SIAM Logistics Conclave banks on collaborative effort

IMG_20160621_142236_SIAM Conclave copy

Automotive logistics business is of prime importance to India’s economy. Almost 95 per cent of the vehicle movement is undertaken through road transport. Logistics costs, in such a situation, are estimated to be as high as 14 per cent of the GDP. Such a scale should make it essential for the industry to address growing complexities in the area of logistics. Experts from the logistics arena, auto industry and the Government came together for the same cause at the third edition of SIAM Logistics Conclave, which took place at Delhi recently. The one-day event, organised by the Society of Indian Automobile Manufacturers (SIAM), saw experts their views about complexities involving the need to reduce emissions and enhance safety. Under the theme, ‘Optimizing operational efficiency in automotive logistics’, the experts shared their vision and knowledge to counter issues that trouble outbound automotive logistics. Already battling problems like poor infrastructure and a complex regulatory framework, one of the major problems automotive logistics faces is the high logistics costs. They are so high that they are known to equal or exceed three per cent of the total sales volume. Said Prem Verma, Chairman, SIAM Logistics Group, “Reliance on road transport should be minimised. Considerable emphasis should be placed other modes of transportation like railways, inland and coastal shipping. These are certain to be more cost effective.” Averred Bipin Menon, Director, Ministry of Commerce and Industry, that measures to counter cost related issues are crucial for faster growth of the sector. He stressed upon the growth of the industry achieved by a uniform evolution of all segments since it not only contributes to GDP but also increases employment opportunities.

The conclave had three separate sessions that focused on various arms of logistics. While the discussion at one session stressed upon capacity building for development, the session on road transportation, highlighted the fact that the Indian logistics industry is fragmented. It put the spotlight on 70 to 75 per cent of the truck owners owning less than five trucks. Small fleet owners, mentioned an expert, constitute nearly 35 per cent of the market on an average. It is such fleet operators that have played a crucial role, added the expert. Another expert drew attention to the limited investments in large car carriers. Issues like high freight transit times were delved upon. It was observed that they arise due to unnecessary procedural stoppages at state borders. Expressed an expert that the high logistics costs are often fueled by a fragmented and inefficient carrier market apart from the lack of skilled manpower. Deepak Garg, Rivigo co-founder the need to pay attention to the drivers of commercial vehicles. He opined, “If the driver fraternity can be trusted with goods worth crores of Rupees, their interests should be dealt with seriously. Said Ram Kidambi, Partner, A T Kearney, telematics and customised car carriers can be instant solutions but long term solutions need to be achieved. The same, he added, can be achieved through logistics park development, highway infrastructure development, bypasses and elevated roads to reduce network inefficiency and supply uncertainty.

A special session on waterways and shipping witnessed active participation of Rabindra Agarwal, IAS, Joint Secretary, Ministry of Shipping, and S Mahiyaria, IRTS, Member (Traffic) Inland Waterways Authority of India. The discussion delved upon the delay in using waterways and railways as a mode of outbound automobile transportation. It was observed that despite initiating measures to enhance operational efficiency, poor infrastructure to handle and store cargo remains an area of concern for the railways. UC Joshi, Executive Director (Freight Marketing), Railway Board, Ministry of Railways, during the session on railways said plans to introduce smaller capacity rakes to cater to lower volumes for smaller regions are on.”We plan to put across a system which will enable us to monitor transit time and real time tracking of the consignment,” he stated. The conclave ended with a clear message, that there was a need for a collaboration between the government and the industry.