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Digitisation has to replace tedious documentation and bureaucratic procedures and the industry should collaborate to bring logistics cost down
The session on logistics discussed the major factors affecting movement of goods in the South Asian region. Tracing the origin of the word logistics, Sean Van Dort, Director, Global Shippers Forum, the moderator spoke of how the French were responsible for the introduction of the concepts of VAT and GST. The panel discussion that included several representatives from multi-national logistics organisations veered towards what it would take for firms to provide world class logistics services. With the world of value added services expanding the boundaries of products a logistics firm can offer, Vincent lee, Business Development Director, STENN International Singapore, said, “Service providers should not restrict themselves on the spectrum of services they can offer. Newer models are disrupting the market with their services leading to cheaper rates and better services.”
While the panel agreed on the aforementioned argument in toto, the role of governments and regulations in smoothing trade for the region was a bone of contention. Rajan Sharma from Nepal Freight Forwarders Association reckoned lengthy foreign currency regulations were an impediment to trade. “Freight forwarder do the de-consolidation. Is there a way to de-regularise these laws,” he asked. In a globalised world that is rapidly progressing with the help of technology, the panel members saw a need for companies across the region to digitise their operations to avoid tedious documentation processes. The need to rid the trade of unnecessary bureaucratic procedures was loudly echoed by the panel. Amal rodrigo, Director, Hayleys Free Zone Limited said, “We have benchmarked ourselves to offering services equivalent to those offered by Europe and the USA but we are shy of handling bureaucracy and unfriendly policies well.” To address the rising need for the logistics firms across the region to work together, Jagath Pathiratne from the Sri Lankan Freight Forwarders Association suggested collaboration as an effective mode to move forward. “Whether it is liberalisation or cost effectiveness, we have to work to make things happen. Economies can no longer be protective afford to be protective,” he said.
The major factors driving the development of logistics market are globalization, time-proportional economy, presence of virtual organizations, improved customer awareness, strategic concerns to achieve more flexibility and better IT infrastructure. Third-party logistics is a process or operation of sub-contracting industrial functions like cross-docking, inventory keeping, warehousing and transportation to a third party or supply chain management provider. Globalized product availability, demand for product individualization in terms of logistics, on-time delivery, just-in-time inventory, agility in time response transport, big data analytics and atomization of shipment are some of the global market trends guided by technological innovations like remote tracking and monitoring using RFID and EDI-based location of the shipment.
The market in Asia-Pacific region shows a steady and consistent growth through service innovations by companies, so as to attract economic customers. The companies need to shift their focus from integrated services to offering broad range of products & services portfolio. With more focus on growing B2C sector, the scope for logistics outsourcing will extend towards value-added and specialized services., the experts said. There were several upsides that featured in the hour-long discussion. The fact that a logistician is making his way to many board rooms is an indication of the importance being given to logistics in companies is a point to take note of. The panel also mooted the point of creating a free zone like Dubai has for the trade’s benefit. South Asia is expected to have grown by an impressive 6.7 per cent (y-o-y) as a whole over the last year, staying higher than the growth rate of East Asia, which stood at 6.3 per cent. Other regions around the world have either been growing slowly or contracting. In this light, the benefits of a free zone could be many.
The panel discussion concluded on an important point stating that way forward has two elements that would play a key role in forging collaborations. Speed is way. Efficiency is key.
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