National Logistics Policy will build a resilient logistics ecosystem | The Financial Express

National Logistics Policy will build a resilient logistics ecosystem

National Logistics Policy talks about multimodal connectivity, which will alter the turn-around time, lead to sustainable infrastructure development, generate employment, and would help in contributing to the GDP of the country.

National Logistics Policy will build a resilient logistics ecosystem
As per the SCOR report, in 2021 alone there has been a +430% growth in supply chain attacks. This revealed the vulnerability of today’s supply chain and logistics industry.(Representative image)

By: Nikhil Agrawal, President – CJ Darcl Logistics

The National Logistics Policy (NLP) will be a game changer that would help India reach its apex target of becoming a $20 trillion economy by the year 2040. NLP has been in making for about eight years and will bring a paradigm shift in the logistics industry by streamlining processes with technology and digitalization. Imbibing technology under ULIP will ease cumbersome paperwork documentation therefore discrepancies can be avoided.

NLP talks about multimodal connectivity, which will alter the turn-around time, lead to sustainable infrastructure development, generate employment, and would help in contributing to the GDP of the country. Logistics being an important part of the economy therefore improving its efficiency, could be the key to the economic growth of the country.

India’s Logistics costs are 13-14% higher than other countries thus NLP aims to cut down to single digits by improving connectivity, infrastructure, and logistics efficiency. Current logistics costs are high due to day-to-day hike in fuel prices, fragmented nature of the industry, high toll charges, lack of storages and their availability. 

Movement of goods is majorly dependent on three factors-route connectivity, mode of transport and distribution channels. Logistics sector has majorly been dependent on roads as compared to other modes of transport. Roadways have a 65% share in comparison to a 25% share globally. India’s dependence on railways is 30%, whereas the global dependence on railways is 60%. Waterways account for a very tiny share in the modal mix at 5%.

Road transport is expensive at around Rs 2.2 per tonne-kilometre compared to Rs. 1.4 for rail and Rs 0.7 for waterways. Road transport also increases carbon footprint whereas government aims to be carbon neutral by 2030, the other alternatives like waterways can be put-in function for movement of goods. Government programmes supplementing NLP such as Mission Gati Shakti, Sagarmala and Bharatmala have created many opportunities for skilled, semi-skilled and unskilled workers in the sector. 

Nikhil Agrawal, President – CJ Darcl Logistics

While project Sagarmala is the government’s main scheme to build and modernize ports along the coast, Bharatmala is the ministry’s effort to improve road connectivity throughout the nation. Mission Gati Shakti intends to implement a significant infrastructure reform in the field of connectivity and transportation. In order to accomplish this, the Master Plan will bring together sixteen Ministries, including the Ministries of Railways and Roads, to build a cohesive and efficient network of connectivity. Eliminating departmentalization, promoting seamless communication, and institutionalising all-inclusive project planning are the goals. 

NLP aims to alter this large dependence by substituting it with other modes of transport through fleet centralization. This will also help in seeking last-mile deliveries, end transport-related challenges, achieve time-bound deliveries and prevent wastage of Argo products with the construction of new warehouses. NLP is expected to catapult India’s ranking to the top 25 countries in the World Logistics Performance Index. India is currently a major exporter of iron, steel, cotton, gems and jewellery, aluminium products and automotives. NLP will open new export avenues for textiles, toys, electronics, and chemicals whereas these products, a have strong manufacturing capabilities, have potential to improve the country’s export competitiveness in the international market altogether can help in the economic growth. 

Technology and digitization have always been a matter of concern in the logistics industry, but the newly introduced NLP is expected to fill in the voids in supply chain management. NLP tries to languish its bureaucratic red tapes with the launch of Unified Logistics Interface Platform (ULIP), a single window interface that will bring all the digital services under one umbrella. This e-portal will promote better coordination and bring transparency between different ministries and logistics companies by creating a single-window system therefore will ease the long que processes. The introduction of FASTag and e-Way bill will increase the efficiency of the logistics industry in every aspect.

The vision of NLP as stated in the policy is “to develop a technologically enabled, integrated, cost-efficient, resilient, sustainable and trusted logistics ecosystem in the country for accelerated and inclusive growth.”  In line with NLP’s vision, the policy has also introduced Ease of Logistics Services (E-Logs), a new digital platform, which will allow the logistics industry to take up operational issues directly with government agencies for speedy resolution. 

The Government of India launched an ambitious effort of graphical interface, GI Cloud, also known as “Meghraj”, to make use of the benefits of cloud computing. The goal of this programme is to maximise government Information and Communication Technology, ICT spending while accelerating the delivery of e-services in the nation. ‘Meghraj’ will make sure that the infrastructure is used to its fullest potential and accelerate the creation and delivery of e-Gov applications. NLP, with its focus on infrastructure development is also expected to generate employment, thereby improving its contribution to GDP. 

Challenges in improving India’s logistics efficiency, CJ Darcl Logistics see this policy as a huge boon for the sector. The policy will build a resilient logistics ecosystem in the country, improve efficiency by innovating new routes, discovering the modes of transportation and building-in sustainable infrastructure. Summarising, NLP as a whole will reduce the cost of logistics and benefit the end-consumers by leveraging up the speed of deliveries. 

Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 05-11-2022 at 08:45 IST