With the Indian logistics sector having taken centrestage with regard to government reforms, moving towards an integrated ecosystem is pertinent for holistic growth of the sector, as recommended in a thought paper jointly produced by ASSOCHAM and Deloitte.
The paper, titled ‘India-On the cusp of a logistics revolution’, noted some of the continuing concerns impeding the growth of logistics sector including inadequate infrastructure, slow rate of digital adoption, lack of sufficiently skilled labour, poor quality and performance standards, and regulatory hurdles.
In light of these, a key recommendation of the paper is the need for achieving integrated end-to-end logistics for ensuring easier and “smoother interface among logistics stakeholders for seamless delivery.” It focuses on how integrated end-to-end logistics network with the required infrastructure facilities, and a digital and services platform can lead to improved efficiencies in the sector.
Commenting on India’s potential to develop a globally competitive logistics sector, Peeyush Naidu, Partner, Deloitte India said, “Government of India has over the last year, taken a number of initiatives to improve logistics performance. Setting up a dedicated Logistics Cell in the Ministry of Commerce & Industry, granting logistics infrastructure status, implementation of GST, and conducting a pan-India study on logistics ease across different states has been some of them. This pan-India study (LEADS) was carried out by us and released by Minister of Commerce & Industry, Suresh Prabhu. It has established a baseline of logistics performance across states and generated keen interest in logistics at state level. In focus now are integrated end-to-end logistics network, greater adoption of technology, and digitalization.”
Sharing his views on the country’s logistics sector, ASSOCHAM’s secretary general, D.S. Rawat said, “India’s future logistics network is to be built optimally, to meet the growing demand through an integrated and coordinated approach in which development of each mode such as, railways, waterways and roads – is matched to the needs and existing assets are better utilised in order to recurring losses to the economy and improve capital efficiency.”
“With the Central government taking several initiatives in sectors such as roads, railways, airports, sea ports, coastal shipping and inland waterways to win back the confidence of domestic and overseas investors, the logistics sector can expect renewed momentum in coming years,” added Rawat.
While a National Logistics Plan is already under works for successfully implementing integrated logistics, several elements need to be integrated with the horizontal flow across the logistics value chain including services, infrastructure and information. The paper highlighted the need for arriving at an all-encompassing solution instead of a piecemeal approach to make Indian logistics sector globally competitive.
It added that the government’s National Logistics Plan, among others things, should focus on: creating a vision for the logistics sector in the long term, formulating action steps for achieving this vision, and, creating a conducive environment for the growth of the logistics sector and should identify programs to address all aspects.
Further, establishing coordination between various departments of the central government, state governments and private players is central to achieving integrated end-to-end logistics. The paper called for more active participation of state governments and private players in improving the performance of the sector. “While the state will take the lead in putting the policy in place, it is the responsibility of other stakeholders to contribute to the framing and implementation of this blueprint,” it read.
As an important prerequisite for integrating the logistics ecosystem, a key focus area mentioned in the paper is the need to shift towards more digitized platforms that allow for integration between modes of transportation, as well as between users and third-party service providers to harness efficiencies.
“Multiple digital technologies can potentially impact different activities across the entire logistics value chain to bring in operational efficiencies, maintain cargo safety, enhance customer interface, revamp business models and bring about rationalization of logistics costs,” the paper said.
Better integration of the systems, stakeholders and processes of the logistics value chain enabled by the adoption of digital technologies through a single platform is key to catalysing further growth of the logistics sector in India, as highlighted by the paper.