The logistics industry has traditionally operated using the principles of point-to-point, or direct-route transit, where freight carriers collect goods from one point and travel directly to their destination. This has long been an acceptable, profitable mode of operation, as most serviced just a few nodes.
But the Indian logistics industry has seen rapid growth, especially following the explosion of eCommerce services in India. And the fault-lines in the traditional approach emerged just as quickly – the number of delivery nodes drastically increased, adding layers of complexity to the process. Add to that last-mile collection and delivery, and it soon turned into a logistical nightmare. It was time to update the freight transit model.
The Mega Freight Movers’ advantage
The hub-and-spoke model has seen an industry-wide adoption. But at Mega Freight Movers, we also introduced certain tweaks that make the best of this mode of operation.
- Dedicated carriers deployed at the hub
Powered by a state-of-the-art IT infrastructure set-up, our predictive model allows us to determine carrier requirement accurately and have carriers deployed beforehand. This ensures that all our trucks leave as soon as possible, and goods get to their destinations faster than expected.
- Tailor-made carriers
Another advantage of our IT infrastructure is that we can precisely identify the throughput of each node. This has allowed us to build custom carriers with higher capacities and deploy them to service these locations. This allows for faster movement of goods and also reduces cost-per-kilometre.
- Scheduled arrivals and departures
There are certain advantages to being one of the best-known brands in the Indian logistics industry. The scale of our operations, along with an extensive use of technology has enabled us to schedule our carrier services. This reduces down-time and improves efficiency.
What is a Hub-and-Spoke model?
In this system, all goods collected from various nodes are first brought to a central hub, where they are sorted, distributed and then transported to their respective destinations. This makes perfect sense in larger-scale operations, because the number of routes the freight company needs to operate reduces considerably.
Why does a Hub-and-Spoke model work?
Consider a carrier servicing 10 nodes. Using point-to-point transit, they would need to operate 45 different routes, [r=(n-1)x(n/2), where r is the number of routes, and n, the number of nodes] while the hub-and-spoke model would only require n-1, or 9 routes. This gap grows exponentially as the number of nodes increase. At 50 nodes, it is 1225 routes vs 49, and so on. Also, very rarely does it happen that all the goods from one particular origin node need to be transported to a single destination node. So, in a point-to-point model, each node would require warehousing and sorting capability, leading to an increase in costs. But in a hub-and-spoke model, all the warehousing and distribution is done at the hub, leading to a dramatic increase in efficiency.
At Mega Freight Movers, we are not only early adopters of best practices, but our R&D team also ensures relevant localisation that further improves on these practices. This helps us provide logistics services that work for you just the way you want them to.