With the unveiling of the visionary ‘Make in India’ programme in 2014, which is aimed at transforming India into a global hub for manufacturing, setting forth of a well-defined aspiration to become a US$5 trillion economy, the need for reforms in the logistics sector was further amplified. More recently, the clarion call by Prime Minister Narendra Modi for an ‘Aatmanirbhar Bharat’—a self-reliant India requires an eminently robust logistics sector.
It is therefore that the centre formulated a vision “To develop an integrated cost-effective, reliable, sustainable and digitally enabled logistics ecosystem in the country for accelerated and inclusive economic growth”.
Approach: Initiatives and Announcements
The logistics industry is one of the key sectors of the Indian economy that has seen immense growth in the last couple of years. With improved logistics infrastructure, there is a significant growth potential of trade in general. Most importantly, during the pandemic induced lockdowns, the sector has stood the test of time by supporting the movement of essentials and non-essentials. Now it is expecting the government shower much-needed attention to it.
With whole of the government’s effort planned to ensure that problems facing the logistics ecosystem are viewed in their entirety and solved with an end-to-end perspective, the key aim is to capitalise on the massive infrastructure investments already made and further planned.
Formulation of Logistics Division: The Logistics division in the Department of Commerce under the Ministry of Commerce and Industry was created on July 07, 2017 to allocate the task of “Integrated development of Logistics sector” to the Department of Commerce. It is consequent to the amendment to the second schedule of the Government of India (Allocation of Business) Rules, 1961. The division is headed by a Special Secretary to the centre and has been given the mandate to develop an Action Plan for the integrated development of the logistics sector in the country.
The Logistics Division adopted a consultative approach for identification and resolution of gaps based on interaction with more than 100 with stakeholders in the public and private sector by way of policy changes, improvement in existing procedures, identification of bottlenecks and gaps and introduction of technology in this sector. The following initiatives have been planned and are underway as part of the consultation:
- The National Logistics Policy is in its final stages of being issued. The policy has been developed after wide consultations with all central ministries on the supply and demand side and takes a comprehensive view of the sector defining specific action points.
- A National Logistics Law that would provide an agile regulatory environment through a unified legal framework for “One Nation-One Contract” paradigm (single bill of lading across modes) supporting “One Nation-One Market” agenda has been framed and is under consultation with stake holders. The provisions of the law will enable the assignment of a unique Logistics Account Number replacing unwieldy registration systems and encourage excellence certification in the currently fragmented market of logistics service providers. It will also promote common terminology, transparency in charges and better mechanisms for industry lead conciliation and dispute settlement.
National Logistics Master Plan: To deal with fixed infrastructure development in an integrated and holistic manner, the National Logistics Master Plan that is under development adopts a geo-spatial approach rather than a sectoral approach to identify gaps and blind spots. The plan aims to augment intermodal and/or multimodal transport mix through convergence of various ongoing projects/programmes. Conjoined development of related infrastructure (optical fibre cable networks, gas and utility pipelines) is planned so as to ensure no disruptions at a later stage.
It is planned to monitor the Master plan implementation through an Inter-Ministerial Committee (IMC). State and City Logistics plans are proposed to be developed in alignment and synergy with the National plans.
National Grid of Logistic Parks and Terminals: Additionally, a National Grid of Logistic Parks and Terminals is planned with a unified approach for coordinated development of Intermodal facilities, promote intermodal and Multimodal Logistic Parks (MMLPs) as a separate class of infrastructure with a national registry of multimodal facilities to enable price discovery, optimal utilisation, and to facilitate planned development.
Adoption of National Packaging Initiative: A National Packaging Initiative is planned to reduce logistics costs, ensure product safety and promote sustainability. It is proposed to issue guidelines and standards for packaging material and design, promote domestic industry for manufacturing specialised packaging materials and machines and provide certification of bulk packaging of dangerous goods for all modes.
Industry-best Warehousing Fulfilment: For development of modern warehousing, recommendatory guidelines and standards for warehousing and related physical assets are being developed to drive interoperability and compatibility. It is also planned to streamline processes for securing approvals/ clearances for setting up warehouses and their grading and certifications for excellence.
For development of a modern and agile fleet of rolling and floating stock, the steps planned include local manufacturing of containers, promoting containerisation in less than train load and palletisation in less than wagon/truckload, innovative wagon/truck design—for quick release at terminals, and high capacity and light-bodied rolling stock to meet needs specific sectors, low daft vessels suited for Inland waterways and coastal shipping, use of slurry pipelines and containerisation in railways for bulk commodities, designated well-equipped logistics facilities for movement Over Dimensional Cargo (ODC), reefer container and trucks to facilitate temperature-controlled logistics, promotion and proliferation of innovative delivery models like Double Stack Dwarf Containers (DSDC), Roll-on Roll-off (RO/RO), and road railers, etc.
Accelerating Digitalisation: The Logistics Division has also planned ‘digitisation initiatives’ to create an integrated IT backbone to bring efficiencies, reduce empty trips and enable a seamless interface. The specifications of a National Logistics Platform (iLOG) are under finalisation in consultation with Ministry of Electronics and Information Technology (MEiTY). The iLOG will serve to bring together a single platform for the different IT solutions created over time by the various stakeholders viz logistics service providers, buyers as well as central and state government agencies such as customs, DGFT, railways, ports, airports, inland waterways, coastal shipping, etc. In addition to the iLOG, specific initiatives to fill the gap areas are also planned which shall, inter alia, enable digital document exchange, truck visibility, electronic logging in and out of truck drivers, directory of all warehouses in the country, and so on.
Ensuring an adequate supply of Competent Workforce: A National Logistics Workforce Strategy is being put in place for integrated skill development of logistic sector professionals. Building on the existing framework of skill development centres which are currently transportation mode based (for Road, Railways, Ports, Civil aviation, etc.) it is planned to enable exchange of ideas and best practices across sectors and build a workforce of professionals who will be the key drivers to development of logistics in the country. The measures include:
- A coordinated approach to assess and meet current and future skill needs, bringing to mainstream the education and training in logistics sector in the regular formal education from school up to post-graduate level.
- Introduction of a Certified Logistics Professional (CLP) scheme and to incentivise the engagement of such professionals.
- Driver Employment and Empowerment Programme with the objective of reducing logistics costs due to high shortages of truck drivers by making truck driving a preferred vocation.
Improving Cold Chain Systems: The Logistics Division aims to meet the sector-specific needs of the Agriculture and MSME sector to ensure they are able to discover new and far reaching markets, of bulk sector by using operations research for optimisation of their logistics, pharmaceutical, fruits, vegetables, etc. by developing an efficient National Cold chain for and the special requirements in transportation of Dangerous Goods and ODC shipments by streamlining the processing and compliances involved. Specific steps are also envisaged with focus on international trade to integrate our supply chains with the world.
With above, it is hoped that in the next 5 years the targets set by the National Logistics policy to improve India’s ranking in Logistics Performance Index to 25 and to reduce cost of logistics in India by 40 per cent from 13 per cent to 8 per cent of GDP will be met.
