INTERNATIONAL NEWS
INCORPORATING COLD CHAIN
India details a
focused approach to logistics
L
ack of trained manpower continues
to remain a challenge for India’s
logistics sector.
With innovations and developments
in the cold supply chain, specialised
warehousing, and digitisation, it has
become mandatory to have a skilled
workforce that is well-equipped and
efficient.
India’s logistics sector is pegged
at USD215-billion (R3.1-billion) and as
per a study by the India Brand Equity
Foundation (IBEF), the sector is expected
to attract investments worth USD500-
billion (R7.4-billion) by 2025. Having
received the infrastructure status in 2017,
employment generator, estimated to
employ up to 40 million people by the
end of 2020.
Despite these encouraging numbers,
logistics still continues to be marred with
the sector has also been a massive
The Indian government is placing a serious focus on the logistics sector to improve it.
challenges, the biggest among this being
the cost for transportation. Currently,
the Indian logistics sector costs come to KEY FOCUS AREAS:
about 14% of GDP, which is considerably •
Focused approach to logistics to fast
higher compared to logistics costs in track development
developed countries. While there are a lot of infrastructure
projects in the pipeline announced
Higher logistics costs lead to higher
export costs, which directly impacts with an objective of improving
the competitiveness of Indian goods in connectivity, a focused approach
international markets. to logistics would help fast track
While the sector is dominated by the development. With dedicated
transportation, comprising 85% share in freight corridors and logistics parks
terms of value, followed by warehousing to development of waterways
that contributes the remaining 15%, and air connectivity, a re-look at
strategic reforms in the transportation subsidies on electricity for cold
area can help to considerably bring storage, special warehouses, and
down the overall logistics cost. incentivising green initiatives would
•
warehouse leasing
on transportation, with schemes like While the implementation of
the SagarMala – for developing India’s Goods and Services Tax (GST) has
waterways, BharatMala – for a robust streamlined several processes,
road network, and UDAN, the regional it has impacted the leasing of
airport development and connectivity warehouses. Tax subsidies and
scheme). relaxation in the indirect taxes for
Going forward, India is expectant
warehouse leasing can help boost
of a series of supportive initiatives, the growth of Third-party logistics
like effective execution of a well- service providers and warehousing
defined National Logistics Policy (NLP), operators. The slump in sectors
rationalisation and relaxation of taxes for like automobile and real estate
warehousing, a push for digitisation in the have impacted the revenues for
sector, incentivising green supply chain warehouses as well, which seek
initiatives and focus on creating a skilled additional support, subsidy, and tax
workforce for logistics and supply chain. relaxations so as to continue growing.
COLD LINK AFRICA •
March/April 2020
fast-evolving sectors catering to
pharma, agriculture and meat and
driven largely by the eCommerce dairy, remain handicapped with
boom, have implemented some an inefficient workforce. A policy
of the latest technologies like IoT, that streamlines the training and
AI and machine learning (ML) for employment process for logistics,
smart warehousing and logistics, other than transportation, would be
scale digitisation is now the need of
Streamline process related to GST,
highlighted the government’s focus Budget 2002 and Digital Push While several international players,
of great help.
policy support and push for large
go a long way to boost the sector.
During her maiden budget in 2019,
Finance Minister Nirmala Sitharaman
•
Incentivising Green SCM
the hour. To ensure India manages Road transportation remains one
to reach their goal of cutting of the largest contributors to air
logistic costs to 10% of GDP from pollution, especially in urban areas.
the current 14%, implementing While freight forwarding across
technology-enabled smart solutions railways and roadways is a more
are vital. Inclusion of a digital policy environmentally viable option, these
specifically for the logistics and are currently ill-equipped and marred
supply chain management (SCM) with long journeys and delays.
in the NLP will be a great push to
•
•
Additionally, setting up of a green
ensure the sector is on par with supply chain, with sustainable
international standards. warehousing, use of electric vehicles
Skill development a key challenge and recycling of packaging
Lack of trained manpower continues material etc., is yet to become
to remain a challenge for the sector. mainstream and cost-effective. Policy
With innovations and developments support, through tax relaxations
in the cold supply chain, specialised or incentivising players pushing for
warehousing, and digitisation, it greener solutions, will help boost the
has become mandatory to have green SCM, thereby contributing to
a skilled workforce that is well the environment and attract global
equipped and efficient. While players seeking responsible corporate
logistics continues to be one of the practices for logistics.
CLA
largest employment generators,
most of its manpower is employed
in transportation. Specialised and
Source: Financial Express
www.coldlinkafrica.co.za
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