Challenges, Opportunities & Future of Logistics Industry

<b>By Rupesh Kohli, Regional Director – North & East & Director Airfreight, Geodis India </b>Having over two decades of experience, Rupesh is positioned to deliver leadership excellence, proven resource maximization methodology, innovative operational efficiency and cost reduction.

1.What are your thoughts on the current state of logistics industries in India that is accelerating the increasing digital transformation?
Transparency, Speed, Interoperability, Ease of Doing Business are the fundamental pillars of the future digital transformation of our industry. However, much is still to be fulfilled by various Private and Govt. agencies and intermediaries. We are witnessing piecemeal and patchy digital transformation. The pace at which progress is being made to enable digital solutions leaves a lot to be desired. From authorizing AEO certification to export and import documentation filing; from export incentives claim, to import duties and taxes assessment; from transportation permits (E-waybill), to warehousing, FTWZ, SEZ and others, and from customer invoicing, to GST credit. All need to be brought under one Block Chain design.

Once again Cloud technology can enable platform solutions. It can also provide flexibility and scalability, as well as standardised and harmonised processes across a complete supply chain. All such synchronization must be backed with a strong encryption (hacker proof) system. If we want to move towards Rs.5 trillion economy, we need to push the Logistics Engine to run seamless and ever faster to encompass hours and Not Days. There are few other industries in which so many experts ascribe a high importance to data and analytics over the next five years, than transportation and logistics – 90 perent compared to an average of 83.8 percent, according to a recent survey. The sector has never had access to more data. There are vast opportunities here to improve performance and serve customers better. That’s especially important for those LSPs or carriers who have grown through acquisitions, and currently rely on a patchwork of legacy systems. The potential is huge, but the industry has thus far been slow to seize it.

Look it this way – the process of digitization can start from the first activity of production right up to the consumer. When governmental and regulatory interfaces can be integrated seamlessly under one system, we will witness a revolution in our Logistics Throughput.

2.Where do you see growing demand for new logistics technology and the key challenges for emerging logistics industry?
India is still unchartered territory and technological utilization is concentrated only in the commercial hub of the country. There is a vast rural interface still untapped. Farm to consumer will set up an ideal mechanism of integrated logistics and only technology can make this happen. Also, various industry technologies and systems are not compatible with each other; there are breaks at multiple touchpoints and governmental interfaces. There are different systems and then again systems working in isolations. I foresee a remarkable revolution in the demand for Logistics Technology. Such a demand will help to build the required infrastructure to make things happen in hours than in days.

The existence of challenges are gateways to new opportunities and progress for the nation. It is good that there are challenges

We are living in a matrix of a digital quagmire and the full potential of the digital world are yet not explored in the developing world

as these will lead to new and smarter way to utilise the existing resources or create new resource to make life easier.

With the speed of data communication, there will be new avenues that can result in solutions to our existing challenges. The first is to have the ‘Can Do – Must Do Attitude’ – this is biggest challenge we face. Once we get over our inhibition (this for both private player and govt. agencies), we can then address the realm of introducing robotics & Automation in Logistics Chain; Encourage the Internet of Things (IoT) through knowledge transfer, training and ease of usage towards increase adoption of mobile apps. We need to Integrate a Uniform Transportation management system (TMS), which will have the value of being a ‘hub’ for all logistics communications and processes, including route scheduling and optimization, freight auditing and payment processing, carrier management and more. Furthermore, TMS applications need to look at shifting from terminal-based installs to cloud-based platforms, reducing postponements in implementation, removing bottlenecks from downtime and refining cybersecurity simultaneously.

Exploration of Blockchain technology, which has the promise to transform industries, including the government, healthcare, content dispersal, supply chain and more. To deal with all the said challenges, we must ensure a very strong Cybersecurity monitoring and stricter laws to prevent misuse and put ‘Safety First’. Logistics providers will be concentrating more on safety, since the amplified demand for faster turnaround will also have an inevitable result of increasing the risk of accidents in transportation operations.
3.What are relevant methods/theories one would use to study application of Technology in Supply Chain/Logistics?
We are living in a matrix of a digital quagmire and the full potential of the digital world are yet not explored in the developing world. Nowadays real-time information, enables companies to be aware of consumer needs and the requirements of various groups and of other companies, by better understanding the means to offer products and services and also contributing to their management models. Specifically, the combination of these new technologies in Supply Chain Management (SCM) has provided important advances in the methods used by service providers. One example has been the adoption of systems such as VMI (Vendor Managed Inventory) and CPFR (Collaborative Planning, Forecasting, and Replenishment) which are representative of the use of technology and its relationship with the concepts of demand management and relationships with the elements within the chain. The most popular theories that have been used in Logistics and SCM research actually represent various different disciplines — management, economics, statistics, data analytics, Artificial Intelligence (AI), psychology, and sociology—giving evidence to the multidisciplinary nature of Logistics and SCM.

4.What are the implications for freight and logistics companies in the operationalisation of the Protocol on the free movement?
The Protocol on Free movement has been a much debated topic at a variety of forums. If there is an Encrypted + Secure, Common, Transparent and Interoperable platform envisaged to form the backbone of Free Movement, then it could lead to a major transformation and boost for the freight and logistics companies. Some white paper studies identified certain indicators showcasing prospects for freight and logistics companies included - higher trade volumes as local economies diversify and expand; growing population within the sub-region; domestic consumer trends increasingly demanding finished products from abroad; fast growing global demand for natural resources escalating ; infrastructure improving and thus boosting intra Sub-regional trade. The study also recommends that an incorporated transportation network the likes of BBIN road network, can be developed to extend to other ASEAN countries, resulting a substantial reduction in landed cost & “farm to consumer” time. The advantages of free movement of goods to freight and logistics companies comes in many forms, particularly its allows the creation of a level playing field, creating the smooth progress to a more open market and fairer competition. The other merit from the protocol is not limited to the purging of tariffs and quantitative restrictions in trade but at the moment extends to a common set of rules on products and safety standards; on production methods that create a truly level playing field and institute consistent consumer standards. The Protocol on Free Movement will result in a substantial growth of Freight Movement and Efficiency which will be judged by speed at which the end to end movement is executed seamlessly. Thus there will be a greater dependency on modes of transportation and communication platforms that will effectively consume less resource but deliver a higher efficiency.