Writing New India’s Growth Story with Logistics Efficiency
India is at a take-off point today. The logistical bottlenecks are falling by the wayside as the country’s global logistics rating zooms past its competitors.
India’s global positioning in manufacturing and trade is strongly related to reforms for improving infrastructure and EXIM logistics. Recognising infrastructure as a critical growth engine for the economy, reforms such as the Prime Minister’s GatiShaktiNational Master Plan (NMP) and the National Logistics Policy have focussed on improving logistics infrastructure and logistics services for goods and passenger movement.And in a very short time, these reforms are showing results.
The World Bank, in its report for 2023 on Logistics Performance Index (LPI) has acknowledged India’s progress in the direction of improved logistics efficiency. World Bank’s report shares the LPI across 139 nations, and has placed India at 38th position, a jump of six places over our rank in 2018.
LPI is ‘a survey-based quantification of qualitative perceptions’ across six broad parameters that consider Customs, Infrastructure, International Shipments, Logistics competence and quality of logistics services, Timeliness, Tracking and Tracing.
The World Bank gives India’s example as an emerging economy that has invested in infrastructure and technologies since 2015, connecting the ports on both eastern and western coast of the country to economic centres in the hinterland. Such investments, apart from other factors, is why India’s dwell time for containers at ports leapfrogged that of many developed nations. Between May to October 2022, India’s dwell time was at a low of 3 days, while it was 4 days for UAE and S Africa, 7 for US and 10 for Germany.
The report upholds India as a good case study of a country that has brought in supply chain visibility through use of a digitization platform, namely, the National Logistics Data Bank Services Ltd (NLDBSL). The report explains how Logistics Data Bank (LDB) tracks and traces the movement of EXIM containers in India, through use of RFID (Radio Frequency Identification) tags, thereby making it possible for consignees to undertake ‘end-to-end tracking of their supply chain.’ Such a cargo tracing mechanism, introduced initially on the western coast of the country in 2016, and today covering all major ports and private ports, is credited with improved dwell time of containers at the Indian Ports. To quote from the World Bank’s report, “With the introduction of cargo tracking, dwell time in the eastern port of Visakhapatnam fell from 32.4 days in 2015 to 5.3 days in 2019.”
Recognising the critical role of the logistics sector in the country’s future, Government of India had launched Logistics Databank Project (LDB) as a digital system for tracking supply chains. The NLDBSL is run as a SPV (special purpose vehicle) between National Industrial Corridor Development Corporation (NICDC) and the Japanese Company, Nippon Electric Company (NEC), Limited. LDB integrates digital information available with various agencies across the supply chain to provide detailed real time information on EXIM container movement. The platform handles 100% of India’s EXIM container volume, with the information available for consignees to access through a single portal, with a mobile app as well. Thereby, LDB provides visibility and enables big data analytics related to India’s containerized EXIM Logistics.
Since it went live in July 2016, LDB has tracked 60 million EXIM containers. With a combination of technologies related to RFID, IoT (Internet of Things) and Big Data Analytics for tracking and tracing 100% of India’s containerized EXIM cargo, LDB has integrated with major Indian ports, the busiest toll plazas, about 400 Container Freight Stations (CFS)/Inland Container Depots (ICDs) and Empty yards at Ports, with special economic zones, and even the integrated check posts on Nepal and Bangladesh borders. Almost 3000 RFID readers have been installed by the SPV at all major routes on roads and rail, including Dedicated Freight Corridors, in order to capture the RFID data.
With the data fetched and integrated by LDB, various analytics are done, including calculation of port dwell time for containers, congestion analysis of transit movement of freight, speed analysis of container movement, performance benchmarking, transit time analysis (from Port to CFS or vice-versa), etc. This analysis is reported on a monthly, quarterly, and annual basis and shared with all concerned line Ministries, Port authorities, terminal operators, custom agencies, and other stakeholders.
Regular analytics is in turn used by concerned agencies to identify pain points and areas requiring improvement. An analysis of data from LDB in last few years also shows improvement in container handling performance, evacuation of road bound containers, container speed on major highways, besides in container evacuation performance of the ICDs and CFSs. Container speed on major highways, such as on Delhi-Mumbai route and the one connecting to Mundra Port,has also improved in comparison to 2018.
Today, LDB has not only extended its services up to the Nepal and Bangladesh borders to ensure efficient cross-border trade, it also uses the maritime tracking system to track India’s EXIM containers till the international port of first call. Further, the possibility of leveraging our FTAs to integrate with similar international systems is part of our next steps so as to ensure that Export containers reach end destination in the most efficient manner, giving a boost to our trade performance.
This is just the start of a long journey in the fast lane. India’s use of innovative digital technologies for improvement of the logistics ecosystem,will further boost our speed, and, as an icing on the cake, our global logistics rankings,within the next few years. This speedwill surelyhelp lead us to our cherished goal of becoming a developed nation by 2047.
[Written by: Sumita Dawra, IAS, Spl Secretary to Govt of India (Logistics, M/o Commerce & Industry); &CEO & MD of NICDC]
