landscape. We celebrated more of this in 2013 and I can see an amalgamation of moods and tempers as we head into the new year. I had then, also written that the coming XIIth Plan, the government would allocate appropriate focus on strengthening the country’s supply chain. This may have Pawanexh Kohli Chief Advisor been late in its coming but NCCD is now assured, especially in the agri-business sector. The business of agri-logistics can expect intelligent application of technologies being incentivised by the government with a mega scheme having been launched in December 2013. This centrally sponsored scheme by the Ministry of Agriculture extends till 2017, and the largest share of its budget is allocated to strengthening supply chain and market links for perishable food products. I saw 2013 as the year when the logistics sector and its user base re-evaluate their strategic methodology and this has resulted in most of them having leaned towards the understanding that short term realisations, or lack thereof, had blinded them to the core fact – that this trade is inherent and intrinsic to any growth, or the stunting thereof! Logistics has taken a step towards partnering in growth and in wealth creation; it is no longer to be viewed merely as need fulfilment. I can only wish this consciousness rollerballs across leaderships as I sincerely believe it to be the prime logjam to our national development. Surprisingly, all through 2013 we saw no sharpening in the insights offered by market researchers. A spate of white papers and studies were repetitive of poor perceptions with secondary outputs and tended to perpetuate fallacies – specially in the cold logistics sector. There is clear disconnect between desk top research and the primary business, though this did not really detract from various developments. The previous three years witnessed INR 940 crores of PE investment in agri-logistics and cold-chain enterprises. This was despite high valuations ranging 15-20 time EBIDTA multiple. This is not only very leading but telling about what one can expect in coming years in this sector. The only holding back is the limited experience and human capacity in this sector. This at time makes the deployment narrow in the opportunity context. The close of 2013 was overcome with heightened awareness on the political front, and of course the pending general elections. In this interim a few important developments in the logistics sector have gone largely unnoticed. One of these was the start of the largest Inland Waterways delivery systems for the country. NTPC’s plant at Farakka commenced receiving coal which is transhipped onto barges
at SandHeads in the Bay of Bengal. This historic initiation is a game changer in logistics development and will trigger more than is perceived today. The coming year should see special steps to promote multi-modality and unitisation of cargoes. This has obvious implications on infrastructure and working styles and profitability. Prepare for a decade long change in this direction. The shift towards easing of regulatory bottlenecks as they exist in domestic and international movement will
All through 2013 we saw no sharpening in the insights offered by market researchers. A spate of white papers and studies were repetitive of poor perceptions with secondary outputs and tended to perpetuate fallacies – specially in the cold logistics sector.
be hastened. Faster clearances, simpler tracking and ease in compliance would be the change factors to push in the coming year. Expect also the development of a national policy on cold-chain, specially related to agricultural produce.
supply chain and logistics industry performed reasonably well under pressure in 2013. There were numerous challenges last year, right from cost escalations and business slowdown to managing ever-increasing collection cycles. But, to the industry’s credit, it has come out of it all Vineet Kanaujia by demonstrating a remarkable VP (Marketing) amount of resilience. Safexpress The logistics industry in India is growing at a fair pace. To support the industry further, government needs to take substantial measures which augment the current growth rate and bring about holistic development of our industry. Some of the major initiatives expected by us from the government in 2014 are infrastructure development, setting of standards & accreditation procedures for the industry and simplifying complex tax & land classification laws to give a fillip to the logistics industry. If these measures are taken by the government on priority in the coming year, then we can expect the Indian supply chain industry to achieve global standards in the near future. LOGISTICS TIMES January 2014
Published on Feb 3, 2014