National Logistics Policy – How it is going to impact the country

Logistics in India have always been multi-modal, multi-dimensional, fragmented and unorganized. This is on account of the size, diversity and the geography of India. This is reflected in the cost of logistics as a proportion of GDP which is estimated to be in the range of 12% – 16%. The international best practice, however, is to keep the cost of logistics at less than 10%. This requires massive planning and execution at both the central and state levels since logistics, by nature, sits at the intersection of several actors in the

economy involving states, law enforcement agencies, trade associations, businesses and transporters. The National Logistics Policy is an attempt at overhauling the logistics sector to bring in policy level and administrative reforms with a vision to significantly improve country's logistics performance and reduce logistics costs. The policy intends to fulfill this vision through several pillars. One of the most important steps taken in this directions is to introduce a unifying legislation to govern the policy and implementation of logistics reforms. Under this policy, several important standards would be implemented which include standardization of processes, equipment, documentation and the like in order to aid multi-modal logistics. This is an outcome of a present-day situation where linkages between different modes of logistics like road-rail, road-waterway, rail-waterway etc. are not streamlined/synchronized for speed, efficiency and turnaround time. By standardizing processes, procedures and physical assets, multi modal logistics would be streamlined, allowing stakeholders several low-cost end-to-end logistical options. This standardization would directly leads to savings in cost and time for exports and domestic producers alike. At the moment, the provision of logistics services in India is fragmented. In the absence of national level standards, training programmes and capacity building exercises, there is significant scope to boost the professionalism of this sector. Logistics is also a key sector in the employment generation targets of the Government of India. The policy shall be a means to significantly improve the working conditions of the workforce in the logistics sector. There is also a palpable imbalance in the density of logistics sector services when rural areas are compared to urban areas. Especially in sectors like farmland agriculture, MSMEs and traditional crafts, the presence and effectiveness of logistics services is not at par with services provided to manufacturing and service sector industries. The policy, either directly or indirectly will impact one critical area where national level implementation has not been benefitted till now. This is planning and execution of logistics for disasters and national calamities. As climate change impacts the regular environmental phenomena, the government's role becomes crucial in providing an adequate mechanism to predict and prepare for major disasters. Logistics plays an extremely crucial role in making sure vital nodes in the infrastructure are resilient during such calamities. It is hoped that the policy puts in place robust mechanisms to ensure logistics plays a crucial role in preventing extreme loss to life and property during such events. The setting up of

Multi Modal Logistics Parks across the country will be a game changer for domestic logistics. In order to effectively utilize road, rail and waterway networks in the country, massive investments will be required to integrate these modes at junctions close to metropolises. At these hubs, logistics decisions will be taken on the basis of efficiency, speed and cost. In the absence of these hubs, transportation of goods happens through inefficient, time-consuming means. When coupled with the incorporation of latest technology in warehousing and the introduction of standards in the same, MMLPs will further boost standardization and cost-saving. It is hoped that the plan of MMLPs which is a country level hub-and-spoke strategy will be extended to cities and states through the urban logistics plans which will include local hub-and-spoke models at the city level for consolidation, distribution and pick-up of goods. The Logistics Plan is also envisaged to be future proof. Through incorporation of elements to make the implementation carbon-neutral and non-energy intensive, the logistics policy shall a torch bearer to other strategic planning projects in the country. Through the creation of research institutes and harmoniously engaging with academia, the

Logistics Plan is envisaged to make significant investments in Research and Development. Incubators, accelerators and funding ecosystems shall be created to encourage and incentivize the involvement in startups in the upstream and downstream, linkages created by the implementation of the logistics plan. Logistics is an interesting vertical. It is the lifeblood of the "hard" infrastructure of the country. It is a major employer and also provides a significant scope to increase the country's efficiencies. The National Logistics Policy is not only a step in the right direction, it is also timely and ambitious. Author: Subhash Jangala, IRS. Views are personal