Honourable Prime Minister Shri. Narendra Modi at the second edition of the ‘Maritime India Summit 2021 held early this month spoke about more than 574 port projects identified at a cost of 82 billion besides an array of initiatives in the pursuit of building India into the leading Blue Economy of the world. While the announcements reiterated the huge potential of the maritime sector, it also signalled the need to build a strategic roadmap to accelerate investments, drive digitisation while addressing the enduring issues the industry has been plagued with. This has become all the more germane today as the sector is competing with the large well-established players of the industry across affluent countries.
Recording a CAGR of 10.5%, the country’s logistics industry is projected to be worth $215 billion by the end of 2021-22. Advancements in digital technologies, changing consumer preferences due to eCommerce, government reforms, and shift in service sourcing strategies are expected to lead the transformation of the Indian logistics ecosystem. However, embracing digitisation has been one of the most pressing needs of the industry which was further accelerated during the Covid-19 pandemic.
With the manufacturing and logistics activities suspended through the lockdown, supply chains were seriously disrupted which in turn resulted in soaring freight costs, demand-supply imbalance and shipment delays. Even as the industry continues to battle an uneven global economic recovery, critical shortage of containers is the latest in the list causing a global transport crisis while rendering a steep rise in freight rates for containerized transportation channels across the globe.
The pandemic has brought to the fore the significance of the Shipping and Logistics (S&L) industry, rendering it as an essential sector rather than just a support service. Now with the 4th Industrial revolution already here, digitisation, Artificial Intelligence (AI), Blockchain, Internet of Things (IoT) and automation are not just buzz words in the S&L industry but have become inevitable for sustainability and growth. Primarily driven by manual processes the industry has been exposed to errors resulting in high-risk situations and causing losses worth millions. With huge involvement of multiple stakeholders, manual interventions and paper-based transactions weighing heavily on the growth prospects of an inherently unorganised sector, transition to digitisation needs to be the core focus of the industry.
Digitisation is what will usher in a strategic transformation in the S&L industry. Re-thinking processes, digitising shared operations and implementing collaborative technologies will minimise manual errors, maximise efficiency and reduce trading costs. It will enable the industry to leverage data led insights, to take informed decisions thereby improving every segment in the shipment value cycle. Besides improving the resilience of supply chains, it will help businesses to reinvent models based on data-driven revenue streams and shifts in trade flows.
Investments in AI, Machine Learning, and Blockchain technologies can facilitate complete transformation. Whereas implementing smart single-window clearance will enable smooth processing of shipments or approvals. Besides boosting productivity across the sector, the initiatives will help us prepare to tackle any untoward incidents thereby increasing resilience to future shocks, like the current pandemic.
Digitisation is also likely to change the global geographies of trade as comparative advantages of nations will shift. Smart ports and shipping, will help countries tap e-commerce capabilities and transport facilitation benefits that boost trade. This in turn will fuel cross border movement of goods and services and narrow the digital divide. Reduced labour costs and improved trade efficiencies will have a bearing on the demand of port and shipping services, thereby helping the industry to drive further economic growth.
Yet again digitisation and technological advancements is also what will help ensure a level playing field for traders from developing economies. It is therefore critical that developing countries work towards minimising the digital divide to remain competitive whilst leveraging the advantages of digitisation to build resilience.
At Freightwalla, we have been on a constant pursuit of revolutionizing the country’s traditional USD 160 billion worth logistics industry. We have witnessed a considerable shift in the mind-set of exporters and importers — evolving as smart shippers and consignees. Even through the lockdown with exporters/importers operating remotely, our full-stack digital platform helped businesses to plan, book, and manage their international freight shipments seamlessly online. Additionally, real-time tracking helped customers remain abreast with overseas cargo movements helping them to take appropriate actions in a timely manner
We recently integrated Maersk Spot rates on our digital platform which allows users to instantly search, compare, and book container space online and simplify the overall booking process with Maersk. We are one of the few freight forwarders in India to enable this process through our digital portal. The integration is a part of our larger initiative of using technology to bring more transparency, visibility & reliability to EXIM operations for businesses, while providing end-to-end supply chain services.
The shortage of containers is a global issue today and has impacted India gravely. We have witnessed a substantial reduction in large cargo vessels calling at ports that have resulted in massive piling of containers at the port. There are also many containers detained and lying idle with various authorities. Digitising the supply chain management will aid in bringing down the detention and waiting charges besides optimising costs for the industry. Digitisation can effectively address the chronic issues of overbooking and no-show while helping carriers to price dynamically based on micro-factors, such as supply and demand on an individual vessel.
Digitisation will prove to be a game-changer for the industry creating new paradigms in visualisation and capitalisation of data thereby helping the industry to take informed decisions while building a more optimised infrastructure. This in turn will go a long way in building India into a global hub for international trade besides actively contributing to the GDP target of a 5 trillion dollar economy.
Source: Financial Express