Eyeing beyond INR 20 Th Crore Opportunity for Digital Freight Market in India by 2025- What will make the industry more lucrative in future? Ken Research

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The digital freight brokerage market is expected to be consolidated in future with few players dominating the market, says a report by Ken Research.

 1. The Funding Wave in India Digital Freight Brokerage Market

Investment Scenario in Digital Frieght Market India

• The investment has been across the three key areas — long haul movement, short haul delivery and logistics software solutions, with long haul earning great interest.
• Intracity space has also captured interest of investors. For instance, a Bangalore based intra-city logistics startup named Let’s Transport raised nearly USD 20 Mn across four funding rounds since 2015 uptil now.
• OEMs have shown interest in this sector, for instance, TATA Motors via its subsidiary, acquired  26%  stake in the intra-city startup “TruckEasy” for an undisclosed amount in July 2018.

2. Trends and Developments to look for in India Digital Freight Brokerage Market

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• Border wait time has dipped from 70 minutes to 10 minutes, particularly in states such as Assam and Andhra Pradesh. At present, 22 checkpoints have been dismantled. This will lead to the fixed costs associated with truck hiring going down by 3-5% because the rest is variable.
• India’s digital freight logistics sector is attracting marquee venture investors as more large and small enterprises are seeking to leverage technology to move their goods. Investors are seeking to fund this venture owing to the fact that on demand transportation services is about 20% cheaper than offline players.
• With logistics management apps solution, shipper or admin app, driver app, an app for merchant is all integrated. Shippers and merchants can track the overall distance covered. This will further help drivers to optimize the route, reach destination on time and get more deliveries done every day.

3. Impact of the government regulations over India Digital Freight Brokerage Market.

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• Road transport and highways ministry has increased the permissible load carrying capacity for trucks and tractors that are already plying by 20-25% to the same capacity. Owing to this, overloading is anticipated to reduce in the trucks. In case of contract booking, aggregators will witness an increase in earning as they may charge higher prices from their carriers due to higher load capacity.
• Driver profile provisions lay down the qualifications of the drivers and the licenses/ permits that they have to procure in order to be eligible to drive taxis enlisted on a digital market place.
• License Provisions make it mandatory for aggregators to procure licenses from the respective authorities, state the period of validity of such licenses, application and renewal procedure and conditions to be satisfied to become eligible to procure such a license.

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