Ashok Goyal, MD, BLR Logistiks, discusses the Indian logistics industry’s progress from a manual to an automated industry due to the increasing use of technology to drive efficiencies, reduce delays and accidents by eliminating human intervention and errors, and streamline the processes.
How is technology bringing efficiencies in the logistics industry?
Technology is revamping the entire logistics chain; it is reducing manpower, cost, and time, and increasing work efficiencies. Unlike the manual process, where one had to depend on information provided by the driver, one can now immediately locate the cargo and know its destination arrival time by using GPS.
Since most manufacturing companies follow the concept of ‘just-in-time’ inventory, work cannot stop at factories if raw materials are not supplied on time. GPS technology now gives the latest update on the cargo and pinpoints its exact location, while in the warehouse, software helps determine the space available for stocking.
Technology has brought down the cost of labour by three times and reduced 30% of manual interventions, which in turn has reduced human errors. Billing has become digital and is saving bill processing time by 15-20 days.
How is software like SaaS helping the industry?
SaaS is bringing visibility in the supply chain, and helping companies make well planned logistical decisions. Software analyses and tracks movement of goods in real time and thus prevents disruptions and errors. SaaS is optimizing logistics by also enabling reverse logistics. Earlier, vehicles would come back empty, wasting fuel, time, and money.
The IBM software has reduced transportation time by locating route alternatives and bypasses. Earlier, there were times when we had to make a bridge over a river to transport cargo since we did not know any alternative route.
Approvals and permissions are now obtained online. Earlier, it would take two months to get permission to use a bridge; now it takes only 48 hours. Earlier, vehicles would wait for two hours to get documents checked at every state border crossing, but with Fastag, we are saving almost 30 minutes at toll plazas.
Earlier, because of tax issues, there were many small warehouses (sometimes as many as three) within a 5-km radius. Now, due to GST, only the bigger players have remained in the business. Vehicle breakdowns are now attended to immediately through call centers while earlier we had to wait for a mechanic to arrive.
How will Gati Shakti facilitate the logistics industry?
Gati Shakti is a digital platform that aims at coordinated planning and execution of infrastructure projects in India to reduce logistics costs. It will usher in seamless movement of goods and people across the country; provide information on upcoming connectivity projects, and on business and industrial hubs. However, it may take some time before we see how it actually works since it has just been launched.
If all stakeholders in all the four modes of transport and logistics come onto a single platform, get connected and network digitally, then visibility and transparency in the logistics business will increase tremendously, and there will be a lot more efficiencies in the sector.
Currently, the costs incurred by India's logistics sector is the highest in the world at 14%, whilst the world average stands at just 8-9%. With Gati Shakti, the costs will be reduced. Gati Shakti is also promoting Public Private Partnerships (PPP), which can be a game changer, especially for organized players, which currently account for only 5% of the industry – the rest comprise the unorganized sector.
Sagarmala, Bharatmala and the Dedicated Freight Corridor will further change the way things move in India.
What are your views on the National Logistics Policy and the Mega Food Parks planned by the Government?
The National Logistics Policy of the Government aims to reduce logistics cost from the current 13% of the country’s GDP to 8% in the next five years. It also aims to improve India’s trade competitiveness in international markets, generate employment, and make India a logistics hub of global standards.
The Policy has been framed after consultations with the Government and the private stakeholders. We believe that such a policy should be transparent, consumer-friendly, and digitally accessible. It should be lucrative for all the stakeholders in the logistics industry and benefit even the smallest of players.
The Mega Food Park Scheme envisages setting up modern food processing units with a well-established supply chain, cold storage, effluent treatment plant, warehousing, water facilities, sewerage etc. state of the art infrastructure in a well-defined agriculture / horticultural zone for The creation of such infrastructure would particularly benefit the small and medium scale units.
So, having Food Parks is a good vision of the Government since 40% of the produce is wasted in transport. If stored well, the farmers will benefit tremendously. However, it is a highly capital-intensive business, so only the big players will enter this space.
What are the strengths of BLR?
BLR Logistiks, is a 3PL company based in Mumbai. It is one of the most progressive freight forwarding companies and is known for its innovative solutions in the supply chain. Technology is at the core of our operations because we believe that a well-planned logistics management system is possible only if it is backed by technology.
Our fleet is GPS enabled and our drivers are DG certified to carry high-value cargo. Our operations, finance, and tracking are managed on a single digitized platform. This helps us optimize operations, monitor payment cycles, and manage our fleet. We are using robotics and have installed retina readers in our fleet to monitor the driver’s performance and send alerts (for example, if he is sleepy it could lead to an accident). The software monitors his driving habit for 30 days and suggests changes, based on which we counsel him. We are now seeing tremendous improvements in driver performance and also on the safety aspect.
We offer customers complete integrated Logistics Services, including Multimodal Transportation, through our fleet of more than 2500 owned and attached vehicles. We have over 24 warehouses in all major cities of India. We are well equipped to provide complete logistics solutions for both domestic and international logistic requirements with our 63 offices across India, supported by a highly competent management team and staff of 600. We are now planning to start rail services from India to Bangladesh and Nepal.