With our government granting infrastructure status to logistics, the scope of the sector expanded to include multimodal logistics parks, cold chain and warehousing facilities, urban public transport, roads, highways and bridges, ports, shipyards, inland waterways, airports, railway tracks, tunnels, viaducts, stations and adjoining commercial infrastructure. This welcome move notwithstanding, the scope of problems too increases as an inevitable consequence.
At the top of the running list of Logistics problems in India is lack of seamless movement of goods across multiple modes. Others that follow are poor quality of roads, dissatisfactory past track record of developments, colossal under-investment due to collapse of public private partnerships and stressed balance sheets of private companies, lack of strategic warehousing facilities, lack of inter-connectivity between ports, highways and railways, skewed preference to costly roadways over economical railways, huge investment gaps, delays in infrastructure projects, land acquisition and forest clearance problems, degrading vehicles, high cost of repair and maintenance, high costs of handling and carrying inventory, damages in transit, fragmented warehousing lacking automation, heavy traffic congestion in cities due to high influx of population and vehicles, urban development far outpacing infrastructure development, poor traffic management, capacity constraints increasing with demand growth and aggravated by lack of optimization, lack of information technology penetration in the highly unorganized sector, lack of co-ordination between multiple ministries handling the sector, regulatory delays, embedded taxes and tolls taking a toll on cost and competitiveness, growing scarcity of skilled drivers, lack of educational and training facilities for drivers and unattractive pay and work conditions for drivers.
This inexhaustive list of problems is evidently ridden with dependencies that are internal, external, serial and circular. They add to the complexity of these problems. Here is where collective wisdom calls for shared responsibility. The four main partner stakeholders are government, industry, investor community and citizens.
The problems of time and cost overruns in infrastructure projects, under-investments, traffic management and control, taxation constraints and overheads adding to logistics costs, regulatory delays and lack of co-ordination between multiple ministries handling the sector are majorly the responsibility of government. For the ultimate objectives of being able to increase speed and reduce cost of delivery, government must facilitate and promote industry instead of trying to bring in any type of price-cap regulations in logistics. Increased ease of doing business will decrease cost automatically.
Industry needs to step up promoting logistics business ventures. Companies can either outsource its logistics operations to multiple service providers promoting competition while themselves benefitting from it or undertake fleet operations through direct ownership for optimization, maintenance and control. Companies also need to sponsor training and skilling programmes for drivers through knowledge partners and consultants.
The problem of gaps in investments is what the investor community can lead in solving. Individual and institutional investors need to make a concerted attempt and shed concerns on lack of enforcement of contracts and inherent delays in infrastructure projects dissuading investments. Instead, they need to capitalize on the opportunities innovative credit enhancement schemes and infrastructure investment trusts (InvITs) bring, and grow returns on government guarantee lowering risk.
As responsible citizens of the fastest growing economy, individual citizens need to contribute our bit and cut traffic congestions which delay completion of infrastructure projects. For the proliferating population we are, every bit is quite a bit. Cutting commutes by working remotely, rationalizing vacations and business travels, using teleconferencing and remote communication technology, avoiding wrong-side driving and drunken driving against slightest temptations, giving way, observing lane discipline and safety measures while driving to avoid accidents prove very effective decongestion measures.
Enormous enhancement in India’s logistics infrastructure is indispensable. To uphold manufacturing and ‘Make in India’, to create jobs, to reimage India as global tourist attraction, to boost exports and earn foreign exchange. If there is one hurdle in India’s sprint to economic superpower title, it is logistics. And it can be jumped over in a sprint medley relay (SMR) between the government, industry, investor community and citizens. A unique race in that a unique opportunity, it is more than worth seizing.