‘National Logistics Policy will Help Reduce Fuel Costs’: What Industry Experts are Saying on Govt’s Latest Move

Prime Minister Narendra Modi unveiled the National Logistics Policy last week, and, on September 21, the Union Cabinet approved the policy which aims to improve the competitiveness of Indian goods in domestic and export markets by enabling smooth movement of goods across the country.

It should be noted that logistics facilities include, in general, transport services for the movement of goods, storage facilities that are especially important for trade in perishable goods such as food, fruits, and vegetables, and the smooth operation of government services that facilitate trade such as licencing and customs.

As per the policy, the three major goals are — reducing logistics costs in India to global benchmarks by 2030, improving the global Logistics Performance Index ranking, and developing a data-driven decision support mechanism.

It should be noted that in terms of the Logistics Performance Index, India was ranked 44th in the last edition of the index, released in 2018. However, during a press brief, the Information and Broadcasting minister stated that now the target is to be among the top 25 countries by 2030.

The features of NLP include Integration of Digital System (IDS), Unified Logistics Interface Platform (ULIP) and Ease of Logistics (ELOG).

The IDS integrates 30 different systems from seven departments, including data from road transportation, railways, customs, aviation, and commerce.

The PM said the Unified Logistics Interface Platform (ULIP) is expected to bring all digital services related to the transportation sector into a single portal. In other words, it will allow for integration with existing ministry data sources as well as data exchange with private players.

ELOG is a digital dashboard that is being developed by the industry department for registering, coordinating, and monitoring time-bound issue resolution. It will include timelines and the status of the resolution.

Additionally, a new digital platform called Ease of Logistics Services (E-Logs) has been launched to help industry associations resolve issues by contacting the government.

Under NLP, two groups will be set up to improve the coordination across the ministries and between state and central government. These are the Network Planning Group (NPG) and the Service Improvement Group (SIG).

Industry’s Overview

After the NLP was announced, Kami Viswanathan, Senior Vice President, FedEx Express, Middle East Indian Subcontinent and Africa (MEISA) Operations told News18 that they welcome the government’s this initiative as the development of an integrated and efficient logistics ecosystem will be a crucial enabler for India to become a $5 trillion economy.

He also believes that it will improve trade competitiveness.

Viswanathan stated: “As India looks to modernise infrastructure and supply chains, it’s evident that technology is the key to unifying all involved stakeholders and to help manage complexity better.”

“As one of the world’s largest express transportation companies, we at FedEx Express support the Government’s vision to make India a more attractive and connected place to do business,” he added.

Meanwhile, Rampraveen Swaminathan, MD and CEO, Mahindra Logistics, said the NLP comes as a big boost for the sector, as it aims to promote seamless movement of goods across India and potentially could lead to a reduction in the cost of logistics and accelerate GDP growth.

According to Swaminathan: “It will further have a positive impact on the nation’s supply chain and will help to augment warehousing capacity and take products closer to the consumption points.”

He said the focus of the policy on enhancing human capital and operating standards are welcome initiatives to increase the formalisation of the sector.

“As one of India’s largest Third-Party Integrated Logistics solution providers, we at Mahindra Logistics Ltd. are aligned with the Government’s vision of making India a better and easier place to do business,” he noted.

Rajesh Kapase, CEO of Trackon, said the NLP will improve efficiency in cargo clearance movement thereby bringing in efficiency in cargo movement, as well as also reducing cost and this will directly boost the economic growth as competitiveness in the export business will increase substantially.

He said: “As we all know India’s logistics market is not organised, and NLP will help in transforming the logistics market into an organised sector. Regions, which are not technology-driven, NLP will provide a platform for the same and they can adapt technology which will enhance and improve the efficiency of logistics.”

“If things work out as planned, NLP would also bring down the fuel costs dramatically thereby allowing logistics companies to pass on the benefits at the last mile delivery to the end consumer. In a way, with NLP in place, prices of commodities and other consumer goods are likely to go down,” Kapase said.

According to Gautam Kumar, COO & Co-founder of FarEye, with India’s growing SMB market, it would have been encouraging to see if the policy had a push towards opening up cross-border logistics.

“Leveraging technology would ensure that products made in the country get visibility and access in global markets- a massive boost for the nation’s ‘Make in India’ policy. This would also enable them to sell their products at a global scale,” the industry insider noted.

Another industry expert, Uddhav Kumar, CEO of Lynkit Solution Pvt Ltd, told News18 that the NLP aims to achieve the goals by building on four pillars which are performance, the private sector, interconnectedness and transparency.
He said: “The first is being achieved from open APIs and integrations with government portals like ULIP — a unified platform for logistics service providers.”

“The second is being done by the introduction of new systems like e-Logs, a single portal for all grievances that would then allow for quick inter-ministerial intervention. This would solve a huge problem as most of the issues would involve not one, but up to 5 different ministries and the issues would just get lost,” he added.

Lastly, he believes that transparency is being achieved via the Gati Shakti which combines 1500 data layers on a single map.

“We really look forward to seeing this all unfold,” Kumar stated.

However, Udit Sangwan, co-founder of Agrigator said it is still too early to say about implementation and impact on the Agri supply chain and benefit to stakeholders involved in this.

“[But] This policy will reduce friction in cross-border transactions as policy aims to use robust infrastructure and technology to support a fast-growing Agri economy,” he noted.

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