Logistics industry has always been an underdog, and has not achieved the much deserved attention yet. The sector is full of potential, but we are still lacking optimal utilisation of resources. This was the topic of discussion during the session on Efficiency, Effectiveness and Employment in Logistics at Global Exhibition on Services (GES) 2018 at Bombay Exhibition Centre, Mumbai.
Anant Swarup, Joint Secretary - Logistics & Social Media, Department of Commerce, Ministry of Commerce & Industry, Government of India, threw in some figures. He said that the global present industry is worth $15.5 trillion and it is likely to grow at the rate of 7.5 per cent over the next five years. In India, the industry is $160 billion and is likely to touch $220 billion by 2020. Passenger traffic is increasing, growing at a CAGR of 15.7 per cent. Air cargo is increasing by 14.3 per cent, shipping has registered a growth of 6.2 per cent. Warehousing can grow at 10.6 per cent, cold chain can grow at 15 per cent, etc.
The Government is very clear. Unless we promote inter modality, the multi-modality model is not going to work, felt Swarup. For this, a new division has been created in the Department of Commerce whose mandate is integrated development of logistics, he added.So how are we developing integrated logistics? He said, We are developing a national logistics plan for the country, which is long term plan for the integrated development of logistics. To make that plan work, he said what presently the government is trying to do is that they have identified 22 commodities that constitute 90 per cent of the transportation within the country, including exports and imports. Then we are trying to map the entire value chain for these 22 commodities and to see what the cost is in that commodity.
He added, Other idea we are working on is to develop a portal where to bring in all the regulatory authorities at one single portal. The portal will provide seemless movements of documents. Once an information has been filed, it should seamlessly move across agencies. That will add to the ease of doing business.
The other thing we are doing is with multi modal parks. Unless we are able to promote multi modality, there cant be efficiency in logistics. We are working on the multi modal logistics park policy. NHAI has already identified 28 locations where they think there are chances of implementing multi-modal logistics park, said Swarup. R Dinesh, Chairman, CII Institute of Logistics Advisory Council and Managing Director, TVS Logistics Services said, Logistics plays a vital role in strengthening the economy. It is the lifeline for every other commercial sector. The sector is evolving at a fast pace and infrastructure, and technologies are paving new paths towards growth.
Speaking on the opportunities in the Indian logistics sector, Neelesh Mundra, Partner with McKinsey & Co felt that there is rapid hike in demand and awareness of the sector. He added, We can see a lot of startups entering the sector offering services like never before. With the advancements in technologies we can surely say that theres a lot more to come.
Mundra, in his presentation, pointed out a few findings from the sector: Government has taken the right steps both in infrastructure spending and policies; the biggest inefficiencies in the value chain are within a few commodities (eg: agriculture); to become an effective logistics system, India needs to leverage its coastline; employment creation is not an opportunity its a necessity for survival; operating models needs to change to ensure productivity improvement and skill building; embrace SCM 4.0 it can help efficiency and effectiveness significantly; and the start-up eco system is blooming industry needs to reach out and find partners.