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Logistics Policy: Federal Structure, TFA and existing capacity utilisation should be focused

DSC_8241Speaking at the first National Conference on Logistics Policy at FICCI House in New Delhi Mr Samir Shah, immediate past Chairman, Federation of Freight Forwarders’ Associations in India (FFFAI) and Partner, JBS Group maintained that the draft Logistics Policy, which was recently unveiled by the Ministry of Commerce, Government of India,  seems homogeneous in nature. However, it should keep the federal structure in mind. “There are differences in the country with diversity. We will have to accept it. Simultaneously, there should be separate Logistics Policies from all state governments as well,” he said. He was speaking at the Session on “Facilitating Efficient Logistics Processes, Logistics Skilling and Standardisation for Enhancing Ease of Doing Business.”

Union Minister of Commerce & Industry and Civil Aviation, Mr Suresh Prabhu, inaugurated the first stakeholder consultation on the draft Logistics Policy prepared by the Department of Logistics of the Ministry of Commerce & Industry. Jointly hosted by FICCI and Ministry of Commerce & Industry in association with FFFAI and other trade associations the National Conference on Logistics Policy was held on 19 – 20 February, 2019 at the FICCI House in New Delhi.

Commenting on logistics cost in India, Mr Shah was of the opinion that there are procedural errors about the calculation of logistics cost, which has been taken as 13-14 percent of GDP. It does not have scientific basis as far as calculation is concerned, and it should be commodity wise.

Mr Shah also emphatically said that the Logistics Policy will have to be guided by Trade Facilitation Agreement, which is a very well-structured and wonderful document as regard to action plan on enhancing exim trade through effective EDI and Single Window Interface for Facilitating Trade (SWIFT) systems, etc.

On skilling the logistics sector Mr Shah observed that this sector is predominantly human resources- based industry. However, paradoxically, biggest challenge is to get people to come and join this industry. “Ensure good mobility and make this industry an attractive career option. People should be the prime pillars of logistics industry. Training should be mandatory and monitoring the training institution should be of prior importance. Pay for the trainees rather than training institutes. There should be multiple Centres for Excellence across the country. Women should be encouraged more to join this industry,” he suggested. In his opinion, objectives and functions of Logistics Sector Council should also be incorporated in the Logistics Policy. Mr Shah also urged for massive media campaign by the government to promote logistics industry, for creating good image of this sunrise sector.

DSC_8109Earlier, offering his views on the Logistics Policy, Mr S Ramakrishna, Chairman, FFFAI, observed that the logistics Industry in India is presently facing challenges predominantly in three areas in the multimodal transport arena: 1. Railways owing to scarcity and uneven movements of rolling stocks, 2. Roadways owing to toll gates and 3. Need of Multimodal Logistics Parks due to underutilization of available capacity. These are resulting in exorbitant transaction time and cost, hence should be appropriately addressed to make India’s exports competitive in the international markets.

According to Mr Ramakrishna, better utilization of rake capacity, code sharing system among container train operators, faster evacuation of containers, optimal use of ICDs/CFSs capacity instead of adding more capacity like Multimodal Logistics Parks, elimination of toll gate hassles, etc can improve logistics operation drastically. FFFAI has also recommended that in the Air Cargo Policy there should be at least one AFS (Air Freight Station) in each state where the existing warehousing facility/ICD/CFS can be utilized with upgraded technology of scanners, QR coding, custom clearance facilities, etc.

It is worth mentioning that meanwhile the government has allocated Rs 132 crore to the Directorate General of Foreign Trade (DGFT) to revamp IT infrastructure for upgradation of logistics in a bid to provide paperless, faceless and transparent solutions to the problems faced by industry and trade in the movement of goods and services across the country.

The Conference was also addressed by Mr N. Sivasailam, Special Secretary, Logistics;  Mr Binoy Kumar, Secretary Ministry of Steel (who was the first to helm the Department of Logistics when it was set up); Mr Y K Modi Past President, FICCI; Mr Shantanu Bhadkamkar, President, AMTOI and past Chairman, FFFAI; Anant Swarup, Joint Secretary, Ministry of Commerce & Industry; Ms Sushma Vasudevan, Partner, BCG; Mr R S Subramanian, Chairman, Express Industry Council of India and other dignitaries.

Key Objectives of Logistics Policy

According to the commerce minister sources, the primary objective of the draft National Logistics Policy 2018  is to facilitate  integrated  development  of  the  logistics  sector  in  the  country.  It aims to strengthen and prioritize the key objectives, focus areas and the governance framework for logistics and  also  clarifies  the  role  of  the  various  stakeholders  including  central  ministries, state governments and other key regulatory bodies. The draft policy also seeks to create a single point of reference for all logistics and trade facilitation matters in the country which will also function as a knowledge and information sharing platform.

Adding further Mr Sivasailam said that the logistics business in the country is worth USD 160 billion and is growing at 7 per cent – 8 per cent every year. The key objectives of the policy are to reduce logistics cost from 14 per cent  to 10 per cent of GDP, create additional 10-15 million jobs in the sector, become a single point for all logistics & trade facilitation and reduce losses in agriculture to less than 5 per cent, by facilitating agri-logistics in the country.

Further Mr Sivasailam informed that in order to drive these objectives, 18 thrust areas have been detailed in the policy. These include optimizing modal mix in the country and development of logistics infrastructure, enhancing transport and rolling stock infrastructure, strengthening the warehousing and agri-logistics sector, streamlining key logistics processes – EXIM and inter-state movement, facilitating first mile and last mile connectivity, and easing logistics for MSME, e-commerce and all other key sectors in the economy.

SAFAR Mobile App launched

Suresh Prabhu lauching Safar App-at FICCI HouseOn this occasion, the Commerce Minister Mr Suresh Prabhu launched the SAFAR Mobile App. This app will help to gauge the actual issues faced by transporters on the road. The app tracks the incidence of a number of parameters faced by transporters and automatically records the location of the issue. Transporters, truck drivers, and general public may use the app for reporting their logistics issues to the Ministry of Commerce and Industry.  The app is available in 8 languages.


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