Dr. Anwarul Hoda, Chair Professor of ICRIER's Trade Policy and WTO Research Programme, and former Planning Commission Member, chaired the Working Group on Logistics last year, and explains to Shashidhar Nanjundaiah the role of the Central Logistics Development Council, which the Group had recommended but is yet to see the light of day.
You have recommended the establishment of a Central Logistics Development Council (CLDC). What would the Council do?
The CLDC would ease into being an apex advisory body on regulatory and policy issues related to logistics. This is the summary of it. We should start with the most fragmented among logistics sectors, road transport.
So, CLDC would start with the road sector?
Yes, the main focus in the beginning will be road secÂtor and the idea would be that it should collect all the information from various players to serve as the founÂdation for analysis and to create a data back. Memberships would emerge from the stakeholders of the sector: truck owners, association of drivers, transport companies, logiÂstics companies, warehouse operators, freight forwarders, 3PL and 4PL providers. The logistics council will get resources from the registration, which will not be high. The council would also be the fountainhead of all advice for policymakers.
We also need a portal which would serve as a freight exchange. The whole process is currently rather unsciÂentific, and there is not enough readily available informÂation in regards to freight providers, rates, technical serÂvices providers, etc. Transport enquiries and the offers will all be posted on this portal and there would also faciÂlitate online negotiations as well as return road planning as that is the most important thing in logistics. Truck owners simply go out and hope for the best for a load on their way back, which takes unspecified amounts of time. A portal such as the one we have recommended will help plan better, make rates transparent, and bring costs down substantially.
Can the formation of a Council and a portal help in the industry's efforts to achieve a just-in-time working capital base?
Time, reliability and cost should be the pivots of logistics. Reliability helps a manager in planning. Secondly, cost of transportation itself will go down. Our trucks are only able to move about half the distance they can in a day, thanks to delays at check posts and other locations-leaving more idle time for them, and incrÂeasing costs.
The Council and the portal should be supported, but not regulated, by the central government. The governÂment should initially provide capital for a building or whatever but after that there should be no interventions. Our initial thinking was that the Council should be comÂpletely independent of the government, but the minisÂtries of road, rail, shipping and commerce, who were represented, believed that the government's presence would help with better inclusion of data.
At what level was this discussed sir in the working group or did you take it up to the Ministries?
The ministries were represented at the executive level-which I believe is the most effective level for impÂlementation. No one expressed any disagreement with the recommendation for the Council, and many of the suggestions were made. The only far reaching suggestion is that about setting up of the special facility of driving licence and authority.
One of the biggest deficiencies that the group found was in that the drivers were not properly trained and state governments had not been exercising caution in giving license. We have suggested a system for quality assurance, that truck driver's licensing system needed to include special training leading to certificates, with the Central Institute of Road Transport (CIRT) being accÂorded that authority. We also recommended an accreÂditation system which every training institution should be compelled to become a part of.
But I am not sure what has happened with our recommendations.