National Logistics Policy 2022 :- Catalyst for Robust Trade and Commerce.

The most fundamental idea of living in a society is to give and take. Basically, if you as a unit of the society, individually, want to prosper and live comfortably, then some way or the other, you have to contribute to the society, serve it and get your own credit for it called 'money'. This is where society and economy intersect. This is where service and commerce meet. Think about it. Its very subtle.

Hence, at the very birth of an integrated society, the concept of helping each other and serving each other sprang - and mind you, not just free service, but you also get credits for it, the proof token for it - called money, in return.

The more complex and vast society evolved, the more complicated our give and take structures became. And alas, what is this give and take called in economical sense? Trading.

So friends, logistics can be defined as effectively managing trade. Wikipedia explains it as the detailed organization and implementation of a complex operation - in a general sense.

In terms of commerce, logistics is the management of the flow of things between the point of origin and the point of consumption to meet the requirements of customers or corporations. The resources managed in logistics may include tangible goods such as materials, equipment, and supplies, as well as food and other consumable items.

Logistics management is the part of supply chain management and supply chain engineering that plans, implements, and controls the efficient, effective forward, and reverse flow and storage of goods, services, and related information between the point of origin and point of consumption to meet customers' requirements.

 The complexity of logistics can be modeled, analyzed, visualized, and optimized by dedicated simulation software. The minimization of the use of resources is a common motivation in all logistics fields. A professional working in the field of logistics management is called a logistician.

As India endeavors to become a self-reliant USD 5 trillion economy by 2025, a modern and efficient logistics network has to be developed, to address key challenges such as:

 1. Fragmentation and unorganized nature of the logistics space.

2. Complex regulatory environment on account of presence of multiple regulations governed by various stakeholders.

3. Highly skewed modal mix with 60% of transportation activities conducted via road, which is highly fragmented and unorganized.

4. Low level of technology adoption amongst transport and warehousing players.

5.  High indirect costs on account of unpredictable supply chains and poor first & last mile connectivity.

Given the above, the country currently records relatively higher logistics costs -13% of GDP in 2018!

To enhance logistics sector competitiveness, the Ministry of Commerce and Industry, has set up the Logistics Division, which has drafted a "National Logistics Policy" to provide a unified policy environment and an integrated institutional mechanism, for developing the logistics sector.

Therefore, in today's blog we will study the vision and objective of the National Logistics Policy and dive into its policy architecture and take a glimpse of its action plan.

1. Vision and Objective

Vision -

"To build a modern, efficient, and resilient logistics sector that seamlessly integrates multiple modes of transportation and leverages the best in class technology, processes and skilled manpower in order to significantly improve country's logistics performance and reduce logistics costs"

Key objectives -

1. Logistics Efficiency -

Improve performance and the efficiency of the logistics sector with focus on reducing logistics cost and dwell time.

2. Multi-modal Transport - 

Ensure multi-modal cargo movement for optimal use of all transport modes, that is, road, rail, air - by developing multi-modal transport infrastructure, Including MMLPs (Multi-Modal Logistics Parks).  

3. Digital Tracking

Ensure predictability visibility and tracking and tracing regarding cargo movement, and improve in-transit warehousing leveraging digital initiatives.

4. Sector Modernization

Support modern trade and e-commerce, and create resilient supply chain for effective emergency response through modernization of the logistics sector.

5. Excellence in Logistics

Promote professionalization and excellence in logistica services and create employment opportunities, to Improve quality of life of workforce.

6. Logistics Democratization

Democratise logistics services to benefit all sections of society, in particular the farmers and micro, small and medium enterpriser (MSME).

All in all, it is to improve India's ranking in Logistics Performance Index to 25-30 over next 5 years and reduce logistics cost in india by 5% of GDP over the next 5 years.

Now this was its objectives. What is that step-by-step planning and implementation of policies which will achieve this target?

Policy Architecture -

Pillar 1 - Integrated Logistics Services, faster-cheaper-safer.

Pilar 2 - Efficient and Mull Modal Transport Infrastructure

 :- Modal shift from road to rail and water.

Pillar 3 - Meeting Logistics Needs of Core Sectors of Economy :- Driving efficiently and reliability. 

Pillar 4 - Logistics for International Competitiveness :- Connecting Local to Global

Pillar 5 - Logistics for emergency and disaster :- Building Resilience.

So friends, this is the basic idea of the National Logistics Policy 2022. Ofcourse I cannot explain, or let alone explanation, even understand the extreme complexities of the grassroot level details of this policy. Still, you can read its original draft on the internet.

Indeed this policy is very ambitious and will definately boost India's progress. We will surely monitor its future impacts, now that we know its aims and significance.

In conclusion, I believe, whether this policy is a success or not, I admire this policy-making culture, constantly innovating and refurbishing our various sectors. It is a good sign for our growth.

I wonder what would be the complex procedure to draft and implement policies? Lets discuss it in one of our upcoming blogs as soon as possible :)

Thanks,

Daksh Parekh.