Logistically possible~ I

The cost of logistics for a retail chain, as a percentage of the cost of goods sold COGS), is about 4-5 per cent according to global estimates. In India, logistics costs as a share of COGS are estimated to be at least three times higher. The Prime Minister has called for a concerted effort to address the high logistics costs

A sine qua non of efficiency and quality, logistics is acritical factor in a country’s competitiveness and resilience. Launching the National Logistics Policy (NLP) on 17 September, Prime Minister Narendra Modi said, “To ensure quick last mile delivery, end transport-related challenges, save time and money of the manufacturers, prevent wastage of the agro-products, concerted efforts were made and one of the manifestations of those efforts is today’s National Logistics Policy”.

Logistics in India has been an Achilles’ heel. Characterised by high costs and low service, India’s logistics infrastructure has been termed “insufficient, ill-equipped and ill-designed” to support the expected economic growth rates of 7-8 per cent, putting its growth at risk. (McKinsey: Building India: Transforming the nation’s logistics infrastructure). The last biennial Connecting to Compete report, 2018 ranked India 44th in the logistics performance index that had Germany at 1st rank, China 26th and Vietnam 39th. In fact, India is shown to have done little to improve its score over the years ~ with a rank at 46 in 2012, worsening to 54 in 2014, improving to 35 in 2016, but falling to 44 in 2018.

Addressing cardinal issues of high cost and inefficiency, NLP lays down an overarching interdisciplinary, cross-sectoral and multi-jurisdictional framework for the development of the entire logistics ecosystem. Brought in tandem with the PM GatiShakti National Master Plan, launched in October last year, to build robust infrastructure, fill missing gaps in logistics, and promote investments, the two will complement each other.