Aiming At Allied Logistics Growth

Railways and waterways are expected to complement roadways to address Indian auto industry’s logistics needs.

- Anirudh Raheja

India spends around 14 per cent of its GDP on logistics. Logistics costs are expected to fall by almost 20 per cent with the advent of GST. The fact that 70-80 per cent of the goods in India are transported by road does not seem to lead to a fall in logistics costs as expected. Factors like rising fuel prices don’t seem to provide the necessary impetus to lower the logistics costs. Delving upon such developments, the fourth automotive logistics conclave – ‘Changing Facets of Automotive Logistics’, organised by the Society of Indian Automobile Manufacturers (SIAM) at Delhi, put the spotlight on railways and waterways as a means to complement roadways to fulfill the logistics needs of the Indian auto industry. Bringing logistics industry stakeholders under one roof, the two-day event saw industry leaders speak about how the logistics industry could perform brilliantly by close co-operation between various means of transport. Pointed an industry leader that this would lead to competitive logistics costs. He drew attention to AT Kearney analysis, which states that logistics costs (contributing up to three and a half per cent of auto sales) are higher by 100-200 basis points when compared to other Asian countries. This, he said, is impacting the bottom-line. With vehicle sales expected to grow three times over the next decade, the need to keep a check on logistics costs is becoming imperative.