Digital Integration: Key for Logistical Transformation

NICDC Logistics Data Services (NLDS) is a track and trace technology joint venture between India’s National Industrial Corridor Development and Implementation Trust (NICDIT) and Japan’s NEC Corporation. Through its Logistics Databank (LDB) service, the Indo-Japanese technology partnership aims to provide easy-access single window visibility solution to streamline container logistics operations leveraging RFID systems. With successful implementation at key ports across India’s western, eastern and southern belts, LDB has been able to reduce the lead time for truck routes by 25-27 per cent and improved the dwell time at ICDs by 18-20 per cent. LDB also provides detailed analysis of dwell time, average delivery time, efficiency of different port operators, CFSs/ICDs and toll plazas, helping identify bottlenecks across the supply chain. Abhishek Chaudhary, VP- Corporate Affairs, NICDC and Director, NLDS in a conversation with Upamanyu Borah, elaborates how their overarching solution has revolutionised the country’s logistics network through the provision of accurate, real-time container tracking solution, and building on its current expansion and success, looks to further consolidate its services across CFSs/ICDs/SEZs and contribute to the development of an integrated logistics framework.

For a ‘smart ecosystem’ in global shipping to take form, it would require transparency among various players and data-sharing between competitors. Do you think companies can tackle the issue of trust?

India is one of the fastest-growing economies in the world and is home to some of the largest manufacturing facilities, delivering goods in both domestic and international markets. Global shipping has to be at pace with the moving economy and transparency plays an instrumental role in tackling the issue of trust among stakeholders.

Supply chain operations are complex but with the advent of Artificial Intelligence (AI), IoT-based technologies, we have been able to provide complementary insights into the whereabouts and status of goods and assets. All this data put together improves operational efficiencies. Data sharing not just enables well-planned and logical decision making but also facilitates smooth and seamless movement of goods.

According to you, how efficiently a company can make use of analytics to respond quickly and therefore ensure prompt and timely delivery during these trying times?

Given the current pandemic situation where multimodal transport has become a necessity and dynamic decision making is required for the routing of goods in-transit, visibility and transparency play a key role in bringing agility, resilience, and predictability into the supply chain.

During these trying times, when the tides continue to shift, it’s not surprising that analytics, widely recognised for its problem-solving and predictive prowess has become an essential navigational tool. COVID-19 has accelerated the adoption of data analytics to keep supply chain industry moving forward. The repurposed and reshaped supply chain of the future will have to deep dive into analytics to make informed and efficient decision making during crises.

Data analytics helps to resolve numerous urgent tasks that businesses face today— forecasting demand, detecting potential supply-chain disruptions, identifying bottlenecks, delays and resolving the same.

Companies have now well understood that the COVID-19 pandemic is not just a short-term crisis. In fact, it has created long-lasting implications on supply chain and logistics operations. Leaders need to have a holistic approach which should be technology-led, leveraging platforms that support applied analytics, AI and machine learning (ML).

How intelligent is the analytics generated by your flagship product Logistics Databank (LDB) and what is its greater purpose?

LDB analytics reports are published on a monthly basis; it provides insights into the stakeholders’ performance across today’s competitive landscape. Analytics helps in identifying the bottlenecks effectively to ensure better planning and streamlining of processes, reduces lead time, which in turn brings down the overall transaction cost incurred. Key improvements during the course of the project are:

  • Port to ICD Transportation time reduced by 57%
  • ICD Dwell Time reduced by 20%
  • Port Dwell Time (import cycle) reduced by 49%
  • Port Dwell Time (export cycle) reduced by 22%

Reduction in lead time and transaction costs is a result of predictability and optimisation achieved through collaboration between LDB, port operating systems and freight operation information system (FOIS) of Indian Railways. It ultimately promotes modal shift from truck to rail transport which will contribute in reducing carbon footprint in India. 

How do you see the NLDS expansion to Nepal and Bangladesh continuing to benefit EXIM trade?

Extension of services to Nepal and Bangladesh region marks a successful growth story for NICDC Logistics Data Services (NLDS) and is a first step towards utilising NLDS services for improving global logistics. It came to fruition following Land Port Authority of India (LPAI)’s consent to install RFID readers at Integrated Check Posts (ICPs) at India-Nepal and India-Bangladesh borders.

With this expansion, exporters and importers from Nepal and Bangladesh are able to track movement of their containers through LDB portal and mobile application NICDC-LDB. This is allowing importers and exporters of Nepal, Bangladesh and India to have better visibility of their shipments and further plan their daily operations effectively, thus reducing their logistics cost.

NLDS tracking technology has streamlined and integrated the entire supply chain and enhanced the complete operation. But, when can we aim at 100% container volume tracking in India, as this will certainly mark a great milestone in bringing efficiency in logistics and reducing costs?

In November 2020, NLDS launched its container tracking services at Pipavav Port. With this expansion, NLDS now covers 100 per cent of India’s container volume. This is indeed a great milestone that we have achieved. Further, we are planning for an extensive coverage in the coming years—connecting hinterlands with all ports of India to maximise visibility, and reduce logistics cost. Going forward, we intent to cover 150+ toll plazas and maximise coverage across Container Freight Stations (CFSs) and Inland Container Depots (ICDs). We are further planning to track bulk cargo and extend NLDS coverage to all major SEZs of India in years to come.

Any underlying challenge that you face in this nationwide endeavour to streamline container movement across the logistics value chain and identify inefficiencies and bottlenecks to develop strategies to ensure the development of the sector?

Indian logistics sector is highly fragmented and there are lot of challenges faced by the players, including steep freight carrying costs, high turnaround time, poor capacity planning and lack of integration between hard and soft infrastructure. In addition, shippers and consignees have been facing a lot of trouble while tracking their freight movement. Up till now, every stakeholder (ports, Customs, railways, CFSs/ICDs etc.) had their own IT systems to manage their operations, which worked in siloes, leading to challenges at handshaking points (ports-railways, ports-CFSs, etc.) that led to poor workforce planning and inefficiency in operations, eventually causing delays in container movement. Post a detailed feasibility study of the Indian logistics scenario, with a view to reduce overall transaction costs incurred by the trade and to bring in transparency and visibility across the supply chain, NLDS was incorporated.

Further, to reduce the logistics cost from current 14% of gross domestic product (GDP) to 10% by 2022, digital transformation and the infrastructure status will surely play a vital role. This will foster development of small and medium logistics players as they will be able to receive infrastructure lending on simple terms with increased limits.

Tell us about how your company has evolved for a diverse yet fragmented market like India and what we could expect from the board in the near future?

The concept of LDB project was developed after having an in depth study of the logistics environment in India, discussions with various stakeholders across government ministries and their departments, importers/exporters, trade associations, ICDs, CFSs,  to understand the existing scenario and conceptualise the project to bring in best practices across the supply chain.

With the support of Ministry of Shipping, LDB started its commercial operations across the terminals of Mumbai’s Jawaharlal Nehru Port (JNPT) on July 01, 2016 and extended the services at Mundra and Hazira Terminals operated by Adani Ports and Special Economic Zones (APSEZ) in Gujarat on May 01, 2017. From November 2018, NLDS extended its operations pan-India—Krishnapatnam, Kattupalli, Chennai, Tuticorin, Cochin, and Mangalore ports in the Southern corridor and Kolkata, Haldia, Visakhapatnam ports in the Eastern corridor along with Deendayal Port in Gujarat. With the recent expansion at Pipavav port, NLDS now covers 17 Ports and 27 port terminals across India.

The project has enabled quick decision making and has improved competitiveness of logistics and manufacturing industries. It has also provided better governance and complete transparency and visibility of services for performance evaluation of ports, ICDs, CFSs and the entire supply chain sector.

While the government is building the physical infrastructure like dedicated freight corridors, multimodal logistics hubs, national highways, industrial corridors, etc. there is relatively low information technology penetration in the country’s logistics sector, resulting in operational inefficiencies. Solutions like LDB would help leverage the physical infrastructure, making them more efficient.

In India, the government and regulatory authorities are definitely accessible to the industry. Can you identify some rooms for improvements in the communication flow between these two crucial parts of the ecosystem?

India’s logistics sector is very complex with more than 20 government agencies, 40 PGAs, 37 export promotion councils, and a 215 USD market size. India’s logistics cost has been an expensive affair. India spends about 14% of its annual GDP on logistics.

Although the government and regulatory authorities are accessible but there’s lot of room for improvement in communication flow. With the government’s focus on digital transformation in logistics, we expect this to act as a bridge to provide multitude ways to communicate. In the last couple of years, social media has too has played an instrumental role in improving the communication between the two.

Added to this, a few more direct interactions, round table and related conferences can be organised both at the government and industry level to keep the communication flow more effective between the two.

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