Infrascape 2013 | We do not expect any dramatic imp­rovement in 2013

Chander Agarwal, Executive Director, Transport Corporation of India Limited

The year 2012 has been a challenging year for the logistics sector as the economic slowdown affected manufacturing leading to general decline in the movements of goods across sectors like auto, commercial vehicles, heavy engineering and capital goods. Tight credit situ­ation, no major policy reforms and weak demand made the situ­ation further difficult for the sector.
Growth: TCIÂ’s performance during the year has been stable as we managed to hold on to our market share and improved margins despite rising fuel and manpower costs that shaved off profit margins. We invested in technology and workforce training apart from working closely with clients across sectors to provide innovative solutions in order to cut costs.

Performance in 2012: The logistics sector, performed relatively better in comparison to other sectors on the back of investment in technology and workforce training that helped it in providing innovative solutions to clients looking to cut costs by outsourcing their logistics requir­ements. Firms having competency in providing the com­plete service bouquet right from supply chain consultancy, inbound logistics, warehousing/distribution to outbound logistics.

Prospects: We do not expect any dramatic imp­rovement in the business environment in 2013 despite the recent move by the government to address key policy bottlenecks. The sector, however, should benefit from the implementation of policy reforms like FDI in retail, Goods and Services tax (GST) etc. The recent RBI decision to grant infrastructure status to projects involving infrastructure like roads, ports, railway tunnels, bridges etc. should provide impetus to the sector by boosting the movement of goods by infra companies apart from the development of alternate mode of transportation and reduction in the transport time.

We expect non-conducive policy environment like indirect tax regime, widespread industry fragmentation, high credit cost and lack of adequate and robust infr­astructure to remain key challenges in the coming year ahead.  The sector will also continue to remain dep­en­dent to a large extent on the improvement in transport infrastructure due to lack of warehousing and cold chain infrastructure.