibration based on real-time data
and local dynamics.
Adding to this, Jyothis Jagajeeve, Head– E-commerce
Logistics at Decathlon Sports India, stresses that datadriven decision-making is central to ful昀椀lment strategy.
“The key lies in making data-driven decisions—particularly
around location selection, SKU assortment, and the
MANU RAJ BHALLA
Director and Global Head–
Contract Logistics and
Supply Chain,
Freight Systems India
VIRAT SHARMA
Sr VP– Expansions,
Zepto
Shared urban logistics
infrastructure is a viable path to
reduce cost and environmental
impact. We’ve submitted
concept papers to governments
like Delhi and Karnataka,
proposing the idea of commonuser fulfilment centres in
central business districts.
These shared hubs could be
used by multiple platforms,
easing urban congestion,
reduce delivery overlap, and
improve last-mile logistics, all
while keeping the consumerfacing brand experience
intact. The only way forward
is collaboration—whether it’s
shared warehousing, joint
infrastructure, or pooled
delivery services.
Choosing the right location
is crucial. That’s why we
invest in detailed analysis
and research at both city
and neighbourhood levels.
We look into expected
demand, how much
storage space we need,
and whether the rent
and inventory costs are
justified by the savings in
last-mile delivery. In the
end, optimising last-mile
delivery—whether through
dark stores or microfulfilment centres—requires
the right balance. It
should improve speed and
customer satisfaction while
keeping costs under control.
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