A leg-up for logistics

Source– The post is based on the article “A leg-up for logistics” published in the Business Standard on 2nd november 2022.

Syllabus: GS3- Infrastructure

Relevance– Logistics

News- The article explains the logistical related issues. It also explains the National Logistics Policy.

How is the performance of India in logistics?

A 2018 logistics performance index prepared by the World Bank put India at rank 44. China is ranked at 26th position.

India’s logistics costs add up to around 13% of gross domestic product. It is quite high compared to developed economies such as the US, South Korea, Singapore, and EU. Here, costs are estimated to be 7-10%.

But this cost is disputed by some scholars.

Which are Initiatives by the government that will help in improving logistics?

Transport infrastructure has been put in place. It is evident from greenfield expressways to dedicated freight corridors.

The goods and services tax and e-way bill system have transformed the nature of transport documentation.

Coastal zones are being developed. GatiShakti platform seeks to build the necessary connectivity.

How will the National Logistics Policy be implemented?

The National Logistics Policy will be implemented Through a five-pronged strategy–

One, the share of the railways is to be pushed up from the current 28 per cent to 40 per cent. The current emphasis on “dedicated freight corridors” with committed time-tables, along with RORO will help enormously.

Two, multi-modal logistics parks are to be set up.

Three, special emphasis is to be given to inland water transportation, coastal shipping, and moving liquid bulk cargo via pipelines.

Four, specific plans are to be drawn up for 15 industries that constitute the majority of bulk cargo movement.

Five, digital integration is to be achieved for tracking and monitoring.  A new platform called Unified Logistics Interface Platform or Ulip will offer open access to relevant data crucial to tracking and expediting cargo movement. It will be done by integrating e-portals of the railways, customs, aviation and commerce authorities.

The outcome of all these efforts is to be monitored by a Logistics Ease Across Different States survey.

What are the issues that need to be resolved?

The adoption of standardised multi-use containers is to be emphasised. Agricultural mandis to aerotropolises, modern reefer trucks and refrigerated warehouses as viable cold-chains need to be established.

The capacity and efficiency of Indian ports have improved considerably. The average turnaround time of a container vessel has come down to 26 hours from 44 hours. But maritime freight-pricing-power needs some bold reforms.

The issues related to perennial navigable channels, night navigation, and, crucially, the absence of appropriate river-ports and related connectivity need to be resolved.