Foreign hand uplifts Indian logistics?

The arrival and presence of foreign players in the Indian logistics industry has been a profitable outcome. But, it could also be an opportunity for the foreign stakeholders to gain maximum experience. explores more.

Shantanu Bhadkamkar DDP Gallery of Legends 2016 & Managing Director ATC Global Logistics Since liberalisation, the presence of foreign freight forwarders has considerably increased in India. As a result, the fragmentation in the industry has also increased. Presence of foreign forwarders has considerably affected the business of Indian freight forwarders.

However, their presence has not changed the structure of logistics in India, nor have they enhanced the level of skill and training as they have also not made significant investments in training, logistics infrastructure and equipment. Whatever has been done or claimed to be done is only an insignificant tokenism. The foreign forwarders, by and large, have been conspicuous by their absence in the local and national initiatives taken up by freight forwarders through their associations and federations. Therefore, even by their presence in India, they have stayed foreign in this respect. Many, in the industry accuse foreign freight forwarders of unsustainably extending long credit periods, unfair competition owing to unequal playing field and poaching of trained personnel, however, a closer look at this issue reveals that the situation is no different among the Indian freight forwarders among themselves. As the customer is concerned, they do now have an even more wider choice in an already fragmented market and have an even greater bargaining power than in the past.

One positive contribution of foreign forwarders is, by and large, they don’t sign contracts on dotted lines. It is said that the logistics contracts today are written in blood. Foreign freight forwarders have been more vigilant about contractual terms and their legal consequences compared to their Indian counterparts. Whereas, most Indian freight forwarders would sign contracts on the dotted line in good faith, without taking serious cognizance of the fine print as they rely on the kindness of the customers in implementing the conditions.

Since the foreign freight forwarders in India have neither invested significantly in skill building nor in infrastructure building nor in technical upgrading of the industry, it seems their presence of in India, at least as of now, is purely opportunistic and not a strategic one. They have therefore not changed the face of the country’s logistics sector.