Indian Logistic Sector to be worth $385 bn in 2015

Siddhi Vinayak Logistic Ltd - A leading player in Indian Logistic Sector

Siddhi Vinayak Logistics Limited (SVLL) is one of India’s most rapidly growing companies in the road transportation sector. Currently SVLL has loading points in the states of Gujarat, Maharashtra, Rajasthan, Karnataka, Uttarakhand and Himachal Pradesh providing a comprehensive network and easy access.
Deepak Baid, Director – Siddhi Vinayak Logistic Ltd stated that the introduction of GST will be a boon for the logistics and transportation industry as it will cut down cost in both logistics and warehousing sectors.

Deepak Baid

Deepak Baid

Excerpts from the interview:

India spends around 13% of its GDP on logistics; this is higher than USA (10%), Europe (11%) and Japan (10%). Inefficient practices have inflated the industry size, how can we improve supply chain efficiencies?

Indian Logistic Sector, formed by a majority of small players is highly fragmented which in turn creeps in inefficiencies in the overall supply chain. Countries such as USA and Japan have lower marginal GDP spent on logistics owing to the fact that even smaller businesses in these countries are able to optimize their SCM with the latest market trends. Some tools and techniques that can improve Indian SCM are:

-Making use of Cloud Based IT Systems for operational efficiencies

-Choosing ERP application that fits with existing systems

-Tailor made solutions for customers based on segments

-Informing sharing and regular analysis of data from multiple sources

-Introducing driver centric programmes to build loyalty and improve performance


Shipping and Road Transport Minister, Nitin Gadkari recently announced that the central government was working on a new multimodal transport policy. Do you have any suggestions?

The new policy if implemented effectively can certainly boost the country’s infrastructure and institutional structure for multimodal transport. There are end numbers of bottlenecks that can prevent this policy implantation to keep up with its timeline. Uniform policy framework across ministries can help as well investment from private sectors.


What is the current size of project logistics industry in India? Tell us about the estimated future growth scenario of the industry?

The Indian Logistic Sector is estimated to be worth $385 billion in 2015 as reported by the experts. In the first quarter of 2014, the Indian logistics industry was said to be worth $100 billion and currently it is expected to grow by 15-20 per cent. This growth rate is also expected to pave way to a lot of job opportunities in the sector.

 

Currently India faces a need for at least another 123 million tonnes of warehousing (including cold storage capacities) capacity. How can this huge shortfall be met? Tell us about the role of private participation in this initiative?

The warehousing sector in India forms 20 per cent of the logistics market but continues facing challenges in the form of inadequate skilled labour, lack of infrastructure, lack of funds etc. The shortfall can be met by the government investing in the infrastructure development projects, changing regulatory setup, increasing transparency in policies and relaxing tax structures.

Privatization will aid to cope with the challenges in this industry. It will enable to acquire expertise in warehousing technologies, well trained manpower, a well equipped infrastructure, improved standardization, clear tax regimes and land availability thereby contributing in transition of vertical sector in to an organized sector.


How will the introduction of GST impact the logistics industry and SVLL in particular?

Introduction of GST will be a boon for the Indian Logistic Sector as it will cut down cost in both logistics and warehousing sectors. Levitation of taxes at a national level instead of individual states will cut down on logistics cost and increase cross border transportation.

GST will definitely prove advantageous SVLL and other transport players that have PAN India offices in the form of streamlining paperwork, avoiding freight delays and stoppages and boosting operational efficiencies.

What is SVLL’s future growth strategy? Going forward, does SVLL intend to increase focus on any specific business segment?

Looking ahead, we’re planning to add more number to our current fleet of 7965 vehicles, in order to meet with increased customer demand. Attention to detail, adopting customized vehicles as per customer requirement, 100 per cent dedication to our customers and CSR initiatives for our truck drivers are the factors that lays the foundation of success at SVLL and it will continue being our future growth drivers.

 

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