Union Budget 2021-22 Expectations for Shipping and logistics: In 2020, an Invisible enemy has brought the world economy to its knees. Sector after sector have fallen and the growth figures around the world are coming in negative. Shipping and logistics has also faced the brunt of lockdowns and disruption in the supply chain due to Covid pandemic. Talking to Financial Express Online Anish Chakraborty, Business Leader in Shipping and Logistics space and a motivational speaker discussed his views on the current state of affairs in shipping and logistics and his views on the upcoming Union Budget 2021. Excerpt:
What are your expectations from the next general budget for Indian logistics and Shipping industry?
This is certainly a very large subject to discuss and multiple layers of value can be added through the time. India has taken a few steps in the last general budget including injecting huge amounts and announcing schemes like “SagarMala”, “BharatMala” & “UDAN”. I clearly see the interest here including the mid-term vision till 2025.
However, I would be very keen to see if following steps are taken into consideration:
- One Window system for all export formalities through highly advanced digital system
- Adopting Better Customs Documentation process which will enable exporter and importer to handle this area with ease and transparency
- Complete Digital Transformation and adopt the international standard which is very important considering Indian Volume
- One Tax Window for all taxation factors
- Enhancing the Transportation mode which covers the major part of logistics business in India, high speed road, periodical vehicle’s passing system to carry heavy load, short connectivity, single window documentation to avoid inter-state border issues etc. Such step will reduce Air Pollution as well which happens due to transportation
How COVID Impacted Indian Logistics and Shipping Industry?
COVID has impacted Global logistics business but we have observed that the business started opening up soon after the initial few months. Logistics Industry runs on thin margin hence even small stop have created big impact. So, the recovery time could be longer than other businesses. In this time, players who could think innovatively and adopt changes quicker they also gained the best benefit during COVID 19 such as using charter flights etc. though the size of gainer is small percentage. This period has certainly opened up different dimension of handling business and pushed many organization towards the digitalization side which should have happened long before.
What kind of transformation of logistics and shipping industry can be done with automation?
Digitalization is happening to the logistics industry big time, many key players have started and utilized this opportunity to the core yet such practices are not adopted by most of the players both in private and government sector globally. Automation, machine learning and Block Chain technology will have to come into place. Automation can increase productivity in every sector, and design very efficient and effective work flow, starting with documentation, Transportation & Commercial. I strongly believe that multiple area can be automated introducing the advance technology such as warehouse sorting systems, package labelling, documentation, Sourcing, Distribution of loads to Transport Industry etc. One of Europe’s largest Port is named as “ the most advanced port in the world,” they have adopted the best technology of automation. The port’s fully-automated container terminals use Automated Programme for stacking cranes to unload cargo in ways that increase production, improve handling performance and highly reduce labor costs. We can also consider
Robots are very efficient in E-Commerce and warehousing operation, which demands a very heightened level of speed and efficiency. Due to the rapid growth of the E-Commerce sector Machine Learning is key to meet such demand. A recent study also confirms that a robotic operation can reduce the turn around time to 85% which is absolute profit and high efficiency.
In addition to these we can also confidently design various sector under automation such as
- Self Driven vehicle
- Power of data Analysis
- Voice Command Technology
How can we make logistics a cost effective process?
We need to divide this into two segment one what government may adopt which will benefit all the importers and exporters and other one will be for logistics service providers, planning for present and future to enhance their productivity and increase volume handling capacity with less cost but not compromising the deliverable quality.
When it comes to Government, few steps which government may consider like:
- Enhancing Transport system
- One Window Solution for all customs activities
- Avoid manual interaction at customs and ports
- Avoid manual Payment System to Ports and Customs
- Enhance Gate Entry Systems for cargo at Airport and Sea Port
- Opening up options to use near by ports to meet their sailing and departure system instead of focusing only one and or within city ports. This will open up better options in overseas market.
- Reduce number of documentation process and introduce single documentation for export and import
For Private Sector I personally recommend the following steps:
- Implement the end-to-end Digital connectivity including customer’s portal
- Use Automation and Machine Learning Practices to the core
- Create different product vertical and do not limit to traditional way of logistics, changes are constant and this needs to be adopted on a daily basis
- Balance your team with Young Energetic and passionate employees and blend them with high skilled experience staff.
- Complement with competitors
- Think of Innovation
- Include Voice Command Technology and Automation in Warehousing and Freight Industry
- Move towards proper training of staffs through finish-school institutions
- Hire Freshers who are trained by the industry professionals and do not limit to only considering degree
What are the reforms required in the shipping industry?
- Business Standard needs to be reformed with Highly Skilled professionals
- Indian Ports and Airport Operation needs to be enhanced to International standard
- Skilled Labour is always a challenge so proper training needs to be given to make them successful and increase productivity
- Simple gateway and Booking systems need to be implemented which will give smooth transaction opportunity to both Logistics provider and Exporter/Importer
- Distribution of work needs to be monitored between top players and mid-level or SMEs.
- Need to motivate the New Players to take part in government schemes
- Duty Element should bring complete visibility and re-visit the taxes and duty formula keeping in mind the growth that we need to focus
- Free Zone Concept should be developed
- India Needs to start planning to become a HUB between South East Asia and Middle east or Europe with simple gateway concept and simple documentation process
- Invite Logistics Companies and Global Organization to establish their company in India with simple company set up law, taxation law and access to all government documentation through a single window system.
What are your views on announcements made last year in the general budget for the Logistics and shipping industry?
There are good initiatives taken in last year’s Budget however monitoring them till execution and output will be a real task! The schemes are good and those needs to be aligned with the Global Standard. Some of the Projects like Linking the connectivity of waterways within India is very important, Draft of the Port needs to be increased to invite bigger vessel operator to target Indian Sector. If we look back, we will always see that none of the Ports in India is constant, whichever port had the best draft eventually it has reduced and some ports have even shut down most of the operations and a new port is built with better draft. New Port building is essential but it is also important to maintain the existing port that’s how we will create better connectivity for global market and India can benefit from every single port and Investment.
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