The 13th edition of the NISAA Business Forum 2023 tackled some basic issues against the backdrop of the advancements in the Indian Logistics Sector. Capt. D Mishra, President NISAA, in his preamble speech, dwelled on the strides that India had made in the past decade and in the direction, it was headed.
India has become the fifth largest economy in the world and was poised to become the third largest economy by 2029. With the current growth rate, India was expected to surpass Germany in 2027 and most likely Japan, by 2029. The Government was making all out efforts to make India competitive in the global stage. The results of the Gati Shakti Master Plan were becoming visible and would soon change the pace of India’s infrastructure and its multimodal logistics.
In this year’s budget 100 critical projects have been prioritized at Rs 75 thousand crores. He believed that along with improvement in the logistics sector, there was bound to be improvement in the ease of doing business. Compared to 2013-14, the Capex had increased 5 times compared to financial year 2013 -14. The Government was moving towards a target with an investment of 110 lakh crore under the National Infrastructure Pipeline. The Unified Logistics Interface Platform (ULIP) was yet another initiative by the government to enhance efficiency and reduce the cost of logistics.
The inaugural session attempted to deal with the all-important question that was in everybody’s mind – Can India be the emerging hub in the global supply chain? Kalyana Rama, Chairman and Managing Director, CONCOR, handled the question with perspicacity and discernment.
Hefelt that the various initiatives started by the Government to make India a manufacturing hub and to make India a hub of global supply chain, was based on the foundation of domestic consumption. To cater to 140 crore people, he however felt that the logistics for the entire supply chain, the readiness of logistics infrastructure, was still in the nascent stage. For the next 15 years it would be a sunrise industry. However, he felt opportunities abound. The current global situation provides a good opportunity for India. He felt that digitisation of logistics would greatly contribute towards reduction in logistics costs.
The National Logistics Portalwhich was recently started for sharing of data was a good initiative. The issue comes down to how best the data could be utilized. There is sufficient data but it is not utilized sufficiently. There was bound to be a reluctance to share data, but general data would be shared. It was here for the industry to come forward and ways of how best the data could be shared.
For reducing logistics costs, it was necessary to have good supply chain management. Innovation methods were required for handling large quantities of material in the shortest possible time. The cost of material handling methods must be brought down which has been taken up by CONCOR. Carriage of cement was not being done in specialized containers but in regular containers, so that these containers could be utilized in the reverse leg with general cargo. Many cement companies have begun showing interest, Kalyana Rama contended. Many cargoes which were earlier containerised were now moving in bulk. He however, felt that in India, multi modal logistics was still not very successful. Further they found that moving bulk cargo from coast to coast was cost effective as compared to rail sea rail movement. CONCOR has not been able to wean away road movement of cargo from hinterland to sea port due to various cost factors.
Kalyana Rama also touched on reduction of costs through proper warehousing. Using containers as warehousing was being promoted.
He categorically stated that it was only when logistics costs were reduced, that India could become a hub for the global supply chain. Several initiatives were being taken by CONCOR in this regard. They had begun introducing LNG trucks into India in a commercial way; electric trucks were being utilized for short hauls; 12 ft containers were being employed to move voluminous cargo.
The first session of the day evoked the question – Was India ready to lead? What would be India’s role in the supply chain industry? Prominent speakers from the maritime and allied industries contributed to the session, dexterously moderated by Neelkant Ghumala, General Manager, HMM Shipping India Pvt Ltd.
Amit Bhardawaj, COO APM Terminals, asked whether the advancement in the logistics sector were good enough to handle the volumes in the future? Digitisation was the common bond between different modes of transportation. Clearly over the years digitisation had led the way. Today he felt they were well positioned to react to the market dynamics a lot faster. On the question whether having multiple ICDs all over the country would lead to reduction of costs, Bhadawaj felt that it was dependent on many factors, such as labour availability, quality of labour, safety of cargo itself etc.
On the question of simplifying procedures, Shikhar Pant, Department of Revenue, Ministry of Finance, said that today the customs were faceless, contactless and paperless. Out of charge was done online. If any examination was to be scheduled, it was also done online. The assessment of Bill of Entry was anonymous and transparent and it was quicker because it was based purely on the merit of the case. With time they were integrating more technology into the system.
With regard to regulations, they had tried to look for technological solutions such as the Electronic Cargo Tracking system where tracking was done through GPS. Now no one needed to travel with the container. When a container was opened an SMS would automatically be sent to the customs. Earlier considerable documentations were involved. Now it was done seamlessly online through an electronic platform.
Mr Ghumala felt that ethics had to play an important role, if India must march ahead. Of late, he believed that there was a level of comfort working with the customs. Could that be ascribed to the trade finding it easier to deal with the procedures laid down by the customs? Pant believed three reasons could be attributed to the comfortable relationship. They were the Annual Time Release study, the Trade Facilitation Committee and of course induction of technology. In the Time Release study, the customs measured the dwell time of customs with all stakeholders such as shipping line, custodian of cargoes, other government agencies etc in all major ports in India. The purpose of the exercise was to make the customs and the trade accountable. In this regard a white paper was published every year for the perusal of all the stakeholders.
In the trade facilitation committee, there were regular interactions between different stakeholders in the supply chain. Lastly the induction of technology at the various ports has led to installation of container scanners in several ports across the country. Laboratories were being upgraded on a regular basis. Dog squads were also being introduced in ICDs and ports which would greatly speed up clearance of cargo.
How were the programmes of the Government of India designed to strengthen India’s preparedness as the emerging hub in the global supply chain? This question again resurfaced in the session. Poroma Munshi Rebello, President, Business Development, Pristine Logistics and Infrastructure Ltd, delved deep to explain India’s position. She had some hard questions to ask. She was of the opinion that only when the cost of manufacture and exports were reduced, could India hope to compete with China, Bangladesh, and other far eastern countries, particularly in the areas of readymade garments.
She further went on to ask what was the port call cost of the vessels calling at Nhava Sheva as compared to Jebel Ali, Singapore etc. If it was four to five times higher, how would India be competitive on the global stage? Why would an 18000 teu vessel call on Indian ports? Each component of the costs needed to be examined.
On intermodalism she said there was a proliferation of ICDs across the country. She was firmly of the opinion that it was the province of the private sector to decide where the ICDs should come up and not with the Government.
The movement of cargoes from the hinterland to ports was skewed heavily in favor of the road. Doubtless the road infrastructure had exponentially improved over the years. That being said a large portion of the freight earnings was given to the Indian railways. If a major portion of the money had to be given back to the Government, where was the scope of reducing the costs?
The other speakers in this session were Ajit Mahajan, Managing Director, CMA CGM (Agencies) India Pvt Ltd and Alpana Chaturvedi, CEO, My Logistics Gurukul.
The final session of the day was focussed on whether India’s digital initiatives were keeping pace with the times. The moderator to guide through the sessions was Satish Lakkaraju, Senior Vice President, Wiz Freight.
Abhishek Chaudhary, Director-NLDSL National Industrial Corridor Development Corporation Limited, expanded on digitisation. He said that they started with the logistics data bank project whereby they were mandated to track and trace all Exim containers in the country, both by road or rail. The tracking was done through RFID tags. He proudly stated that all containers, export, or import were now being tracked. He emphasized that no container could move out of the port premises without an RFID tag. In terms of coverage, they covered 17 ports, 27 terminals, 19 toll plazas, 342 CFSs and ICDs, empty yards and parking plazas, 16 SEZs, 5400 railway stations. They have developed interfaces with the Voice Systems of Railways as well as with the Terminal Operating System of every port. Fifty-six million containers have been tracked in the last six years. They have started tracking empty containers. They were now able to locate where an empty container was located at any point in time. At present they installed RFID readers in 171 empty yards which is almost 50% of the total number of the country.
Various data is collected and reports are compiled for dissemination to the trade on a quarterly or yearly basis. The purpose of the report was to name and shame. However he emphasized the action was primarily to inculcate healthy competition within the trade, that would enable all the stakeholders to make an informed decision.
Coming to Unified Logistics Interface Platform (ULIP), phase 1 was already completed, encompassing multiple modes of transportation. In phase 2 of the project, they would be working on the documentation aspect. This would greatly ease the procedures in the system. All the documents would have a common unique number, so that it can be tracked and traced and pulled out, when required. Every single transaction of the logistics sector would be done using the ULIP. The users of the system would be Government agencies, export/ import, CHAs, 3pl.4pl players, freight forwarders, CHAs bankers will stand to benefit from this integration. ULIP isa dynamic portal with 33 systems being integrated into it. As and when new systems were created, it would automatically be integrated into ULIP. So far 390 private sectors have been registered.
The ULIP will provide the most optimum route for the trader to reach from point A to point B regardless of the mode of transportation. Optimum route and optimum selection would be the key factor for the purpose of reducing the transportation costs. The waiting time would be substantially reduced.
Liji Nowal, Managing Director at ODeX India Solutions spoke on the adoption of technology and to what extent do they value the product. She said that the Indian markets were resistant to change. In India the understanding of digitization among the senior management was about 65% and adoption rate was only about 25%. She further emphasized that any Government plan in the logistics sector should not be for the next 5 years, but should be for the next 30 years, in order to compete with China
Mayur Chhabra, Head Logistics Planning, JK Cement Jaffrey Thomas, Partner, PWC India, were the other speakers. Dr Surinder Ahirwar, IRTS, Joint Secretary (Logistics and Trade) DPIIT. The Ministry of Commerce and Industry spoke on NPL and PM Gati Shakti were two landmark initiatives for the entire logistics and supply chain in the country.
