Prioritising Transport And Logistics Policies To Thrive In Hub Economy
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FEATURE PRIORITISING TRANSPORT AND LOGISTICS POLICIES TO THRIVE IN HUB ECONOMY 88 I CARGOCONNECT JUNE 2022 TRANSPORT AND LOGISTICS FEATURE rowth is rooted in economy building forces Needless to mention trade and logistics are extremely essential pillars of the national economy and the fact that these are interconnected highly makes these pillars share a symbiotic relationship While trade is the exchange of goods and services nationally and in- ternationally logistics is the supporting aspect which complements the former If logistics is so crucial to the national economy that is to help the services and goods reach their ap- The transport sector will play an important propriate customers it becomes equally crucial to maintain the cost of logistics and regularise the lev- role in the post-pandemic recovery both as els of efficiency with which the logistics operations a facilitator of economic activity and as a are performed And through a proper cost-effective- direct contributor to GDP and jobs The key ness and efficiency management the national trade message is that a restructuring of priorities will also subsequently improve both in terms of • 0061 can go a long way towards creating a robust quantity and quality Talking about the trade and logistics channels transport sector The current logistics system and their position nationally Indian roadways are Programmes like still has significant shortcomings regarding its the second largest and busiest in the world Bharatmala to efficiency safety and sustainability To satisfy According to National Highways Authority of improve overall the demands of a more prosperous society India NHAI about 65 per cent of freight and policy makers stakeholders cargo movers 8o per cent passenger traffic is carried by the roads logistics alike need to further improve and enable the The National Highways carry about 4o per cent of performance and total road traffic though only about 2 per cent of the domestic logistics sector s transformation development of road network is covered by these roads points out Overall the approach to logistics needs Anil K Mishra National Logistics Head - India multimodal to cater to the needs of the different South Asia Pladis Global Logistic parks will industries and provide for active and orderly This pressure on roadways especially National drive overall market competition through self-correcting Highways aggravates the problematic situation of trade and transport in India as roadways are the growth of the institutional mechanisms most expensive mode of transport Increasing fuel industry This will TWINKLE ROY prices have had a strong impact on logistics compa- Lead to better nies as well as vendors that are principally function- al on the very existence of this mode of transport access to funds Hence when the prices of petrol and diesel rise com- and consequent panies need to internally accommodate the prices rise in so that the end-customer doesn t have to bear the brunt of such an exponential price rise investments for On the contrary waterways are the least expen- industrial parks sive but highly under utilised mode of transport warehouses and Taking about same Mishra says India s waterways network in the form of rivers canals backwaters transportation and creeks is the ninth largest waterway network thus providing a in the world Freight transport by waterways is high- major fillip to ly under utilised in India with the total cargo moved in tonne kilometers by inland waterways being consumption per cent of the total inland traffic in India But the contribution in terms of value of trade is immense when we talk about waterways CARGOCONNECT JUNE 2022 189 FEATURE TRANSPORT AND LOGISTICS it not fully realised due to a minor discrepancies er- rors inefficiencies and lacks is something that if present could have been utilised to produce output and generate high profits So every loss of such a re- alisation and materialisation can be called cost And the fact that India s rank has moved up to 44th place in 2018 from 54th in 2014 as accredited ANIL K MISHRA by the World Bank s Global Logistics Performance National Logistics Head - India Index shows that there has been a drastic change South Asia Pladis Global in the trade scenario as well as state policing on lo- gistics and transport further fuelling the ease of do- ing business A host of initiatives and schemes such as Atmanirbhar Bharat Duty Exemption Evidently pointed out by Prakash Khatri work- and Remission scheme Market Promotion and Development Assistance MPDA ing both as the Founder and Director at SCM Inventure scheme Production Linked Incentive PLI scheme etc have helped businesses and as a Professor in Mumbai University The lo- to flourish and prosper with reimagined supply chains new energy order gistics industry has seen a manifold change over the changed face of consumer behaviour alongside improved learning outcomes last 5o years with the increased use of technology The dependence on human intervention and judg- through technology ment has therefore been replaced with increased use of technology tools Successful automated ports show that careful planning and management can sur- mount the difficulties of cargo management oper- ating expenses could thereby fall by 25 to 55 per cent In India about 96 per cent of the foreign trade and productivity could rise by io to 35 per cent ondlimmilk by quantity and 70 per cent by value takes place Similarly with respect to roadways Khatri says through seaports adds Mishra Today in India major inland movement happens The government While Indian Railways is the fourth largest net- through roadways With lack of connectivity and work and the second-busiest in the world it still lags poor quality roads especially in the hinterlands will need to spell behind as the most inefficient mode of transport there is increased hidden cost due to damage high out the roadmap The revenue generated by railways in the financial inventory and holding cost All this results in high- for mobilising and year 2021-22 was 76 per cent and the freight carried er prices and lower competitiveness Indian exports by the Railways mounted up to 1 23 billion metric for e g are rendered less competitive on account of deploying the INR tonnes which accounts for 33 per cent of total freight higher transit times and low reliability If this move- 100 lake crore transported across the nation India aims to opti- ment can be shifted to rail and waterways - there investments mise this per centage of freight transported to a sol- will be increased optimization and reduction in cost id 5o per cent by the year 2030 It will reduce India s fuel requirement by 15-20 3lanned under the All these modes of transport and their inadequa- per cent - thereby directly reducing cost and carbon Gati Shakti Yojana cies point towards a collective solution-cum-goal emissions India needs to look at ways of improving There is already a which bears the capacity to help the national econo- efficiencies and reducing wastage he adds my skyrocket and to boost the competitiveness of lot of excitement Indian Industries and markets The solution-cum- from the industry goal is to reduce logistics cost And while we say cost Clearly outlined strategies regarding this it is noteworthy that cost can be understood as the unnecessary extraneous and futile expenditure of forms the core scheme time energy and resources all accumulated The Dealing with logistics cost also means coping up with general connotation of monetary expenditure and the dynamic nature of the logistics industry This re- loss when we use the term cost is a common mis- quires a high amount of flexibility and agility - to conception because any potential that is latent albe- change with the constantly changing global require- YOU PACK WE COLLECT WE LOAD 90 CARGOCONNECT JUNE 2022 TRANSPORT AND LOGISTICS FEATURE ments and the fast-evolving logistics industry The urgency of this has exponentially increased with the outbreak of the pandemic which has disrupted the global supply chains majorly further highlighting the need for provisions that facilitate quicker more cost-efficient and smoother transportation storage supply and distribution of goods and services But the solutions that will help smoothen the PRAKASH KHATRI chaos and fill the gaps of inadequacies are not com- Founder and Director - SCM Inventure mon for all While some companies have stepped and Professor Mumbai University ahead and taken suitable initiatives for multimodal logistics services to reduce freight cost some have gone for optimum automation and tech and IT en- PPP will bring in the required financial investment rapid execution technology ablement for streamlined transparent smooth com- superiority and globally preferred standards of delivery with improved munication devoid of all forms of errors caused by operational efficiencies India lacks the requisite infrastructure to handle the human labour and intervention while some have influx of cargo and passenger freight volumes we foresee in the coming years taken the pledge of making the most of the PPP mod- hence building multiple airports in metro cities to be able to handle the traffic el in order to boost the logistics infrastructure as and identify new ports and airports to support the connecting growth clusters best as they can The biggest change fuelled by the COVID-19 pan- presents immense opportunity for PPPs demic was the collective move towards digitisation This move was so herculean and gigantic that even the states launched policies and schemes so as to support and align the business services with the ally competitive firms to invest in India through a changing needs of people and other businesses conducive business environment for the new and orisoAnum According to Mishra the government at centre existing businesses industries goes a long way to has taken major steps to boost interconnectivity be- strengthen the business environment of the coun- tween the ports which has led to an impressive rise try puts across Manju Dhawan Co-founder Ecom While the GST on in the per centage of exports in the FY 2021-2022 Express who acknowledges government s efforts to EVs has been International shipments have increased with the improve logistics operations and to reduce logistics reduced to 5 per year-on-year rise in export per centages due to ease cost significantly of business customs clearance less congestion at The PPP model has also benefited many indus- cent the GST on ports and faster connectivity from dry ports to sea tries and sectors a lot as it promotes better access to critical EV ports via railway networks services improved yet reduced cost of infrastruc- The government he says is already on a job to ture as well as enhanced quality of services components is interconnect ports through the Sagarmala Project Dhawan reiterates the role of PPP as an acceler- stil taxed at Talking about the aspects of the different govern- ator in infrastructural growth in India Considering higher slabs ment schemes he believes a host of initiatives and infrastructure sectors including highways port schemes such as Atmanirbhar Bharat Duty Exemption power and telecoms where PPP has been an accel- Specifically and Remission scheme Market Promotion and erator in infrastructural growth the model could components such Development Assistance MPDA scheme Production be used to attract the much-needed foreign and do- as electric motors Linked Incentive PLI scheme etc have helped busi- mestic investment to develop the electric vehicle EV nesses to flourish and prosper with reimagined sup- industry along with building the necessary R D ca- converters and ply chains new energy order changed face of con- pabilities in the country PPPs can be designed to lithium-ion sumer behaviour alongside improved learning out- augment the sector in many ways starting from the batteries continue comes through technology operational aspects to running commercial fleets Government initiatives such as Ease of Doing and developing the storage infrastructure to charg- to be taxed at 18 Business to create an environment that fosters glob- ing assets for EVs he explains per cent Reducing Khatri also points towards the importance of this rate will bring the PPP model calling it imperative for a develop- down costs for ing economy with limited financial resources like India He says PPP will bring in the required finan- OEMs and reduce cial investment rapid execution technology superi- purchase price for ority and globally preferred standards of delivery EVs one of the with improved operational efficiencies India lacks the requisite infrastructure to handle the influx of critical barriers to cargo and passenger freight volumes we foresee in increased 111111111m the coming years hence building multiple airports in metro cities to be able to handle the traffic and adoption identify new ports and airports to support the con- SHIP WE DELIVER necting growth clusters present immense opportu- nity for PPPs CARGOCONNECT JUNE 2022 91 FEATURE TRANSPORT AND LOGISTICS MANJU DHAWAN Co-founder Ecom Express Technology will be critical in tactical and operational decision-making routing fleet optimisation data analysis or strategic planning The adversity of the pandemic has become bearable for organisations with advanced technologies Al A maturing structure has to will automate and optimise crucial logistics planning processes order fulfilment be all-time relevant delivery scheduling route planning task assignment fleet allocation and more Al ML and automation will be the best arrangements to drive logistics planning The third way of reducing logistics cost is not mere means for better services at lower cost Rather it is forward in the years to come a revolution that still has branches of potential to be realised to full extent Industry 4 0 or the fourth Industrial Revolution which comprises tech and IT enablement through Internet of Things IoT Cloud In the recent past we have seen interest and op- Computing Blockchain Artificial Intelligence Machine portunities of private players in port development Learning Virtual Reality Digital Twins Robotics projects metro and airport investments and vari- and Automation and many more relative innova- Improving con- ous other infrastructure development initiatives tions is altogther transforming the logistics sector he further highlights Visibility is the key driving factor in logistics tainer availability Talking about the elimination of risk factors and freight The genesis of tech-driven logistics arose will also be through the incorporation of the PPP model Rahul from the need for better fleet management and end- important a Mehra Co-founder Roadcast Tech Solutions high- to-end visibility Augmented by the pandemic the lights about the private sector that supports the gov- logistics sector needed to provide solutions that were reduction in the erning bodies in carrying out operations for a par- seamless and user-friendly especially for hyperlo- current 18 per ticular project helping dilute the associated project cal deliveries of essential and non-essential items cent GST rate on risks for the public sector Where infrastructure is This need urged many logistics companies to pivot concerned the private sector has the capacity vision to digitisation says Mehra transport contain- and capability to turn concepts into reality especial- Sharing her views on the contribution of IT and ers would be a ly when it comes to e-commerce technology in accommodating the disruptions at a welcome step Further elaborating Mehra continues The faster pace therefore leading to higher customer pandemic has deepened the need for the PPP mod- satisfaction and reduced costs Dhawan says Finally there is a el in order to bring about complete democratisa- Customers today demand speed and efficiency not need to prioritise tion of information and optimise the accessibility just in terms of products but also in performance technological of services In the post-crisis world demand for Hence supply chains must evolve to become faster food personal care and primary health care deliv- and more efficient In handling future scales there solutions for eries have soared high leading to a massive change is a need for automation to improve efficiency and better freight in the ecosystem From larger corporations to lo- deliver speed This reduces the processing time while matching in the cal vendors everyone has shifted towards digitisa- enhancing the productivity of employees at the same tion This democratisation of information and ac- time As a result while the demand for sales force highly fragmented cessibility to the direct consumer has allowed for will continue the sector will also see many oppor- logistics sector the growth in consumer awareness brand account- tunities for niche skills in robotics technology data ability and neighbourhood infrastructure develop- science and analytics ment The private sector can continue to help steady She points at the positive figures to highlight the and expedite this growth with investment in re- projected growth in the logistics sector The Indian lated sectors such as EV logistics warehousing logistics market is expected to grow at a CAGR of tech innovation etc 10 7 per cent between 2020 and 2024 as per India The government and every other sector have re- Brand Equity Foundation IBEF Within that e- alised the urgent need for a thorough expansion of commerce logistics is expected to grow above 40 per this PPP model to smoothly facilitate trade and im- cent CAGR in the next three years prove the national economy thereafter As of November According to her this growth will be accelerat- 2020 1 103 PPP projects were launched in the coun- ed by the introduction of newer technology Technology try representing a total of US 274 959 000 000 of will be critical in tactical and operational decision- committed investments making routing fleet optimisation data analysis 92 I CARGOCONNECT JUNE 2022 TRANSPORT AND LOGISTICS FEATURE or strategic planning The adversity of the pandem- ic has become bearable for organisations with ad- vanced technologies AI will automate and optimise crucial logistics planning processes order fulfilment delivery scheduling route planning task assign- ment fleet allocation and more AI ML and auto- mation will be the best arrangements to drive logis- tics planning forward in the years to come RAHUL MEHRA Talking about the flexibility innovative technol- Co-founder ogy offers Mishra shares a simple example FASTag Roadcast Tech Solutions is a RFID passive tag used for making toll payments directly from customers linked prepaid or savings current account It is affixed on the windscreen of Our Delivery and Order Management Software offers enterprises a reliable the vehicle and enables the customer to drive through platform with information such as pick-up and delivery scheduling image toll plazas without having to stop for than a few sec- recognition auto-route optimisation audio video surveillance distance to the onds for any toll payments which ultimately saves recipient estimated time of arrival and more building a more resilient supply time and money while contributing to lesser CO2 chain management and enhanced accuracy of data emissions Today with the help of GPS and specialised sen- sors monitoring of packages is now being done in real-time Further coupled with specific approaches such as geo-fencing geo-tagging and proximity alert more bottlenecks are being eliminated from the supply chain For instance an incoming ship- Through the confluence of our network infrastruc- ment can be easily traced and the forward supply ture and technology platform we are able to offer a AroAmik chain can be readied to process the shipment faster one-stop solution for the various logistics needs of While some organisations have taken it into their our customers covering a holistic range of e-com- A comparative stride to digitise and automate processes entirely merce and digital transaction use cases study has been thus providing enhanced solutions to their custom- Roadcast a new-age Software-as-a-Service SaaS ers getting better with every passing day some or- based logistics automation platform offers a unique undertaken with ganisations have pledged to provide on-demand soft- combination of a driver application and TOT connec- the Hamburg and wares to various B2C brands logistics service pro- tivity to provide end-to-end visibility including the JNPT seaports viders aggregators etc need for a quick shift to multi-point pickup Talking about the innovations introduced by Roadcast help established and upcoming com- and an analysis of Ecom Express Dhawan says We have developed a panies to digitise their operations Be it the automo- the HKIA and the suite of over 65 technology applications and data sci- bile sector food delivery industry Q-commerce or MIAL airports The ence meta-algorithms which empower various as- logistics as new players enter the market we help pects of our network and our business In addition them compete and strengthen their foothold by fur- study highlighted we operate 15 fully automated processing centres nishing them with relevant tech-enabled solutions that there can be that are also cost-effective informs Mehra Focussing on the products the company offers he says Our variations in the Delivery and Order Management Software offers level of automa- enterprises a reliable platform with information such tion and level of as pick-up and delivery scheduling image recogni- expertise at each tion auto-route optimisation audio video surveil- lance distance to the recipient estimated time of of the nodes arrival and more building a more resilient supply regarding the chain management and enhanced accuracy of data kinds of materials However such tech and IT integrations need to be implemented keeping in mind the rules of tech- handled nology the scope of alignment of the solutions with the operations they cater to and the various blind spots like lack of public policy technical issues and cost of implementation Rigorous continuous upskilling and upscaling with respect to streamlining operations and increas- ing transparency efficiency and interconnectivity when merged with bilateral trade agreements like the recent India-Australia and India-UAE pacts can leverage India s position as the fulcrum around which the entire process of manufacturing production and supply revolves cci CARGOCONNECT JUNE 2022 193