India rows its way into sea of logistics
The logistics industry in India is likely to grow at a rate of 9-10 per cent over the medium-term, according to ICRA report. Our esteemed winners of the India Cargo Awards share the driving factors for the growth.
GST: One country, one market
According to Ramesh Mamidala, CEO, Celebi Delhi Cargo Terminal Management India, “The current government’s emphasis on export oriented manufacturing will lead to more production of export oriented products that should increase the need for logistics services over next five years. Growing domestic consumption combined with growth of e-commerce should lead to increased intensity of logistics activity across the nation.” “GST mantra of ‘one country - one market’ should lead to hassle free cross border transportation and in turn lead to more surface transportation opportunities. Investments in developing infrastructure should also lead to manufacturing and import of raw material/ products that are needed for developing the infrastructure, which may range from airports to sea ports to highways, that need logistics activity to get the material across to the development sites,” he adds.
Logistics industry on rise
“Business has been quite busy for all the service providers (including us) this year and it continues to be till date. Last two to three years were comparatively slow, thus stakeholders had predicted a very positive 2017 based on the global demand and supply fundamental. Further, there were several initiatives taken by the government with regards to extra benefits being extended to small and medium size manufacturers. For example, ROSL was extended as an additional benefit to the apparel community. ‘Make in India’ campaign is already shaping up well, motivating new and existing manufacturers to boost production - which is further complimented by ease of tax benefits by the means of GST implementation. Looking at long term, there will be a huge overall impact on economy in a big and a positive way giving a direct impact to the logistics industry,” feels, Rahat Sachdeva, Vice President - International Logistics, Rahat Continental. He strongly predicts a minimum of 10 to 12 per cent rise in 2018 which could be the best in this decade.
Shubhendu Das, Managing Director, Hellmann Worldwide Logistics India, listed the main game changers which are expected to accelerate logistics growth; GST will help consolidation of multiple warehouse and efficient hub & spoke model for overall improvement in the logistics cost, speed of delivery and reduction of wastage/losses, investment of government on infrastructure development and modernisation of the current assets and the integrated road, rail and coastal waterways. The introduction of dedicated freight corridors of rail, coastal freight and improving national expressways will be crucial. Development of multi-modal logistics parks at key commercial hubs will improve the overall efficiency, speed and reduction of carbon emission. Innovation, technology and automation will bring unprecedented transformation in the current logistics model and SCM. e-commerce and integrated logistics will play a major role. ‘Make in India’ and skill development programme are the current challenges in this area which is quite substantial. Increasing focus by FDI in logistics sector and ‘Make in India’ initiative will enable recovery of our economy.
Reduced logistics cost, increased economic recovery
Raman Kaul, General Manager – Corporate Planning, Jayem Logistics, shares, “New GST policies are encouraging foreign investors across the supply chain and demand for end-to-end solution providers and emerging of e-commerce, logistic parks, cold chains and new startups are the main reasons. Railways’ position is also be expected to improve as its 30 per cent of freight movement is in India - for long-haul and bulky commodities like coal, iron ore, fertilizers, steel and cement. Additionally, the governments’ other major emphasis is on improving India’s transportation mix by developing inland and coastal waterways.” “The GST implementation will also support organised players as it will have three major implications - consolidation of warehousing network and a shift towards a hub and spoke model, higher degree of tax compliance and creation of level playing field between express and traditional transport services providers by virtue of access to input tax credit,” he adds.
Bipin Kulkarni, VP - Sales & Marketing, Spear- An FM Logistic Company, feels, “Indian logistics industry is witnessing high growth phase. Major driving force is GST which has forced the industry as well as logistics players to change. We are already witnessing lot of new opportunities in warehousing sectors. The GST implementation will support organised players like Spear-FM, as GST will have major implications in consolidation of warehousing network and a shift towards a ‘hub and spoke’ model.” “Due to warehouse consolidation, companies are looking to consolidate warehouses which are equipped with advanced IT & WMS, racking and handling equipment. We are ready with our first of many multi-client facilities in Mumbai with 35,000 pallet positions at 250,000 SFT facility. Other cities which will benefit post GST would be cities like Gurgaon, Pune, Bangalore, Hyderabad. We have plans to set next set of MCFs in these cities,” he adds.
GST to support organised players
Dileepa B.M., CEO Bonded Trucking, Shreeji Transport Services, feels, "GST implementation and evolving customer needs expected to favour organised logistics players. The domestic sector is currently in a transformation phase with game-changing trends like implementation of GST, increasing focus by foreign investors across the logistics value chain, growing demand for end-to-end solution providers and emergence of new avenues such as e-commerce, logistics parks, cold chains and new start-ups." "The GST implementation will also support organised players as it will have three major implications – consolidation of warehousing network and a shift towards a ‘hub and spoke’ model, higher degree of tax compliance and creation of level playing field between express and traditional transport services providers by virtue of access to input tax credit. Further, improvement in modal mix and reduction in logistics costs expected with increased focus on development of cost-efficient modes like waterways," he adds.
Best International Air Cargo Terminal Operator (North & East 2016): Celebi Delhi Cargo Terminal
Best Logistics Service-International (North & East 2015): HellMann Worldwide Logistics
Best Diversified Logistics Company (West & South 2015): Jayem Logistics
Leading Freight Forwarding Company (North & East 2016): Rahat Continental
Best Warehousing Company (West & South 2016): Spear Logistics
Best Customs Bonded Trucking (North & East 2015): Shreeji Transport Services