The logistics sector in India has today become an area of priority. One prime reason for it stems from the fact that years of high growth in the Indian economy have resulted in a significant rise in the volume of freight traffic movement. This large volume of traffic has provided for growth opportunities in all facets of logistics including transportation, warehousing, freight forwarding, express cargo delivery, container services, shipping services etc. The growth path has also meant that increase demand is being placed on the sector to provide the solutions required for supporting future growth. But the high logistic cost, delays, poor connectivity and other hurdles have been playing spoil sport.    

These were some of the decisive issues which cropped up during the deliberation at the two day conference on 'Cargo Summit 2014', held earlier this month. Organized by the Confederation of Indian Industry Institute of Logistics (CII)” at Mumbai, the theme of the conference was aptly named “Integrating the Country's Transport Network”.

Delivering the Special Address, Michael Pinto former Shipping Secretary, government of India and considered a prolific luminary on the subject remarked candidly, “India is severely losing brownie points by preferring to move cargo by road and rail instead of using the coastal shipping and inland water ways both of which is in plenty. He observed that the logistic industry was unregulated with 90 per cent being single operators with no standardization or uniformity in their operations. There is much to be desired from the country’s infrastructure and added to this issue are procedural delays, out-dated system of operations and other obstacles that were pushing up the logistic cost. Thus, for India the logistic cost as a percentage of the GDP is as high as 13% to 14% compared to 7%-8% in developed countries and 9%-10% in other BRIC countries.

In the panel discussion on 'Preparing for the next wave of growth', speakers focused on the need for joint development of nationwide logistics policy to address need for multimodal logistics. Sailesh Bhatia, President, Association of Multimodal Transport Operators of India, dwelt on the changing demography of the society and the change in the purchasing power. “The mindsets of logistic players in the country are very self-centered,” he said. “As a result of their self interests there is no holistic approach. 

Bharat Thakkar, Immediate Past President, Air Cargo Agents Association of India, informed that the air terminals were being improved. He too pointed out that there was no standardization and benchmarking in the working of the trade.

“In our country we have policies only on the basis of single mode of transport, viz rail, road, air, etc, stated Vivek Kele, General Secretary, AMTOI.  “It is important that we have to ensure that when certain infrastructure is being developed only for a certain mode we must consider integrating it with other modes. This is particular true for CFSs and ICDs where it can be seen that movement of goods happens either by rail or road viz goods come in and leave by the same mode.”

Nityam Khosla, President, Consolidators Association of India, highlighted the issues relating to the workforce. “Manpower is the biggest asset of logistics,” he stated. “There is a big skill gap in the sectors including road transport, warehousing, 3PL and need for training is of paramount importance. There is a shortage of trained truck drivers, loading supervisors, warehouse keepers, etc. The reason being better opportunities in the other sectors is drawing talent away from this sector and new talent is not forthcoming. We need to make the logistics sector attractive.”

“The market size of the logistics industry in India is around $ 90 billion involving 1.19 million employees and is slated to grow at 16% annually,” informed R K Saboo, Chairman, Express Industry Council of India & Deputy MD, First Flight Couriers Ltd. “Our tax contribution amounts to Rs 1100 crores.” He also laid emphasis on the splendid role the logistics sector can play in shoring up the economy.

Indicating the way forward Cyrus Guzder, Chairman, CII Institute of Logistics Advisory Council and Event Chairman advised that it is important to focus on the key challenges to help industry to leap into the next generation of supply chain. To tackle these challenges he desired the industry embark on various initiatives. These he felt should include skill development for logistics sector, encourage operators to insure their trucks and other equipment, help raise the profession’s standards through the process of certification for the different sectors of the logistics industry with an objective to recognize and endorse the competencies of supply chain professionals based on the `body of knowledge’ and also help attract right talent.