Logistics industry’s wishlist

CargoConnect - JUNE 201422 JUNE 2014 - CargoConnect 23
Logistics industry’s wishlist
to the new governmentThe degree of organisation and control over freight movements is implied by logistics which is at the
core of supply chain management and is considered as an area of priority due to the significant rise in
the volume of freight traffic moved. But despite a significant contribution being made by the logistics
industry to the Indian economy, the logistics sector in India remains mired in several complexities
which has been holding it back. Though the growth in the Indian economy has led to a high rise in the
freight traffic, a lot needs to be done on the part of the government to remove those hiccups which
prove to be a barrier in the growth of this industry. Abeer Ray in conjunction with the stalwarts of the
logistics industry examines the demands put forth by the industry to the new government in a bid to
make the working of this industry smooth and manageable.
T
he logistics industr y has an
important role to play in the
country’s trade and economy because
of its supporting role. Due to the logistics
sector being one of the key determinants of
the future growth of the Indian economy,
this industry is being looked upon as an
area of priority now. The significant rise in
the volume of traffic moved and its future
growth potential has made this sector as
one of the most attractive sectors in the
country.
But despite the logistics sector serving
as the backbone for all the major key sectors
like retail, automobiles, pharmaceuticals,
etc. contributing to the extent of US $ 14
billion and poised to grow annually at the
rate of 15-20 per cent, the logistics industry
continues to suffer due to comparatively
lesser importance being attached to it. The
industry that serves as the cornerstone
to the prosperity of a country continues
to be neglected and though the industry
is poised to develop and extend itself on
strong economic fundamentals, there are
bottlenecks that hamper its growth.
Also despite the cost of labour, which is
one of the most significant contributors to the
costs incurred in logistics, being significantly
cheap in India, the logistics industry incurs
a high cost because of the various challenges
faced by it. Some of the challenges faced by
the Indian logistics industry are listed below:
Poor state of infrastructure
With assured quality and quantity along
with timeliness being the hallmark of this
industry,theneedforproperinfrastructureisan
imperative.Thoughthecountry’sinfrastructure,
being the backbone of the economy, has
undergone massive changes since independence
owing to the rapid growth rate of the Indian
economy and fast paced urbanisation, a lot
still needs to be done to sustain the country’s
expansion and long-term prosperity.
The transportation sector is overburdened
due to important railway networks being
oversaturated, high level of fragmentation
of the trucking industry, inadequate road
network coverage, poor road quality, multiple
check points for vehicle movements etc.
Multiple toll policy
Efficiency gets reduced due to multiple
toll points on highways that adversely affect
the turnaround time of trucks. The trucks
are stopped at state borders for payment of
toll taxes, RTO inspections, Octroi, etc. The
lack of uniformities in toll charges owing
to different stretches on BOT basis creates
irregularities in the cost structure.
Poor warehousing infrastructure
Less attention is paid to warehousing
of non-agricultural commodities. Though
the warehousing costs range between 20 to
25 per cent of the total logistics cost, the
state of warehousing is very disapproving.
Apart from the poor quality, the number
of warehouses in the country is limited.
Majority of the operators of the existing
warehouses are small to mid-sized
entrepreneurs and the large warehouses
are run by government agencies. Stalwarts
of the logistics industry believe that the
public and private players should join
hands together for developing warehousing
facilities. But due to lack of land reforms
by the government till date, there has been
absolutely no provision for setting apart
land for logistics facilities.
Non-implementation of
Goods and Service Tax (GST)
The logistics industry is looking forward
to the much-awaited Goods and Service Tax
(GST) due to the unwarranted tax being levied
on them by Value Added Tax authorities.
Multiple documents required
There is a common complaint among the
professionals in the logistics industry against
the multiplicity of forms to be filled at check
posts or offices. Despite the boom in use of
Information Technology, documentation in
this sector mostly is done manually.
High rail freight tariffs
The Indian Railways follows a policy
of subsidizing passenger tariff by freight
tariff. This has affected the railway freight
adversely with the railway freight rate being
constantly increasing over the years in a bid
to stagnate the passenger tariff rate.
Poor quality of rail terminal
Most of the rail terminals that are used
for loading or unloading of goods are outdated
and old-fashioned. Also, the problems
regarding issues of access and evacuation of
traffic are others which the rail transport
system suffers from.
Coastalshippinghasnotyettakenoff
The inadequate port and land side
infrastructure disallows large scale use of the
ports for freight movement, thus hampering
coastal shipping in India.
COVER STORY COVER STORY

Poor state of ICD/CFS
The ICD/CFS infrastructure available for
trade in exports and imports is inadequate.
Due to several hurdles left to be cleared in the
consolidation of land, it is difficult to acquire
land to set up ICD/CFS at an appropriate
place. The existing facilities, themselves, are
enmeshed in several problems as
• Day movements of trucks are restricted
due to most of the older facilities located
within city boundaries
• Evacuation of cargo difficult due to the
deteriorating quality of the roads that lead to
facilities
• Inadequate parking, lack of available
land for expansion and paving in most
facilities
Multimodal logistics parks
yet to take off
Due to the transpiring and constant
need for integrated logistics, provision of
transportation hub, value addition etc. large
logistics parks were sought to be developed.
But, the integration and amalgamation of
large land parcels has posed to be a major
issue hampering their development. The lack
of recognition of the concept of Logistics
Park by state government is another issue
that needs to be dealt with.
Complex tax structure
The complicated tax regime has posed
several challenges before the logistics industry.
The payment of multiple and central taxes has
resulted in considerable loss of time in transit
for road freight due to payment of such taxes
and fragmentation of warehousing space,
hence, providing a disincentive to create large
integrated warehousing spaces.
Low rate of technology adoption
Though the industry has adopted the
use of RFID, vehicle tracking technologies,
warehouse management systems etc., there
is low level of technology adoption which is
a major disadvantage to the Indian logistics
industry. Automation in processes is at its
early stages.
Skill-related challenges
faced by the industry
A variety of skills as technology skills,
industry understanding and multi-operation
skills are required for the working of this
industry which needs to be upgraded urgently.
Talking about the wishes that the logistics
industry has from the new government, the
veterans of the logistics industry put forth
their views on what the industry is looking
forward from the new government.
COVER STORY
Due to the various bottlenecks that have been hampering the growth of the Indian logistics
industry making it inefficient, thereby, not only impacting the competitiveness of the Indian
economy but also affecting the financial well-being of every individual citizen, the logistics industry
has come with up with a set of demands from the new government that they believe will not only
lead to reduction in logistics costs but also help in increasing the trade flows in a country leading
to increase in the inherent competitiveness of the economy. The demands, if met, will lead to
significant increase in the employment opportunities in the economy.
Vinod Nautiyal,
CMD, EXPAN-unit of FNPL
Moving forward, following solutions
will be required to be taken up by the new
government to boost this major industry,
contributing to India’s economic growth:
• Coordination in infrastructure
planning: Port capacity, road and rail
connectivity growth.
• Improvement in tax regime:
Introduction and implementation of GST, tax
regimes need to be simplified and reduced to
a ‘one window/ one time levy across regions
so that administrative processes do not
hinder physical free flow of movement and to
bring cost reduction, in terms of multiple tax
levying. It’s believed that there will be a saving
on fuel cost of USD 2.5 billion annually that
transport incurs at check points currently.
• Improving dialogue with logistics
industry: Blue prints and policy
regulations today are a largely one sided
affair, making policies prone to avoidable
trial and error events. This needs to
change.
The future of the Indian logistics
industry ultimately lies in the value
proposition of the customer. Value
solutions can be engineered only if the
complex supply chain meshes together
seamlessly. The future course of action,
policies of the government will determine
the success ratio of growth in this field.
It is going to turn around on the back of
robust GDP growth, globalisation and FDI
in logistics.
Growth in the logistics sector would
imply improved service delivery and
customer satisfaction leading to growth
of export of Indian goods and potential
for creation of job opportunities.
Vinod Nautiyal,
CMD, EXPAN-unit of FNPL

COVER STORY
Gautam Nath,
Business Head, People Transport
Solutions, Mahindra Logistics
With Narendra Modi set to become
India’s 15th Prime Minister, I am quite
hopeful that the new government will bring
in developmental reforms and work towards
the economic stability and prosperity of India
in the years to come.
I am expecting the new government
to take up infrastructure development on
priority, not just in terms of reducing the
infrastructural bottlenecks in metros and
tier I cities, but also in terms of developing
a transportation network across all tier II
and III towns. Apart from development of
infrastructure, it is also important to allocate
funds for its maintenance. Another imperative
is that communications infrastructure like
internet connectivity be made more accessible,
reliable and affordable. Development of
logistics parks, hubs and free trade zones will
have to be looked into as well.
India’s post-harvest fruit and vegetable
losses are over Rs 2 lakh crore annually,
owing to inadequate cold storage facilities
and lack of proper food processing units, as
per a study by Assocham. Hence, improving
storage infrastructure is paramount to reduce
post-harvest losses.
Balancing the current modal skew
should be another focus area. The bulk of
transportation today, again as much as 60
per cent, is by road. This is the root cause
for much of the inefficiencies most logistics
systems face in India today. In most cases
rail can be an excellent long haul option, but
the lack of infrastructure - from sidings, to
customised rolling stock, to yards and break
bulk facilities - prevents rail from being a
viable long haul option. The next is the level of
development of, and the handling efficiency at,
ports. Our country has admirable geographic
advantage, a vast coast line, excellent deep
water anchorage and harbours, well placed at
the intersection of major global trade routes.
Yet, we lag well behind others when it comes
to our dock facilities and our capacity to
effectively handle large container and bulk
volumes. Encouraging more public-private
partnerships and investments will certainly
prove to be beneficial.
Implementation of a single GST across
India is one of the most awaited reforms
currently. We expect the government to
speed up this process. GST will offer huge
opportunities to 3PLs, as OEMs will no
longer build warehouses and plants based on
the state tax laws and will be more open to
undertaking inter-state transport activities.
Also, it will boost outsourcing of warehousing
activities, encourage investments in latest
warehousing processes and technologies and
offer economies of scale.
The government should have a committee
for encouraging information technology
integration in logistics and supply chain. Lack
of visibility and transparency of operations
is one of the biggest hurdles this industry
is facing. Automation of logistics processes
can bring in standardisation, predictability
& accountability in the industry, thereby
making it more professional and encouraging
multinationals and foreign players to opt for
domestic 3PLs. Also, facilitating integration of
all logistical activities instead of a piecemeal
approach is essential in making supply chain
as a profit centre instead of a cost centre.
I would like the new government to
simplify regulatory policies that raise costs
for both domestic and foreign firms, thereby,
portraying India as an attractive destination
for international trade giving impetus to
logistics and supply chain. One glaring area
which needs to be paid attention is ‘Border
Management’, not just customs clearance
but also other regulatory requirements and
processes that pertain to goods entering or
leaving a country.
Some other improvements that I would
like to witness are emergency response
systems on highways for accidents with
trauma infrastructure at key locations,
stricter penalties for overloading of vehicles
and better enforcement of traffic laws.
Investment in driver training institutions
and periodic testing and revalidation
of driving skills is the need of the hour
and should be taken up seriously. Not to
forget, the acute shortage of supply chain
professionals that exist in our country has
to be dealt with facilitation of adequate
training and education.
These developments are possible only if
there is integration of flow of information
among various government bodies into one
central framework.

Samik Chakraborty,
Zonal Business Head – East, Drive India
Enterprise Solutions Limited
My expectation from the new government
is that they will speed up the implementation
of GST and streamline the indirect tax
structure. A vigorous implementation of GST
would help in dividing the taxation burden
equitably between manufacturing and
services industries. Investment in developing
transportation network and infrastructure
will strengthen the organised and integrated
logistics industry, which is crucial for the
economic growth of the country. I also hope
that the government takes up new projects
to develop and provide modern facilities and
equipment to the non-major ports in order to
reduce traffic congestion and increase overall
turnaround efficiency.
Development of dedicated railway
freight corridors and establishing airports
for exclusive cargo handling would make
the Indian supply chain more competitive.
Creation of proper framework for PPP
projects would encourage f ur ther
investment. In addition to this, improving
the cold chain storage and transportation
facilities for perishable goods, flexibility
in legislation and taxation for creating
warehousing hubs, ICD/CFS, yard for
multimodal transportation etc. are crucial
for the supply chain set up. Finally, an effective
synchronisation between various government
agencies who are involved in dealing with
sourcing, manufacturing, storage and
distribution processes of different industries
is a must.
COVER STORY
Manvendra Singh,
Regional Manager - Central & West India,
Air France-KLM and Martinair Cargo
The current growth and future potential
of the Indian economy make the Indian
logistics sector one of the most attractive
in the world. With the new Government’s
focus on economic growth, the logistics
sector needs to get the required impetus to
aid this growth.
At present, the air freight sector in India
suffers from several issues which needs to be
addressed, for example:
• Infrastructure at cargo terminals for
access, storage and cold chain facilities
• Long ‘Desk time’ for necessary
permissions and permits for aircraft
movements
• Complicated tax/drawback structure
• Consistent government fiscal policies
for international trade growth
• Develop more SEZs near international
airports
• Indian regulatory bodies need to
be more trade friendly.
The future of the Indian logistics
industry lies in value propositions for
the customer which can be engineered
only if the complex strands of supply
chain mesh together seamlessly. It
would also prove beneficial if the
air freight trade bodies are included
in infrastructure planning by the
various agencies of the government.
I nt roduci ng log ist ics g raduate
programmes in recognised institutions
would help in building a professional
manpower which is essential for the
industry. The future is bright for the
logistics industry in India and we hope
we are near the ‘Tipping Point’ with
the new government’s focus on overall
economic development.

COVER STORY
Bharat J Thakkar,
JMD, Zeus Air Sarvices Pvt Ltd
As a forwarder my wish list is always pro
While on the subject of EDI, it is not out of
place to mention that India is a leader in this
segment. Keeping this in mind the desire of
industry is to implement EDI 100 per cent
and move towards a paper-less environment.
We must strive towards converting all steps
in the entire process of electronic medium
and one of the most important of them
being amendments. It will also go a long
way towards creating transparency, speed
and efficiency resulting in seamless faster
processing, reduce dwell time and transaction
cost. This becomes all the more important
when WTO Bali 2013 agreement becomes
effective from July 2015 once 103 countries
(two-thirds) sign. It is mandated at the Bali
Summit that the current trade across barriers
will transform into trade across borders. India
is expected to sign in near future after the
recently held Trade Facilitation Summit in
New Delhi in March 2014.
Single window clearance: If we are to
make our Exim competitive, the only way to
achieve is to speed up the processing time
of exports; it is prudent to ensure and make
available the facility of a single window
clearance for permission required prior to
exports of pharmaceuticals, medicine, bulk
drugs, leather products, amongst others.
Currently, some of the processes are time
consuming and takes at least one day and
more at some locations. There are different
agencies involved for clearances. This stretches
the limited resources by putting them under
severe pressure in order to prevent delays. A
single window (all nodal agencies, i.e., ADC,
Wild Life, Plant Quarantibe, FSSAI etc.)
clearance facility will benefit all concerned.
There should be no dual process of clearance
for any particular mode.
24 x 7 CBEC: Top most priority should
be accorded to overcome shortage of customs
officers pan India at airports, ports, CFSs,
ICDs and very specifically at major airports,
as any cargo facility is the economic strength
of the country, while airports are show case
of the country.
All customs airports must be connected
by EDI: It is not understood why Calicut and
Coimbatore airports are still not connected
with EDI.
• The lengthy filling up of shipping bills
manually and getting them processed
physically through multiple officers.
• Travelling from air cargo complex to
Deputy Commissioner’s office (which is
12 kms away) and time consuming and
expensive to travel
• Delay in manual disbursement of duty
drawback (it takes between six and 12
months)
• In case of Calicut schemes shipments like
EPCG cannot be cleared by exporters and
importers
• In case of Coimbatore EDI is only available
for cargo flown on direct flights, which is
a small portion, as major tonnages are
moved by bonded via gateway airports,
i.e., Bangalore, Chennai and Cochin.
Inclusion of export related activities
in Service Tax negative list: In view to
encourage exports for economic growth and
making them competitive globally, applying
taxes will be adding cost of Exim, resulting in
it being uncompetitive in global competition.
To comply with WTO requirements, we have
withdrawn several schemes which were earlier
assisting our exporters. Having said that the
least we can do is not add on more costs for
the Exim as all activities directly related
to the exports of goods from India must be
brought under negative list so that they can
be exempted from application of service, as
followed in Australia, UK, Singapore etc.
Frequent break down glitches in the
EDI / System: Of late, system failure and
slow down have become too frequent and
this is a cause for great concern. While
intimation is made available in the IceGate
of system failures, there is a guideline from
CBEC for manual mode to be adopted when
there are system failures, recently during
9th-11th May at Chennai airport not a
single s/bill no was generated until 12th
May, which resulted in stoppage of work.
There is reluctance on the part of customs
to implement the board directive and hence
trade suffers. For the better or stricter
implementation there could be a monitoring
system to allow by manual mode.
exim to collectively work with stake holders
to reduce dwell time and bring down their
transactions cost; it is desire and demand of
our industry to make processes system driven
without human intervention.
Use of digital signature in IceGate to be
made mandatory: IceGate is the e-commerce
portal of CBEC and gateway for processing all
customs documentation related to exports or
imports. It is the sole medium of transmission
for processing of bills of entry and shipping
bills. Exim also avails this facility to file their
documents, make payments and track the
status of their customs entry and shipment.
It is now essential to make digital signature
mandatory in IceGate; as this would be in
keeping with Indian customs’ continued
progress in EDI implementation and also in
tune with many of the dominant 179 member
countries of World Customs Organisation.
India is a matured economy and most of
the organisations in India now use digital
signature pan India.
Electronic processing of amendments:

COVER STORY
Gur Prasad Kohli,
Managing Director, Wallenius Wilhelmsen
Logistics (India) Pvt Ltd (WWL)
• Implement GST before 2016
• Implement dedicated freight corridor
for rail by 2016
• Remove import duty on bunkers for
coastal shipping
• Reduce port tariff for coastal shipping
of this trend will seriously impact viability
of both the Dedicated Freight Corridor and
Delhi Mumbai Industrial Corridor projects.
• NW Ports growing at approx 16 per cent
CAGR
• ICD volume shows declining trend over
the past three to four years; growing at
six per cent CAGR or less
• More ICD export cargo is shifting to road
movement for aggregation at port CFS
• ICD import volume continues by rail
resulting in imbalanced rail traffic and
high cost of rail operation.
This results in:
• Idlingofmassiveinfrastructureinvestments
at inland locations
• Congestion on roads causing accidents
• Environmental degradation
• More land gets acquired for road expansion
• Congestion at port gates affecting port
productivity and port expansion
• Under-utilisation of ICDs and logistics
hubs in the hinterland
• Imbalanced flow of containerised traffic on
DFC (more import and less export volume)
• Under-frame movement of freight trains
leading to reduced number of trains on
DFC
• Domino effect-transit time from ICD to port
increases due to reduced number of trains
• Smaller ICDs are not served by rail leading
to idle infrastructure
• Reduction in number of manufacturing
hubs in the hinterland
• Migration of labour from hinterland to
port areas
• Increased cost of labour in the hinterland
due to labor shortage
• Shipping lines move focus from hinterland
to port cargo (to control equipment
turnaround time)
• There is a difference in customs
assessment policy in ICDs compared to
port locations. Uniformity is required to
reduce outflow of exports from ICDs to
port CFSs.
• Immediate capping of new port CFS must
be enforced. Even existing port CFS in
JNPT and Mundra are underutilised.
Further investment in this area would be
a waste of investment.
Apart from the aforementioned wishes
that the logistics industry has from the
government, there are others that need
mentioning, specifically to grow hinterland
ICD business:
1) Fast completion of the western
Dedicated Freight Corridor
2) Communicate the government’s plan
for the Delhi Mumbai Industrial Corridor to
relevant stakeholders in order to attract more
investment
3) Lower cost of transaction and landed
cost of cargo by rationalisation of rail freight
4) Service tax abatement facility should
extend to shippers even when they pay rail
freight through shipping lines.
The new government must take urgent
and concrete steps to avoid further erosion
of international cargo movement from rail
to road. Policy makers need to understand
the impact of unplanned infrastructure
development in this sector. If not, outcome
Poroma Rebello,
Head Commercial, North Central
Region, APL India Pvt Ltd

COVER STORY
As the new government is kicking off, the
industry expects the following from the new
government:
• Roadways: We hope that the
new government is already aware of the
infrastructure and takes up this as a priority
by public/ private partnerships/ FDI etc. This
will improve the delivery and fuel efficiency.
The wear and tear of the vehicle also will be
improved.
• Fuel prices: There should a mechanism
to bring the price in line and control the
escalation.
• GST system: Introduction of GST system.
• Infrastructure in ports: For congestion
reduction, sufficient staff from customs to
clear the goods in time will definitely cut
down the cycle time to clear the goods from
ports.
• Waterways: Promoting and developing
coastal transport for domestic goods
movement will become an alternative to
roadways, where in the goods are transported
up to 70 per cent. This will reduce the stress
on fleet operators on road as they are finding
it difficult to source the drivers. This will even
reduce the traffic on roads.
• Railways: Develop and increase the
railway connectivity and corridors.
• Tolls and entry taxes: These taxes
are being changed at frequent intervals.
The government should study and fix these
charges for reasonable time.
• Interstate movements: The interstate
permit charges are also to be kept under
control. Harmonisation of taxes, procedures
and policies across states is required to
facilitate a seamless flow of goods and
services. For example, if the vehicle is being
travelled between Chennai and Kolkata,
all the documents and taxes can be filed
in Chennai and the inspection should be
done and sealed. The same information and
data can be transferred to en route check
posts. The truck can be moved without
interruptions on the way till its destination.
This can save lot of time and money to the
fleet operator as the inspection at each
check post can consume more time and
delays.
• Training institutes for drivers: Apart
from fleet operators training and briefing
to the drivers, the government should also
take up certain responsibility for developing
good habits to the drivers. The government
should make some mandatory training
programs for the truck and heavy vehicle
drivers to promote good driving habits.
• Warehousing: The government
should develop some warehousing parks for
establishing warehouses at subsidiary rates.
These parks can be promoted near sea ports/
transshipment hubs/ major industrial parks
etc. This will encourage the 3PL providers
to invest and offer warehousing services at
competitive rates.
Irrespective of many challenges, there is
a lot of potential and many opportunities for
logistic industries. If the government provides
support to the service providers, they can
expect a quality and competitive services from
LSP in line with global standards in future.
We wish the same can happen in the new
government tenure.
The new government is going to take over
soon and we assume that the new government
with absolute majority will favour enterprise,
which will be definitely a boom for the
logistics sector. Changing government policies
and new regulations will play an important
role in this process.
The freight cost in India is high compared
to other countries like France, Japan, Canada,
etc. As we all know that logistics cost is
the contribution from inventory holding,
transportation, packaging, warehousing,
losses and related administration cost etc.
by having good infrastructure, especially
roadways, railways, waterways and airways,
the transit time can be saved and which in
turn helps to reduce the cost of logistics.
Min Joo,
Managing Director, Glovis India Pvt Ltd
(Hyundai Motor Group)
Leif Voelcker,
Cluster Managing Director- South Asia,
Geodis Overseas Pvt Ltd
Our wish list is inclined towards
the smooth and effective operations for
the industry, we expect that the new
government will bring much needed pace
to the development of infrastructure with
an improvement and upgradation of the
road network in India. This will not only
enhance the connectivity of the dry port to
the gateway ports, it will also improve the
transit time for domestic transportation,
facilitating our customers to receive their
goods at right time. We also hope for the
expansion of the sea ports or airports and
enhanced infrastructure of the alternate
ports that can help in decongesting the
traditional gateway points. Also, the
implementation of much-awaited
GST, which is expected to have
a positive impact on the logistics
network of India, is needed. We also
expect to have further clarity from
the administration on the taxation
structure such as service tax for
the freight forwarding industry
and prudent approach towards the
international tax structure. We are
hoping for due support from the new
government in removing hurdles for
the industry and strengthening India’s
position on the global platform.

COVER STORY
Samir J Shah,
Partner, JBS Group of Companies
Main agenda:
• Recognition of Logistics as a separate
industry
- Allotted participation as an industry in
the Planning Commission and other initiatives
of the government
• Encouragement in terms of a fund or
policy for popularising logistics as an industry
so that it may be called as a career option for
the youth of the country
• Encouragement in terms of a fund or
policy for training and skill updating the
existing workforce
• Introduction of GST: Single not multiple
as proposed as soon as possible
Additionally, the government should
look into the following:
• Immediate funding and execution for
upgrading the hardware and software
at all customs locations
• Capacity building within the government
• Linking of all stake holders on a common
platform and a time-bound programme to
achieve paperless working
• Compulsory introduction of software
systems at all tolls or check posts to ensure
smoothmovementofvehiculartraffic
• Development of standards for all
logistics infrastructure and services
• Subsidy for all logistics companies for
various certifications.
taxation between the Central and State
Government so that efficiency increases in
the business as ‘Logistics is all about Time
and Material Management’.
Also implementation of GST will greatly
impact cost and the way business is being
done by Logistic Service Providers (LSPs)
today.
Today, a LSP has to plan for the
warehouse depending on the customer
requirements matching the state tax laws
criteria. This leads to high cost of operations
as infrastructure, manpower etc. have to be
set up independently and also the capital
cost employed is high.
With GST in place, warehouses would
be set up keeping in mind the operational
efficiency, distributions patterns and to
leverage the economies of scale. This is a
‘Win-Win’ situation for the LSPs as well as
the customer as LSPs will have better control
on operations deliverable and also customers
will be enjoying the benefit of low cost of
operations.
Controlling inflation: Taming the
inflation and lowering the interest rate is next
big thing which of importance not only for the
logistic industry but across segments of the
industry. Availability of more capital (at lower
interest rates) will lead to infrastructure
development so that across sectors there is
growth in hiring and more people have jobs
in hand.
Hope ‘development’ and ‘good governance’
are no more words merely but experiences by
every Indian.
GST implementation: It has been ages
we have been hearing on implementation
and roll out of GST. Today while Europe as
a continent has borderless entry and exit,
we in India have set up check points and
barriers within the state borders impacting
the smooth flow of commercial vehicle. Not
only this leads to unnecessarily delays of
inventory stuck up at the check post but
also to wastage of already fast diminishing
resources like diesel as trucks have to be in
long queues awaiting clearances. And also
the fact that these check post and check
nakas have given rise to ‘bureaucratic
controls’ and corruption.
Need of the hour is to simplify the
Sanjeet Walia,
General Manager-Business Development,
M.J. Logistics Services Ltd

COVER STORY
Multimodal Transport Act, amend Cabotage
Law, etc.
• Immediate need for improving
warehousing and cold chain scenario in the
country: One of the major problems that our
new government should take into account is
the lack of sustained investment in both the
sectors (i.e., warehousing & cold chain sector).
The private sector initiatives in these areas are
still small and sporadic. More and more PPP
models need to be adopted to address this
issue.
• Need of active support in acquisition
of land: The new government should provide
active support in acquisition of land for setting
up facilities for cold storages, warehouses
and food processing centres; more incentives
should be provided to the entrepreneurs
on land acquisition so that they can be
encouraged to invest in these sectors.
• Need for creating scientific storage
facilities at the rural door step: There is
an utmost need of creating scientific storage
facilities for the farmers near their door step to
avoid heavy storage losses in the agricultural
produce. Rural warehousing needs a boost.
• Focus on development of reefer related
infrastructure in the country: Special
emphasis needs to be laid on development of
reefer-related infrastructure in view of India’s
export thrust and potential. Much time has
already been lost in this direction. Additional
infrastructure could be developed at ICDs at
Delhi, Bangalore, Pune, Hyderabad, Guwahati
and ports at JNPT, Madras and Cochin. It is
felt that the above mentioned ports and ICDs
and their hinterlands are most suited to
exploit the exports of perishable cargo.
• Focus on construction of temperature-
controlled storage facilities at major airports:
Most of the Indian airports are not able to
ensure cold room space despite getting advance
notices from the freight companies about
possible unloading of large consignments of
temperature sensitive products. This needs a
special attention. There is also a need for cold
chain bonded warehouses near the ports and
airports. Further cold chain dollies need to
be provided at all international airports for
movement of temperature-sensitive cargo from
airport warehouses to the tarmac where aircraft
is parked.
•Domestic reefer market should be
encouraged: Domestic manufacturing
should be encouraged in the country. The
domestic reefer market is large and could
prove as a catalyst in growth of transport of
Suggestions for improving logistics
scenario in the country:
• Need for an apex body for the
promotion of the logistics sector: The new
government should set up an apex body for
management of the logistics sector cutting
across several ministries, and should enable
India to develop logistics at par with world-
class standards and also help in accelerating
and deepen its external trade ties. Such an
apex body should have a say in all inter-
ministerial matters as also interstate
matters.
• Need for infrastructure development:
Intermodal or multimodal transport builds on
the operational efficiencies of the transport
system. Without adequate infrastructure, the
incremental benefits of intermodal transport
will be negligible. Necessary infrastructure
development to provide for compatibility
between modes, less friction costs, low
dwell times, less pilferage and increase
in containerization is basic to growth of
multimodal transport.
• Development of more and more
logistic hubs, ports: Both ports and the
road or rail network are presently working
above their designed capacity. Hence more
and more logistic hubs, ports and necessary
infrastructure should be built to avoid
congestion.
• Inland waterways transport: Inland
waterways transport needs to be prioritised
and leveraged for multimodal hubs.
• Streamlining the tax system:
Elimination of CST, adoption of GST, amend
R. S. Bedi,
PS Bedi Group & Chairman of Task Force
on Logistics Management, PHDCCI
fruits, vegetables, fish and other horticultural
products. The required equipment and
technology for insulation, cooling and the
basic reefer technology should be obtained
from leaders abroad. Import duties on
components and equipment should be
reduced.
• Ardent need of capital investment
in rail support equipment to move reefer
containers: Provision of fast, scheduled,
refrigerated container block-trains, etc.
should be there.
• Focus should be on development of
multi-chamber cold storages in the country:
Challenge is to move from single commodity
(Potato) cold chain to cold chain for high-
value products (for example, Kiwis, Citrus,
Grapes, Lychees, etc). There is an ardent need
of developing multi-chamber cold storages to
support diversification and value addition in
the cold chain sector in our country.
• Need to create mechanism for
financial viability of cold chain projects:
Financial viability of cold chain projects has
emerged as a serious issue and that should be
taken into account for consideration. New
ways of structuring like take-out financing,
roll over financing, put-call options, hedging
or swapping of exchange or interest rate risks
etc, can be offered for funding of long gestation
projects. All these steps might boost up the
confidence and encourage private investors to
invest into the cold chain business.
• Need for Amendment in APMC Act:
Only 17 states have amended the APMC Act to
allow direct marketing, contract farming and
markets in private and cooperative sectors. Key
grain producing states such as Haryana, Punjab
and Madhya Pradesh have initiated only partial
reforms. To meet the three-pronged objectives of
providing remunerative prices to farmers, it is
necessary to strengthen supply chain efficiency
and ensure end consumers are charged fair and
reasonable prices; it is imperative to revisit the
Model APMC Act.
• Need for more trained manpower in
the logistics sector: Logistics, warehousing
& cold chain industries are facing a huge
shortage of adequate and relevant human
capital to manage and operate the whole
system. The new government must ensure that
NSDC does more for this sector. The Sector
Skill Council has to be tasked to lay down the
industry standards in a time-bound manner
and the focus should be on opening more and
more specialised technical institutes where
relevant job training can be imparted.

COVER STORY
Jeevan Rao Sahib,
CEO, Indelox Services Pvt Ltd
I expect that the new government:
• Understands the role of the logistics and
supply chain functions and accord it the
status of an industry.
• Revamps the independent ministry
into one ministry which includes rail
freight, highway road, port, airport,
infrastructure in hinterlands to provide
a consolidated focus. This business
is largely served by SME, support
qualitative improvement in managing
and skill development for the people,
make available at concessional rates
infrastructure for warehouse or
admin blocks or satellite complex near
highway for road transport.
• Speeds up the rail freight corridors and
also improves road on similar line to
Golden Quadrilateral for a high-quality
transportation system.
• Make available cheaper finance which
the foreign enterprise is capable of and
provides level playing field while it has
opened the sector for 100 FDI; Indian
enterprises are at a very disadvantaged
position.
movement of goods seamlessly across the
country. This will be the catalyst to a modern
supply chain in India.
• Revise economic growth forecasts:
Sentiments are an important and integral
part of decision making. Better than
expected forecasts will lift consumer
sentiments leading to better market
demand. This will have a positive impact
on the business climate and will also help
the logistics industry.
• Reduce fiscal / current account
deficit: Rising deficits have compelled
the government to announce many control
measures and mechanisms leading to
currency depreciation and inflation.
• Modernise infrastructure: A recent
study by a leading consultancy house,
mentions that $45 billion is lost each year
due to inefficiencies in India’s logistics
network. Improving transport infrastructure,
modernising and setting up mega
warehousing, enabling access to larger trucks,
reducing documentation bottlenecks, setting
common standards, ensuring consistency
in containers, pallets, cranes and material
handling equipment will boost industry-wide
collaborative trade, reduce costs and drive
economic growth while greening the entire
network.
• Implement GST: GST has been a long
pending demand from the industry and we
believe that this government with a clear
mandate can accelerate implementation. It
will ensure efficient storage, handling and
Devdip Purkayastha,
President, CHEP India
Control on this account will stimulate
consumption as interest rate fall and the
rupee stabilizes. Automotive industry will
receive a much needed boost and rate-
sensitive industries will benefit in the
short term.
• Ease land acquisition laws:
Industrialisation requires vast tracks of land
as do modern warehousing. A progressive
land acquisition regime and laws which
are environmentally friendly yet industry
positive will help drive economic growth,
development of massive warehousing and
cold chain capabilities, modern retail which
will ultimately benefit the industry, the end
consumer and ultimately the country.
Mahesh Trikha,
Managing Director,
Aargus Global Logistics Pvt Ltd
• Simple taxation with regard to Service
tax may be VAT is an answer
• Recognition as industry
• The industry should be under one
ministry
• Freight village at airports
• Needs much improvement on EDI
systems at customs and someone needs
to be accountable.

Vinod Asthana,
Managing Director, Central Railside
Warehouse Company (CRWC) Limited
Vineet Agarwal,
Managing Director,
Transport Corporation of India Ltd
Logistics infrastructure of the country
needs urgent refurbishment. The sector is
plagued with inefficiencies and high costs.
The priority areas that we feel that can take
the sector forward include:
COVER STORY
this growth momentum in years to come but
there have been constraints due to inadequate
infrastructure and incentives to the industry.
The major constraints have been:
(a) Need for an integrated logistics policy
so as to standardise and integrate
different modes of transport
(b) Cold chain based warehouses need
support and encouragement to reduce
wastage of fruits, vegetables and
perishable cargo, integrated into
logistics park
(c) Rationalisation of taxation structure
to encourage logistics sector. GST
when implemented will encourage the
development of mega warehouses and
support smooth movement of goods
across the country. This will provide
economy of scale.
(d) Availability of trained manpower in
both the third party logistics sector and
both the manufacturing and retailing
sectors are weak and need to be put to
next higher level.
The disorganised nature of the logistics
sector in India requires development of
specialised training institute and R&D in
equipment for cargo handling besides other
related issues like IT etc.
India has voted for economic growth
and prosperity in the hope for change. With
great power comes great responsibility. As a
progressive business community, we should
stress on strategic planning and dialogue with
the new government on revival of business
and investors’ sentiment in the country. We
are hopeful of policy moves like introduction
of GST, fast tracking of stalled projects and
opening up of FDI which will give a new fillip
to the logistics sector, the backbone of trade
and economy. New and improved roads, rails,
ports and freight corridors will make logistics
and supply chain management more efficient
and boost coastal shipping.
Shashi Kiran Shetty,
Executive Chairman, Allcargo Logistics Ltd
The Indian logistics industry is poised
for a significant growth in the coming years
as the scenario in the country has changed
drastically over the years and the demand for
logistics services in India has been largely
fuelled by consistent growth of economy and
key industries such as automotive, engineering,
pharmaceuticals food processing, retail and
there is need to ensure smooth flow of goods.
Though the logistics industry has been
witnessing buoyant growth and will continue
• An industry status and an integrated
policy for the logistics sector: Logistics itself
is a large industry but is plagued with various
inefficiencies and high costs. An integrated
approach across multiple stakeholders across
central and state governments is required.
TCI suggests setting up a separate regulatory
authority for the logistics sector on the lines
of the Insurance Regulatory & Development
Authority or Telecom Regulatory Authority
of India.
• Increased focus on multimodal
transportation: Logistics infrastructure
is a critical enabler of India’s economic
development. The country’s network
of roads, rail and waterways will be
insufficient as freight movement is
set to increase about three fold in the
coming decade. This shortfall in logistics
infrastructure will put India’s growth at
risk. Since a large part of India’s future
logistics network is still to be built, an
integrated and coordinated approach in
which the development of each mode-
railways, waterways and roads- is matched
to the needs is the need of the hour.
• Long-term planning and financing
for the sector: Presently, transportation
and logistics companies are not eligible to
go for cheaper foreign currency funding by
way of External Commercial Borrowing
(ECB). ECB borrowing should be allowed
to transportation/logistic companies for
the purpose of investment into commercial
vehicles, ships, construction of logistics
warehouses, etc. Access to ECB will help
save on interest part as margins in this
highly competitive and fragmented industry
are already too low and under pressure.
There is also a need to treat warehousing
for non-agricultural commodities at par
with infrastructure projects to encourage
investment in warehousing industry.
GST should be implemented with
immediate effect to enable the creation
of the common market to permit free and
unimpeded movement of goods and services
across the country.

Harpreet Singh,
Director, Sales and Marketing, TNT Express
Like any other industry there are
challenges that we are facing in terms of
existing practices and some regulatory
issues. Two issues that we would like to the
new government to look into are:-
• Reduce congestion at airports: One
of the major factors that goes into choosing
a hub for an express logistics company is
the level of congestion that an airport
experiences. The more the air traffic in an
airport, the higher the turnaround time
for an express logistics company to deliver
its cargo. The European Association for
forwarding, transport, logistics and
customs services, CLECAT, distinguishes
congestion into occasional and structural.
The latter stems from i l l-adapted
infrastructure which is insufficient for
the level of traffic within the physical
and environmental constraints, or due to
technical compatibility. Solutions such
as enhancement of infrastructure, use or
promotion of fully interoperable loading
units and targeted use of infrastructure
pricing policies in the major Indian
airports will definitely benefit logistics
service providers.
• Improve cargo handling and
clearance services: A teething problem
that express logistics service providers
have faced in Indian airports is the
amount of idle time spent during the
handling and clearing of its cargo.
Multiple screening processes, opening
of sensitive cargo, disparity and unclear
HS codes and rough handling are some of
the few issues that have clients of express
logistics companies indignant towards
the service providers. If the express
logistics service providers could work
with the customs department to frame a
set of policies that uses the insights that
throw light into the problems that the
industry faces because of this it would
help creating a reason to be a trusted
express logistics service provider.
COVER STORY
S L Sharma,
Founder, Skyways Group
and President ACAAI
The logistics sector in India has today
become an area of priority. India is expected
to become the third largest aviation market
in India by 2020. The new government
is likely to take a relook at the country’s
logistics Sector. Poor performance of the
country’s industrial sector has become a
cause of concern for the policy makers who
are looking for ways and means to create
jobs. Today, the air cargo industry in India
is one of the industries that is progressing
with leaps and bounds and time is not
far when it will be counted among one of
the flourishing industries of the world.
Logistics facilities, in the growth of the
Indian economy, is a vital contributor.
We expect that the growth in Indian
economy has resulted in a significant rise
in the volume of freight traffic moved. This
large volume of traffic has provided for
growth opportunities in all facets of logistics
including transportation, warehousing, food
supply chain, freight forwarding, express
cargo delivery, container services, shipping
services, etc. The global outlook is set for
growth after years of declination.
We are expecting double digit growth
in exports and target of US $750 billion by
2019. There will definitely be growth in the
logistics sector. But the new government must
focus on the following issues particularly the
infrastructure.
(a) Advance technology – at par with the
global standards
(b) Focus on services, exports, E-commerce.
hi-tech products
(c) New foreign trade policy should be
initiated; measures for competitive
manufacturing in the country
(d) Most importantly, we must improve our
infrastructure at international level. The
focus should be on energising the Public
Private Partnership model
(e) Availability of electricity for MSME –
manufacturing with concessional rates.
(f) Focus on international trade will provide
required inputs to the Indian economy
(g) Credit availability to the sector with
international benchmark rates
(h) Effective coordination with states
(i) Action on the Taxation side - the Goods
and Services Tax and the Direct Taxes
Code
(j) Free Trade Agreements must be promoted
(k) Need to make the supply chain faster,
cheaper and more efficient
(l) The manufacturing policy needs lot of
improvement – Single Window Clearance
be implemented as per world class
standards of other countries who have
introduced Single Window Clearance
successfully
(m) To reform Labour Law.

COVER STORY
5. Last mile connectivity and terminals
• Expedite the approval processes with a
view to providing time-bound clearances
• Creation of a dedicated cell for approvals
6. Speed up the process for implementing
key infrastructure projects for new
wagon manufacturing units that have
already been announced.
Vendor Relations
Key issues in this area include:
• Delay or stoppage of vendor payments
• Deferment in delivery requirements
• Postponement against committed
purchase orders
1. There is a need to specify time frames for
making payments to vendors, releasing
long standing dues already incurred, and
waiver of certain replicated requirements
for pre-approved vendors to ensure
against financial distress already being
faced by many rail suppliers.
2. Improved order management
• Improved time taken in decision making
• Clear picture on production plans to
enable manufacturers or vendors to
plan their capacity and infrastructure
investments
3. Procurements on ‘life cycle cost’ as a
concept
4. Long term contracts
5. Zero tolerance towards safety and
accidents
6. Energy-efficient initiatives
7. Technology in rolling stock
Tax and freight issues:
1. Freight charges
• Change in classifications or freight
charges should be periodic
• Intimate proposed changes in advance to
industry
2. Debit or credit hours for demurrage
charges
3. Premium customers
4. Service tax exemption on input services
5. Refund of accumulated CENVAT credit
on projects which have subsequently
got exempted from Service Tax
6. Duty and Excise Duty concessions
7. Equalisation of differences in price basis
for imports and indigenous purchases
and parity in price comparisons
8. Price Variation Clause in projects and
time-bound implementation.
Some of the key areas that the new
government will need to address through
various policy initiatives of the railways
include:
• Major capital works like the DFC project
• Investment in rolling stock
• Providing improved terminal access
• Improvements and investments in the
last leg connectivity between the rail
network and the cargo loading and
unloading points.
Suggestions for addressing
key issues:
1. Improvement in existing PPP structures
• Putting in frameworks for RFQ, RFP and
concession agreement templates
• Consultative mechanism for stakeholder
interaction is needed to enable Indian
Railways to attract greater investment
• Create a strategic policy framework
that addresses third-party rail based
transport and logistics services.
2. Time bound implementation for
capacity enhancement works
• Time bound finalisation of the tenders
• Tenders for large size integrated packages
should be processed
• Tender approval powers of GM of Zonal
Railways should be increased.
3. Station modernisation projects and
high-speed corridors
4. Scoping of tenders
• Remove non-core activities from project
scope
Manish Puri,
Managing Director,
IndiaLinx
More to be looked at
1. Major concerns regarding Indian
Railways development:
• Improved project implementation
• Need for streamlined and time-bound
approval processes
• Providing terms in projects that will
allow investors to gain ‘reasonable’
returns on capital
• More efficient vendor management
2. Marginal investments that can be
achieved within a short span of time
for capacity augmentation
• Increase production at IR’s production
units by ramping up scale and capacity
• Using technology to optimise planning
and improving utilisation of rolling stock
• Strengthening the current logistics and
PPP policy of the railways and make it
more industry friendly
3. Long-term measures:
• Heavier, faster and longer trains
• Need for innovative types of track
structures, for example, introduction of
30-35 axle load track
• Create infrastructure for better cargo
handling at terminals
• Double stack containerisation and roll-
on-roll-off trains
• Improved wagon designs – larger wagons
to meet heavy haul requirements
There is an increasing need being felt
for the creation of a formal interaction
mechanism with the railways for regular
interaction to take up matters related to
policy and strategy.

COVER STORY
policies aimed towards boosting
the air cargo growth meeting global
industry benchmarks. Government
support in this venture would play a
very important role. Air cargo logistics
is highly time sensitive and, thus,
processes should be such that they
provide both speed and economy to
the cargo at every step of the air cargo
supply chain. Each link of the chain has
to be efficient. Trade fraternity expects
from the government highly favorable
and efficient trade policies leading to
simplified and faster processes meeting
the global benchmarks aimed towards
overall economic growth.
Today, developed air cargo hubs
work on a very efficient model of cargo
operations. They manage very efficient
dwell time in the range of three to
five hours providing more space and
efficiency at the airports. This comes
through both efficient operations and
efficient processes and policies. As
ACFI, our aim will be to take up with
government such policy improvement
initiatives to facilitate air cargo supply
chain stakeholders to achieve such
global benchmarks.
Another important focus is to
eliminate use of paper from the cargo
processes starting with the paper work
at terminals. ACFI has been successful
in achieving the same in some of the
processes at Delhi airport as a pilot
case. Technology should replace paper
and ACFI has an agenda to ‘Go Green’
while being responsive to saving the
environment.
Efficient infrastr ucture and
operations is also another area where
trade is looking for government
support. For instance, in India trucks
travel to approximately 500 kms a day
in general whereas in other developed
countries trucks can travel up to 900-
1000 kms a day or even more. We need
to reach to this level. ACFI agenda will
be how to bring process efficiencies in
the system and influence government
for an efficient infrastructure.
ACFI is very positive and optimistic
working with the new government on
air cargo trade policies improvement
aimed towards overall trade and
bringing efficiencies in the system at
par with the global benchmarks.
India is poised as one of the fastest
growing economies of the world where the
Indian air cargo trade and logistics industry
plays a very significant role in its economic
growth and progress. Around 30 per cent
of the total international trade in terms
of value moves by air and a proper focus is
required to be drawn towards the valuable
contributions of the air cargo industry for
the growth of national and international
trade as it faces lots of challenges on its way
at every step of its chain of operation.
With the new government coming in,
trade is highly optimistic and looking for
new developments in infrastructure sector,
trade promotion with a very positive impact
on the Indian economic growth. There are
quite a positive developments happening in
India enhancing the air cargo infrastructure
for the supply chain. With developing
infrastructure, ACFI focus shall now be
to facilitate promotion of trade friendly
Pradeep Panicker,
President, ACFI and Chief Commercial
Officer (Aero), Delhi International
Airport Pvt Ltd
Samar Nath,
CEO, DHL Global Forwarding
• Focus on infrastructure development
(cold storage, ports, airport & road) and
their regular progress follow up.
• Implement GST for increasing trade and
within a timeframe.
Vikas Anand,
Managing Director, DHL Supply Chain
• GST implementation
• Momentum on road construction
• Investment to overcome congestion of
airports / ports
• FDI In multi-brand retail (though this one
looks tough)
• Incentive to replace old vehicles on
the road
• Speeding up execution of industrial
corridors like DMIC (Delhi Mumbai
Industrial Corridor)

COVER STORY
to all the stakeholders not only in India but to
ourforeigntradepartnersaswell.IATAinitiated
e-Cargo globally and Ministry of Commerce
initiated e-Trade in India. We have made some
progress but still not there and in case we can
have a timeframe, it will be a real boost for us
as a country.
(2) The entire process needs to be connected
with each other in EDI mode; today we are all
working nearly independently but without
beingabletoconvergewithotherstakeholders,it
should be like manufacturing of potato chip that
you just put the potato on one side and you get
the well packed ready to eat pack on the other
side. In other words, once the EDI process starts
forexportorimportthenweshouldnothaveany
manual intervention in the whole process.
In today’s scenario, we have one process
on EDI then manual and again on EDI so this
breakage should be out of system.
(3) We need to have separate and
independent new customs act for air and sea
freight as the act is nearly 50 years old and
though it has been amended from time to time
but still the concept is based on sea and air
jointly. The most urgent shipments are moving
by air and therefore in terms of volume it is not
even two per cent of sea freight but value wise
greater than 35 per cent, so this justifies that
air module should be totally based on current
minimum process and keeping the e-Cargo in
consideration. We also need to consider trust
and it should be based on random checks
rather than routine checks.
At the outset, would like to thank and
highlights the initiatives taken earlier by the
various ministries so far, i.e., Air Cargo Logistics
Promotion Board by MOCA, e-governance for
Civil Aviation Project by DGCA for complete
automationofalltheprocessesofDGCA,regular
meetings by BCAS, customs 24/7 initiative and
various others airport operators etc.
As wishes have no end, we would like to
highlight few as under:
(1) The most important is e-governance out
of all as it will automatically give comfort zone
Vipan Jain,
Chairman BAR (I) Cargo Committee –
N.R. & Regional Manager, Logistics South
Asia & Middle East, Lufthansa Cargo AG
(4) We as Indians are mainly into IT
export with expertise of people. However,
our own system needs more attention in terms
of 100 per cent reliability with back up and
speed, probably we have more than required
processes in place which are overloading the
system with multiple data.
(5) We should make a study within India
to adopt the best practices for all the processes
including documentation required for airport
operator, BCAS, customs etc., and have an open
dialogue to reduce the complexity. Our systems
are well designed, but we need to look wherever
we are over doing with the processes.
(6) Hub development still remains our
dream and hopefully we will push it further
to have our India on the world map. We need
simple process for air-to-air connectivity to
promote Hub, and once we are able to tackle
it, next step should be multimodal later.
(7) AFS (Air Freight Station) concept in
real terms is also a high expectation for final
delivery at the airport that is still only under
discussion.
Ravinder Sethi,
Managing Director,
RE Rogers India Pvt Ltd
It is globally and historically known
that exhibitions provide the first window
for direct foreign investments. There is a
dire need for state of the art venues in the
country today. Also is there an immediate
need for massive upgradations of the
existing facilities. Around the world, it is
the government which takes the initiative
in land investments for such projects. Today,
Germany and China are prime examples of
how they are able to bring the world to their
doorsteps. Plans to revamp the existing
mega facilities in Pragati Maidan are on
the cards - these should be put on a fast
track. The DIPP mammoth venue project at
Dwarka, as part of the DMICDC, should
be implemented at the very earliest.
Besides these, the immense need for
venues in Mumbai and several second-
tier cities should be on the cards. Delhi,
Mumbai, and Bangalore should take over
the role of Dubai and Singapore in the
entire Mid-East or Asia-Pacific region.
With their existing infrastructure in
place, the cargo facilities of these three
cities can easily expand their capacities.
India’s position in the trading sector
would make phenomenal gains – it
doesn’t need a super analyst to figure
that out.

COVER STORY
which is morally not tenable for a democratic
government. Hence, we call for a complete
scrapping of toll taxes. It is a sorry state of
affair that for just collecting about `8000
cores the transport industry is suffering losses
to the tune of `70, 000 crores and also paying
more than `10, 000 crores to the contractors
in extortions.
We request the new government to
institute detailed research and studies on
the losses caused by unnecessary hold ups at
toll plazas and state barriers (so called ‘check
nakas’ or ‘check posts’) and road accidents
due to stress on driver etc. considering the
fact that the overall cost to the economy in
terms of fuel, time spent in these hold ups,
extortions and harassment is much more than
what the government calls as tolls.
Social security for driver and crew of
commercial vehicles: Drivers are the backbone
of road transport industry and their labour
is a pre-requisite for running the wheels of
the nation’s economy but sadly the numbers
are dwindling fast in the driving profession.
A driver is vulnerable to a myriad of health
problems, death due to accident or disease,
overwork and fatigue. To make things worse
for the driver of a commercial vehicle, he is
There are a lot of expectations from the
new government and as the National President
of All India Transporters Welfare Association;
an apex body that represents the Indian Road
Transport Industry, the new government is
requested to look into the following matters
that concern the road transport industry:
• Barrier free and seamless movement
of goods: We believe that no truck should
be stopped on roads unless there is credible
cause for such stoppage and unless the same
is certified by a senior officer for alleged
violation. Also that the carrier or trucker
should not be in any way responsible for any
compliances related to the goods carried
by the GTAs. All entries, forms, bahati and
transit compliances should be based on
the invoice and other papers issued by the
consignors before start of the journey.
The existing average journey by an Indian
truck is merely 300 kms per day which needs
to be increased to at least 600 kms per say, if
the bottlenecks are removed in the interest of
nation’s economy, otherwise there is no gain
in investing thousands of crores in highways
and road networks.
• Scrapping of tolls: The present toll
policy of the government has been devised
without participation of its stakeholders, viz.,
road transport industry, which has resulted in
chaos, agitations and violence at toll plazas.
The industry believes after collecting multiple
of taxes from transporters and the public, it
is the duty of the government to provide
good roads and highways. Charging tolls
for road construction is a ‘double whammy’
Pradeep Singal,
Managing Director, GIR Logistics and
National President, AITWA
neither financially secure nor there is any
driver-specific social spending under union
budgets. This utter neglect and lack of any
social security like affordable life and health
insurance, pension schemes, retirement
benefits, etc. have resulted in an alarming
shortage of truck driver to the tune of 16 to
18 per cent. Obviously, the road transport
industry is still an unorganized sector with
no lobby or godfather in the echelons of power.
No government, till date, has cared for them
and they remain bereft of any social security,
whatsoever. Any driver having commercial
license should have social security for accident
or natural death etc. like life insurance and
one time premium can be taken at the time
of registration in central pool with matching
grant from government. This will help in
bridging shortage of drivers.
• Primary health centre: There is only
talk about providing basic amenities on our
highways for rest, food and emergency care
of drivers. Even the toll concessionaries
who have contractual obligation to provide
such facilities at the toll plazas have failed
in fulfilling their legal obligations. The
showpiece ambulance and emergency care on
NH-8 have not been replicated elsewhere. We
need at least 150 strategically located primary
health centres in the country in order to
provide much needed facilities to the drivers.
• Driver seva kendras / transport hubs/
driver training centre/logistics schools to
be tax exempted: All driver seva kendras
/ transport hubs / driver training centre /
logistics schools etc. should have 100 per cent
tax exemption like R&D expenses. This is to
attract finance in these areas.
• Tax reliefs and exemptions: As we pay
multiple taxes, this industry needs relief in
the matter of excise on trucks, CENVAT (not
allowed due to abatement) welfare of drivers
and workers etc. We, therefore, ask from the
new government for 100 per cent deduction
on Driver Welfare Expenditure and 100 per
cent depreciation on trucks in the very first
year of purchase. To encourage establishment
of driver seva kendras, we ask the government
to grant central subsidy.
• Recognition as an industry: It is a
paradox that an industry which provides
livelihood to millions has been recognised as
an industry, thereby, losing many advantages
that an industry enjoys. This is a grave
injustice to this industry which provides
employment to lakhs of semi-literate and even
illiterate citizens of our country.

COVER STORY
structure in warehousing & logistics
industry: The immediate challenge is to define
ways to extend support to the unorganised
warehousing market – smaller players with
limited resources, who are mired with
several complexities as they can slacken this
growth story.
• Boost international trade: Demand
drivers for warehouse development are
increasing international trade and the
resulting planned investment in ports
for upgrading container traffic handling
capacity, increased use of containerisation
for inland transport, investment in
manufacturing activity in Special Economic
Zones (SEZs), planned investments in
Free Trade Warehousing Zones (FTWZs),
development of dedicated Freight Corridor,
Warehousing and logistics will be a
gate valve that will control the ebb and flow
of products between the producing and
consuming functions of an economic pipeline.
In my opinion, a robust warehousing and
logistics infrastructure is the life line of a fast
growing economy.
There is a pressing need to enhance cargo
capacity at airports, create modern agro
warehouses that are critical for sustaining
agriculture, propagate integrated cold chain
into rural & urban areas and establish quality
standards and benchmarks, which I am sure
our new government has considered.
My expectations from our new government
in warehousing & logistics front are:
• Facilitation of ramping up of logistics
infrastructure: India’s current logistics
infrastructure is inadequate to meet growth
aspirations. A 2.5 times increase in the freight
traffic in the next decade will put further
pressure on India’s logistics future. Ramping
of logistics infrastructure will stimulate and
sustain business growth.
• Focus on warehousing sector: In the
complete logistics value chain, warehousing
forms a very important link as it constitutes
over 20 per cent of the total logistics
market. Strength of India’s warehousing and
logistics sector is likely to be one of the key
determinant of the pace of future growth
of Indian economy. There must be a specific
focus to give a boost to the warehousing
sector and modernise it to international
standards.
• Issue policies that bring about
S A Mohan,
CEO,
Maini Materials Movement Pvt Ltd
change in government regulations related
to State Sales Tax, emergence of organized
retail and its need for efficient supply
chain management and growing trend of
outsourcing logistics function to third
party logistics (3PL) service provides
to reduce cost and increase efficiency,
recognition of warehousing as a strategic
tool, etc. Increased international trade will
give impetus for strategic investments in
warehousing sector to build next generation
warehouses and operate them in-line with
global standards.
• Implementation of GST: The
Goods & Service Tax (GST) is expected
to be the next big bang fiscal reform by
the Indian Government. This will lead to
the abolishion of almost all indirect taxes
incurred by companies and customers. With
the introduction of GST the key advantage
for all logistics companies will be merging
of small warehouses to one productive
warehouse. We will witness centralised
and large warehousing parks that are more
agile, operate on economies of scale, present
huge cost advantage to companies thereby
contributing to countries economic growth.
Perhaps, the onset of GST, with its potential
to revamp the national warehousing network
could be considered as the single largest
industry-wide opportunity to consider smart
warehousing as a cost-saving opportunity
across the supply chain.
I am sure our new government will
fulfill these expectations and create
an environment for graduating Indian
warehousing & logistics market to offer
value propositions.
G Balaraju,
Chairman & Managing Director,
Sindhu Cargo Services Private Limited
• Speedy infrastructure development
by bringing various departments or
ministries concerned with highways,
ports and airports under one ministry.
• Accord industry status to logistics
industry and consideration as priority
sector by financial institutions.

COVER STORYCOVER STORY
of roads in comparison with China is well
below expectations and our poor hinterland
connectivity is affecting the trade growth in
our country. High transaction costs arising
from inadequate and inefficient infrastructure
can prevent the economy from realising its
full growth potential irrespective of the
progress on other fronts. The sooner our new
government takes some concrete steps to
improve this situation, the better it would be.
• To sustain growth, India needs
significant investment in developing
road, rail and port infrastructure in order
to facilitate quicker and more efficient
movement of goods across the country. The
government must take serious steps in this
direction on an immediate basis.
• The new government must look
at upgrading the supply chain and
logistics industry by setting standards
and accreditation procedures for all the
firms operating in the industry. Also, the
government should focus on the creation of
special tax provisions to encourage private
sector investment in infrastructure. We
expect that our new government implements
GST as early as possible, because it would
solve the issue of unorganised and fragmented
small godowns spread across the country.
• Further, the government must ensure
that documentation at check posts is
computerised and reduced to a minimum,
so that less number of forms are needed. A
uniform toll policy should be implemented
across the country. Multiple toll points on
• The new Indian government must
enhance its focus towards the growth of
supply chain and logistics sector by taking
some concrete measures. To begin with, we
expect our new government to put a major
thrust on infrastructure development and to
take special initiatives for faster development
of roads. It should encourage private and
FDI inflows into infrastructure and must
ease regulatory hurdles in order to facilitate
building up of world-class infrastructure.
• The present pace of road infrastructure
development in India is slow vis-à-vis
other developing economies. The quality
Vineet Kanaujia,
Vice President-Marketing,
Safexpress
highways reduce efficiencies and adversely
affect the turnaround time of trucks. A
centralised toll mechanism is needed to
ensure uniformity in the toll charges paid by
truck drivers at various check posts.
• The government must expedite the
development of the rail-freight corridor to
boost the rail freight business. Modernisation of
railway terminals as well as handling facilities
should be a priority for the authorities. The
government must ensure that there are time-
scheduled freight trains on all major routes.
• There is an enormous shortage of skilled
manpower in the supply chain & logistics
sector. There is a scarcity of theoretical
knowledge as well as practical expertise in
this business. This leads to low skill levels that
could hinder the growth of this sector as well
as the economy. We expect the government
to acknowledge the requirement of skilled
manpower for our sector and to focus on the
augmentation of skills by developing academic
institutes and by introducing specialised
courses for supply chain and logistics in
leading institutes.
• Our most important expectation from
the new government is that it should provide
an industry status to supply chain & logistics.
A regulatory body should be created by the
government to look into the concerns of our
sector.
• If the above measures are taken by our
new government on priority, then we can
expect the Indian supply chain industry to
achieve global standards in the near future.
While talking to these bigwies, Cargo Connect realised that each one of them has a
certain kind of expectation from the new government and they are optimistic about
the positive changes it would have on the logistics sector. Below are listed few of
their common demands and hopes from the government that should be imple-
mented urgently in order to revive growth and progress in the logistics industry.
Better infrastructure: Development
of infrastructure is critical to economic
growth with the country moving ahead on
the backbone of the logistics industry that
consists of road, rail, waterways and air
network. The need to develop the ill-equipped,
inefficient and improperly designed logistics
infrastructure, to support the increase in
freight traffic, was realised long ago, but
despite that there is an urgent need to address
this issue.
Since the country’s current logistics
infrastructure is inadequate to meet its
growth aspirations, the logistics industry has
come up with suggestions regarding the fast
improvement of the logistics industry:
• Increase in road and rail connectivity;
• Construction of motorable roads, as
India’s freight transport relies excessively
on roads, and allocating funds for their
maintenance;
• Focus on an integrated network design;
• Balanced modal approach by using rail
and waterways for long distances, rail
for medium distances and roads for short
stretches;
• Constructing last-mile links and logistics
parks to ensure interconnection between
modes;
• Emphasis on better maintenance of the
existing roads and rail tracks;
• Construction of new national expressways;
• Emergency response systems on highways
• Removal of import duty on bunkers for
coastal shipping;
• Harmonisation of taxes, procedures
and policies across states to facilitate a
seamless flow of goods and services.
Recognition of logistics as a separate
industry: Despite the impact that the
logistics industry has on the economy and
its contribution to the GDP, this sector has
for accidents with trauma infrastructure
at key locations;
• Developing a transportation network
across all tier II and III towns;
• Development of dedicated railway freight
corridors;
• Take up new projects to develop and
provide modern facilities and equipment
to the non-major ports;
• Establishment of airports for exclusive
cargo handling;
• Improving the cold chain storage and
transportation facilities for perishable
goods;
• Proper infrastructure in ports to enable
clearing goods in time leading to reduction
in congestion;
• Promoting and developing coastal
transport for domestic goods movement
will become an alternative to roadways;
• Emphasis to be laid on development of
reefer-related infrastructure in view of
India’s export thrust and potential;
• Developing some warehousing parks for
establishing warehouses at subsidiary
rates.
Change in the prevalent tax structure:
The current indirect tax regime has negative
effects on the economy to the extent that
the Goods and Services Tax (GST) is being
looked upon as a remedy to neutralise the
existing problem of taxes being levied
on top of taxes. To get rid of the various
taxes levied on goods at various points of
manufacture and sale, the logistics industry
demands
• Introduction and implementation of GST,
wherein both the central and state taxes
may be collected at the point of sale;
• Streamlining the indirect tax structure;
• Service tax abatement facility to be
extended to shippers even when they pay
rail freight through shipping lines;
• Inclusion of export related activities in
service tax negative list;
not been recognised as a separate industry.
Recognition of this sector as a separate
industry will not boost the sector but
also speed up its progress. Also a separate
regulatory authority for the logistics sector
should be set up on the lines of the Insurance
Regulatory & Development Authority or
Telecom Regulatory Authority of India.
Concept of Air Freight Station to be
turned into reality: The concept of AFS was
suggested and put forth the government,
but it is yet to be turned into reality. Apart
from the activities traditionally performed at
airports, the construction of AFS nominated
as networked station by airlines will help to
avoid congestion at the gateway airports.
Single window clearance: The single
window facility will make services extremely
cost effective in nature by providing all
logistics activities as transportation, crating,
loading, packaging, warehousing, customs
procedure handling, trans-shipment cargo
tracking, shipment, door delivery and
complete post-shipment activities in a single
window. The logistics industry hopes that
the government would improve the single-
window clearance system and better its
administration to cut down the processes.
High rate of technology adoption and
implementation of communication
technologies like Electronic Data Interchange:
Use of proper technology not only would do
away with the filing of documents manually but
the use of EDI would enable industry issues to
bring in greater transparency, visibility and
real-time tracking ability. The implementation
of EDI would facilitate cost savings, ensure
reliability and ease the monitoring process. The
implementation of the EDI technology would
also help in the significant reduction of cost and
time and do away with human intervention.
The lack of emphasis on logistics leads to slow rate in the
development process and the industry is looking forward to
the new government to rid itself of the bottlenecks that has
hampered its growth till date. Considering that Modi’s name
is synonymous with development, it remains to be seen as
to what extent the logistics industry would be able to get its
expectations fulfilled and demands met.

Logistics industry’s wishlist

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (14)

Similar to Logistics industry’s wishlist

Similar to Logistics industry’s wishlist (20)

More from Abeer Ray

More from Abeer Ray (20)

Logistics industry’s wishlist