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.

Cargo Talk - - Award Talk - KALPANA LOHUMI

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.

Un­prece­dented trans­for­ma­tion

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

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