Union Budget 2021: Nirmala Sitharaman must allocate funds for digitisation of shipping, logistics sector
With the dawn of a new fiscal year, tech-led logistics players are looking forward to re-calibrate their business operations and infrastructure as the Union Budget 2021 is set to be announced in a few days
The year 2020 marked one of the most historic setbacks for the world economy in recent decades. Sectors across verticals were hit one after another, resulting in degrowth across the board. Shipping and logistics were also not beyond the ambit of the viral contagion and suffered the brunt of lockdowns and business disruptions. Therefore, with the dawn of a new fiscal year, tech-led logistics players are looking forward to re-calibrate their business operations and infrastructure as the Union Budget 2021 is set to be announced in a few days. To that end, here are some of the expectations from tech-enabled logistics platforms.
Regulate shipments seamlessly
As things stand, there is a dire need for the EXIM industry's digital transformation to regulate shipments in a seamless manner. International shipment is particularly problematic in the existing paradigm. With digitisation in place, functionalities such as customs can be taken online, resulting in the relative ease of clearance and movement of shipments. In the meantime, digitisation will usher in new levels of transparency and cost-effective management. Furthermore, it will also serve as a necessity for a smart single-window clearance that will streamline shipments or approvals.
The pandemic disruptions across sectors may have created havoc, but the crisis also set in motion business transition from offline to online, hence, giving the eCommerce and the Direct to Consumer (D2C) sectors a catalyst for new-found, dynamic growth. As such, industry digitisation will ensure that these sectors continue to sustain their current momentum and thrive. Players in the logistics ecosystem are fervently looking forward to the holistic digitisation of infrastructures across tier-II and tier-III cities.
Proposed National Logistics Policy
The National Logistics Policy (NLP) is expected to take the logistics sector to new heights, resulting in augmented growth. That said, the policy will also bring with it sector-friendly measures that will go a long way in facelifting the logistics sector. The policy will streamline numerous actions that will pave the way for new-found ease of doing business, enhanced access to capital, faster integration of technology, and automation by traditional retailers.
NLP will reduce logistical costs and improve productivity. People are now looking forward to it as they expect the government to work out government-private partnership models with eCommerce logistics startups. Such undertakings will reinforce the logistics set-up in India by shaping initiatives for efficient infrastructure, technology, and skill development along with tax SOPs, a much-needed scheme at present.
Better internet connectivity
Startups are also expecting the government to invest in connecting rural India and bringing the hinterlands into the fold. This initiative is a must in order to empower eCommerce brands. More than 70 percent of India’s population resides in the hinterlands. This is a clear indication that there is a huge untapped potential for eCommerce players and budding entrepreneurs.
Nothing significant has been done yet in terms of strengthening the rural distribution of commercial products in India's rural areas. Therefore, the urgent need of the present hour is to facilitate commercial enterprises' outreach towards remote regions, which can be achieved by setting up robust internet connectivity. This way, people in rural areas will get to sample the convenience of shopping online, as well.
Enhanced warehouse management
If there is one thing that players of the Indian logistic ecosystem are keenly looking forward to, it is the improvement of warehousing. Warehousing in India is certainly overdue for a revolution. In case you are wondering why India's logistics cost is higher than most advanced economies around the world, it is because the cost of inefficiency can be as high as $100 billion. Due to the poor logistics infrastructure, inventory in transit often suffers the brunt of damages, wastage, and pilferage. This predicament becomes more pronounced in the cold chain sector as products such as dairy, pharmaceuticals, chocolates, and fruits and vegetables can easily lose their material value if the transporter is not equipped with an efficient mechanism to maintain a favourable temperature.
The writer is CEO and co-founder of Shiprocket, a tech-enabled logistic aggregator
With the effect of the pandemic easing out in India and hope for a speedy revival, this Budget is expected to be a gamechanger.
Mining and manufacturing must be supported for ensuring a sustained turnaround in the economy
There is a pressing need for a complete digital transformation of the industry to handle international shipments efficiently