Lo­gis­tics to cre­ate vo­ca­tions for 3 mil­lion by 2022?

Cargo Talk - - Contents -

TeamLease Ser­vices es­ti­mates that the lo­gis­tics sec­tor will cre­ate em­ploy­ment for at least three mil­lion peo­ple by 2022. Mayur Saraswat, Head of North Busi­ness, TeamLease Ser­vices, shares that tech­nol­ogy dis­rup­tions will cre­ate more skilled jobs such as IOT, Big Data, AI and Ro­bot­ics. As the re­port says, the lo­gis­tics sec­tor will cre­ate 3 mil­lion jobs in next four years. Please elab­o­rate on that.

With the new-found in­fra­struc­ture sta­tus and GST giv­ing tail­winds to the sec­tor, the lo­gis­tics sec­tor in In­dia is set for a ma­jor trans­for­ma­tion. Th­ese fac­tors, cou­pled with do­mes­tic con­sump­tion led GDP growth and evo­lu­tion of the lo­gis­tics sec­tor, in re­sponse to In­dia’s in­dus­try and eco­nomic re­quire­ment – is re­sult­ing in an in­flec­tion point in terms of job cre­ation. The sec­tor is poised to grow at a CAGR of 10.5 per cent and gen­er­ate `21,00,000 crore in rev­enues and three mil­lion new jobs by 2022. Of th­ese, Mum­bai, Delhi –NCR, Chen­nai and Bengaluru will gen­er­ate 1.74 mil­lion in­cre­men­tal jobs. The bulk of the job cre­ation will hap­pen within the seven sub-sec­tors of lo­gis­tics. Road freight will gen­er­ate 1.89 mil­lion in­cre­men­tal jobs, fol­lowed by wa­ter­ways (450,000 in­cre­men­tal jobs), air­freight (400,000 in­cre­men­tal jobs), ware­hous­ing (120,000 in­cre­men­tal jobs), rail freight (40,000 in­cre­men­tal jobs), courier ser­vices (60,000 in­cre­men­tal jobs) and pack­ag­ing (40,000 in­cre­men­tal jobs).

If the sec­tor has the po­ten­tial of creating 3 mil­lion jobs, then the sec­tor also need to have suf­fi­cient skill set. What do you feel about the cur­rent skill gap and re­quired skill sets in the lo­gis­tics sec­tor?

There is a crit­i­cal need of man­power de­vel­op­ment in lo­gis­tic sec­tor, which is un­der­go­ing rapid evo­lu­tion, both in terms of scale and scope of ser­vices, thanks to the growth rate that sec­tor is ex­pe­ri­enc­ing. To­day, the man­power avail­able in the In­dian lo­gis­tics sec­tor crit­i­cally lacks do­main skills. The gaps in skills re­quired are at all lev­els, from se­nior and mid­dle man­age­ment to the ju­nior and op­er­a­tional level. At an over­all level, there is a lack of spe­cialised knowl­edge of prac­tices and most workers only have ba­sic in-house ex­pe­ri­ence driven skills with no for­mal ed­u­ca­tion, train­ing or cer­ti­fi­ca­tion. Given the way the in­dus­try is or­gan­ised there is very lit­tle im­pe­tus on skill build­ing and it gives rise to gaps in the core tech­ni­cal skills. In fact our study shows that by 2022, the in­dus­try will ex­pe­ri­ence a skill gap of 950,000 peo­ple across the seven sub-sec­tors and eight key cities, which are cur­rently hubs for lo­gis­tics re­lated jobs. In ad­di­tion to the func­tional and do­main skills, the em­ploy­ees lack knowl­edge of reg­u­la­tory af­fairs, tech­nol­ogy, com­mu­ni­ca­tion and ef­fec­tive plan­ning, which are ma­jor skill deficit that the sec­tor is fac­ing across ju­nior to mid to se­nior level. Fu­ture jobs will be more tech­nol­ogy driven and an­a­lyt­i­cal. Tech­nol­ogy dis­rup­tions will cre­ate more skilled jobs such as IOT, Big Data, AI and Ro­bot­ics, Cloud Com­put­ing,

Man­power de­vel­op­ment in lo­gis­tic sec­tor is needed. The sec­tor is un­der­go­ing rapid evo­lu­tion, in scale & scope of ser­vices

Drones and driver­less ve­hi­cles.

Where do you see the role of start-ups in lo­gis­tics in­dus­try?

While the lo­gis­tics sec­tor is grow­ing, its fu­ture is de­pen­dent on abil­ity to em­brace tech­nolo­gies, im­prove its pro­cesses and drive con­tin­u­ous im­prove­ment man­age­ment in the op­er­a­tions. There­fore, there is a need to de­velop a dis­rup­tive so­lu­tion that can tackle prob­lems re­lated to IT, ware­house man­age­ment, net­work­ing, com­mu­ni­ca­tion and com­plete lo­gis­tics con­trol. The start-ups in lo­gis­tics space have a sig­nif­i­cant role to play in driv­ing tech­nol­ogy adop­tion and help­ing stream­line the or­gan­ised busi­ness such as truck­ing. So we see emer­gence of start-ups which are bring­ing so­lu­tions in area of real-time fleet track­ing, pro­vid­ing mo­bil­ity so­lu­tion, IoT so­lu­tions, route op­ti­mi­sa­tion that will help the trans­porta­tion, truck­ing, ware­hous­ing, freight & cargo com­pa­nies. We also see emer­gence of start-ups which of­fers last mile delivery and hyper lo­cal delivery ser­vices.

How will in­fra­struc­ture sta­tus help grow the lo­gis­tics in­dus­try?

In­fra­struc­ture sta­tus for the lo­gis­tics sec­tor will help at­tract more fund­ing and credit at com­pet­i­tive rates and on a long-term ba­sis. This will specif­i­cally en­able lo­gis­tics com­pa­nies to: 1) Ac­cess larger amounts of funds as Ex­ter­nal Com­mer­cial Bor­row­ings (ECB). 2) Ac­cess longer-tenure funds from in­sur­ance com­pa­nies and pen­sion funds, and 3) Be el­i­gi­ble to bor­row from In­dia In­fra­struc­ture Fi­nanc­ing Com­pany Lim­ited (IIFCL). Ris­ing lo­gis­tics costs im­pacts global com­pet­i­tive­ness of ex­porters, so this move will help the ex­port seg­ment and make In­dian goods more com­pet­i­tive in the global mar­kets. It will also help bring down cost of goods in the lo­cal mar­kets. It is es­ti­mated that lo­gis­tics costs ac­count for 14.4 per cent of GDP, and this in­fra­struc­ture sta­tus will help re­duce this by about two per cent in next three to four years. In line with the in­fra­struc­ture sta­tus, the union govern­ment has ear­marked `6

Lakh Crore, for in­vest­ment in the in­fra­struc­ture sec­tor in this cur­rent fis­cal bud­get of which 50 per cent would be spend on cre­ation and upgra­da­tion of roads, rail­ways and ports. Com­pa­nies across in­dus­tries, whose op­er­a­tions de­pend sig­nif­i­cantly on war­hous­ing and lo­gis­tics can now ex­pand their pres­ence in Tier II and Tier III cities and cre­ate a stronger net­work of ware­housed and lo­gis­tics fa­cil­i­ties in th­ese cities – which will trans­late into more growth for com­pa­nies and more jobs for peo­ple. Over­all, this move will im­prove the com­pet­i­tive­ness of the lo­gis­tics in­dus­try and help stim­u­late job cre­ation.

Mayur Saraswat Head of North Busi­ness TeamLease Ser­vices

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