With a view to promoting the growth of the logistics sector in India, the commerce ministry is considering replacing the multimodal transportation of goods act with a full-fledged national logistics law.
The announcement was made during a webinar organised by industry chamber PHDCCI .
Special Secretary in the logistics division of the ministry said that a National Logistics Efficiency and Advancement Predictability and Safety Act (NLEAPS) is under consideration and this law tends to define various participants of the logistics space and create a light regulatory ecosystem.
He stated, “what the logistics sector is all about is not very clear to us as of now and in that direction, we need to clearly define what the logistics sector is and what are the various elements in it.”
He continued, “There is a thinking and I am just sharing that thinking – that the earlier legislation multimodal transportation of goods act…we are considering to replace it with a full-fledged national logistics law.”
This move comes in the background of the fragmented nature of the sector, which has been an area of concern for a long time.
A Press Release dated July 4th stated, “Digitization of Logistic Sector will help bring efficiency and realize the vision of Aatma Nirbhar Bharat (Self-Reliant India).”
To this effect, the PHD Chamber of Commerce and Industry hosted a virtual conference on ‘Streamlining the Logistics and Warehousing Sectors Post Lockdown‘ with delegates such as Mr. Pawan Kumar Agarwal, IAS, Special Secretary, (Logistics), Ministry of Commerce & Industry, Govt. of India; Capt. T. S. Ramanujam, CEO, Logistics Sector Skill Council (LSC), Govt. of India.
Mr. Agarwal stated, “in these indispensable times, we realized the importance of essential services with their regular supply chains.”
The current state of the industry has been impacting the competitiveness of domestic goods in the international market. The government aims to reduce the logistics cost, which is 14% of the Gross Domestic Product (GDP) at the moment to less than 10%.
Agarwal pointed out that formulating a National Logistics Law Efficiency and Advance Predictability Act in the sector will streamline the logistics sector eco-system.
He said, “We need to formulate logistics services that will help to reduce the cost and integrate the other aspects of the logistics industry. Digitization of logistics is something that is the need of the hour that will help to increase the working capacity and transportation efficiency.”
Agarwal also revealed that the government is working on creating digital platforms and mobiles apps for logistics such as warehouse information tracking and trading yard (WITTY), among others towards mapping of warehouses. Besides, the delegates recognised that there is a need for faster adoption of technology across the board, especially in the trucking sector.
Capt. T. S. Ramanujam, while deliberating about the present industry scenario and future perspectives, stated that logistics has become an integral part of manufacturing. Warehousing was considered essential for transportation but now, it is considered a major value addition for manufacturing.
He highlighted that manufacturing has become more automated with less intervention of manpower; and that there is a need for integration of product schedules with material management.
He stated, “as the world is driving towards e-commerce, there is a need for fulfilment centres and inventory is critically important for data management and optimization of assets.”
He further stated that process efficiency is critical for the smooth working of the supply chain, “we need to ensure the safety of transportation and other processes as well. We can manage all these future needs with the help of skill training that can help to boost the knowledge of the product, process, and people management.”
Dr D K Aggarwal, President, PHD Chamber of Commerce and Industry in his presidential address mentioned the importance and smooth functioning of the logistics sector despite the lockdown and disruption.
He lauded the initiatives and implementations made by the government and ministries and discussed the challenges faced by the logistics sector in terms of the supply chain, disruption in essential and non-essential commodities, huddles of transportation and many more.
The Virtual Conference received extensive participation of more than 140 industry stalwarts’ pan-India.
Thank you Hariesh, for this well written article. As I searched this topic on internet, I couldn’t find much more information. I believe it is because this change is not done yet. But yet, you managed to gather more information than the most.
But I wanted to post a comment because I cannot understand what will change exactly. How will the cost reduction in logistics occur, is it planned to do only by digitization of logistics? I am new in this field and I am searching for opportunities and I wonder what will be the difference with this law and how to adapt it.
Thanks in advance.
The law will bring more visibility to the sector, and thereby, more planning, focus and development. The cost reduction could be met by many measures – investment, subsidiaries or even concessions. While the full imapct and detailed measures are yet to be seen, and will be felt only when the law comes into force, it is indeed a big step for this fragmented, and in many ways, disjointed sector.