Logistics Cos, Etailers Take Steps to Curb Pilferage

TIGHTENING SECURITY Number of recruits increases around the festive season & so does the pilferage of mostly electronic goods
From being robbed at gunpoint to warehouse personnel shipping high-end phones to themselves, instances of pilferage and loss in ecommerce -few and fascinating as they may be -are prompting third-party logistics companies and online marketplaces to tighten processes during the upcoming festival season.While logistics and supply chain company GoJavas has tripled its security budget over the past year to proactively minimise pilferage, babycare etailer Firstcry has intro duced checks at rail way hubs. way hubs.

Online marketplace Paytm is now shipping high-value items directly through fulfilment centres.

“Pilferage has decreased over the last two years and the net average of loss is 1 to 2% for logistics players. Some of the wellmanaged companies also cut it down to 0.5%. The reduction has been due to heavy deployment of IT solutions in the space for tracking the shipments,“ said Manish Saigal, managing director of Alvarez & Marsal, a global professional services firm.

The incidence of theft is high in case of electronic goods and highend mobiles. Ahead of the rush season, extensive training programmes have been implemented for newly hired delivery and operations per sonnel. “With the festive season, the number of new recruits increases and so does pilferage. We have minimised human intervention in our system to reduce pilferage using scanners, cameras and automated processes,“ said Supam Maheshwari, founder of Firstcry , which utilises its own unit XpressBees to deliver orders, mainly by rail.

Spending on streamlining the track ing and IT processes has been high by the players in the ecosystem. “In the last year, we have tripled our security budget and have employed manpower to guard shipments on specific routes,“ said Shobhit Jain, business head for express services at GoJavas, which processes orders from Jabong and Snapdeal, among others.

Paytm records an overall pilferage rate of 0.5 to 1%. “We have beefed up the quality checks at the time of packaging. Most high-value shipments are insured against loss or damage during transit. For any intransit damageslosses, the courier partner either agrees to pay or produces a COF (certificate of fact) leading to recovery through insurance,“ said Saurabh Vashishtha, VP-Business at Paytm.

While this solves the problem for large players, smaller merchants have to choose between high logistics costs or rely on local players.“The courier companies which work on a franchisee model do not equip these outlets with scanners. The data entry is done only six to eight hours after the package is collected by them and pilferage is highest in the first or last mile,“ said Lipjo Joseph, cofounder of cloud platform Shipdesk, which carries out bulk order process ing for small and medium enterprises and small online businesses such as ZingoHub and Freecart.

Much thought has been given to firstand last-mile delivery problems, though linehaul -the movement of cargo over long distances -remains a major concern, with ecommerce players increasingly relying on surface transport rather than air shipments.

“To solve this, ecommerce players are now booking dedicated space in linehaul carriers for time-based delivery and increasing their network in tier-2 cities,“ said Saigal.

 Source: The Economic Times
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Author:

Neeraj; an entrepreneur & a visionary in the field of Railway, Defense & Automobiles, is a graduate in commerce and a Harvard Business School Alumni. He’s an expert in govt. liasoning & contracting and has an exceptional network & connections at both local as well as global level. He’s an expert in Market Strategy & Planning and has served number of overseas companies as an advisor/consultant. He takes a profound interest in upcoming startups & is very receptive towards ground-breaking ideas & innovations. He likes to brainstorm those ideas and if the values & philosophies matches; he is even ready to invest his resources, serve as a mentor or act as an incubator to futuristic businesses.

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