How the logistics policy will speed up lumbering freight sector

Source: The post is based on the article “How the logistics policy will speed up lumbering freight sector” published in Livemint on 15th September 2022.

What is the News?

The government will announce the National Logistics Policy (NLP) this week with the aim to bring down logistics costs and address challenges plaguing importers and exporters.

What is the need for a logistics policy?

India’s logistics sector is largely unorganized and fragmented. So, the country’s logistics costs are as high as 14-15% of the GDP, against 7-8% in developed nations such as Singapore and the US which leverage it to boost exports. 

The National Logistics policy aims to bring down India’s logistics cost to 8% in the next five years.

What role will technology play in the logistics policy?  

The NLP will aim to harness technologies such as AI and blockchain. It aims to create a data analytics centre for driving greater transparency and continuous monitoring of key logistics metrics.

A portal will also be created where service providers such as warehousing providers, shipping experts, transporters, customs brokers and various governmental agencies will be unified.

Will logistics policy boost cooperation among ministries?

Currently, the logistics value chain is managed by several ministries—road transport and highways, shipping, railways, and civil aviation.

Agencies like the Central Drug Standard Control Organization and the Food Safety and Standard Authority of India provide clearances. The NLP could enhance their integration at the central level.

How will the logistics policy help in reducing carbon footprint?

The policy lays emphasis on the shift to more energy-efficient means of transportation, as well as the use of greener fuels which could reduce the supply chain’s carbon footprint.

Moreover, the policy emphasizes on creating regulations for controlling vehicular noise, emissions and wastage.

The policy also aims to incorporate green principles in the functioning of warehouses which contribute to nearly 10% of the logistics costs.

Will the logistics policy change India’s commodity transport?

The policy aims to focus on the transport of crucial commodities such as coal, steel, iron ore, food grains, steel, cement, fruits and vegetables.

The current logistical network for transporting them is mainly confined to regional clusters.

The policy could help establish a link between the place of origin and destination and integrate the supply on a national level.