Small steps, big changes

To en­cour­age ‘Make in In­dia’, a na­tional lo­gis­tics strat­egy is re­quired to trans­form the coun­try into a global man­u­fac­tur­ing hub. Ef­fi­cient lo­gis­tics do not just re­duce trans­porta­tion cost, but also de­crease the over­all pro­duc­tion cost. A time-bound plan

Cargo Talk - - Front Page - KALPANA LOHUMI

Prime Min­is­ter Naren­dra Modi has re­cently launched the am­bi­tious project ‘Make in In­dia’ with the ob­jec­tive to make In­dia a global man­u­fac­tur­ing hub. How­ever, lo­gis­tics has an im­por­tant role to play as the project’s achieve­ment greatly de­pends on the con­ti­nously mount­ing lo­gis­tics cost.

The rea­sons for the in­creas­ing lo­gis­tics costs are tran­sit or cus­tom de­lays, con­nec­tiv­ity and con­ges­tion, to name a few. Even a small-scale man­u­fac­turer can tell you how tran­sit de­lay in­creases his pro­duc­tion costs.

Ef­fi­cient lo­gis­tics do not just re­duce cost of trans­port and tran­sit time, but also de­crease the cost of pro­duc­tion. No one can deny the fact that the coun­try needs a mas­sive man­u­fac­tur­ing push, given the sec­tor’s lower con­tri­bu­tion to the GDP. And to achieve this, a lot needs to be done to bring down the cost of lo­gis­tics and make more in In­dia.

The wish-list

Ef­fi­cient lo­gis­tics is an im­por­tant de­ter­mi­nant of a coun­try’s com­pet­i­tive­ness. And, to make the sec­tor ef­fi­cient, mea­sures are needed to

over­come the bar­ri­ers such as non-in­te­grated time sched­ules, cus­toms de­lays, in­com­pat­i­ble stan­dards or an in­suf­fi­cient flow of in­for­ma­tion about de­lays, to name a few. Echo­ing sim­i­lar views, Bharat

J Thakkar, Joint Man­ag­ing Di­rec­tor, Zeus Air Ser­vices says, “Now it’s high time to ad­dress the chal­lenges faced by EXIM, which is keep­ing the dwell time and trans­ac­tion cost high, and mak­ing them un­com­pet­i­tive. The best and only an­swer is to de­con­gest air­ports by con­vert­ing ex­ist­ing Con­tainer Freight Sta­tions (CFS) and In­land Con­tainer De­pots (ICD) into Air Freight Sta­tions (AFS) and to en­sure their suc­cess part­ner­ship with the Air­port Ter­mi­nal Op­er­a­tors (ATOs) is re­quired.” “The new AFS guide­line came on Oc­to­ber 28, 2014 All the stake­hold­ers in­clud­ing air­lines, for­warders and cus­toms bro­kers should work to­gether to make it a suc­cess. This is of prime im­por­tance to avoid dwell time and dual charges on han­dling,” he added.

Pil­lars of the Cam­paign

“If lo­gis­tics ser­vices are in­ef­fi­cient, firms are likely to main­tain higher in­ven­to­ries at each stage of the pro­duc­tion chain, re­quir­ing ad­di­tional work­ing cap­i­tal,” says

Su­nil Kohli, Man­ag­ing Di­rec­tor, Rahat Cargo, in adding, “Since the Prime Min­is­ter has been high­light­ing his agenda to en­cour­age ‘Make in In­dia’, it is es­sen­tial that all ef­forts should be made by the gov­ern­ment agen­cies to pro­vide op­ti­mal in­fras­truc­tural support to the ex­porters and en­trepreneurs to vol­un­tar­ily opt for ex­port­ing goods from In­dia.”

“The gov­ern­ment needs to ini­ti­ate its ef­forts by up­grad­ing the smaller air­ports in the coun­try by pro­vid­ing with state-of-the-art fa­cil­i­ties and ad­e­quate in­fras­truc­tural support. The tech­no­log­i­cal as­sis­tance can also be so­licited from other coun­tries, if re­quired, to help make such air­ports op­er­a­tional on the de­sired level,” he pointed.

“It is bit dif­fi­cult to ex­pect any gov­ern­ment to de­velop and meet all ex­pec­ta­tions, so the same ap­plies in In­dia; the most im­por­tant be­ing in­fra­struc­ture,” stated Thakkar. “It must also be en­sured that a well-built and ob­struc­tion­free road to the air­port is also ac­ces­si­ble,” added Kohli.

Sim­i­larly, co­or­di­na­tion among the four modes of trans­port – road, rail, avi­a­tion and shipping – to en­sure a smooth mul­ti­modal sys­tem of­ten seems the most dif­fi­cult. Some mea­sures can go a long way to help re­duce the tran­sit cost. First, take up those is­sues (such as pro­ce­dural mat­ters) which have al­ready been iden­ti­fied and can be sorted out with­out any fresh in­vest­ments or rev­enue loss to the gov­ern­ment. Sec­ond, there is a need to di­vert cargo from the high-cost mode of trans­port to low-cost mode, i.e. from road to rail and from rail to ship for ef­fi­cient lo­gis­tics. To­day, roads carry the max­i­mum cargo – nearly 60 per cent – fol­lowed by rail (30 per cent) and then coastal shipping (seven per cent). A lot needs to be done in terms of im­prov­ing the over­all sup­ply chain man­age­ment to bring down costs.

Su­nil Kohli Man­ag­ing Di­rec­tor Rahat Cargo

Bharat J Thakkar Joint Man­ag­ing Di­rec­tor Zeus Air Ser­vices

Sachin Bhanushali Pres­i­dent Gate­wayRail

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