Public-Private Participation can improve the logistics scenario
Cargotalk, strikes up a conversation with Madhukar Subramanian, Branch Head – Mumbai, DIESL, who talks about the warehousing situation in India, building required infrastructure and implementation of GST.
How do you feel is the warehousing situation in India?
The warehousing industry is undergoing a transformation. We are seeing consolidation of warehouses in the country with companies choosing to optimise distribution costs by consolidating Distribution Centres. There is also an emerging adoption of technology in Warehouse operations with increased usage of automation tools like Warehouse and Transport Management systems. At DIESL, we have aligned our offerings with this trend and offer leading IT tools to our customers. With companies embarking on Vendor Consolidation, it is also becoming important for warehouse operators to integrate delivery capabilities with their service offerings. The emphasis on Health & Safety has also increased in recent times. DIESL has responded to this by placing emphasis on safety procedures and appointing safety officers and Emergency Response Teams ( ERT) in all facilities and offices.
The warehousing industry is expected to show a growth of 35-40 per cent in India. Would you agree with this statement?
Our estimates are more modest at ~15% growth in the short- to medium-term. With this being an election year, we don’t expect to see any immediate major initiatives from the Central Government that will boost the economy and logistics industry to a large extent.
What are the challenges faced by the organised warehousing players in India?
Availability of skilled/quality manpower remains a big challenge. Organised warehousing players also face heightened
With companies embarking on Vendor Consolidation, it is also becoming important for warehouse operators to integrate delivery capabilities with their service offerings. The emphasis on Health & Safety has also increased in recent times” Madhukar Subramanian Branch Head – Mumbai, DIESL
competition from low-cost unorganised operators where compliance to wage laws is not the highest priority. In some cases, infrastructure hurdles like continuous power supply and network and surface connectivity pose challenges to operations on a day to day basis. At DIESL, we ensure that such challenges are anticipated well in advance and mitigation plans drawn when we roll-out projects for our customers.
What are your suggestions to improve the situation of logistics and warehousing in India?
Implementation of GST will lead to logistics-efficient supply chains as against the tax-efficient designs that are more prevalent today. Focus on building infrastructure and connectivity to interior areas will also help in improving the situation. Logistics scenario in India can keep improving due to PPP for infrastructure and land development projects, and reforms by the government. While the quality of warehousing may not be at par with those seen in developed western economies in the next 5 years, investments in infrastructure, automation, technology, and engagement levels will definitely lead us in the right direction.