OCTOBER 2022 VOL IV ISSUE III INR 120 Logisticsinsider.in

No. F.2 (L2) PRESS/2019 F-PP-06/01 Annexure - VIII

Logistics Insider

“Policy plus Performance will be equal to Progress. Which is why, after the (National Logistics) Policy has been released, the responsibility of performance by the stakeholders as well as the government increases manifold. It will act as a driving and guiding force." ~ NARENDRA MODI, Prime Minister of India, during his address on the occasion of the launch of the National Logistics Policy at Vigyan Bhawan in New Delhi

"We need to reduce logistics costs to a single digit number and bring about a paradigm shift in the way we look at reforms. There are three keywords connected with supply chain -robust, resilience and reliability. They signify the presets of a successful supply chain paradigm." ~ JYOTIRADITYA SCINDIA during a session on "Future Ready Supply Chains" at LEADS summit organised by industry body FICCI

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"There is real and hard work ahead for all of us. And global economic and political developments could well make the going even tougher. But it will be nothing compared to what we have been through with COVID-19. And there is much to motivate us." ~ BRENDAN SULLIVAN, IATA Global Head of Air Cargo during his address to the global air cargo industry at the World Cargo Symposium 2022 held in London

"Due to the recent increase in interest rates by the Reserve Bank of India, the GST payments on such high freight cost will have a significant negative impact on exporters' liquidity. Global trade is entering a very challenging era as countries are facing high inflation with an impending recession impacting the demand."

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~ FIEO President A SAKTHIVEL told the media while voicing his concerns if the GST exemption on export freight is not extended

“We dream of future where coffee from Chikmagalur will seamlessly make its way via National Highway 73 to Mangalore port for possible consumption at a café in Paris. Karnataka has always been an outlier in India and has become a key hub for information technology, as well as several industries and the e-commerce sector.” ~ SHASHI KIRAN SHETTY, Founder and Chairman of Allcargo Group during the unveiling of Allcargo Logistics state-of-the-art warehouse in Malur, Bangalore 2

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Logistics Insider www.logisticsinsider.in Editor & Publisher Tariq Ahmed [email protected]

EDITOR’S

Principal Correspondent Prabhatesh Tripathi [email protected]

NOTE

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Senior Correspondent Karvi Rana [email protected]

s India completes 75 glorious years of Independence and steps into a new era of economic and social development, we must all acknowledge the fact that it has not been an easy ride for the nation. Our nation has battled through severe adversities to reach where it stands today, mighty and proud. Personally, as a thirty-year-old, it gives me great pleasure to think of how this living and breathing organism that is India has taken strides in in different fields – be it trade, manufacturing, medicine, cyberspace etc. – and has rightfully earned itself the title of Vishwaguru in the truest sense of the term.

Correspondent Rachayita Sidharth [email protected] Feature Writer Abhilash Srivastava [email protected] Art Director Shaique Ahmad [email protected]

India, today, is counted among the top major economies of the world. The growing economies are looking up to us like they once used to look up to the US. On a separate note, the US has extended greetings to India on 75 years of its Independence and said the two countries will work to advance a free and open Indo-Pacific and address the challenges they face around the world. So, yeah. India has been able to make an impression on the world that it has always aspired for. And there’s no denying that India is probably one of the most aspirational countries out there.

Lead - Business Development Gaurav Dubey [email protected] Director Sales & Marketing Parminder Singh [email protected]

HOWEVER, it would be wrong to pretend as if everything is rosy. And I am only talking about the economic aspect of it. India’s trade deficit ballooned to a record high in July, as elevated commodity prices and a weak rupee inflated the country’s import bill. The gap between exports and imports widened to $31.02 billion in July, from $26.18 billion in June. Growing concerns about the gap and an exodus of foreign capital from Indian markets had pushed the rupee to a new low of 80.06 per dollar last month.

Manager - Marketing Niti Chauhan [email protected] Corporate Relationship Manager Sunish Chukkath [email protected] After Sales Executive Akshay Sharma [email protected]

There are gaps of course. But, then again, this nation is known for its resilience. Come what may, I am super confident about this nation’s growth trajectory as we embark on a new and exciting journey of the world’s biggest democracy.

Executive Events Apoorva Rajpoot [email protected] Published by Tariq Ahmed on behalf of Chromosomes Media Pvt Ltd. Published at C 320/2, Abul Fazal Enc-II, Okhla, New Delhi – 110025. ©2022. All rights reserved. No part of Logistics Insider magazine may be reproduced or transmitted in any form, by any means, electronic or mechanical, including photocopying, recording or any information storage or retrieval system, without prior permission in writing/email from the publisher.

On this special occasion, let me share that we have successfully completed three magnificent years of our Logistics Insider magazine. And we are now a 70,000 strong member community on LinkedIn. There couldn’t be a better time to celebrate these milestones. A big thank you to all our readers and patrons for helping us be where we are today.

The views expressed do not necessarily represent those of the editor or Logistics Insider. Advertisements in the magazine do not imply endorsement of the products, events or services advertised.

Tariq Ahmed No. F.2 (L2) PRESS/2019 F-PP-06/01 Annexure - VIII

Editor For suggestions and feedback, please email the editor at [email protected]

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CONTENTS 22

OCTOBER 2022 VOL IV ISSUE III

COVER STORY

India En Route to Pinnacle

National Logistics Policy 2022

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SPECIAL FEATURE

The Race Against Time: Supply Chains during 6

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FEATURE

Introducing supplier diversity in logistics to build a resilient supply chain 2022

TOTAL PAGES 84

INTERVIEWS

EXIM VIDYA

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HEMANT KEJRIWAL

PRAMOD SANT

a seasoned Supply Chain Leader and Ex-VP (Operations and Supply Chain) at Sugar Cosmetics

Former Vice President -Head of Import Export and Customs, Siemens

GUEST COLUMN

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RAJENDRA NIMMAGADDA

COEN VAN DER MAAREL

Lead - Supply Chain Projects - India, Herbalife Nutrition

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Managing Director Kuehne+Nagel India, Sri Lanka, & the Maldives

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SATESHWAR TUTEJA

RAKESH GUPTA AGM - Finance Om Logistics

Regional Managing Director- India & APAC, WeFreight

OPINION 66

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LEADERS SPEAK

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LOGISTICS MIRROR

B. GOVINDARAJAN

Chief Operating Officer Tirwin Management Services

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Picture Perfect: CCUB 2022

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Focus: COLDMAN LOGISTICS

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NEWS THAT MATTERS

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VIKASH KHATRI Founder

AVIRAL CONSULTING

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In its bid to eliminate trade barriers, gain access to preferential markets

LOGISTICS MIRROR

and eventually become one of the top manufacturing and logistics hubs in the world, India has been signing free trade agreements (FTA) with various countries. The most recent trade agreements that India signed were with UAE and Australia, and the Government of India has been

working towards making India a developed nation in the next 25 years. To simplify, FTAs are a pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange. As we await for the Government’s Diwali gift in the form of an FTA with the United Kingdom, this month we take a look at a few of India’s FTAs with various nations.

INDIA-UAE COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT (CEPA)

  The historic India-UAE Comprehensive Economic Partnership Agreement (CEPA) was signed on 18 February 2022, and came into force on 1 May 2022. Gems & Jewellery sector is expected to benefit significantly from the tariff concessions obtained for Indian products under the India-UAE CEPA. Overall, India will benefit from preferential market access provided by the UAE on over 97% of its tariff lines, which account for 99% of Indian exports to the UAE in value terms, particularly from labour-intensive sectors. CEPA is expected to increase the total value of bilateral trade in goods to over US$100 billion and trade in services to over USD 15 billion within five years.

INDIA-MAURITIUS COMPREHENSIVE ECONOMIC COOPERATION AND PARTNERSHIP AGREEMENT (CECPA)

  The India-Mauritius Comprehensive Economic Cooperation and Partnership agreement (CECPA) was signed on 22 February 2021, entered into force on 1 April 2021, and is the first trade agreement signed by India with a country in Africa. Post the signing of the landmark CECPA, growth of the bilateral merchandise trade between India and Mauritius rose to USD 786.72 million in 2021-22, from USD 690.02 million in 2019-20. The CECPA covers 310 export items for India. Mauritius will benefit from preferential market access into India for its 615 products.

INDIA-KOREA COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT (CEPA)

  The India-Korea Comprehensive Economic Partnership Agreement (CEPA) was signed on 7 August 2009, and came into effect on 1 January 2010. The agreement provides better access for the Indian service industry in South Korea. South Korean car manufacturers will see large tariffs cuts, to below 1%. Similarly, Korean corporations have flooded India with cheaper imports of raw metal, steel and finished products. Both countries have avoided issues over agriculture, fisheries, and mining and chose not to decrease tariffs in those areas. This was due to the very sensitive nature of these sectors in the respective countries. The initial impact of CEPA had been very encouraging. 8

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INDIA-SINGAPORE COMPREHENSIVE ECONOMIC COOPERATION AGREEMENT (CECA)

  In a virtual ceremony on 2 April 2022, India and Australia signed the Australia-India Economic Cooperation and Trade Agreement (AI ECTA). Australia is the third OECD country after Japan and South Korea with which India has signed a FTA. The Agreement is aimed at achieving a trade target of USD 100 billion between both countries by 2030. 96.4% of Indian exports will get zero duty market access in Australia, and the duty on the remaining 3.6% of exports will be phased out in the next 5 years. Similarly, 85% of goods coming from Australia will also be admitted without any duty.

AUSTRALIA-INDIA ECONOMIC COOPERATION AND TRADE AGREEMENT (AI ECTA)

  The India-Singapore CECA has four key components: a free trade agreement (FTA) in goods; an arrangement for boosting trade in services, including financial services; a package to promote investment flows and provide mutual investment protection; and a new agreement for avoiding double taxation. It also includes Mutual Recognition Agreements on quality certification of goods and services, liberalized visa rules for professionals, and undertakings to cooperate on several sectors. FDI equity inflows in India from Singapore during 2021-22 stood at USD 15.87 billion. Bilateral trade expanded after the conclusion of CECA from USD 6.7 billion in FY 2004-05 to USD 30.11 billion in 2021-22.

INDIA-MALAYSIA COMPREHENSIVE ECONOMIC COOPERATION AGREEMENT (CECA)

  The Malaysia-India Comprehensive Economic Cooperation Agreement (CECA) was signed on 18 February 2011 and came into force on 1 July 2011. The Agreement is a comprehensive agreement that covers trade in goods, trade in services, investments and movement of natural persons. It value-adds to the benefits shared from ASEAN-India Trade in Goods Agreement (AITIG) and will further facilitate and enhance two-way trade , services, investment and economic relations in general. Palm oil is the main export to India from Malaysia followed by mineral fuel and electronics goods. India’s main exports to Malaysia are transport machinery, food items like meat, non-basmati rice, and sugar. Malaysia is the 24th largest investor in India.

INDIA-JAPAN COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT (CEPA)

  The India-Japan Comprehensive Economic Partnership Agreement (CEPA) was signed on 16 February 2011, and aimed at eliminating tariffs on 90% of Japanese exports to India until 2021. The CEPA with Japan is among the most comprehensive trade agreements that India has entered with any country. India’s major exports to Japan comprise petroleum products, followed by organic chemicals, fish and aquatic invertebrates, natural or cultured pearls, precious or semi-precious stones and machinery and mechanical appliances. Imports, on the other hand from Japan are machinery and mechanical appliances, followed by electronics, iron and steel, plastics, and copper and its articles.

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SPECIAL FEATURE

SUPPLY CHAINS DURING FESTIVE SEASON

THE AGAINS

Festive season is here, and as much as it is a joy to us customers, it is quite a challenging time for supply chain managers. Appropriate manpower, properly equipped first and middle mile logistics, safe but timely last mile deliveries and seamless returns/exchanges/refunds are few things that a supply chain manager strives to balance

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SUPPLY CHAINS DURING FESTIVE SEASON

SPECIAL FEATURE

RACE ST TIME:

amid the crazy volumes of orders to be processed. Afterall, pleasing the ‘modern’ customer is not a piece of cake. Take this journey with us as we try to breach the minds of supply chain experts on what it takes to effectively manage their supply chains during the rush hour. Rachayita Sidharth

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S SPECIAL FEATURE

SUPPLY CHAINS DURING FESTIVE SEASON

hopping, for customers, has transformed from the mere activity of visiting a store and walking out with the desired ‘bundles of joy’. In the modern world, the customer especially those exploring the digital world - wants everything to be perfect. Right from how easy it is to find what they seek on a website/app, to eventually getting their order(s) delivered safely and as quickly as possible, and furthermore, get them exchanged or refunded with least inconvenience. And these expectations only increase as the festive season comes to town. It is said that the modern customer now ‘plans’ his festive shopping well in time to get the best deals on products. According to Integral Ad Science, 73% of young shoppers say they would prefer if brands released holiday deals earlier. As shoppers gear up for placing their orders, shippers need to ensure that they are absolutely ready to handle the surge in volumes.

Customer First Supply Chains What is a customer first supply chain? Well, according to experts, it refers to all customer experience improvement initiatives embedded

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in the process of moving finished products from suppliers to customers. The emphasis is not too much on generating profits, but increasing and maintaining customer delight, which ultimately brings along the profits. The key elements of a customer first supply chain include real-time market analysis, customer data, a top-notch warehousing management system, a dense network of fulfillment centers in key locations, and robust last mile support. “In the face of significant shifts in consumer behavior, the role of the supply chain has been elevated to a critical enabler of a company's customer responsiveness. A customer-centric supply chain is deeply knowledgeable of and responsive to customer needs. According to a recent Gartner report, 83% of companies demand that supply chains improve customer experience as part of the digital business strategy. In response, most are shifting away from a product-centric supply chain and toward a customer-centric supply chain.” says Kami Viswanathan, Senior Vice President, FedEx Express, Middle East Indian Subcontinent and Africa (MEISA) Operations. Talking about the competitive advantage that a customer centric supply chain brings along, Dipanjan Banerjee, Chief Business Officer at Ecom Express says, “Thanks to the use of real-time data for demand sensing, customers receive seamless services and are encouraged towards repeat purchases, and thus

SPECIAL FEATURE

SUPPLY CHAINS DURING FESTIVE SEASON

We work towards creating personalized gifting experiences. The challenge lies in doing each and every order 100% right, with the right product, shipping in the right way, at the right time to ensure it reaches on or before the festive season." ABHISHEK AGRAWAL Senior Vice President - Supply Chain and Sourcing, Bombay Shaving Company

businesses see an uptick in sales and bottomlines. Customer-first supply chain is even more

Let’s move to why it is important to have a customer first supply chain all around the

crucial during the festive season to fulfill the sudden surge in demand and to have better control over operations.”

year, especially around the festive season. Simply put, logistics has become a major part of the brand experience for customers shopping online. The customers like the feeling of being in control of the delivery cost and speed, product availability and whether there is a good return policy, on top of product quality and price. Their purchase decisions are largely affected by the logistics of it all. Therefore, it becomes of utmost importance to be a brand functioning on customer centric supply chains.

“During the festive season, as a service partner, we look to acquire new customers and the sales revenue also grows 3x to 5x. It is a very good time to showcase our ability to scale as a service provider, and it helps in brand building too. The connections we make during this time go a long way.” adds Harshal Bhoi, Chief Business Officer, ExpressBees. 14

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SPECIAL FEATURE

Forward-looking companies aggressively attend to the customer’s demands by providing them with better products or customer experiences. Yet, without a strong supply chain, customer experience can be impacted." DIPANJAN BENERJEE Chief Business Officer, Ecom Express

When the customer has demands more than just quality and price of the product, your supply chain strategies can make or break your brand. Abhishek Agarwal, Senior Vice President - Supply Chain and Sourcing at Bombay Shaving Company says, “An efficient supply chain helps to source the products in a cost efficient manner. Good logistics partners help to use technology and logistics muscle to deliver on time with tracking updates. This ensures a great customer experience.” Mr Bhoi explains how driving the entire customer experience is a challenging landscape for logistics service providers - “The customer wants everything as per their demand. Giving a great experience in terms of shipment pickup, timely updates, timely delivery, various payment options, and simplified exchange & return processes, becomes a task. However, an efficient supply chain can be built on all these services.”

There are some proven mechanisms that supply chain managers can and do follow in order to ace the game during the festive season. They include but are not limited to collaborative planning, forecasting and replenishment of various products offered during festival season, inventory management using digital technologies like RFID, Chatbots, Voice, AI and ML tools for planning and control, a robust system for returns management, advance planning for critical resources particularly workforce across the supply chain, reliable channel partner for last-mile delivery, and using digital technologies for tracking and tracing.

Man v/s Machine or Man & Machine? Lately, there has been a wider adoption of various tech-based solutions across the supply chain industry to make it more agile and efficient. Ultimately, technology plays a crucial role in delivering seamless customer experience.

Ms Viswanathan also adds that for consumers, the brand experience has now extended to the backend operations of transportation and logistics, that weren’t thought of before. www.logisticsinsider.in

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The warehouse management system basically depends on what kind of commodity you are handling. But on a generic level, everyone needs common functionality. The foremost things is that the warehouse management system, at the peak season, should be scalable." HARSHAL BHOI Chief Business Officer, ExpressBees

Technology is used to gather information (demand forecasts, consumer behavior patterns, inventory related data, possible disruptions, etc.) and make it available to all supply chain participants. This eventually increases visibility across the supply chains, allowing you to satisfy the demands of your customers in a better way. During the festive season, having the right product in stock at the right time for the right target consumer segment, is the only way to have the good cards on your side. Here, predictive analytics – the use of machine learning (ML) and artificial intelligence (AI) to analyze current and historical data - helps supply chain managers better forecast the demand. It should be noted that Implementing such applications does not require a rip and replace strategy, rather just small changes over time. Technology also plays an important role in inventory management - from ERP systems to RFID chips to robots moving cargo in and out of the warehouse. Mr Banerjee says, “Before deciding to use AIbacked tools or systems, organizations must plan the ‘what for’ and ‘why’ factors for business maximization in the festive season. Companies will be able to make use of the advantages and broad effects that intelligent technology may provide while providing crucial insights and 16

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tailored products for each consumer thanks to the properly constructed framework.” What needs to be understood here is that it shouldn’t be ‘man v/s machine’ when it comes to better managing festive supply chains, rather they should and also do exist in unity and coherence with each other. Mr Bhoi and Mr Agarwal both agree on the fact that there should be a combination of both - one can employ technology to speed up the process, but if the process is labor intensive and customized, then people have to be brought in to manage the complexity. Sudharson S., Manager - Supply Chain, CaratLane highlights an important point “Festive season demands extensive attention towards supply chain management systems and new emerging technologies that are able to identify potential areas where the systems can break. This helps to fine-tune our systems to avoid any kind of disruptions that might occur during the festive rush.”

Demand forecasting and Warehouse Management Demand forecasting is a critical part of managing festive supply chains, however, not limited to the event. With the way that global supply chains have transformed during the last couple of years, demand forecasting has

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SPECIAL FEATURE

SUPPLY CHAINS DURING FESTIVE SEASON

Jewellery plays a critical role in the festive season as intent and purchase dramatically spikes during this period. Being an omni brand, we constantly strive to optimise for ensuring that each customer has access to any channel of preference as they move between online and offline." SUDHARSON S Manager - Supply Chain, CaratLane

become more of a 365 days 24x7 concept. A certain event may require extra attention on part of the supply chain manager, but if you’ve done your ‘inventory and warehouse’ homework for the rest of the year, you are not going to face any major difficulties.

Here, the Warehouse Management System comes into the picture. The items that experience increased demand throughout the festive season, will need to be separated from the rest of the inventory and categorized accordingly. The earlier you start on it, the more sure you can be of on-time deliveries and 18

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being able to prevent shortage of or excess inventory. “Making the necessary procedures to guarantee that the right shipment is delivered to the right customer is essential because the festive season window is limited, and sellers want lower order returns. SKUs are essential for efficient inventory planning and management since they make it easier to trace products. By cutting down on the amount of time needed to spend picking and recognizing the products, they help improve operational efficiency.” adds Mr Banerjee. There are various methods for predicting demand, and forecasts may vary depending on the method. Demand forecasting can be broadly categorized according to the level of specificity, the time period, and the size of the market taken into account. Sudharson says, “The choice of location for the inventory and warehouse management plays a crucial role during large scale orders and festive seasons. Based on our past

SUPPLY CHAINS DURING FESTIVE SEASON

learnings we identify possible blockers and process gaps before the start of the season. This information along with our current year growth aspirations gives us a sense of the minimum inventory required across our sales channels.”

Being Omni The way forward for retail will be a blend of brick-and-mortar stores with online selling platforms, with both likely to continue to grow in markets like India, says a Deloitte report ‘ReWriting the Rules of New Retail’. Undoubtedly, retail has undergone an unprecedented change over the past couple of years, and the pace of change has been accelerated due to the large-scale switch to digital, demand for contactless deliveries, changes in consumption patterns, rising customer expectations around speed and convenience. Widespread deliveries became popular due to the pandemic, and now people are unwilling to give up on the huge convenience, time-saving, and cost advantages offered by fast home deliveries.

SPECIAL FEATURE

directions, is being an Omni-channel brand a bane or a boon? Saying that being an omni-channel brand helps companies to grow, Mr Bhoi remarks “Different types of business models exist currently. Even though modern trade has somewhat taken over conventional practices, both models will co-exist. With the availability of smartphones and internet in Tier-2 and Tier-3 regions, one can make purchases via Apps. e-B2B is one area where modern trade has taken over.” Mr Banerjee adds, “An omnichannel strategy can help increase your Customer Lifetime Value (CLV) and make the most of both online and physical store presence to succeed in a crowded retail market, especially during the festive sale. The user in a multi-channel environment has access to several communication channels, however, they aren't always connected or synchronized. However, with an omni-channel experience, apart from there being several channels, they are interconnected allowing for seamless switching.”

Cyber Risks Just like most things have both upsides and downsides, so does going digital. The sheer magnitude of customer information - both generic and specific - has increased the risks of being digitally vulnerable. Mr Bhoi enunciates,

But considering that orders flow in from all www.logisticsinsider.in

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In logistics, artificial intelligence can help save time, reduce costs, increase productivity, and accuracy with cognitive automation. Furthermore, the digitization of logistics planning through machine learning can help predict unforeseen circumstances, which can further reduce the chances of any issues during the delivery of goods." KAMI VISWANATHAN Senior VP, FedEx Express, Middle East Indian Subcontinent and Africa (MEISA) Operations

“With millions of customers getting online, cyber security becomes a must as a huge amount of customer data is being processed via websites and apps. A cyber security breach can lead to serious disruptions affecting the sale as well as customer service. There is also a huge impact on the auxiliary service brands associated with the affected party.” Sudharson adds, “Festive season or not, cyber security is of utmost priority and we make sure we provide a sub-optimal experience pertaining to cyber safety.” Just more than a year ago, a combination of cyber risks, the pandemic and a festive season digital shopping rush, created the perfect storm that wrecked supply chains globally. “Organizations are frequently overworked during the festive season rush however, most organizations are prepared and have systems in place to counteract cyberattacks and to safeguard the sensitive data transmitted to complete a transaction when customers buy products, whether online or in-person.” says Mr Banerjee. Festive season and increased digitisation makes supply chains more vulnerable to cyber threats, leaving business, employees and consumer data at higher risk. It is imperative 20

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all businesses prioritize security technology to keep them protected, especially during the peak festive season. Supply chain managers must identify risks, understand the potential downstream effects of a security breach or cyberattack, and prepare response plans so they can act quickly in the event of an incident.

Final Remarks With companies gearing up for festival season sales, their supply chain strategy is eventually what makes them different from the others, and last-mile delivery is turning out to be the primary factor that will determine their success. With a large number of brand switchers in the Indian market, building a delightful delivery experience is a must-have element. This high-level customer experience depends on consistent on-time delivery performances coupled with transparency, visibility, and flexibility. Fulfilling on-time delivery promises require investment into a tech tool like logistics optimisation software. Not to forget third party logistics service providers. With their extensive and experienced courier partners, a wide pin code reach, techenabled services – right from order processing, picking, packaging, and delivery, and last-mile order fulfillment, they can prove to be a strong support system, just the thing you need.

COVERSTORY

NATIONAL LOGISTICS POLICY 2022

India En Route to Pinnacle

NATIONAL LOGISTICS POLICY 2022

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NATIONAL LOGISTICS POLICY 2022

COVERSTORY

17th September 2022 has been marked in the history of India as the day when Prime Minister Narendra Modi gave the gift of the National Logistics Policy to the country. The Policy is being touted as another power-packed one from the Prime Minister’s agenda of India’s holistic economic development. With the immediate target to bring down India’s logistics cost by at least 5% and the ultimate goal of making India stand in the top countries on the Logistics Performance Index, the National Logistics Policy has been made with extensive participation of the industry stakeholders. For this month’s cover story, we have tried to cover what the policy includes, along with how it plans to achieve its goals, with special attention to what the members of the supply chain industry stakeholders have to say about it. Rachayita Sidharth

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COVERSTORY

NATIONAL LOGISTICS POLICY 2022

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rime Minister Narendra Modi launched the National Logistics Policy on 17th September 2022 and said that it was a gift from him to India on his birthday. The policy was announced in the capital, in the presence of various Ministry representatives, government dignitaries and supply chain pioneers and leaders. The PM, while addressing those present at the launch, said that the government’s aim is to make India stand among the top 25 nations in the Logistics Performance Index (LPI) by 2030. The draft of the National Logistics Policy was initially published by the Ministry of Commerce on 5th February 2019, to seek suggestions from various stakeholders which can be examined and reviewed before finalizing the Policy. The draft Policy aimed at reducing logistics costs from 14% to less than 10% by 2022. The National Logistics Policy was eventually announced during the Union Budget presentation in 2020, however, got delayed majorly due to the pandemic and some other setbacks. It was announced again by Finance Minister Nirmala Sitharaman as she presented the budget for FY22-23. And now that it has been released, it is being welcomed by the country’s supply chain sector on a positive note. As per estimates, India’s logistics market is worth over USD 200 billion but the sector is defragmented as there is no single department that manages it. According to the MoCI, the sector is highly complex with more than 20 government agencies, 40 PGAs (Partner Government Agencies), 37 export promotion councils, 500 certifications, and over 10,000 commodities. It also involves 200 shipping 24

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agencies, 36 logistics services, 129 ICDs, 168 CFSs, 50 IT ecosystems, banks, and insurance agencies. The logistics sector provides livelihood to more than 22 million people and improving it will facilitate a 10% decrease in indirect logistics costs leading to the growth of 5-8% in exports. It has been deemed necessary to transform the vast unorganized logistics sector and also to reduce logistics costs as it impacts the competitiveness of domestic goods in the international market. The policy’s target is to ensure that logistical issues are minimized, exports flourish, and MSMEs/Startups and the people working in them benefit significantly. The policy will work in sync with the PM Gati Shakti National Master Plan and its implementation across the nation will also be facilitated & overlooked by the Empowered Group of Secretaries (EGoS). The PM Gati Shakti Portal will digitize the information related to all infra-development projects of Central and State, equivalent to 1500 layers of data. The information will result in improved planning, speeding up of clearances, and reduction in infra gaps. “A policy is not the end, but the means to the end. Policy plus Performance will be equal to Progress, which is why, after the policy has been released, the responsibility of performance by the stakeholders as well as the government increases manifold. NLP will act as a driving and guiding force.” Narendra Modi said while presenting the policy.

THE SITUATION SO FAR The Indian logistics and supply chain sector is like a 2000-piece picture with all the parts

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COVERSTORY

NATIONAL LOGISTICS POLICY 2022

RAMPRAVEEN SWAMINATHAN

MD and CEO Mahindra Logistics

As India aims to become a $5 trillion economy by 2024-25. Connectivity and superior infrastructure will be critical towards achieving these goals. The National Logistics Policy (NLP) comes as a big boost for the sector. The enhanced focus of the policy on enhancing human capital and operating standards are welcome initiatives to increase formalization of the sector."

jumbled. It’s huge and at least for an outsider, it’s confusing. Even though the cost of transporting cargo is the lowest via rail, followed by road and air in ascending order, it is surprising that railways also hold the lowest volume transported. A majority of the cargo moving within the country, and from manufacturing hubs to EXIM locations (and viceversa) is transported via the roadways. Railways and Inland Waterways account for the least contribution to the movement of cargo. The above being said, the picture of the Indian roadways sector isn’t all rosy either. The segment is highly fragmented and most truck operators have a small fleet of fewer than 50 trucks. Moreover, the empty running rate of trucks in India is very high, as compared to global statistics. There is also the point of intermediaries between a truck operator and a shipper, which eats into the revenue of both parties. The lack of digitisation in the road transport segment also poses a hurdle in effective operations. Apart 26

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2022

SHANKAR SHINDE

Chairman FFFAI

The land-marking NLP has an aim to bring down the present logistics cost to single digit. There will be new opportunities for the Logistics industry and support trade with seamless movement of cargo across all modes of transport thereby leveraging through PM Gati Shakti initiatives with introduction of ULIP digital E-Logs to be at speed of Cheetahs.

from that, the absence of on-road infrastructure for truckers takes a toll on their mental as well as physical health, thereby reducing efficiency. There are multiple reasons why the manufacturing sector is unable to leverage one of the world’s largest railways networks to reduce its logistics costs. Along with a dearth of freight-only trains

NATIONAL LOGISTICS POLICY 2022

COEN VAN DER MAAREL

Managing Director Kuehne+Nagel India

These enhancements (under the NLP) will provide a strategic direction for the sector and act as a critical catalyst for attracting investments. Tech-enabled solutions and digital integration systems for logistics ecosystems will provide much-needed impetus to the sector."

as well as tracks, there are concerns pertaining to timeliness, security and track & trace. The railways suffer from many structural deficiencies which have to be eliminated if the logistics cost has to meet the global benchmarks. The average speed of a freight train has stagnated at 25 kmph for decades and needs to be urgently doubled to 50 kmph at least.

COVERSTORY

K.K AGARWAL

Chairman and Managing Director CJ Darcl Logistics

The initiatives announced by the government today would help bring logistics costs down to 8 to 9% of GDP from existing around 15% and make our products for domestic and international markets competitive. Going ahead, we believe movement of goods via railways and shipping is set to see strong growth as ULIP becomes one of key triggers to drive logistics expansion and growth.”

Coming to inland waterways, although there has been considerable progress on that front in the last half a decade, there are a few impediments that still hamper their practical usage. These include shallowness of river channel, lack of key channel markings, lack of accompanying dredger during the journey, and unavailability of the uniform depth of 2.5 to 3 meters, among others. Not only do all these factors increase the duration of transit, but also increase the chances of damage to the cargo. There is also a need to install night time navigational facilities along the waterways, which will not only reduce the overall time of transporting cargo but also make efficient use of multimodal transportation and cut down logistics costs considerably. All of the aforesaid point to the obvious - the need for streamlining logistics and supply chain operations, the need for digitisation across the sector’s various segments, and the need to reduce logistics costs. “Bringing down the logistics cost in India is one of the key motivators for companies to reimagine the value chain of the www.logisticsinsider.in

27

COVERSTORY

NATIONAL LOGISTICS POLICY 2022

VINEET AGARWAL

MD Transport Corporation of India

SHASHI KIRAN SHETTY

Founder and Chairman Allcargo Group

Push towards seamless multimodal transportation and modern connectivity will be a game changer as it will shift the transportation stress from just road to other modes as well. It will help us drive the ESG goals and focus on a better cost structure. NLP is an encouragement for all the stakeholders in the Supply Chain segment & will be one of the key pillars for India to become a USD 5 trillion economy."

The NLP brings a holistic approach to making India self-reliant and a global manufacturing hub. With an ambitious goal to bring down logistics costs by up to 25%, this could lead to a paradigm shift in the logistics industry in India and will boost India's export competitiveness in the global market. The NLP will act as a guiding and driving force for the new phase of growth."

future and place the country in consideration,” says Dr Johannes Schlingmeier, Co-Founder and CEO, of Container xChange.

increasing prosperity and promoting startups, among other benefits, eventually making India 'atmanirbhar'. It will make the Indian logistics sector at par with global benchmarks. To sum up, the vision is to develop a technologically enabled, integrated, cost-efficient, resilient, sustainable and trusted logistics ecosystem in the country for accelerated and inclusive growth.

Here comes the National Logistics Policy into the picture. Undoubtedly, digitisation is the key to National Logistics Policy achieving India’s aspirations. It is high time that Indian logistics companies sport the digital way of doing business - top to bottom. And it is also high time that the government puts in appropriate resources towards helping the sector as it digitizes itself. All things said, it should be more of a two-way support system between the sector and the government, so that the country can move towards complete development.

WHAT THE POLICY HOLDS The NLP is said to have been made after extensive stakeholder consultation and its implementation will lead to reduced logistics cost, and increased international trade, thereby, 28

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ITS 3 PRIMARY TARGETS INCLUDE: i) Reduce cost of logistics in India to be comparable to global benchmarks by 2030 ii) Logistics Performance Index ranking – endeavor to be among top 25 countries by 2030 iii) Create data driven decision support mechanism for an efficient logistics ecosystem. The National Logistics Policy also aims at achieving seamless stakeholder coordination, improved manufacturing competitiveness, and promotion of MSMEs and agricultural produce, leading to global competitiveness.

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COVERSTORY

NATIONAL LOGISTICS POLICY 2022

RIZWAN SOOMAR

Chief Executive Officer and Managing Director DP World Subcontinent

The launch of the National Logistics Policy is a seminal moment for India’s logistics sector. The multi-pronged approach by the Government adopted in the policy to suggest regulatory and procedural reforms across infrastructure, services and human capital provides a comprehensive strategic direction to the sector and will be a key catalyst in attracting investments."

To achieve the aforesaid goals, the NLP will focus on parameters like u Modern Warehousing u World Class Infrastructural development u Digitisation u Regulations u Trace and Track u Ease of arranging shipment u Timeliness Major economic sectors like coal, steel, fertilizers, food grain, cement and port connectivity, will receive sector-specific logistics plans.

Comprehensive Logistics Action Plan (CLAP) A Comprehensive Logistics Action Plan (CLAP) will be used to implement the Policy and would include 8 key action areas (i) Integrated Digital Logistics Systems: Develop a system of unified logistics interface to link multiple data sources and develop cross sectoral use cases for logistics stakeholders. 30

Logistics Insider

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2022

KAMI VISWANATHAN

Senior Vice President, FedEx Express, Middle East Indian Subcontinent and Africa (MEISA) Operations FedEX

The development of an integrated and efficient logistics ecosystem is a crucial enabler for India to become a US$5 trillion economy and improve trade competitiveness. As India looks to modernize infrastructure and supply chains, it’s evident that technology is the key to unifying all involved stakeholders and to help manage complexity better."

(ii) Standardization of physical assets & benchmarking service quality standards: Enhance interoperability, minimize handling risks, undertake process optimisation, and improve ease of doing business, through standardization of physical assets and benchmarking of service quality standards in logistics. (iv) State Engagement: Provide support for development of state/city level logistics plans, set up institutional framework to take action at city/state level, measure and monitor action by states and rank them. (v) EXIM (Export-Import) Logistics: Addressing infrastructure and procedural gaps in India’s EXIM connectivity and creating an efficient and reliable logistics network, with transparent and streamlined cross-border trade facilitation. (vi) Service Improvement framework: Improving regulatory interface to enable seamlessness

NATIONAL LOGISTICS POLICY 2022

Integra�on Status Ministry of Ports Shipping & Waterways •Port Community System (PCS) •Terminal Opera�ons System (TOS) •Inland Waterways Authority of India. (IWAI)

COVERSTORY

ULIP Ministry of Civil Avia�on •Air Cargo Message Exchange System (ACMES) •Air Cargo Community System (ACCS) •AAI Cargo Logis�cs and Allied Services (AAICLAS) Ministry of Commerce & Industry •Director General of Foreign Trade (DGFT)

between sectors, promote standardization, formalization, interoperability; eliminate fragmentation in documentation, formats, processes and liability regimes; reduce gaps in regulatory architecture. (vii) Sectoral Plan for Efficient Logistics: Sectoral Plans for Efficient Logistics (SPEL) would address logistics issues pertaining to infrastructure, processes, digital improvements, policies and regulatory reforms, and capacity building for better workforce. It will also prioritise crosssectoral cooperation to complement and not duplicate efforts and focus on optimisation of modal mix

Unified Logistics Interface Program (ULIP) Though it is not uncommon for supply chain operations to function otherwise, let’s take a

Ministry of Road Transport & Highways • Vahan • Sarathi • FASTag MeitY • DIGILOCKER

Ministry of Finance •Indian Customs Electronic Gateway (ICEGATE) Other Sources of Informa�on •NICDC Logis�cs Data Services (NLDS) – LDB

Ministry of Railways •Foreign Opera�ons Informa�on System (FOIS)

E – book on key ini�a�ves in Logis�cs

situation where goods from other countries arrive at ports via ships. They are then transported to hubs located in various cities via railways, and further deep into the hinterland via roadways (trucks). Eventually, smaller pickup vehicles shove the goods into the cities, from where last-mile delivery happens via two/three wheelers. As easy as it sounds, with each mode of transport comes its own share of delays and hindrances. To manage the entire logistics network efficiently, the Integrated Digital System (IDS) for Logistics Services and Unified Logistics Interface Program (ULIP) will be used. With all the information available in a digitized and organized manner from across the sector, this tool can incredibly increase efficiency and cut down logistics costs. The ULIP will connect roadways, shipping, MoCA (ACMES, AAICLAS, ACCS), MoRTH (Vahan www.logisticsinsider.in

31

COVERSTORY

NATIONAL LOGISTICS POLICY 2022

RAMACHANDHRAN DINESH

Executive Vice Chairman TVS Supply Chain Solutions

The policy addresses some of the pertinent issues in the sector like, improving efficiency in services through the adoption of technology, skill development, main streaming logistics in higher education, etc. I am confident that this new policy will open the door for India to become a global logistics hub and I am sure we are not too far away from seeing a new India in the Logistics sector.”

MAHENDRA SHAH

Chairman and Group Managing Director V-Trans (India)

Out of all the strategic and aspiring initiatives in the policy, I am more excited about the difference that MMLP and ULIP will bring. Players with a progressive mindset, technology inclination, and competitiveness will be immensely benefited in years to come from the National Logistics Policy.”

Saarthi), MEITY (DigiLocker), NPCI (FASTag), Customs (ICEGATE), DGFT (IEC) and NICDC, ensuring seamless flow of information between government agencies and industry players. It will be a platform for stakeholders to manage, offer and track their services while maintaining the ease of doing business.

components which define the ULIP platform: • Integration with existing data sources of ministries: As authorization, compliance and clearance are some of the critical activities of logistics, the integration with data points of ministries shall enable a holistic view and interlink the handshaking points.

In addition, with simplified processes and regulations, one can expect an increase in efficiency which will reduce time and cost overruns, a major headache for the stakeholders as of now. As reported by a national publication, Niti Aayod CEO Amitabh Kant said that it will bring all modes of transportation under a single window by connecting all logistics stakeholders spread across multiple ministries, enterprises and associations. It will assist just-in-time inventory management, cargo movement monitoring, identification of cheaper logistics modes, eliminating tedious documentation processes and improving international competitiveness.

• Data exchange with private players: To enable the private players, logistics service providers, and industries to utilize the data available with ULIP and at the same time share their data (transportation, dispatch, delivery, etc.) with ULIP, thereby, streamlining the processes to bring better efficiency through data exchange.

According to Niti Aayog, there are three key 32

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2022

• Unified document reference in the supply chain: To enable a single digitized document reference number for all the documentation processes in a single platform. ULIP shall enable start-ups and private organizations to build the presentation layer,

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COVERSTORY

NATIONAL LOGISTICS POLICY 2022

VIVEK JUNEJA

Founder and Managing Director Varuna Group

CYRUS KATGARA

Partner Jeena & Company

The big push is to target digital integration of multiple coexisting systems via ULIP (Unified Logistics Interface Platform), once achieved the transparency brought about by this system will greatly enhance cost efficiencies and reduce waste. The National Logistics Policy holds a similar power to bring a shift in the Indian logistics universe, as seen in previous policy shifts such as GST."

The National Logistics Policy will accelerate the growth of the sector in the coming years as it aims to promote seamless movements of goods across the country and addresses the infrastructure, procedural gaps in India’s EXIM connectivity by creating efficient, reliable and streamlined cross border trade facilitation.”

encompassing various use-cases to serve the service, trade and logistics service providers.

‘Services Improvement Group’, will be tasked with overseeing this mechanism.

Pilot run of the ULIP platform has already started by onboarding some start-ups to verify usability of this platform. It integrates and converges 24 systems, 78 APIs and 1454 fields across waterways, ports, shipping, civil aviation, railways, DGFT & customs and road transport & highways.

Sabyasachi Ray, Executive Director at the Gem and Jewellery Export Promotion Council of India (GJEPC), said that while logistics for the gems and jewellery sector are ‘well-defined’, it still requires insurance, security personnel and overall, the secure movement of goods.

eLogS - Dashboard for Ease of Logistics Services

“The eLOGS dashboard and ULIP are steps in the right direction. However, it will depend on how fast these are implemented by the government agencies and without teething glitches in the initial implementation,” he said.

The Ease of Logistics Services (eLogS) Dashboard has also been announced as a part of the National Logistics Policy. Any problems/concerns that may directly or indirectly be causing hindrance in the operations and performance of the stakeholders of the supply chain sector can be communicated by the industry associations through this portal. Such matters will be promptly taken up and will be resolved in a speedy manner by the government agencies. This will further promote accessibility and transparency. A group of officers nominated from various ministries to form the 34

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2022

The Dashboard is envisaged to be operationalized through: 1. Formation of a Services Improvement Group (SIG) on the lines of the Network Planning Group (NPG). SIG will comprise of officers nominated from various user ministries and will provide for the monitoring and coordination mechanism for unresolved user

NATIONAL LOGISTICS POLICY 2022

issues pertaining to services, documentation, processes, policy, along with identification of interventions for improving user interface. 2. Creation of a Digital Dashboard - E-LogS: Ease of Logistics: A digital system for registering, coordinating, and monitoring resolution of user issues is being developed on which authorized user associations will register and upload their issues/suggestions. This portal has been developed by the Logistics Division, DPIIT to facilitate time-bound resolution of issues.

e-Handbook on Warehousing Standards As per DPIIT, Warehousing and related assets are an important segment of the overall logistics sector in the country. In warehousing value chains, standardization is essential for reducing costs, improving efficiency, and ensuring global compatibility as well as competitiveness. While there are many generic infrastructure design and operational standards published in India, awareness about applicable warehousing specific standards itself poses a challenge before they are even applied by facility operators, owners, developers and regulatory agencies. The e-handbook on Warehousing Standards will collate existing standards and global best practices for easy reference to the sector. A team of experts from private industry and the Logistics Division, MoCI have done extensive

COVERSTORY

brainstorming to generate the e-handbook. “While this handbook is an endeavor to consolidate relevant standards as issued by concerned standard-setting agencies and to sensitize stakeholders for necessary adoption, this handbook shall not be valid for settling any legal, commercial or any other claim whatsoever. The e-Handbook on Warehousing Standards envisages to act as an enabling and guiding document for facility developers and regulatory agencies to identify and implement facility and sector specific standards.” said Dr. Surendra Ahirwar, Joint Secretary, DPIIT, MoCI. This e-handbook includes the existing standards that are issued by the standards agencies such as the Bureau of Indian Standards (BIS) and the Warehousing Development and Regulatory Authority (WDRA), and wherever there are gaps those have been identified and suggestions have been made thereof.

And a lot more The Policy will also work in tandem with the Prime Minister Gati Shakti National Masterplan, and facilitating its implementation will be the same Entitled Group of Secretaries who overlook the functioning of Gati Shakti. While Gati Shakti focuses on the development of integrated infrastructure, the NLP is concerned with creating digital services and a regulatory framework that will help streamline www.logisticsinsider.in

35

COVERSTORY

NATIONAL LOGISTICS POLICY 2022

AJAY SINGHAL

CMD OM Logistics

A common concern for logistics speed barriers is RTO checks. RTO is forced to stop more than 1000 trucks behind an unlawful truck. This leads to late delivery of goods, and increases logistics cost. Our government is actively promoting digitization; it has already launched LEADS, E-logs and ULIP. I would request to digitize the RTO process too for fast last mile delivery.”

the logistics ecosystem in India. While presenting the Policy to the nation, the PM said that the PM Gati Shakti Portal will digitize the information related to all infra-development projects of Central and State, equivalent to 1500 layers of data. The information will result in improved planning, speeding up of clearances, and reduction in infra gaps. “Gatishakti and National Logistics Policy together are now taking the country towards a new work culture. The talent that will come out of the recently approved Gatishakti University will also help it a lot,” said the PM in his address. The PM also mentioned that all Indian states need a Logistics Coordination Committee. Each state’s performance will be evaluated annually using the Logistics Ease Across Different States (LEADS) Index, and the central government will give a template for improving logistical efficiency, allowing states to build their own systems. It should also be noted that many Indian states are already working on their state-specific logistics policies, which are aimed at giving industry 36

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2022

ANIL G VERMA

Executive Director Godrej & Boyce

The NLP will provide the much needed filip to export growth allowing Indian manufacturers to expand footprints globally. The impetus given to transportation through new waterways, airports and multi-modal logistics hubs will provide an effective roadmap to deliver products efficiently and at a very competitive cost across our various global markets.”

status to the logistics and supply chain sector. This will help the sector reap various benefits in the form of subsidies. Lastly, the policy tries to tackle the problem of manpower shortage. It was during the pandemic that it was realized how crucial an efficient and skilled workforce is for coherent logistics operations. The PM said that various courses related to the logistics and supply chain sector will be introduced for students at graduation and post-graduation levels. Various organizations will also work on skill development for better domestic and international employability among the workforce. Overall, the NLP has been launched with a motive to bring efficiency in logistics services and human resources through streamlining processes, regulatory framework, skill development, and digitization. The ultimate goal is to develop ‘Atmanirbhar Bharat’ which runs on a technologically enabled, fully-integrated, price competitive, sustainable, and seamless logistics

1. 7. 2.

3. 4.

8. 9. 10.

5.

11.

6.

12.

COVERSTORY

NATIONAL LOGISTICS POLICY 2022

PERVINDER SINGH CHAWLA

Co-Founder OnMove by Zast Logisolutions

plan to divide the country into six zones for zonal conferences and conduct workshops on different action plans of the Policy, such as on warehousing, skill, and Ease of Logistics Services (ELoGS) platform.

THE ELEPHANT IN THE ROOM For making Indian products competitive not just in India but globally, we need strong supply chains. While policy has covered most of the focus area, the key challenges of implementation would be coordination between different ministries, alignment of key stakeholders for the larger picture, pace of infrastructure development and implementations."

ecosystem for faster and inclusive economic growth of India. It will also strive to make processes paperless while providing access to all essential data to key stakeholders.

WHAT NEXT? The National Logistics Policy is being said to bring with it the winds of transformation for the Indian supply chain and logistics sector - with better efficiency and lesser costs. It may just give a 360 flip to how multimodal logistics work in India, especially to the ratio of road, rail and waterways. The policy also aptly focuses on the organization and formalization of the sector, development of human resources and standardization of services in line with global benchmarks. The Policy has set targets and an action plan ready to achieve them. In fact, the Department for Promotion of Industry and Internal Trade (DPIIT) plans to hold a series of workshops and deliberations in the coming months with all stakeholders to facilitate an easy transition into the entire gamut of the Policy. They also 38

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Yes, the National Logistics Policy is truly transformative in principle and holds the power to uplift India’s logistics and supply chain sector to the zeniths. But let’s address the elephant in the room - a small one, yet quite prominent. The base of the NLP is the integration of the logistics industry through technology. The technology which the policy talks about is not very straightforward/ easy to understand. The policy aims to utilize cutting-edge methods such as artificial intelligence, blockchain technology, smart contracts, Big data etc. It plans to create a data analytics centre for driving greater transparency and continuous monitoring of key logistics metrics. Considering that those actually working at the ground level, someone like a truck driver, may not be completely familiar with the aforesaid technology, it can be a task getting all of them completely onboard the new system. Plus, hurdles can be as basic as a language barrier between the support staff at the call centers and a trucker traveling somewhere in South India. It is fingers crossed right now as far as the implementation of the National Logistics Policy is concerned. Though industry leaders have presented a positive outlook towards the Policy, what remains to be seen is how efficient the government and its agencies will be in connecting the millions of dots that make up the Indian logistics and supply chain industry. Afterall, we all love the UPI system, but can we say the same about the IRCTC website though? Let me leave you with that thought.

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New Logistics Policy Embracing Opportunities 17th October 2022 Venue Radisson Blu Plaza Hotel Near Mahipalpur Extension, New Delhi

52

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Official media partner

INTERVIEW

D2C challenging the status quo with an evolved supply chain 40

Logistics Insider

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2022 2022

Hemant Kejriwal, a seasoned Supply Chain Leader and Ex-VP (Operations and Supply Chain) at Sugar Cosmetics

Q] How are inefficient logistics operations eating into D2C revenues? 

When it comes to e-commerce, D2C brands especially, logistics is a highly involved function. It is the all too critical layer that converts an order into realized revenue.

From a broad perspective, the inefficiencies I have observed in D2C companies are not very different from those in the traditional ones. Functionally, there is Sales & Operations Planning, Inventory Management, Procurement, Warehousing. From the tech perspective there is - ERP, OMS (Order Management System), WMS (Warehouse Management

Further, unlike B2B supply

System), TMS (Transportation Management System).

chains, the end customer

From the external service providers there are

expects complete visibility on the order status from the time

transporters and carrier partners for bulk movement vs end customer deliveries, local vs upcountry deliveries, within an hour / same day / express deliveries by road

it is placed, till it is delivered.

/ rail / air. And then there is always the overarching

And the job doesn’t end at

concern on keeping costs under control.

making final deliveries. The delivery/reverse pickup is a critical touch point with the

As you can see, there are several elements that work together in harmony (like several musical instruments in a melodious symphony) to run an efficient

customer, which has a lasting

supply chain operation. At any point in time, every

impact. In fact, the conduct

organization I have seen lags behind in effective

of the delivery executive while handing over the package,

implementation of at least two of the above elements, if not more. This leads to poor visibility & hence poor inventory planning. As an organization grows in size,

and collecting cash payment

it starts becoming increasingly difficult, but even

also affects the customer’s

more critical to keep the different functions operating

relationship with the brand. In this super insightful interview, Hemant Kejriwal, a seasoned Supply Chain Leader and ExVP (Operations and Supply Chain) at Sugar Cosmetics takes us into behind the scenes of D2C supply chains. Rachayita Sidharth

in sync. Else it directly impacts your top line. Having said that, it is a journey and there is always room for improvement. But what is most important is that one realizes that your supply chain / logistics management is a key strategic strength - a competence that cannot be built overnight just by spending more money. And hence a key driver of your topline & bottom line in the long run.

Q] What do D2C brands consider while choosing between in-house logistics and 3PL? A lot of factors come into play when D2C brands need to make the decision to either outsource or handle things by themselves.Some are listed below: www.logisticsinsider.in

41

INTERVIEW i) Objectives of outsourcing: You need to be

the one with the highest weightage. Given

clear about the objectives that you want the

what is at stake, you want to work with a service

arrangement to serve. A brand may want to

provider who you see as a potential partner in

scale up rapidly while retaining the flexibility to

growth over the long term, not the one that

scale down if needed. Others may want to focus

quotes the lowest price.

on core operations and outsource the others. If some proprietary processes and tech has been developed by you, you may want to run things

Q] What are the challenges that are unique to D2C supply chains?

in-house. Basically, being clear about the key

Some challenges and problems that are quite

strategic objectives makes it easier to make a

unique to the D2C supply chain would include

decision.

the following:

ii) The brand’s stage of evolution & preparedness: It makes sense to outsource an operation

1. Maintain dark stores - Tens of thousands of

only after it has achieved a certain degree

orders are processed daily with the ordered

of stability and maturity. Is your technology

quantity in low single digit. To process these

platform stable & are your processes clearly

orders, the warehouse also needs to be

defined? Do you have clear performance

designed to look like a retail store - where

metrics defined to measure and monitor all

the order picking team shops for the product

aspects of warehouse performance? If not, the outsourcing arrangement is unlikely to work and deliver the intended results.

instead of the end customer. 2. High Returns - Today, more than 60% of all orders are COD, and on an average 12% of

iii) Reliability: Has the service provider handled

orders get returned - undelivered & unopened.

other clients with product characteristics similar

This leads to wasted cost of packaging,

to yours? Does it have experience in managing

shipping cost both ways, outward & inward

the service levels expected by the leading

order processing cost - inspite of zero revenue

marketplaces? Is the team comfortable using

from the given order.

the OMS / WMS used by your organization?

3. Fraudulent orders - Unlike traditional players

iv) Compliance: Compliance with the labor laws &

who sell only to previously approved &

other laws of the land, availability of fire safety

registered distributors & retailers, every D2C

equipment and trained staff, strong processes in

brand needs to be on its toes at all times to

place to control access to the facility & maintain

be able to identify & block fraudulent orders

confidentiality, and adequate CCTV coverage of

before they are processed.

the facility are just a few checks that need to be made before arriving on a decision.

4. Power lies with the customer - The customers have the enormous power of social media at

v) Flexibility: Assuming that the prospective

their fingertips. They expect to know when they

partner meets all the above criteria, you want

can expect the order to be delivered, and also

to make sure they are flexible enough to make

expect real-time updates on the status. Further,

exceptions to the agreed terms, if & when

they sometimes expect you to re-attempt

required - whether it is going out of the way

delivery, or request a change of the delivery

to handle unexpectedly high order volumes,

address after an order has been shipped!

or make an important change in the process, which was not anticipated earlier. vi) Cost: It is an obvious concern, but clearly not 42

Logistics Insider

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2022 2022

Q] How have the changing consumer expectations impacted D2C supply

Hemant Kejriwal, a seasoned Supply Chain Leader and Ex-VP (Operations and Supply Chain) at Sugar Cosmetics

chains in the recent past? The

single

most

significant

mention the damage it can do to the reputation change

in

of the brand and permanent loss of customers.

customer expectation has been in the speed of delivery. From days it came down to hours, and now players are competing to deliver

Q] What can be done to ensure an errorfree reverse logistics system?

within 20 minutes! This has clearly raised

The importance of this aspect of the D2C

the bar and increased cost. One needs to

supply chain system cannot be emphasized

understand that such fast deliveries cannot

enough. Let me try to explain this in a step by

be made possible within the same system that

step manner.

processes orders for delivery within 2-3 days by just getting the team to work faster. These

It starts with the pickup request. The customer

hyper-speed deliveries require a completely

return policy must be clearly defined & the team

different system - tech, team, storage facilities

must ascertain the validity of the pick up request

& delivery infrastructure. The jury is still out

before scheduling the pickup and initiating the

on its feasibility and its ability to increase

pickup request with the logistics partner. The

revenue. Most of the brands are actually

brand must also have a clearly defined and

piloting these super fast deliveries just to

documented process for the pick-up executive

explore and understand its impact.

to follow. The executive must thoroughly inspect the product(s) before pickup as per a clearly

Q] What are the cost parameters involved in a D2C supply chain and how does one optimize logistics costs? The basic cost parameters are the same - ware-

defined process with the logistics partner. The logistics partner must be held fully accountable for timely pickups and to bear the cost of an unauthorized or incorrect pickup.

housing & transportation with the fixed cost heads being rent, utilities, manpower and vari-

Also, it is best if the refund to the customer

able being packaging, and transportation.

can be initiated as soon as the pick up is confirmed, instead of waiting for the product

The key input here is to design operations

to be delivered back to the warehouse. Further,

keeping the broader business objectives of

there must be a periodic review of the reasons

higher sales and better customer service. In my

for return pickup requests, and interventions

experience, the biggest gains are achieved by

be undertaken to minimize them.

working closely with the sales & product development teams to scale up and scale down ca-

I am sure there are experts out there who have

pacity timely & to proactively draw attention to

already imagined and are already building a

overstocked or slow moving inventory.

process better than what I have just described. I would summarize my suggestions by saying

For example, imagine a scenario where a fast

that at the end of the day, our processes need

growing D2C brand is under-staffed, and has

to be customer-centric – How will it make the

not engaged adequate storage space and or-

customer feel? How will it make it easier for

der processing infrastructure for the festive

them, delight them, make them want to shop

season. The cost of this failure can be very high

with us again and recommend us to others? (of

because of the sheer loss of revenue in terms of

course without diluting the accountability of

stock outs or canceled & returned orders, not to

our teams.) www.logisticsinsider.in

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PICTURE PERFECT

CCUB 2022 proves to be an event to be reckoned with Being helmed as a one-of-its-kind event since its very inception, the Cold Chain Unbroken 2022 (CCUB) - a 2-day premium affair put together by Wiz and Logistics Insider - stood true for every adjective used to describe it. Flagged off in Hyderabad, Telangana on 15th September, the event was a portal for the industry stalwarts to come together, and witnessed brilliant minds discuss and deliberate on opportunities and challenges of the cold chain. More than 350+ delegates thronged to Hyderabad to be part of this invite-only event. Being the pharma hub of the nation, Hyderabad served as the right destination to organize and host such a unique event.

The event was honored by the presence of Mr. Jayesh Ranjan, Principal Secretary Industries & Commerce, and Information Technology, Government of Telangana as the Guest of Honor, as he inaugurated it in the presence of Mr. Satish Lakkaraju (Global Head, Airfreight and Pharma, Wiz Freight), along with Mr. Ramkumar Govindarajan (Co-founder & CEO, Wiz Freight), Mr. Ramkumar Ramachandran (Co-Founder & Chairman, Wiz Freight), Mr. Julian Sutch (Head of Global Sales - Pharma, Emirates SkyCargo), Mr. Marrie Groeneveld (Advisor to the Board, SkyCell AG) and Mr. Anil Agarwal (President, FTCCI). The Principal Secretary also unveiled a special report on 'Infrastructure Augmentation for Pharma and Perishable Handling at Indian Air Cargo Terminals' during the event. 44

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PICTURE PERFECT

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PICTURE PERFECT

While addressing the industry before opening the floor for discussion, Mr. Ranjan said, "This is the best time to re-group, understand the advancements taking place on the technology frontier as well as the last mile delivery frontier; how policies need to be formulated and how the industry needs to be supported. I’m glad that the industry is taking an ecosystem approach to the event, because eventually in Telangana, it has become a part of our DNA to bring all partners on board, sharing responsibilities and leadership."

The event unfolds The first panel discussion on ‘New Airport Infra, New Routes and New Initiatives Bolstering Pharma & Perishable Trade for the Country’, was moderated by Satish Lakkaraju and saw the participation of Ramesh Mamidala (Adani Airports), Julian Sutch (Emirates SkyCargo), John Ackerman (Dallas/Fort Worth International Airport), Anthony Pagnotto (Mohawk Global), S. Burak Omeroglu (Turkish Cargo) and Mohammed Esa (Worldwide Flight Services) as panelists. The session track partner was Mohawk Global and it showcased some interesting discussions around the importance of developing new infrastructure and introducing new routes, and how it will have manifold benefits for the entire pharma and perishable trade. Marking the second-panel discussion of the day, ‘Pharma 4.0: Digital Technologies Driving Disruptive Changes and Smarter Data Could Help Reduce Losses’, was moderated by Dr. Ravi Prakash Mathur, Dr. Reddy's Laboratories, and saw the participation of speakers like Ramkumar Govindarajan (WIZ), Bharat Bhusan Rathi (Mankind Pharma Ltd.), Anurag Mehta (Mediterranean Shipping Company), Halit Tuncer (Turkish Cargo), Stefan Braun (SmartCAE) and Vivek Sharma (ZIM Integrated Shipping Services). The session track partner was ZIM Integrated Shipping Services and it included some exciting and insightful deliberations around customer experience, data, predictability, digital twins, and everything digital. The session on ‘Latest Legislation on Dangerous Goods, Perishables and Regulatory Framework for Air and Ocean’ was the third panel discussion of the day which was moderated by B. Govindarajan and saw the participation of Laurence Jacobi (Emirates SkyCargo), Milton De La Paz (Dallas/Fort Worth International Airport), Satish Lakkaraju (WIZ), Vilas Rebello (Teva Pharmaceuticals) and N. Natarajan (Indian Institute of Packaging). The session track partner was Emirates and it touched upon various aspects of Dangerous Goods Regulation, checklists for shippers, types of packaging used, etc. The panel discussions for day 1 were concluded by a special session on ‘IMO 2023: How to Prepare for the Coming Changes and the Need to Know More’ which was moderated by Nikhil Nadkar (WIZ) and Radar Ventures Private Limited was the track partner for this session. The session saw the participation of BVR Vijaya Bhaskar (Pfizer Healthcare India), Capt. Amar Mascarenhas (Director of Operations, WIZ Bulk), Jebakumar S (CMA CGM), and Jayaram Radhakrishnan (M+R Logistics (India) Pvt. Ltd.) and brought forth many interesting points about the upcoming regulations, checklist for preparation and the potential impact that this relatively new legislation will have on supply. The event also saw the felicitation of other individuals and organizations for their path-breaking work and their contribution towards transportation of vaccines, medicines and other medical equipment during COVID-19. The following awards were presented at CCUB 2022: 1. Supply Chain Heroes Award - Dr Reddy’s, Bharath Biotech, Serum Institute 46

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PICTURE PERFECT

2. Lifetime Achievement Award - M Sriram, Head, International Logistics, Dr Reddy’s Laboratories 3. Lifetime Achievement Award - Vandana Aggarwal, IES 1986 Batch 4. Lifetime Achievement Award - Laurence Jacobi, Cargo Manager - AP and TS, Emirates SkyCargo Keeping the night young and the crowd engaged was a combination of groovy music and some cocktails with dinner.

Continued on Day 2 Major Dr. Surendra Poonia, an international award-winning sportsman, Limca book record holder, physician, and former Special Forces officer of the Indian Army, enlightened all the participants in the event about the importance of physical fitness in daily life. He has organized a 5K run for the interested participants at 5 am in the morning, which has witnessed a pretty good voluntary turnout. Major Poonia has represented India in Croatia, Spain, Ireland and Turkey in 5 World Championships and won 27 medals including 10 Golds. He is the first Indian power-lifter to have won gold in four consecutive championships from 2010 to 2013. On 26 January 2012, he was felicitated with the ‘Vishisht Seva Medal’. He is also the founder of Fitistan Ek Fit Bharat, which has been propagating the importance of physical fitness through a good balanced diet and physical exercises.

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Day 2 of CCUB 2022 saw its first session on ‘Cold Chain for Agro - Where we are and what more can be done’ , for which, the track partner was Del Monte. The session, moderated by Keku Bomi Gazder (Aviapro Logistics Pvt. Ltd.), witnessed some amazing deliberation around what more can be done in the agro supply chain to increase our export potential, importance of packaging, and how we can increase the shelf life of the agro produce. The speaker panel included Dr. MJ Khan, Chairman, Indian Chamber of Food and Agriculture, Mihir Mohanta, GM - Supply Chain, Mother Dairy Fruit & Vegetable Pvt. Ltd., Sameer Sachdeva, Vice President, Baramati Agro Ltd, Santosh Gavandi, Trade Manager, CMA CGM and Akhil Gawar, Director - Food Processing, Government of Telangana. The next session weighed on ‘Active & Passive Packaging: What's coming in the future?’, was moderated by Satish Lakkaraju and SkyCell AG was the track partner for it. The session saw the participation of excellent panel speakers including Marrie Groeneveld (SkyCell AG), Fabrice Panza (Etihad), Ankit Jhanwar (Pluss Advanced Technologies Pvt. Ltd.), and Ravi Kumar Tummalapalli (va-Q-tec) who spoke about the value offered by active or passive packaging, how to ensure zero loss and also explored the potential of hybrid & adaptive packaging. Continuing the streak of bringing to the industry with some brainstorming discussion, the third panel discussion of the day witnessed the industry deliberate and discuss ‘Challenges created by Counterfeit Medicines for the Supply Chain and End User’. The session was moderated by Ravi Kumar Tummalapalli and va-Q-tec was the track partner for it. Panel members joining this session were Rashmi Karnad (Qatar Airways Cargo), Pramod Pereira (Cargo Service Center India Pvt. Ltd.), and Anand Garg (Dr. Reddy's Laboratories) who spoke about the impact that counterfeiting has on the pharmaceutical supply chain and the ways to minimize it. Further, throwing light on the concept of Supply Chain Control Tower, CCUB 2022 empanelled a session on the theme ‘Control Tower: Supply Chain of the Future’ which was moderated by Satish Lakkaraju. The session track partner was GMR Hyderabad Air Cargo and it saw expert speakers including Guhan A T (WIZ Tracks), Riaz Ahmed M. (Granules India Limited), Saurabh Kumar (GMR Hyderabad Air Cargo), Gubba Kiran (Gubba Cold Storage Ltd.) and Krishnakumar V. (WIZ) discuss the tangible benefits of a Control Tower which could enable end-to-end visibility, real-time data sharing and much more. Logistics leaders and bureaucrats from around the world flew to be a part of the 2-day premium event. The power-packed event not only held an enlightening and insightful exchange of views, but also held exhibitions from the different logistics organizations showcasing their products and services. The event ended on a high note with Satish Lakkaraju presenting the concluding remarks as he hinted about the next edition of this mega-event. www.logisticsinsider.in

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FEATURE SUPPLIER DIVERSITY

Introducing supplier diversity in logistics to build a resilient supply chain Karvi Rana

Ever since the outbreak of the pandemic in 2020, sustainable supply chains have been making a case for companies to revisit their efforts, and commit to supplier diversity efforts more seriously. Diversity, equity, and inclusion programs within organizations proved to have definite commercial and social benefits, forcing organizations globally to prioritize supplier diversity and ramp up efforts to work with minority and women-owned businesses. Owing to this growing shift towards building a resilient supply chain on the back of a diverse pool of suppliers, we explore the concept and weigh the advantages and challenges of adopting supplier diversity in a supply chain.

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SUPPLIER DIVERSITY FEATURE

T

he year 2020 has brought a wave of change, not only in the way of living but also in the ways of working. As the world moves towards taking a more diverse shape, the predominantly hesitant businesses of India also embrace supplier diversity in their supply chains. Largely put under the spotlight since 2020, India has always put the entire responsibility onto the central public sector enterprises, with few to none private companies showing a meaningful approach towards supplier diversity. Whereas multinational organizations in the US, like Ford, GM, Nestle, IBM, Walmart, and Apple, swear by supplier diversity to flourish.

WHAT IS SUPPLIER DIVERSITY? A diverse supplier is a business that is at least 51% owned and operated by an individual or group that is part of a traditionally underrepresented or underserved group. Smallbusiness enterprises (SBEs), minority-owned enterprises (MBEs), and woman-owned enterprises (WBEs) are some of its common classifications. In current times, the definition

of diversity has also expanded to businesses owned by other minority groups such as LGBQT, veterans, and proprietors with disabilities. To put it in a sentence, supplier diversity is all about embracing disadvantaged business enterprises into company supply chains. While it is without question that a diverse supplier base is good for society, but many executives confirm that it also improves business performance. It is said better relationships and supplier diversity in logistics leads to wealthier and more profitable opportunities.

IMPORTANCE & BENEFITS Supplier diversity can be the part of a company’s efforts to maintain high moral and ethical standards, but it can also bring in many benefits for the supply chain of a company. Representing an enormous pool of opportunity to drive profits through proactive, diverse logistics of a company, supplier diversity is vital to the logistics of a company because it www.logisticsinsider.in

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FEATURE SUPPLIER DIVERSITY

allows for more of everything. “When we invest in supplier diversity, it helps us to increase the pool of possible suppliers and promote healthy competition, leading to better product quality, more innovation, and cost savings.” Carlos Guzman, Managing Director - Supplier Diversity and Sustainability at Cigna. A diverse pool of suppliers yields benefits for the business community at large by giving a competitive advantage and promoting innovation in products, services, and offerings, as suppliers try to differentiate to compete. Ajit Shenoy, Senior General Manager Procurement Services, Hindustan Construction Company Ltd., while explaining the advantages of investing in a diverse pool of suppliers says, “By diversifying the pool of suppliers we get into new networks too, giving a distinct advantage of a new perspective on product applications, new technologies, raw material, and cost dynamics. We can push for customization too through these new suppliers who would agree in their eagerness to get an entry as well as trying to give a distinct advantage to us.” “By subscribing to bring in diversity in the supplier base, the company is seen as committed to fair business ethics, and creates economic opportunities for new businesses start-ups and disadvantaged communities in our ecosystem as well,” he adds. It helps in reducing lead time, ensures continuity of supplies, and spreads out the liability servicing (i.e., outstandings – payable). It also tends to drive down prices and drive up the competition. 52

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“Diverse suppliers can provide the best combination of the total cost, quality, and service, and this leads to healthy competition and a level playing field for all potential and existing suppliers – which proves vital when the supply chain is strained or disrupted,” says Anil Kumar Mishra National Logistics Head India (South Asia), Pladis Global

AN AID TO THE STRAINED SUPPLY CHAIN Diverse and sustainable are the qualities of a resilient supply chain. One that can mitigate and secure itself for the long term by limiting the impact of disruptions- which are usually in form of unexpected competition, sudden changes in market trends, trade and geopolitical changes, meteorological, health, or economic shocks, or even changing consumer behavior and expectations. A truly resilient supply chain must be able to forecast and anticipate disruption and as

SUPPLIER DIVERSITY FEATURE By diversifying the pool of suppliers, we get into new networks too, giving a distinct advantage of a new perspective on product applications, new technologies, raw material, and cost dynamics. We can push for customization too through these new suppliers who would agree in their eagerness to get an entry as well as trying to give a distinct advantage to us.” AJIT SHENOY

Senior General Manager - Procurement Services Hindustan Construction Company

far as possible avoid them altogether, and an important factor in enabling the same and aiding the supply chain is diversifying suppliers. Getting the answer to what and where of your supplier can help in maintaining a successful and efficient supply chain during disruptions, or in times of strain. It is often seen that a delay in shipment of a small yet crucial item can halt productions and even break supply chains. Thus, in this new era where businesses are

taking the glocalization approach-balancing localized and globalized business options to stay competitive multi-tier mapping of suppliers and reviewing supplier sourcing are fundamental to resilient supply chains. “Multiple sourcing strategies can benefit businesses who prefer to spread demand across several suppliers that, collectively, have more capacity and are more responsive to the buyer,” Mr Mishra says, while citing the following benefits of multiple sourcing: •

• • • •

Less reliance on any one supplier providing a safety net if a supplier runs into difficulties More flexibility to cope with unexpected events that could jeopardize capacity Fewer bottlenecks as more suppliers can meet peak demand Competition often provides an incentive for suppliers to improve cost and service Competition between suppliers also provides the buyer with more bargaining power

“Diverse suppliers help in ensuring continuity of supply, if mapped and introduced into the supply chain strategically. They also drive down the costs and bring in innovation while keeping the products or services relevant to customer expectations and demands,” Mr Shenoy says. www.logisticsinsider.in

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FEATURE SUPPLIER DIVERSITY Festive season and seasonality impact demand and supply. It is important to have diverse supplier base with reliability and openness for multiple sourcing to support business requirement. Small and big suppliers divide the volume/job in multiple parts, give supply chain transparency, and integrate in multiple functions. This activity support optimized cost, increases innovation, brings in agility and reduces risk.” ANIL KUMAR MISHRA

National Logistics Head India (South Asia)

Pladis Global

He highlights that sometimes the organization’s longest standing suppliers are their riskiest ones and the same can be mitigated by way of bringing in diversity in the vendor pool. While one might be required to look into suppliers that the organization hasn’t dealt with before. A diverse supplier base helps your supply chain to be more agile and prevents any breakdown under pressure, given their vast and unique footprint.

MAKE YOUR RUSH SEASON SMOOTH AS A GLIDER Supplier diversity for peak season is a win, win, win! For supplier, shipper and customer. The rush season is the busiest time of the year, with increased customer spending, and increase workload arising of sudden unforeseen hurdles. A diverse supplier base can offer clear bottom line advantages and help retain businesses during the rush seasons. “Festive season and seasonality impact demand and supply. It is important to have diverse supplier base with reliability and openness for multiple sourcing to support business requirement. Small and big suppliers divide the volume/job in multiple parts, give supply chain transparency, and integrate in multiple functions. This activity support optimized cost, increases innovation, brings in 54

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agility and reduces risk,” Mr Mishra said.

A LACK OF SUPPLIER DIVERSITY CAN HINDER OPPORTUNITIES. Highlighting that a diverse pool of suppliers can be a upside during the peak or lull season Mr Shenoy says, “One major reason for supplier diversity is certainly to help smoothen the peaks and troughs of the demand supply cycle. However, having reliable suppliers is the key and that requires time and handholding while nurturing these suppliers right from the introduction stage, to maturing them as partners in the chain. These suppliers then stand by your side during all adversities and help you meet your deadlines and customer expectations maintaining your costs giving you steady, if not high margins, through all the demand cycles, peak or lull.” Access to a diverse supply chain is the cornerstone of building relationships within all communities that conduct businesses. Suppliers’ relationships with shippers and customers will drastically increase when everyone receives that extra access and service. Tapping into a broader base will attract many shippers and consumers by touching each part of the market to prevent stock-outs and avoid upset customers. It also expands the options that everyone has during peak season and

ANNUAL EVENT

Present

INDIA SUPPLY CHAIN CONFERENCE 2022

India Supply Chain Conference 2022 Future-Proofing Supply Chains For A New India

MARK YOUR CALENDAR

8th DECEMBER, DELHI Stay tuned for more updates!

Get ready to hear top supply chain leaders of India at ISCON 2022

Expert speakers joining the forum

Umesh Madhyan

Ashish Pande

President, CVSCL VP - Logistics Hindustan Coca-Cola Beverages

Head of Supply Chain South Asia Nestle

Vineet Jain Head - Supply Chain Havells India

MORE ENQUIRY:

Parminder Singh [email protected] +91 98702 12244

Anand Maithani

Deepak Vazirani

Group Head - Global Supply Chain & Manufacturing Planning Apollo Tyres

Supply Chain Director Skechers South Asia

Gaurav Dubey [email protected] +91 70425 34911

More speakers will join the forum shortly...

FEATURE SUPPLIER DIVERSITY results in a more collaborative atmosphere, which leads to better service and products. E-For e-commerce logistics peak season is the time to expand and meet consumer demand Building a relationship with a diverse business community can help thrive and double e-commerce profits. commerce companies like Amazon, Flipkart etc. put a good case in support of having a diverse supplier base.

BUT IS IT ALL WITHOUT CHALLENGES? No. As the saying goes - nothing comes easy. Adapting a supplier diversity policy or approach is not without its baggage of difficulties. Just introducing or publicizing the need to do so will help draw some new talent but major challenges will persist. “While many organizations profess the concept of diverse supplier base, there is a lack of monitoring the same by fixing of goals and accountability for ensuring meeting of targets for the same,” Mr Shenoy says. The introduction of supplier diversity can bring complexity in terms of information sharing, lower order volumes, reduce bargaining power, and reduced ability to save through economies of scale. “In the process of having a diverse supplier network, when the focus shifts to driving down the costs, there is a likelihood of losing sight of maintaining the quality of the inputs, thereby affecting the quality of the final product or services. Also while trying to engage diverse suppliers, the organizations may tend to lose sight of cost and end up paying more just to ensure diversity,” Mr Shenoy says highlighting the challenges of adapting to the diverse supplier approach.

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Apart from these, organizations can have unconscious bias against a class of suppliers and lose out on taking advantage of those vendors in their supply chain and have loyalty issues with newer entrants. Moreover, while taking in diverse suppliers it is also very necessary to identify who would be the potential long-term partner and the shortterm one. It is very important to have in place a plan to retain long-term partners and evaluate and convert short-term partners into potential long-term ones. “Working with more than one supplier adds complexity to the supply chain, but it also protects against certain risks. Finding a balance between these two concerns is a key factor,” Mr Mishra said adding that, diverse sourcing is both a social and business imperative that can help drive supply chain resiliency. He said we should harness supply chain to feed into broader goals, make diverse suppliers part of end-to-end procurement processes. Supporting his argument Mr Shenoy comments, “While supplier diversity is certainly a soughtafter model, it will continue to evolve slowly and may exist alongside the traditional models for some more time. However, it is certainly going to be beneficial in future for all the stakeholders if supplier diversity is encouraged and embraced to its maximum in all the industries.” With traditional models of vendor development and supply chain as the backbone of now existing supply chains in various industries, supplier diversity is the future to derive a resilient, efficient business.

Understanding the many facets of D2C supply chain INTERVIEW

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Rajendra Nimmagadda, Lead - Supply Chain Projects - India, Herbalife Nutrition

Q] What are the latest trends in D2C supply chains? 

In the recent years, Direct to Consumer (D2C) as a business model has gained quite a lot of traction because of the numerous benefits it offers. By putting themselves out in the open, without the presence of an intermediary, manufacturers & sellers are one step closer to their customers, and can build closer relationships along with increased brand loyalty. However, the said model also brings an added responsibility of fulfilling consumer demand and managing the associated logistics in a seamless manner, especially in a postpandemic world. Take this journey with us as Rajendra Nimmagadda, Lead - Supply Chain

While there are a lot of trends that have potential to affect the way supply chains of future operate, I would like to mention a few which I believe are important. 1. Focus on Sustainability: Supply Chains including manufacturing operations have tremendous opportunity and potential to opt for sustainable approaches. While a lot of companies are making the initial efforts towards sustainability by say revamping packaging to more sustainable alternatives and switching to electric vehicles for logistics, there definitely is more that can be done. The major areas supply chains can focus for improving sustainability are – Greenhouse Gas emissions management and solutions – Shifting to circular supply chains 2. Risk management: The world is becoming increasingly uncertain and unpredictable as everyone would like to say, ‘we live in a VUCA world’. This calls for altogether a new approach to different things we do in managing supply chains. Some key areas that can be focused are diversification of suppliers, planning and placing inventory, managing warehouses & transportation in such a way that we can respond to unplanned disruptions, and in mitigating risks. We need to look at inventory planning and supply chain design from risk mitigation perspective and in being agile and meeting customer needs. 3. Cyber security: D2C organizations need to be more vigilant and proactive not only with systems within their organizations but also with the supply chain partners that they deal with, with it comes to cyber security.

Projects - India, Herbalife Nutrition explains the niches of managing the supply chain of a D2C brand.

Rachayita Sidharth

Q] How is technology transforming D2C supply chains? Technology definitely plays a major role in effectiveness and efficiency of supply chains in meeting the organizational objectives. For instance, order fulfilment plays a major role in D2C supply chains. Many companies, which have started a D2C channel during COVID-19 and were accepting e-commerce orders to be shipped directly to customers, realized that they do not have robust order fulfillment processes and technology applications to achieve this. www.logisticsinsider.in

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INTERVIEW Technology is needed in every aspect of supply chain right from demand forecasting and inventory planning and deployment, to warehouse management and transportation management. The latest offerings by technology service providers in each of these areas, which leverage AI and machine learning in decision making, and IOT service providers in automation are definitely transforming the way supply chains operate.

Q] Amid such high competition, how can one stand out from the crowd? While at a strategy level, companies constantly work on having sustainable competitive advantage and work on business models and value propositions, the job of supply chain leaders and teams is to align with these strategic objectives and achieve them through best possible execution. If a D2C company is focusing on being the best low cost or value for money alternative to the other expensive options that exist in the market for customers, the job of supply chain leader is to achieve this by right procurement strategies and being able to execute the entire supply chain operations within the permissible cost criteria in a tight margin scenario. Similarly, if the company is focusing on being a sustainable alternative or say giving personalized options to customers these would translate into execution goals such as having sustainability focused more in operations or say building personalization into designing/ manufacturing/ packaging and other processes. Customer centricity and giving the best overall experience to customers and having a clear customer value proposition can 60

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definitely allow one to stand out from the crowd. Supply chain leaders can achieve competitive advantage for the company through innovation in supply chain operating models as well as aid in execution and achieving strategic objectives of the company.

Q] What is your mantra for successfully running a D2C supply chain? My first mantra is managing people and relationships. Building the right culture. Supply chains are as good as the talent that operates those supply chains. My second mantra is building adaptability and agility i.e., having the right supply chain design, policies, processes, and tools depending on the scale of the organization at that point in time and the key external factors (that aid us as well as constrain us) and key customer expectations under which we operate. All these are dynamic, and we should always match our capabilities to the changing requirements and adaptability should be in the DNA of the teams. My third mantra is leveraging technology and data. Teams should use technology to drive efficiency as well as in being agile and resilient. Teams need to have process and data-oriented thinking. 

Q] What is the importance of real-time visibility in D2C supply chains? What kind of an edge does it give you over your competitors? The pandemic has, in some cases, exposed the gaps that existed in organizations, and in some cases, created an important and urgent need for having supply chain visibility, due to unprecedented disruptions that have happened (and are happening).

Rajendra Nimmagadda, Lead - Supply Chain Projects - India, Herbalife Nutrition

Supply chain visibility can range from having visibility to information from upstream raw material suppliers to factories to warehouses to distribution centers to finally the end customers. Also add to this the suppliers, contract manufacturers, warehouse service providers, shipping lines and logistics partners that are involved in manufacturing, storing, and moving the goods across this chain. If we look at D2C supply chains, real time visibility is very important in so many areas within supply chains. For example, the post purchase experience of D2C orders. For companies operating full stack supply chain, this might mean having such features within their own applications and their processes. However, for D2C companies which use logistics service providers, it might mean that their websites or apps need to fetch and display real time information from all the logistics service provider’s applications, provide tentative ETAs (pre and post purchase) and provide other important status updates and trigger emails/ SMSs to end customers. Real time Visibility can definitely give edge to companies in meeting their key KPIs (such as fill rate and OTIF) despite operating under constraints and disruptions and allowing these companies to be consistent and thereby resulting in improved customer satisfaction. 

Q] Give us an insight into reverse logistics. What are some of the peculiar trends witnessed for reverse logistics in the D2C ecosystem? For most companies in food industry, product returns from end customers are majorly due to damage issues or quality issues. Also, there can be return to origin (RTO) by logistics service providers if they are unable to deliver

a particular order. For returns from customers, there must be a defined process to receive the product and initiate the necessary process. For returns accepted due to quality issues, information needs to flow to QA departments to initiate necessary investigation and preventive measures. Or initiating product recall from market. Also there needs to be effective process in place to dispose these items. For damage issues reported, replacements are shipped, or refunds are processed, however returned product might not be collected physically. But these returns should also trigger investigation as to why the damages have occurred in the first place. But in all cases, replacements or refunds need to be processed on priority to ensure highest level of support to customer. Similarly, for RTOs there need to be approval mechanisms to prevent RTOs as well as processes in place to track RTOs and ensure the incoming returns are checked for quality to get back into inventory or disposal and also processes in place to initiate quick replacement shipments or refunds to customers on priority. The idea is to have clear return policies, communicate these policies well to customers, understand the reason for returns and provide information such as pictures, specifications, dimensions etc. upfront at the time of purchase to customers to better manage their expectations and avoid returns in the first place, all in addition to the root cause analysis for post purchase returns and having processes in place as discussed above. www.logisticsinsider.in

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INTERVIEW

The traditional freight forwarding industry of India is at the cusp of transformation. India's Digital Freight Forwarding Market is Estimated at USD 311.48 Mn in 2022 and is expected to reach USD 925.36 Mn by 2027, growing at a CAGR of 24.33%. The evolving industry, largely driven by technology and infrastructural developments and various government policy reforms, is also

Fostering a customer centric ecosystem to emerge stronger and serve better

taking the next step piggybacking the young startups of the nation.

One such startup is WeFreight - a fast-growing freight forwarder incepted in 2019 and has amassed a global network since then. The company aims to become an agile leader in emerging markets serving customers with its digital ecosystem, and customer-centric approach. In this exclusive interview, Sateshwar Tuteja, Regional Managing DirectorIndia & APAC, WeFreight talks to us about the challenges of the segment, the role of technology in bringing efficiency, the importance of skilled individuals in the segment along with highlighting the company’s USP, its

Karvi Rana

expansion plans and more. 62

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2022

Sateshwar Tuteja, Regional Managing Director- India & APAC, WeFreight

Q] Indian freight forwarding segment is going through some drastic changes. What are some of the prominent challenges for the segment at the moment? How is WeFreight dealing with these challenges? 

are you deploying to transform your operations and most importantly how are you bringing it all together to work as a harmonious ecosystem? This question helps to explain how COVID has made everyone accept the adoption and

I would say that the Indian freight forwarding

usage of technology in many different ways.

industry, along with 3PL and 4PL providers,

Freight Forwarding has been a traditional

is on the cusp of major transformation. The

industry, most of the transactions until

current market has been the most volatile

recently required some kind of exchange of

since the beginning of the containerized

paperwork. But the pandemic taught us that

business. Some very evident challenges

we all have been just making excuses to not

include:

accept and embrace technology, which was the most obvious thing to do in all these

1. Market Disruption through new entrants

years. Technology enables us to be closer

2. Mergers & Acquisitions of large 3PLs.

to customers, more responsive, and act

3. Digitalization

differently when needed.

4. Unstable freight market. We at WeFreight are building a digital At WeFreight we are ensuring that we

ecosystem, which can transform our customer

are focusing and investing in customer

touch points but it all can work only if all our

experience and on what matters to them,

internal processes are digitalized and what

along with our employees (our real assets). We

our major current focus has been and will

live in an experiential economy and customer

continue to be. We feel that is something that

experience is at the centre of all that we do.

is missing in our industry, and WeFreight is

Behind the scenes, we are partners with

looking to pioneer this model. As I said before,

prime/leading carriers and our relationships

our industry is very old-fashioned and we

with them ensure that we get predictable

look at competing with other LSPs, whereas

transit times and costs. We are also opening

when it comes to digitalization we must look

offices in new locations so that we can be

beyond the horizon and understand that we

closer to customers and to the market, which

are being compared with the likes of Amazon

makes us available at key locations.

and Google. At the end of the day, we need mindset change and the rest will follow! 

Our aim is to provide best in class and state solution in logistics will only add to the overall

Q] What distinguishes WeFreight from other freight forwarders out there?

growth of the country and that’s what we aim

I think our offerings across the competitors

to do with Bobba Logistics.

are very homogenous. WeFreight is different

of the art facility, across India. Every kind of

from other freight forwarders because we

Q] The pandemic brought about a wave of change that flipped the outlook of everyone regarding technology and its application. What all technologies

place a very high value on our people, and we believe that we can retain and grow our customers if we can retain and grow our employees. We invest in our people www.logisticsinsider.in

63

INTERVIEW

Sateshwar Tuteja, Regional Managing Director- India & APAC, WeFreight

and return, they are walking “billboards” of

and online. We have recently recruited in the

WeFreight. Some examples are we encourage

Learning and Development area so that we can

our team members to work from home

continue to invest in our employees.

twice per week now, offer flexi hours, have a recreational area in the office, and encourage open and transparent communication, to name

Q] Kindly share with us some of the recent milestones achieved by the company.

a few. We are ensuring that we have a very

We are a very young company, albeit with many

engaging environment, which includes regular

experienced employees, so we are achieving

management dialogue with every single team

and then exceeding our milestones on daily

member who joins us, quarterly management

basis. I am very pleased to announce the

town halls, regular HR connects, and the global

opening of our first contract logistics facility in

town hall where colleagues can interact and

India and we already have a very prestigious

ask questions of our global management

global corporation entrusting us by partnering

team. I ensure that I interact with respective

with us in that facility. In addition, we have

teams wherever I am visiting and this helps me

very

understand how can we do better!

complicated

successfully

executed

defence

an

extremely

contract.

Recently,

WeFreight India offices were awarded ISO

Q] Every aspect of sustainability is of paramount importance for any business. But we in particular would like to know how WeFreight is incorporating the economic and environmental sustainability model. WeFreight believes that we owe to our society and the environment. At a broader level, we

9001, 14001 & 45001 certifications. Our efforts were recognized recently when we were awarded “Emerging Cargo Company of The Year” by National Awards for Leadership & Excellence.

Q] What are WeFreight’s plans for growth and expansion?

have an “Environment and Sustainability board”

We offer all traditional forwarding and logistics

that ensures that our decisions across the globe

services, which include Air & Ocean freight,

are in harmony with the environment. As an

brokerage, and Contract & Project logistics. We

asset-light provider, we work with our partners

have expanded our portfolio by offering Marine

on the topic of sustainability to see how we can

Insurance and an integrated supply chain control

reduce the impact on the environment.

tower that offers an extensive menu of services encompassing and exceeding traditional 4PL /

Q] How important is it to have a team of skilled individuals for the overall growth of a freight forwarding business?

64

LLP. We are fast expanding our network in the hinterlands and we will have a specific focus on industrial belts in Madhya Pradesh, Utter

Our belief system is such that we wish to hire

Pradesh, and Goa, along with strengthening

for attitude and train for skills. That being said,

our foothold in markets where we are already

without skills it would be problematic to grow

present. We are growing by design and in a very

and sustain in the competitive world that we

sustainable manner with a long-term vision in

face. As already mentioned, our employees

mind. All of this growth and expansion will be

are our assets and key differentiators, so we

supported by our people and by using the latest

need to make sure that our employees receive

technology to improve our processes and to

ongoing skill upgrades through an array of

ensure that we continue to serve our customers

internal and external training, both in-person

to the best of our ability.

Logistics Insider

October

2022

FOCUS

Coldman Logistics launches new temperature-controlled warehouse in Coimbatore

A

n important enabler in minimizing

Attentive to the Industry’s requirements, Coldman

the losses of post-harvest produce,

Logistics is actively contributing toward building

the Indian cold chain network plays

the required cold chain infrastructure in the

an important role in maintaining the

nation. Coldman Logistics has recently unveiled

quality and shelf life of perishables and other

the Phase-II of the ‘Design to Suit’ Temperature

temperature-sensitive products.

Controlled Warehouse in Coimbatore, Tamil Nadu.

Producing

more

than

400

million

MT

of

perishables every year (horticultural produce,

With a capacity of 6,500 temperature-controlled

dairy, meat, poultry & fish), the nation has to

pallets space, both the phases of the new facility

deal with a significantly high wastage level in

are operational and cater to clients in diversified

perishables due to the lack of an efficient cold

industry segments like FMCG, Confectionaries,

chain infra. The wastage level in India is 4.6 to

QSRs, Ready to Eat, Ready to Cook, and Dairy.

15.9% in fruits, 5.2% in inland fish, 10.5% in marine fish, 2.7% in meat, and 6.7% in poultry, estimating

Swearing by its motto to deliver Grade A

the annual value of losses of Agri produce at INR

infrastructure to the clients, Coldman Logistics

92,651 crores. While the annual value of losses

is rapidly ramping up its cold chain infrastructure

in fruits and vegetables, meat, fish, and milk is

facilities and now has over 90,000+ temperature-

estimated at INR 50,473 crores.

controlled pallets spread over 20 warehouses in 12 locations throughout India.

To combat this, an adequate and efficient cold chain infrastructure from farm gate to consumers

Believing in the philosophy of “One size does

is required which can arrest the high losses in the

not fit all”, Coldman Logistics’ Solution design

supply chain of perishables. At present India has

team focuses on customizing the warehouse

over 7600 cold storage facilities with a combined

space to improve operational efficiency, and

capacity of around 37-39 million tons which is far

safety, reducing operating costs and enhancing

below the requirement.

customer experience. www.logisticsinsider.in

65

OPINION

NLP: a booster for the industry but lacks footprint for national freight capacity building “Today, India prepares the ground before bringing any policy. Only then the policy can be implemented successfully. The National Logistics Policy has not come out of the blue and there are eight years of hard work behind it,” said Prime Minister Modi while unveiling the policy on the 17th of September 2022. No doubt, eight years of dip-stick study and consultations with all stakeholders has helped the Government to come out with a policy that would take the Indian logistics sector to greater heights. The National Logistics Policy that was approved by the Cabinet within a couple of days of Prime Minister integrating the processes associated with various ministerial agencies and authorities is expected to pave the way for smooth and seamless processes to ensure the speed - the most important factor - to bring down the total logistics cost. Similarly, the policy aims at creating national infrastructure in terms of transit hubs, storage, freight corridors etc., that is expected to give a sustainable growth not only for the logistics sector but mainly for the economy of the nation. However, the policy that is focusing on effective process management and national infrastructure appears to have failed to 66

Logistics Insider

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2022

recognize the most important requirement of building national freight capacity that is critical for accelerated growth of Indian international trade. The country that has the aviation footprint for a century has not created national (desi) air cargo capacity for international air cargo though we see one or two players surfacing and vanishing in recent days. Similarly, the country with a vast coastline that

OPINION

B. GOVINDARAJAN Chief Operating Officer TIRWIN MANAGEMENT SERVICES

has put in great efforts in developing the sea ports’ capabilities has not seen even an Indian flag carrying shipping line that can match a foreign one in terms of recognizable capacity - either tonnage/ TEUs or routes.

The market is facing high freight and other related costs not because of increasing operational costs but mainly due to exploiting the inability of the Indian market in creating its own capacity.

When a country depends on foreign air operators or shipping lines for capacity to ship its cargo, it is evident that ìts foreign trade competitiveness is determined by them by holding a firm control on freight and other related costs.

The foreign operators regulate capacity, creating artificial demand to raise freight and other related costs, thus, putting Indian trade on backfoot. In the Indian air cargo market, foreign air operators decide what cargo to be accepted, and at what cost, thus providing a geo-political contour to India’s international trade. No doubt, the National Logistics Policy aims to bring down the logistics cost from 14% to 8%. But it can happen only when the freight costs and related costs are under control. It can be under control only when the carriage capacity lies in the hands of Indian operators. It can happen only when national (desi) capacity is built to counter the foreign operators. For a sustainable growth of Indian logistics business and to keep the cost of logistics down, the country needs a policy that encourages building of national (desi) capacity and till that time, the national logistics policy can only be a wish-list and be seen in print in the policy paper. www.logisticsinsider.in

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OPINION

Future of CEP businesses in India: Perspective with Global Trends

G

rowth of efficient logistics plays significant role in promoting economic growth of a nation. Logistics help in significant macro contributions to economy by way of employment, investment and GDP. Logistics Industry in a broader sense includes all activities of the supply chain like transportation, inventory management, information flow, order processing, warehousing, packaging etc. Out of these transportation commands major share in terms of activities and revenue both. In a country like India, most part of transportation is still with unorganized hands excluding few exceptions like Express logistics, Railways and Inland waterways. In line with the global logistics sector landscape, Express has been most hyped and blue-eyed boy of financial investors of the sector. Some of the obvious reason for this is linked to growth, tech adoption and high ROCE. Express logistics market, which is also referred as CEP (courier, Express and Parcel) market is estimated to be around $5Bn in India for last financial year. This comprise of largely B2B (Parcel Cargo) and B2C (e-commerce) shipments, C2C and courier are relatively small component of this market. In past decade express industry has registered healthy growth rate in range of twenties and the driver for this was e-commerce evolution 68

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2022

and GST implementation. But going forward outlook also seems to be very robust in spite of some taper down in growth rate of eCommerce industry. The positive driver seems to be social commerce, e-invoicing and make in India. Growth journey of express has been very interesting so far and is expected to be more challenging for the players in coming days. While plotting future outlook for the industry, we need to take consideration of CEP growth trajectory in other countries specially those who are ahead of India in evolution of CEP market. Two of the largest market for CEP are US and China. US and other developed economies are quite mature and are having two or three players, which control overall market. Apart from number of player and market evolution, the consumption and industrial pattern of these country is also different from developing countries. While on the other hand Chinese logistics market can be a good precedence for Indian CEP industry. On a broader perspective, we are more than a decade behind China in term of volumes handled by CEP industry, although we may be at par with Chinese market in terms of technology adoption for the industry. Chinese market has also evolved over period of time. As per Statista data, A decade back

OPINION

VIKASH KHATRI Founder AVIRAL CONSULTING

in 2012 China was having 5.8 bn parcel, which has grown to 108 bn parcels by 2022, While Indian logistics sector handled 408 million parcels in 2012 and which has grown to 2.8 bn by 2020. Majority of growth in both markets has been driven by e-commerce shipments. As population and growth rate of both economies are quite comparable, India has

(Source: www.statista.com)

tremendous headroom to grow in terms of volume in spite of significant gap in per capita income of both countries. In the growth journey of last 15 years of CEP volume, Chinese market has gone through phase of consolidation. As of now 5 major players: ZTO Express, YTO Express, Yunda Express, STO Express and SF Express jointly command almost 72% of Chinese express market. If we also exclude share of China post in CEP, other fragmented players have only 18% market share. In Chinese market further consolidation is expected. All the major players have capability and service offering for serving omni channel. Chinese CEP market also has two segments identified as e-commerce market and the commercial & personal market almost same as we define B2C and B2B segment. As per certain Chinese reports of 2016, approx. 71% parcels were from e-commerce market and remaining parcels were from commercial & personal market. One major player has emerged in each of these segments: ZTO in e-commerce market and SF commercial & personal market. On the other hand, India being a much smaller CEP market with significantly www.logisticsinsider.in

69

OPINION

high number of service providers. In B2B segment there are 5 major players and few other mid-sized relatively small players. B2C market has 4 major player, 2 captive players and few other small players. Out of this complete list of more than 10 large players only 2 offer full pledge services in omni channel (B2B + B2C) capabilities. Some other global players are also looking to expand their presence in Indian CEP market with sound investment plans. Such a scenario will clearly pave the way for possible consolidation in Indian CEP market. As per our analysis India will have 4-5 major CEP players in next one decade and these players will be having omni channel capability. Some of the early signs of consolidation have been witnessed in last two years by acquisition of Gati and Spoton. Few days back there was an unconfirmed news about possible acquisition of a large B2C player. Chinese largest e-commerce retailer Alibaba has a subsidiary - Cainiao Smart Logistics Network. Cainiao Network is a digital platform for logistics which adopts a collaborative approach by integration of existing logistics resources to connect partners with a data platform. Cainiao Network has become collaborator to all major CSP service provider instead of becoming their competitor. Cainiao provides highly efficient onestop cross-border storage and delivery services with more than 50 global partners. Cainiao has become one of the major players in cross border segment. In Indian market both major e-commerce players have their own captive logistics service arm, which mostly serves the captive volume of e-com market place. Absence of collaboration and competition by captive players will have its own challenge in long run, when these captive players will have intense competition in open market with other CEP players and captive arm of other market place. Another interesting aspect for future outlook will be asset ownership model and pricing 70

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2022

/ profitability. Currently pricing in Chinese e-commerce market is hovering around $1.4 - $ 1.5 parcel vs less than $1 per parcel in India in spite of low volumes. Same service gets offered in developed market like US for $9 per parcel. Once we compare cost model and other drivers of Indian Vs Chinese player, we don’t find much scope of price reduction in overall CEP (B2B and B2C) market. Any price war and rate cut will lead to poorer balance sheet. In spite of strong growth and increasing competition pricing pressure seems visible on both the markets. Many challenges are also similar like increasing labor cost and availability of skilled human resources to support the growth. Which can be addressed only by reducing manual interventions through upgrade of technology and automation. In coming years more and more investment will go in automation of transshipment, sorting, fulfilment centers and control tower. Such massive investment capability will be with few large organized players. Such massive owned infrastructure will create an entry barrier for new players in longer run (might be a decade). Few new entrants may plan to enter with partner model in CEP business, instead of complete ownership model, but that also does not work as transshipment center, sorting center and line haul require ownership. At most first and last mile can be outsourced to partners similar to Tongda Operators in Chinese CEP market. To conclude we can say that when CEP volumes are growing rapidly, more numbers of players will witness M&A for acquiring market share. But once the growth rate will taper down in next 5 years or more, CEP market will lead to next wave of intense price competition and optimization of operating resource wastages as happened in China. At that time M&A / consolidation will be more in of upstream and downstream side to improve efficiency.

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EXIM VIDYA | PART-1

~ PRAMOD SANT Former Vice President -Head of Import Export and Customs, Siemens Ltd

Customs Brokers Challenges & Future

W

hen I was born in 1962, nobody thought that I would be dealing with the Indian Customs Act which came in force the same year. It will be close to 39 years since I am working in the area of Import Exports and Customs which is now coined as 'Trade Compliance' to give the topic a modern look.

3. Competition 4. Customer’s Expectations

First time in 1982 when I was deputed to Air Cargo Complex, Mumbai I was informed that Customs House Agent -CHA (Now termed as Customs Brokers) will clear your shipments and your job is only to follow up with him. Over the period, I got deeply involved in understanding Customs clearance and working of Customs Brokers. As time passed there was a 'Sea of Change' in Customs, and it is important to have a new look at 'Customs Broker - Challenges and Future'.

With WTO focusing on ‘Ease of Doing Business’ and WCO working hard on ‘Trade Facilitation Agreement’, a lot of simplification is done by various countries and India has implemented FTA aggressively in the last 5 years. Some of the changes resulted in transparent customs procedures, digital and reliable and trade friendly.

There are many topics which have an impact on Customs Brokers, however, we will focus only on four main topics which have the highest impact. 1. Changes in Laws, Regulations and Simplification of Customs Process. 2. Transformation of Industry and Digitalisation 72

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Each area is subject by itself, so a few salient points are as below: 1. Changes In Laws, Regulations, Ease Of Doing Business, Trade Facilitation For Simplification Of Customs Process

• EDI Connectivity, National Portal for Indian Customs ICEGATE. • Digitisation -E-Payment of Customs Duty, E-Sanchit, Single Window, Digital Signature, OOC, etc. • Schemes like Authorized Economic Operator (AEO), Clearance under SelfAssessment, ‘Turant’, Faceless assessment etc. • Elimination of old outdated notifications. • Implementation of online processes such

as Project Registration. • Simplification of SVB process Many countries including India have made the use of customs brokers as optional. This means importers and exporters can file declarations directly with customs. Considering a combination of simplification, digitisation and use schemes like AEO, RMS and online out of charge, work of Customs Brokers is reduced. All simplification and digitisation have an effect on the Customs Brokers community across the globe. Customs clearance is handled in-house in most parts of Europe, however USA, South America, Asia continues to use Customs Brokers. In India, more than 99% of companies are using customs brokers. Considering the need for expert knowledge, 24x7 working, harsh working conditions, and lower cost of operations, the industry will continue to outsource clearance work to Customs Brokers. 2. Transformation of Industry and Digitalisation How business is done, is fast changing in each industry. The way we order food, book taxis, listen to music, shopping, travel, and banking has transformed. Mobile phones have provided all solutions. COVID -19 has further accelerated the process and many activities which were never dreamed to be done online. Customs compliance is influenced by the wave of Digitisation. We could never imagine the customs clearance team in companies Working From Home (WFH). Customs Brokers team filing documents from home and field operations to be limited to take delivery of cargo. Barring a few documents customs allowed scanned documents to be submitted on ICEGATE /e Sanchit after digital signature. Increased number of start-ups in the area of Supply Chain, Logistics and Trade compliance

are defining new ways to handle supply chains seamlessly. EDI connectivity right from Suppliers, Forwarder, Customs Brokers, is looked at by most Industries. In addition to digitisation mentioned above, customs has developed robust AI tools for analysis of classification, valuation etc. This has helped Customs officers to compare imports across all ports and for classification, valuation and use of notification etc. Customs has moved very swiftly towards digitalisation with a focused approach, however, the industry and service providers are yet to catch up. Customs Brokers’ core competency was to interact with customs for submissions, clarifications etc. which has now changed, and back-office work has become more important with new skill sets. Customs brokers need to handle not only customs and IT systems, but different IT systems of forwarders, custodians, shipping companies, port and industry. Each system has their own set of challenges, and in case of any delay in clearance, Customs Broker is finally held responsible. The pandemic has accelerated the need for minimizing the physical presence and maximizing electronic transactions which require the Customs Brokers to redefine their roles and responsibilities.In future Blockchain solutions will change border management and will impact on working of customs brokers. Every business is moving on to mobile, and customs brokers need to develop robust mobile solutions for importers and exporters. 3. Competition In today’s world no-one is free from competition, everyone is facing competition. It is important to know the nature of competition. Unless you know competition, you cannot make plans to stay ahead. www.logisticsinsider.in

73

EXIM VIDYA | PART-1 o Competition from new players from outside the Industry - In today’s world you cannot imagine who will be your competitor tomorrow? Cloud/Ghost kitchens used by food delivery companies suddenly became competitors for restaurants. Old well-established companies for decades are being challenged by companies completely from different fields.

Community - Each Importer-Exporter is looking for cost savings, in past companies used to work with customs brokers for a long time without any changes in rates. Now a new trend is to release RFQ every 2 year. This results in stiff competition between Customs Brokers. In case the customer is a Global/MNC company, competition becomes multi fold.

New Tech companies/start-ups are building logic and software for filing custom declarations and making the process of clearance more automated and digital. Filling customs declaration can be done from any part of the world with a higher skill set, reduced risk. These companies will be new challengers for Customs Brokers.

o Competitors from new area - shipping companies, ports and Terminals - After windfall profits in last 2 years, now shipping companies are not only investing in Airlines but also entering with new focus to provide 'end to end service'. Small and medium exporters are looking for these services to reduce hassles and multiple handling. Shipping companies are also giving warehousing solutions.

o Competition

from Logistics service providers like Freight Forwarders, 3PL Companies and Transporters - It is logical extension and coverage of wider area of operations for logistics service providers by offering Customs Clearance Services to their customers using the tag line of 'end to end solution'. Most global companies and MNCs are looking for umbrella service providers, mostly global forwarders or 3PL companies to give end to end services. Logistics service providers may either have their own customs clearance licenses and team or subcontract customs clearance to customs brokers at rock-bottom rates. In the last few years, transporters who are handling import or export cargo are increasingly getting involved in customs clearance, as an additional source of income. Many customs brokers who do not have their own vehicles have already seen impact on their business.

o Competition between Customs Broker 74

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2022

Last few years ports and terminals were providing only Transportation Services. Now they are pushing their existing customers to take end to end service from them. o In house BPO /Shared services by Importers /Exporters - Many global companies are already having their shared services or BPO in countries or in regions, handling topics like HR, bill passing, accounting etc. These companies are working to establish Tax Compliance share Services or BPO handling custom delectation filing. This helps them not only in better economics but more compliance and visibility. o Self-Clearance by Importers and Exporters - Due to simplification by Customs, companies are contemplating to handle customs clearance internally. Even though most Indian companies prefer customs brokers, this trend may pick up in future. In Europe where customs declarations/

returns are filed on a fixed period, it is possible to submit such returns directly from System and custom brokers are used on a small scale. 4. Customer’s Expectations 'Customer is King' and customer is changing fast, resulting in a new set of challenges to the Custom Brokers community. o In past customs brokers were contracted for a long period and rarely changed, all contracts were always extended without any change or minor changes. Today Management of each company is focusing on cost savings. SCM or Tax team have targets to reduce customs clearance costs. This results in reduced margins for customs brokers and sometimes losing customers which were serviced for decades. o Many Global companies and MNC comes out with new strategies such as use of global forwarder for Customs Clearance, one customs broker per country etc. In such cases new strategy implementation results in a new set of challenges. Change in global contract with forwarding agent results in change in customs broker. o In order to cater to Import Export at various ports across India, everybody is looking for customs brokers having pan-India presence. Customs brokers working at few locations lose business to competitors with pan-India presence. o Reduction in number of suppliers is a trend and customs brokers reduction is helping corporates in many ways. Firstly, the volume of import and export is handled by a few customs brokers so that they can work more efficiently and offer reduced agency charges due to economies of scale. Importers and exporters have advantage of better control on service, easy to implement new

processes, IT tools and better data quality. o Companies are continuously restructuring themselves - this results in customs function moving internally from one dept. to another. Taking an example, customs clearance moved from SCM to Finance, Tax or Logistics. Another trend is centralisation. Changes from decentralized working where customs clearance was handled by each plant independently after centralisation entire handling is done from office. Mergers and Acquisitions is another event which poses such challenges for customs Brokers. o Many times, importer and exporter force customs brokers to make payments of customs duty or port charges demurrage on their behalf. This amount gets blocked for a long time. o Delay in clearance results in demurrage cost. Many times, this could be reasons beyond control of customs brokers or may be due to delay by the importer in providing documents/clarifications. Some importers deduct such cost from customs brokers payments which is wrong practice. o In line with today's trend attrition of people handling custom clearance in corporates is high. The new person taking over makes changes to give him better control as well as to showcase success. Most professionals are looking for short term gains like cost reduction and customs brokers are always soft targets. All these hard and soft facts result in challenges to the Customs Brokers Community. In the second part of this article, I plan to cover the topic of how to convert the above challenges into opportunities, and look beyond normal customs clearance in areas of Trade Compliance. www.logisticsinsider.in

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GUEST COLUMN

Navigating the difficult waters of Global Supply Chain Crisis COEN VAN DER MAAREL Managing Director KUEHNE+NAGEL INDIA, SRI LANKA, & THE MALDIVES

2020 was the year where we witnessed the beginning of the supply chain-relevant calamities, testing the resilience of organisation supply chains. The COVID-19 pandemic struck hard for everyone in the world, putting a halt to businesses and interfering with the supply of essential goods. At the same time, fueled by the e-commerce boom, container shipping freight rates have skyrocketed, and transport capacity is being held up in congested ports. This has been the biggest concern for developing countries, the small island developing states (SIDS) and least developed countries that are distant from global production hubs. What triggered the supply chain crisis? Due to the pandemic, operations slowed down at all levels on the supply side. On the demand side, rising e-commerce and the relaxation of COVIDrelated restrictions had increased pressure on carriers, ports, and intermodal transport providers due to insufficient labour availability. All of this caused significant bottlenecks at ports by causing transportation delays during the loading and unloading of shipments. Thus, to transport freight through the supply chain, both skilled and unskilled labour is required at various levels. “A study by analysts at Royal Bank of Canada (RBC) found that one-fifth of the global container ship fleet was currently stuck in congestion at various major ports.” This is one of the many such similar situations across the globe. Trade is harmed by congestion, which poses a danger to the global logistics sector's goals for sustainable development. Backlogs at key supply chain nodes contribute to the crisis in the supply chain since containers are stuck at jampacked ports for a longer time. 76

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2022

Will supply chain disruption continue? There is still a backlog of shipments worldwide even if borders may have opened and life has resumed in the cities. We are currently experiencing port congestion in Europe, along with the significant backlog caused by China's lockdown and the forthcoming Thanksgiving holiday, which is indicative of how the situation for sea freight will develop over the course of the year. Lower container shipment rates disrupted production operations and decreased shipping demand in China, which accounts for about 12% of global trade. Also, container rates are expected to change around the world as marine supply chains adjust to the disruption caused by Chinese ports. Finding a way out of supply shortages For an economy to thrive, it is critical to have a resilient supply chain that has visibility. Freight forwarding businesses have in depth experience so global network can withstand the challenges occurring in the supply chain ecosystem. Businesses must be proactive in addressing the financial and operational challenges of the pandemic while making sure that the needs of their people, customers and suppliers are met. As pandemic has long-lasting implications, there is a pressing need for businesses to embrace holistic approaches. That requires a robust framework inclusive of a responsive and resilient risk management operations capability. With the right action, the supply chain leaders can transform massive complexity and supply chain disruption into meaningful change.

GUEST COLUMN

RAKESH GUPTA AGM - Finance OM LOGISTICS

Express Logistics proving to be a quicker, easier and safer mode for movement of goods

I

ndia is now the 5th largest economy

in the world and the logistics and supply chain sector is a key partner behind its growth and success. Logistics cannot be forgotten when counting the vitals that contribute to the GDP ratio. The logistics and supply chain arena is full of value-added services. While major services like Air Cargo, Train Cargo, Surface Transport, Warehousing and Technology are directly supporting. Also, several value-added services such as packaging, packing of goods and express delivery are contributing a lot to the growth of this sector. Logistics is an integral activity for economic development as it involves the management of the flow of goods from origin to omega. Every business whether it is big or small needs logistics services to reach its customers. If manufacturers want their products to reach every corner round the globe, they need a partner friend that is logistics. These are things that are too old to

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2022

understand and react to. Today's era is digital and customer’s demand real time tracking and express delivery. Now the time frame is tighter, the delivery is compact and the door to door integration has increased a lot. Here, engagement within

the international-domestic market increases as sensitive logistics cargo requires attention to detail and that too within tight timings. In India, Road Transport is the main mode of goods transportation for logistics deliveries. The rapid e-commerce and unprecedented development in retail as well as the rush to get the product first and deliver first has given rise to the express market and it is now a business necessity. The newly developed infrastructure, progress in Gati-Shakti and the recently launched National Logistics Policy will also give a boost to the express logistics system. Express Industry is a significant contributor to the Indian economy as it facilitates speed of trade and commerce, employment creation and infrastructure development, and to the government in terms of the tax revenues. One of the most important contributions of the express industry is its impact on the competitiveness and growth of the other industries. The new-age customer, however doesn’t just want an efficient supply chain but also customized solutions powered by

predictive analytics. Thus, the need of a tech-enabled eco-system that boosts both efficiency and profitability is necessary. The Government of India's initiative to develop infrastructure, remove octroi (toll) and introduce the new tax regime called GST helped logistics industry a lot. The government's 'Make in India' program has also given a boost to the manufacturing sector and certainly express logistics. Today, GST has transformed the express logistics business, like a true industry game changer. In India, various express partner companies are present and increasingly serving manufacturing and e-commerce customers. Express truly means timely pickup and delivery and safe handling of products at the destination with round the clock customer support. Door to Door Express cargo services ensure that you always have satisfied customers and have an edge over your competitors. Many companies are trying to convert their traditional businesses to technical means of delivery, and it is good because there is no mean to express logistics without technology. Express logistics solutions are primarily timesensitive. Express Logistics solutions helped us to gain the trust of our customers for a long lasting relationship. From a domestic B2B stand point auto-components, textiles, electronics and IT hardware, pharmaceuticals and industrial goods, are the key consumers of our express services. Express delivery services are becoming increasingly important for the competitiveness of companies – to maximize the efficiency of their production activities, minimize their inventory costs, and provide a superlative customer experience. We, at Om Logistics, are also anticipating fast growth of the Indian logistics and supply chain market as India's B2B express cargo service provider. www.logisticsinsider.in

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NEWS THAT MATTERS

Exporters seek an extension of exemption from GST on exports The strained Indian exporters led by the Federation of Indian Export Organisation (FIEO) have sought

Exporters seek an extension of exemption from GST on export freight

an extension of previously granted exemption from

NICDC Logistics Data Services (NLDS), a

Goods and Services Tax (GST) on export freight from

joint venture between the Government

Finance Minister Nirmala Sitharaman, citing that a

of India and Japan’s NEC Corporation,

non-extension “will add to their liquidity challenges”.

recently celebrated handling 50 million EXIM containers since its inception 6 years

If the request for exemption is denied, the exporters

ago. The team was congratulated by the

will have to pay GST of 18 percent on export ocean

Union Minister for Commerce and Industry,

freight for a further period which will result in

Sh. Piyush Goyal on achieving the feat as

increased logistics costs for Indian goods in the

Sh. Amrit Lal Meena, Special Secretary

global market, says exporters.

(Logistics), DPIIT & Chairman NLDSL, said that NLDSL is striving to make the LDB

FIEO President Dr. A Sakthivel apprised Finance

project a hallmark of logistic development

Minister Sitharaman in a 2 October email of the

in India.

repercussions of ending the exemption. The objective of NLDS is to provide the EXIM

“Overseas freight has gone up by 300-350 percent

container visibility service across India along

from pre-covid levels and though there is a little

with comparative performance metrics for

correction in the freight rate recently, freights are still

all logistics container operators to enable

200-250 percent more than at 2019 levels. Therefore,

the users to take informed decisions. As

payment of GST on such high freight rates will

a flagship product of the company, the

affect the liquidity of the exporters to a large extent

Logistics Data Bank System is an overarching

particularly as the interest rates have also moved

solution that integrates the information

northward with the recent hike by the Reserve Bank

available with various agencies across the

of India (RBI),” Sakthivel wrote in the email seen by

supply chain to provide detailed real-time

ET Infra.

information within a single window.

The payment of GST on export freight and subsequent

The LDB system has also been used to

refund particularly through the ITC mechanism

develop the ULIP, which is an umbrella

comes with a time lag of 2-3 months or so, though

scheme under the PM Gati Shakti National

refund through the IGST mechanism is faster, he said.

Masterplan. The ULIP will reduce logistics

“Such a move will affect our agriculture exports

cost and time, and at the same time assist just-

the most as in many cases of export of fruits and

in-time inventory management and eliminate

vegetables, the air freight, at times, is much higher

tedious

than the freight on board (FOB) value of exports.

approach of infra development will also

Therefore, exporters would be required to pay a very

encourage

high GST amount on such freight adversely impacting

entrepreneurs, developers and institutional

the cash flow,” he stated.

investors to further invest in the sector.

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Logistics Insider

October

2022

documentation. This and

provide

integrated

confidence

to

NEWS THAT MATTERS

NCRTC rapid rail between Delhi and Meerut likely to offer freight services at night The National Capital Regional Transport Corpo-

Ocean shipping order drops by 20%, signal a drop in consumer demand

ration (NCRTC), which is constructing the rapid

Ocean shipping is seeing a significant consumer

rail in Delhi-NCR for passenger service, is also

pullback with logistics managers reporting a 20%

considering utilizing the rail to facilitate freight

drop in ocean freight orders for the months of

movement between Delhi and Meerut.

September and October. Logistics CEOs believe that the decline in demand is due to a combina-

“During the day, the trains will run for passen-

tion of too much inventory coupled with a lack of

gers… but the tracks will be empty at night…

clarity on consumer demand.

So, the NCRTC is planning to use night hours for logistics and cargo services. For this, separate

The logistics industry executives expect the num-

coaches will be procured and run,” said officials.

ber of waiting for ships to drop over the next several weeks after seeing historic vessel calls.

The construction of the 17-km-long priority corridor between Sahibabad and Duhai is in the

The apparel and footwear industry has no defini-

final stages of completion.

tive trend, though inventory issues are becoming more prevalent. As per Seko Logistics orders

The officials informed that there are plans to

for expensive items like smart parcel lockers, in-

construct warehouses in every depot where

tegrated server racks, ultrasound machines, and

companies and courier services can operate. As

time-sensitive cargo like retail displays are still

per the officials, the first three warehouses will

strong.

be constructed at Jangpura in Delhi, Modipuram, and Duhai in Uttar Pradesh. This step will

DHL Ocean Freight does not see any indication

bring cost-effectiveness into the logistics opera-

of a 20% drop off in orders, but it anticipates a

tions and help expand small businesses. For in-

flat demand in October. Issues like the ongoing

stance, if there is a factory in Haridwar and it has

threat of labor action among rail and port work-

to deliver products to Delhi, it can opt for rapid

ers in some geographies, port congestion in Eu-

rail instead of road transport… it is cheap and

rope, and weather-related schedule disruptions

will cut pollution and save time,” said officials.

are expected to lead to more canceled sailings and port omissions, partially offsetting some of

It is likely that from 2023, the Regional Rapid

the rates decreases out of Asia Pacific.

Transit System will act as a preferred mode for the industry by meeting their logistics and trans-

Ocean shipping rates are dropping, and ships

portation needs said the officials at NCRTC add-

are being canceled With ocean shipping rates on

ing that a consultation with the logistics industry

a decline, the ocean carriers are now indulging

has been held to deliberate on the ‘Provision

in tactical canceled sailings to match the vessel

of Logistics Services through RRTS corridors in

space with orders, which they hope will stop the

NCR’. The meeting was attended by representa-

decline in prices.

tives of various firms participated in the meeting. www.logisticsinsider.in

81

NEWS THAT MATTERS

Companies start signing up to ULIP for access to data

First shipment on ChinaAfghanistan Corridor successful

A critical element of the National Logistics Policy launched earlier this month is Unified Logistics Interface Platform (ULIP) and members of the Indian logistics and supply chain sector are gearing up to leverage it for its benefits. At least 10 companies, including MapMyIndia, Cargo Exchange, FreightFox, Intugine Technologies,

The

China-Kyrgystan-Uzbekistan-Afghani-

SuperProcure, and Shyplite have recently signed

stan corridor witnessed the first successful

non-disclosure agreements to access data on the

shipment along the route. The train carrying

ULIP.

just 2 containers departed from Kashgar, China on 13 September and reached Hairatan, get

Afghanistan on Friday, 23 September, mak-

information on all modes of transport available

ing the service’s total transit time ten days.

Companies

with

access

to

ULIP

will

to facilitate cargo movement. IT companies involved in logistics can enhance their business

The new service is a combination of rail-road,

by using this facility, officials said.

where the first leg of the service is carried by truck. From Kashgar, containers are trucked across the

With all the information available in a digitized

border to the Kyrgyz city of Osh, where the con-

and organized manner from across the sector,

tainers are loaded on a train, which continues its

these tools can incredibly increase efficiency and

way across the Central Asian countries to reach

cut down logistics costs. The ULIP will connect

its final destination, Hairatan in Afghanistan.

roadways, shipping, MoCA (ACMES, AAICLAS,

With this multimodal transportation solution,

ACCS), MoRTH (Vahan Saarthi), MEITY (DigiLocker),

the journey should take a total of two weeks

NPCI (FASTag), Customs (ICEGATE), DGFT (IEC)

marking a significant reduction in journey time.

and NICDC, ensuring seamless flow of information

At present, Cargo between China and Afghanistan

between government agencies and industry

is shipped via the seaport of Karachi, and over-

players. It will be a platform for stakeholders

land through Pakistan. The delays and transit hur-

to manage, offer and track their services while

dles make this journey almost two months long.

maintaining the ease of doing business. The

Kashgar-Hairatan

corridor

is

not

the

The NLP is being said to have been made after

same as the much-anticipated China-Kyrgyz-

extensive

its

stan-Uzbekistan (CKU) railway line. The CKU

implementation will lead to reduced logistics

ends in the city of Andijan in Uzbekistan and

cost, international trade will increase, thereby,

does not include Afghanistan. Moreover, the

increasing prosperity and promoting startups,

CKU railway line is expected to pass through

among other benefits, eventually making India

the agricultural region of Naryn, an area with

'atmanirbhar'. It will make Indian logistics sector

a lot of potentials to develop as a trade hub.

stakeholder

consultation

at par with global benchmarks. 82

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October

2022

and

NEWS THAT MATTERS

China's loss turns out to be India's gain - iPhone 14 to be manufactured in the homeland

Amazon 4 hour delivery upped to 50 cities and towns across India

Amid the global ongoing China plus one movement, which is a result of the geopolitical tensions and pandemic-related restrictions on trade, China's loss has turned into a profitable deal for India. Apple announced on Monday that the new iPhone 14 will be manufactured in India. India is the world’s second-largest smartphone market after China, however, iPhone sales have struggled to capture a large share of the market due to the price factor.

Amazon India has expanded their 4 hour delivery from 14 cities and towns last year to 50 recently.

“The new iPhone 14 lineup introduces

The facility applies to categories like consumer

groundbreaking

and

electronics, books, toys, media, kitchen, luxury,

important safety capabilities. We’re excited

sports, video games, and personal care equipment,

to be manufacturing iPhone 14 in India.”

among others. Amazon India launched their same

~ Official Statement by Apple

day delivery in India back in 2017. This facility

new

technologies

will also be expanded to places in Surat, Mysuru, The latest iPhone 14 will be shipped out by

Mangalore, Bhopal, Nashik, Nellore, Anantapur,

Foxconn, a major iPhone assembler, whose

Warangal, Ghaziabad, Faridabad and Patna.

facilities are on the outskirts of Chennai. Apple began manufacturing iPhones in

"We’re always innovating to bring our customers

India back in 2017 with the iPhone SE, and

new levels of convenience and delivery options that

continues to assemble a number of models

work best for them; making Same-Day Delivery. We

in the country. Apple is likely to shift about

are especially excited to introduce this in cities and

5% of its iPhone 14 production to India from

towns beyond metros, which are under served in

later this year, raising it to 25% by 2025,

terms of speed of delivery,”

according to a JPMorgan report. Abhinav Singh, director, Customer Fulfilment, The analysts expect nearly a quarter of

Supply Chain & Amazon Transportation Services,

all Apple products to be manufactured

Amazon India According to Singh, such same

outside China by 2025, compared to about

day deliveries are great opportunities to delivery

5% now. Supply chain risks like the stringent

associates since the site locations are within the

COVID-19 lockdowns seen in China are

cities. Their same day delivery warehouses are

likely the trigger for such relocation efforts

located at prime locations in the cities so as to

that will continue over the next two or three

minimise the delivery times.

years, the report said. www.logisticsinsider.in

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