It is time to implement what we learned from our hard experiences gained during the time of the devastating COVID-19 pandemic period. A lot has been discussed on the future of businesses and business models due to the challenges faced during this time. We have also witnessed that most business models could sustain with the implementation of technology and still had to further enhance IT Infrastructure, with the requirement of training for Work from Home (WFH), which was by force and not by choice.
The rapidly changing requirements/demands from customers/ users of logistics services and exigencies like the pandemic situation resulted in disruptions of traditional business models that transportation and logistics companies are accustomed to. In the coming decades, some of these traditional business models will be fully overturned. However, the introduction of advanced technology in this industry has given them the ability to adapt to recent imperatives such as constant improvements in innovations, customer centricity, efficiency and effectiveness.
We must acknowledge that presently the Government of India is a step ahead, faster than the private sector in adapting and implementing enhancing IT infrastructure. And if the logistics industry professionals choose to go slow with this technological approach, it may hold them back from the advancements that technologies bring.
We should also appreciate that it is difficult for the industry to change directions overnight and become efficient immediately. There is a need for them to evolve and adapt to technological advances. Significantly, there is a quest for technological innovations such as drones, data analytics, Artificial Intelligence, Machine Learning, Natural language processing etc., though currently, the stakeholders in supply chains are operating in isolation.
Unless there is a seamless data flow within every stakeholder, they would be compelled to duplicate DATA and multiple software platform utilities, resulting in high cost in furthering the API latching with Government statutory organizations. The DATA systems should be latched for the seamless supply of data flow integration within the stakeholders along with the Government Portals using advanced blockchain technology.
ROLE OF FFFAI
Licensed by the Government of India, Customs Brokers play an important link in the complete supply chain having niche domain knowledge. The Federation of Freight Forwarders’ Associations in India (FFFAI) has always worked to empower the Customs Brokers.
FFFAI emphasizes that given the current challenges including increasing pressure on profitability, emerging technologies, compliances, government policies/rules & regulations, etc., Customs Brokers must think beyond customs broking services to cope and diversify their business. They should provide various other value-added services in the field of the international supply chain.
The government has taken various initiatives to reduce cost and dwell time. (viz Self-Assessment, Risk Management, Faceless Assessment in Customs and PGAs’ Digital Customs SWIFT, DPD, AEO facilitation measures, etc.). In addition, the Ease of Doing Business score is being monitored regularly, and various programmes have been implemented to prepare the scorecard of LSP.
FFFAI’s prime focus is to empower logistics service providers by educating and supporting with soft skill training, protection & safeguarding fraternity interest, professionalizing the fragmented sector and enhancing productivity by providing a technology platform.
PRESENT MARKET SCENARIO
We are cautiously optimistic considering the worldwide economic scenario, geo-political conflicts and market trends. This market trend is the lifecycle of the economy, which changes with demand and supply. We had also experienced such trends earlier and sailed through them by identifying productivity based on cost structure. However, every person in the system has to change their business models depending upon the revenue stream and the opportunities. Stakeholders should watch out for various other verticals or adding up to the business in forward or backward integration through effective utilization of technology.
Logistics Service Providers (LSPs) should look forward to the opportunities in Freight Forwarding, Warehousing and Transportation and integrate with the partners in the international supply chain arena to be known as ‘End to End Logistics Service Providers’ emphasizing/establishing single window proficiency. Setting up infrastructure may be challenging; therefore, LSPs should seek a partnering model to show their presence at various destinations and networks for providing services.
FURTHER EXPECTATIONS FROM THE GOVERNMENT
Government should consider formulating industry-friendly policies, developing infrastructure and supporting the logistics industry by creating a seamless movement of goods. They should also simplify the process to reduce dwell time further to minimize transaction costs. Various other bottlenecks also hamper the seamless movement and the need to be addressed on priority.
The government has taken various steps, and it’s appreciated that now we have Spl. Secretary Logistics to address our trade concerns. Our trade is still dominated by the unorganized transport sector, which governs the movement of goods. Logistics cost is significantly high in India as compared to developed countries. Logistics services today need intense IT infrastructure at individual level which is very expensive. Accordingly, I would look forward to creating and setting up a “Co-operative Model” for creating a common IT Platform, Software, Asset sharing, and networking to create a competitive advantage, and the members get the ownership of the business developed. This will help enhance productivity, employing expertise to create domain knowledge and retain outflows within the members.
Moreover, since logistics is the backbone of the economy, the government should support elevating the training institutes for the Logistics Industry on priority. If we are benchmarking the achievements of a developed country, the Government will have to be at par in providing infrastructure at that level.
Meanwhile, FFFAI is representing the logistics industry’s concerns on various Government forums that are very seriously working on bringing transparency in Ease of Doing Business with a technocrat approach. We look forward to supporting the Government of India in every aspect to facilitate the EXIM trade and boost the country’s economy.