Reema Jogani, Director, Reema Transport, obsevers that digitalization and industrial collaboration are essential for future growth. She assures that demand for road transportation will witness an increase because the cost factor in road transport as compared to air, rail, or sea is much lower.
What are the key growth drivers for the Indian road transport and logistics industry for 2022 and beyond?
Digitalization: The government has taken measures to digitalize various processes by increasing accountability and unification. By bringing all payments under one comprehensive regime, the government has ensured transparency and reduced black marketing and illegal trade practices. Another important tool is GPS, used not only for tracking the vehicle but also to understand driving patterns, temperature monitoring, vehicle utilization, and fuel monitoring.
Collaboration: Customers’ ever-changing expectations present a challenge, which is why LSPs must engage with ecosystem partners. The alliance will pool the best talent, infrastructure, and know-how to improve service levels and give the sector a better negotiating position, ensuring best services at low costs.
Changing customers’ demands: 3PL logistic solutions can meet customer demand for transportation and warehousing. Existing solutions face various obstacles, including a lack of trained and skilled labor and infra.
Infrastructure: Highway construction grew at a CAGR of 21.44 per cent between 2016 and 2019. In 2018-19, 10,855 km of highway were built. The GoI aims to build 65,000 km of highways by 2022. Under the Bharatmala Praiyojana, the Centre has awarded 322 projects totaling 12,413 km of road construction. An increasing focus on infrastructure will help us achieve this growth in a shorter time.
Warehousing: Warehousing is becoming increasingly structured to streamline operations. The multimodal logistics, supply chain, and Blockchain revolutions will change the whole sector. AI is also being adopted to assist the trucks in avoiding extended wait times.
How do you foresee the future of the road freight industry?
With ongoing investments in digital and physical infrastructure, as well as in modernizing the road transportation sector by building National Highways (NHs) and Dedicated Freight Corridors (DFCs), we see this as a boon to the industry. The transportation time will be greatly reduced. Newer road conditions will minimize a vehicle’s maintenance costs. The demand for road transportation will rise since the cost of road transportation is substantially lower than that of air, rail, or sea transportation.
What are the challenges?
The key issues are retention and the scarcity of drivers. The welfare, rewards, recognition, and status given to drivers are critical. There should be an online platform where drivers may register their complaints and help the government enhance roadside services. Collaboration and unification among multiple LSPs and end-users will provide internal industry strength. Collaboration will aid in the pooling of the best latent infrastructure and know-how. Educating small and mid-size transporters about the value of technology and pushing them to invest in it is a pressing need.
As a cargo agent, what are your expectations from the government?
The most crucial expectation is for fuel prices to stabilize. Daily fluctuations in diesel prices pose operational risk. GoI should lower the excise, customs duty, and VAT on diesel even further, as these taxes account for about half of the diesel price. Improved road conditions will help to improve cargo flow and smooth operations. Drivers require facilitation centers and resting stops. `