The Logistics Division of the Department for Promotion of Industry and Internal Trade under the Ministry of Commerce and Industry in October released the annual ‘Logistics Ease Across Different States’ or LEADS 2022 Survey which assesses the logistics performance of individual states and union territories and suggests measures for improvement in logistics infrastructure.
One of the key suggestions of LEADS 2022 Survey for states and union territories is the need for the preparation of a comprehensive ‘City Logistics Plan’ for coordinated cargo movement through efficient long distance and last mile transportation while minimising the negative impacts of freight movement in the city.
In an interview to ET Infra, Dr Surendra Kumar Ahirwar, Joint Secretary, (Logistics Division), Department for Promotion of Industry and Internal Trade, said that the government in collaboration with a German entity GIZ India is preparing a model city logistics plan, which can be presented to the states and UTs as a reference model.
“We are just going to give a kind of a suggestive plan, or a Model Plan, which can act as a reference,” said Dr Ahirwar.
“Bangalore (Bengaluru) and Delhi have been identified for a pilot project for the purpose of development…and we may come out with a model city plan,” he added.
However, Dr Ahirwar emphasized that cities need not adopt the model logistics plan as it is, highlighting that the Central government will only help with an enabling framework with the responsibility being either on the city administration or the state administration, as every city has its own unique set of problems and issues related to logistics.
The need for efficient cargo movement within cities has grown in importance with the rapid advent of e-commerce business. According to a Ministry of Commerce and Industry statement in July 2021, demand for urban freight is expected to grow by 140 percent over the next 10 years and final-mile freight movement in Indian cities is currently responsible for 50 percent of total logistics costs in India’s growing e-commerce supply chains.
“Currently infrastructure development in cities is primarily focused around mobility of people, while cargo transportation is considered as a problem,” he said.
LEADS SURVEY TAKEAWAY
Dr Ahirwar outlined that the biggest takeaway from the LEADS 2022 Survey has been the adoption of objective assessment based on hard data obtained from either the state governments, the industry, or various organizations in the logistics sector.
“…we have generally in the previous reports been depending on the surveys which were all subjective or perception based. Therefore, there was no objective measurement of the (states) performance…,” said Dr Ahirwar.
With regard to hard data points, which have been now incorporated for assessment, Dr Ahirwar outlined that states have shared the quantum of investment, the quantum of increase in their infrastructure capacities, among some of the broad data points.
“States have shared whatever infrastructure changes which have happened during one year period and changes from the previous year. Changes in the services and then the investment or the capital expenditure the states have done either from the public exchequer or if there has been a private investment for development of infrastructure,” he added.
LOGISTICS COST INDEX
While the recently unveiled National Logistics Policy aims to bring down India’s cost of logistics operations from 13-14 percent of gross domestic product to single digit by 2030, Dr Ahirwar outlined that the government was also aiming to assess state-specific reduction in logistics cost.
“We may come out with some index, maybe pick some parameters in the next LEADS report, which will measure the logistics cost, reduction or efficiency improvement,” he said.
The performance of states will be crucial for the country as a whole to achieve the target of bringing down the logistics cost to single digits.
LEADS 2022 Survey has also advised that states and UTs develop a monitoring framework including KPIs or Key Performance Indicators for assessing their respective performance.
“This is a work in progress, we are formulating or devising some framework for assessment of the outcome, or you can say the output-outcome framework,” he said.
“The larger objective of this outcome assessment will be the efficiency which has been brought in the logistics sector, through whatever means or whatever initiative, the ones undertaken by the states,” Dr Ahirwar said.
