The Hindu Business Line : National board to handle logistics issues mooted

DR A.K. Chanda, Chairman of Kolkata Port Trust (KoPT), has suggested constitution of an apex National Logistics Board complete with regional outfits to work out an integrated approach towards handling various logistics issues entailing participation of several agencies.

"Timely intervention of an apex body like a National Logistics Board is often needed to sort various issues to improve the operational efficiency of agencies engaged in providing logistics services to achieve improved turnaround," Dr Chanda observed while addressing a seminar on `Logistics in Business' organised by the Bengal National Chamber of Commerce & Industry here recently.

He referred to myriad problems thrown up by the restrictions clamped on the grounds of environmental and health considerations to various import and export consignments.

"I'm not disputing the rationale of imposing the restrictions; what I would like to point out is that the restrictions would often delay the movement of the consignments clogging the port premises," he said.

Similarly, the curbs on the movement of containers within the city in major metros during the daytime, though justified for various reasons, would often choke the normal flow of traffic in and out of docks. An efficient logistics management, therefore, presupposed efficiency at levels in the chain, he added.

The issue of creating additional railway capacity in the form of dedicated freight corridors, the KoPT Chairman felt, should be viewed against the backdrop of huge existing idle capacity.

"It is somewhat incongruous that the capacity in one part of the country is virtually lying idle while that in the other part is overstretched," he said emphasising the need for fuller utilisation of the existing idle capacity.

Kolkata port, he pointed out, despite being the country's northern-most port failed to attract the traffic to and from the northern region with the result that huge railway capacity built up over the years between the North and the East to facilitate freight movement had remained grossly underutilised.

Mr R.R. Bhandari, General Manager of South Eastern Railway, giving a detailed account of how the Railways acted as the logistics service provider, indicated that the freight traffic of SER in the current fiscal (2005-06) would be up by around 10 million tonnes over 73 mt in 2004-05.

This would be possible because of the several steps initiated by the Indian Railways in general and SER, which is a major freight loading zonal railway, in particular. The Tatkal scheme for freight customers, as announced in the Rail Budget for 2005-06, attracted as many as 9,000 applications, which was unexpected.

Central Warehousing Corporation (CWC), according to its Regional Manager, Ms Manju Verma, has signed an MoU with the Railways for setting up 22 rail side warehouse complexes. There were also proposals for setting up rail-linked multipurpose warehouses with ICD (inland container depot) facilities, one at Royapuram near Chennai and the other at Dronagiri near Navi Mumbai.

CWC was also planning to acquire two rakes each with 40 boxes at a total cost of Rs 8 crore to facilitate traffic movement between its container freight stations located at Patpargunj, Noida and Loni in UP and Jawaharlal Nehru port, Ms Verma said.

Mr P.M.U. Menon, CEO of Lee Muirhead, said a proper logistics management could be a critical source of competitive advantage. Quoting from a study by McKinsey, he said the inventory cost in India was estimated at $25 billion and even a 10 per cent reduction in the cost would mean a saving of $2.5 billion, which was substantial.

He regretted that India, despite being a huge country, was not being seriously considered either by global airlines or shipping lines for developing a regional hub.

Logistics as an industry was getting constantly inundated with new concepts, ideas and practices, the ultimate objective being to remain competitive in a fiercely competitive environment.

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