Ecommerce companies smell money in railway logistics support

Ecommerce companies smell money in railway logistics support

Ecommerce players have welcomed railway minister Sadananda Gowda's move to set up logistics support for them, as it would offer them an alternative to the expensive air cargo that they now rely on for delivery.

In his first rail budget on Tuesday, the minister had said the railways would extend "logistic support to various ecommerce companies by providing designated pick-up centres at identified stations." Rail cargo could be up to 45% cheaper than air-cargo, according to distance and volume, as per industry estimates.

"The initiative is certainly a positive move forward for the ecommerce industry," said Rohit Bansal, cofounder of online marketplace Snapdeal. "The extension of this mode of transport to the ecommerce industry will further ascertain timely and faster delivery of orders to consumers." Bansal, whose firm is targeting sales of about Rs 6,000 crore this fiscal, said it would also lower costs, which meant that "customers can get their products at even better prices". The company's third-party logistics partners at present use airlines to transport 95% of Snapdeal's orders. The industry is waiting for clarity on what "pick up centres" mean.