By: Neha Mohatta, CEO & Co Founder, Brize
The Indian logistics market was valued at INR 24 trillion in 2022 and expected to reach INR 45 trillion by 2027, growing at 10-12% CAGR. The industry is going under a major transformation. For the past few years the industry was dependent on delivery fleets, warehouses, fixed assets, and storage facilities that required large capital investments and long-term leases. While the model has supported the growth of e-commerce, retail, and industry supply chains, it comes with some obstacles like underutilised capacity during off-peak seasons, high maintenance costs, and limited scalability. Today, rising consumer demand expectations, seasonal demand change and a shift towards sustainability are pushing the logistics sector to move away from fixed assets models towards more cost-efficient models.
Companies are thinking about space utilization and increasingly adapting to flexible and modular spaces. They are using shared warehouses, and dynamically allocated delivery networks to utilize space and reduce cost, and respond effectively to changing market conditions.
The growth is being driven by certain factors such as the rise of e-commerce and quick commerce, increased demand for next-day or same-day delivery, and increased adoption of digital technology in supply chain management. Consumers at present want real-time visibility in supply chain management. Customers today expect real-time visibility and sustainability initiatives, forcing logistics players to rethink their traditional model.
The Rise of Flexibility in Logistics
India’s logistics and warehousing industry is gearing up to handle a sharp spike in e-commerce activity during the festive season, with sales expected to rise 25% over last year and warehousing demand projected to jump 40%. Flexible logistics solutions are emerging as the solution for these issues. The idea is simple: instead of investing heavily in assets that remain unused for extended periods, businesses prefer rentals, pay-per-use schemes, and short-term leasing. This strategy allows companies to adjust operations flexibly based on demand, improve cash flow, and steer clear of depreciation issues linked to assets that aren’t consistently utilized.
The warehouse industry and conventional systems depend on long-duration leases, often tying up massive amounts of capital even when demand varies or is seasonal. In contrast, flexible warehouses allow businesses to lease space as and when it is required through technology-driven platforms to secure storage of inventory for months or weeks rather than years. Likewise, logistics fleets once considered fixed-capital investments with fixed maintenance and depreciation plans are now being made available to lease on fleet-as-a-service contracts that grant companies the ability to respond to demand surges without long-term commitments of financing.
Several factors are driving the move from fixed assets to flexible rentals in India’s logistics industry. Seasonal Demand Fluctuations like during the festive season, and you can see massive spikes in consumer demand, while off-season demand may drop drastically, and similarly, agricultural cycles create irregular demand for cold storage and transport. Fixed assets often remain idle in lean periods, locking capital without returns, and flexible rental enables businesses to expand capacity during surges and shrink when demand slows down.
Customers now have some faster, cheaper and more reliable deliveries. Same-day or next-day shipping is no longer a luxury but a baseline necessity. To keep up with demand, logistics providers need to scale operations instantly, something fixed asset models cannot achieve without excessive cost. Flexible rentals, whether in warehouses or fleets. Providers help them to deliver on these rising expectations of consumers. This shift is not limited to logistics; other industries are also adopting similar models. For example, brands in the cooler sector have begun offering industrial and seasonal air coolers on rental, allowing businesses to have essential equipment without the burden of capital expenditure or maintenance or storage, reflecting the flexible and customer-first approach used in today’s supply chains.
The brand has addressed one of the customer’s pain points, which is seasonal usage, warranty lapses, maintenance costs and storage burden.
To overcome these challenges, they have developed some smart solutions such as free home delivery, a 7-day replacement policy, an unconditional three-year warranty on motors and free post-season cleaning and maintenance. This initiative shows us that customer expectations across industries are increasing, and it not only makes operations more efficient but also improves the overall customer experience.
Role of Technology in Flexible Rentals
Technology plays a major role in helping the transition from fixed assets to flexible rentals. Digital platforms are revolutionising logistics, increasing productivity, opening up new avenues, and raising the standard of services. Real-time decision-making, demand forecasting, and predictive analytics are made possible by artificial intelligence (AI) and machine learning (ML) models. When employing flexible rental models, these tools help businesses to effectively allocate resources, predict changes in demand, and guarantee on-time delivery. In the meantime, asset and inventory management as well as end-to-end visibility are provided by the Internet of Things (IoT). By offering real-time tracking, remote monitoring, and proactive maintenance, networked sensors help operators anticipate problems and ensure trouble-free operations during periods of high demand. Meanwhile, automation and robotics are revolutionising warehouse operations and last-mile delivery.
Autonomous vehicles and robotic process automation (RPA) simplify repetitive activities, minimise errors, speed up operations, and provide protection, leading to cost savings and productivity. Combined, these technologies guarantee rented fleets, warehousing space, and other versatile logistics assets are utilised effectively and on time, meeting rising consumer demand.
Cost Efficiency and Sustainability
Flexible rental models have some significant advantages in both cost management and sustainability. By replacing large upfront investments in warehouses, fleets, or equipment with pay-as-you-use solutions, businesses can reduce capital expenditure and free up working capital for other strategic initiatives. From an environmental perspective, flexible rentals contribute to more sustainable operations. By renting equipment or storage space only when required, businesses can reduce the carbon footprint associated with manufacturing, maintaining and storing underutilised assets.
Customer experience is ultimately the driving force behind the trend toward flexible rentals. Both businesses and consumers today demand scalable, dependable, and quick solutions. Flexible rental models put logistics firms and equipment suppliers in a better position to satisfy these demands. Without the burden of maintaining fixed assets, they can maintain service quality, offer same-day or next-day availability, and react quickly to spikes in demand.
Nowadays, a lot of companies that rent out industrial equipment put the client first. They make necessary equipment available while guaranteeing dependability and convenience, two factors that are equally important in supply chain management and logistics, by providing short-term rentals, maintenance assistance, and replacement services.This flexible, customer-first approach reflects the evolving expectations across industries that rely on seasonal or high-demand assets.
As India’s logistics industry continues to expand, the adoption of flexible rental models will likely grow. Penetration of e-commerce, increasing customer expectations, and sustainability pressures are pushing businesses to rethink asset models. By embracing flexibility, using advanced technology and giving priority to customer experience, businesses are able to fluctuate demand, optimise costs and operate more sustainably. In the end, this shift is part of a larger business best-practices revolution that aligns environmental sustainability, operational effectiveness, and customer service. It is not just about logistics. Companies that adopt responsiveness and flexibility will be well placed to succeed in an increasingly competitive marketplace and provide customers faster, smarter, and more sustainable
solutions.
With India’s logistics sector expanding by each passing day, there will be a rise in flexible rental models. Businesses have been inspired to reconsider the asset model by the growth of e-commerce, consumer demands, and sustainability issues. By combining cutting-edge technology and a customer-centric approach, flexibility enables businesses to adjust demand, optimise costs, and run sustainably. Broadly speaking, this change is a component of a larger best-practices movement that combines client satisfaction, operational effectiveness, and environmental sustainability. It goes beyond simple logistics. Responsive and flexible businesses will stand better positioned in an increasingly competitive marketplace to themselves serve as a front-runner in offering faster, smarter, and sustainable solutions for customers.