Being more productive at the same cost

With a focus on unblocking bottlenecks and capitalising on opportunities, PHD Chamber of Commerce organised the National Maritime Conclave - 2019 in New Delhi. The conference was graced by the presence of dignitaries from the ministries of commerce & industry and agriculture & farmer welfare, along with other industry professionals. N SIVASAILAM Special Secretary (Logistics), Department of Commerce Ministry of Commerce and Industry

All countries with which we compare our logistics cost have it between 7-10 per cent, and that is where the catch lies at present. When you come to think of logistics cost, the interpretation of 13 per cent would be that every rupee spent on logistics should drive more. If 13 per cent of logistics cost is supporting 87 per cent of the rest of the industry, we would like to increase logistics because that’s what would provide business. Logistics is an inherent part of value addition in a product. The Department of Commerce, in consultation with Ministry of Shipping and the Indian Port Association (IPA), is addressing the issues relating to port charges and shipping funds so that both domestic exports and imports become cost-effective.

The Exim Bank has already come out with ‘shipping funds’ to provide funding assistance to the shipping industry for a period ranging between seven to 10 years. However, the industry is demanding that the life of such funds stay within the period of 20-40 years and therefore, efforts are on to find a suitable arrangement so that funds accessed by industry through this channel also become cost-competitive for both stakeholders.

DILIP KUMAR GUPTA Managing Director Sagarmala Development Company

The present government began this programme in 2015 to make full use of the potential of a 7500-kilometre coastline. Project implementation under Sagarmala has been advancing progressively, and one-third of projects have already been completed; the remaining will have been commissioned by 2020. Additionally, 1900 kms of roadways and 1900 kms of rail linkages are also expected to be commissioned as per schedule.

PAWANEXH KOHLI Chief Advisor & CEO, NCCD Ministry of Agriculture & Farmer Welfare

As an industry, we must all try to make logistics more productive. Increasing port capacity to cater to the growing traffic will automatically bring down the cost of operations and per unit cost of goods handled.

The mindset, however, needs to be changed in terms of being productive for the same cost. For instance, we can increase our capacity utilisation which should be done with greater operational efficiency. The industry must speak to the government about turnarounds to help them become more productive. The idea of multimodal logistics is to make sure that every part of the country is connected to any possible exit point. Logistics is a bridge and it’s good to ensure that the length of the bridge becomes shorter, but how do we make sure logistics, as a wider spread, has greater affectivity?

V KALYANA RAMA Chairman and Managing Director Container Corporation of India

The need of the hour is to reduce transaction costs both for agricultural commodities as well as industrial products. Logistics solutions are not clearly developed in our country. Using a coastline and coming out with seamless multimodal transport will reduce the logistics cost. CONCOR is setting up 120 centres across the country for effective distribution of multiple products so that the transaction cost for products and commodities is rationalised.

CAPT SURESH N AMIRAPU Chief Executive Officer PSA Bharat Mumbai Container Terminals

The first major problem we are facing with the ports is that we don’t have a master plan. Investment in ports in India is a little haphazard because of this. What is also important is that if there is a master plan for the 12 major ports, it should be transparent. The issue really is lack of coordination. The second point I want to highlight is evacuation. Here again, it’s a question of coordination because as a port operator or terminal operator, I can bring international standards and bring the highest productivity level internally, but once I step out, it all comes back to square one. There is no holistic integration among various departments, divisions, and policymakers. We must look at issues with a larger perspective if we want to be future-ready.

PN SHUKLA Director, Gati

Port modernisation should not be taken only for international business. With a 7500 km coastline, everybody is only thinking of international exports, which doesn’t make sense for modernisation. We must think of leakages of our ports for domestic cargo and that only can bring a change in mindset, like investing big in international ports, existing ISO containers, etc. Once you are doing domestic business, you have to bring down your ease of doing business and then there have to be ports which will serve you internally along the coastline. Hence, it becomes crucial that modernisation take care of domestic cargo. The focus, however, is missing. I believe that ports which are getting modernised must develop the network for domestic business; here we need government support.