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Freight transportation is a challenge for a country like India. Coupled with rough terrains and various legal requirements to be fulfilled before goods transportation, transporters often find it difficult to send their goods. The Government of India proposed to introduce a “single logistics law” for freight transportation that will simplify regulatory ecosystem and improve cost efficiency of goods transport.
What is the single logistics law?
While addressing the 12th DACAAI (Domestic Air Cargo Agents Association) AGM held in August 2022, the Union Minister for Road Transport and Highways Nitin Gadkari said, “The government is working on bringing a single logistics law for all modes of freight transportation to eradicate duplication of processes and simplify procedural requirements. This system will facilitate multi-modal transportation in the true sense.”
Gadkari mentioned “single logistics law” to signify the introduction of a nation logistics policy for multimodal transportation. Following his announcement, the government launched the National Logistics Policy in September 2022 with a vision “to develop a technologically enabled, integrated, cost efficient, resilient, sustainable and trusted logistics ecosystem in the country for accelerated and inclusive growth.”
National logistics policy
The National Logistics policy of India has several objectives including seamless integration of processes, digital systems, policies/plans and legislative requirements to promote inter-modality, multi-modality. Have a look at the primary targets and the plan to achieve each goal of the policy:
Target 1: Reduce cost of logistics in India to be comparable to global benchmarks by 2030 (from 16% of Gross Domestic Product (GDP) to a global average of 8%)
- Improvement in transportation through migration towards relatively more efficient, economical and environmentally sustainable modal mix.
- Improvement in warehousing through enabling adequate development of warehouses with optimal spatial planning using the PM Gati Shakti National Master Plan and facilitating private investments in warehouses.
- Improvement in inventory management through improvements in reliability of supply chains by promotion of digitalisation to facilitate tracking, improved predictability and visibility of replenishment orders.
- Improvements in speed of transit by adoption of smarter enforcement, and de-risking of supply chains through resilient infrastructure planning and implementation.
- Facilitating simplification of regulatory processes, promoting standardization and digitalization for greater integration and inter-operability.
Target 2: Improve the Logistics Performance Index ranking – endeavor is to be among top 25 countries by 2030
- Facilitate identification and resolution of issues related to logistics capacity, last-mile connectivity gaps, ground level operation and infrastructure.
- Develop a compendium of reforms, in consultation with stakeholders and based on periodic reviews, to act upon, for improvement of India’s ranking,
Target 3: Create data driven decision support mechanism for an efficient logistics ecosystem
- Data to be captured using datapoints derived from the PM GatiShakti National Master Plan, the Unified Logistics Interface Platform (ULIP) and the Logistics Ease Across Different States (LEADS) study for monitoring logistics performance across states
- Development of a robust standardized methodology for calculating logistics costs and institutionalising regular national assessment of logistic costs in the economy.
Impact of National logistics policy
On completion of ten months of the launch of the National Logistics Policy (NLP), an inter-Ministerial meeting was held by the Department for Promotion of Industry and Internal Trade (DPIIT) to review the progress of its implementation.
During the meeting the DPIIT secretary discussed the impact and the progress of the new logistics law. The secretary announced that India’s ranking in the World Bank’s Logistics Performance Index (LPI) has gone up by six places from 44 in 2018 to 38 out of 139 countries in 2023.
Various other action plans under the policy are in progress including:
- For tracking and tracing all of India’s containerised EXIM cargo, the Logistics Data Bank (LDB), has been developed. This supply chain visibility platform has contributed to reducing India’s average dwell time to just 2.6 days and improved logistics efficiency.
- An EXIM Logistics Group has been constituted and 60 projects of Ministry of Road Transport & Highways (MORTH) and 47 of railways have been sanctioned to improve last mile connectivity to ports.
- Efforts are being made to integrate training courses on Logistics and PM GatiShakti NMP with Central Training Institutes (CTIs) and State Administrative Training Institutes (ATIs) for business and MSME training.
- Rating of states on parameters of ease of logistics – infrastructure and services, under the annual “Logistics Ease across Different States (LEADS)” survey across all States/ UTs is in progress.
- Unified Logistics Integrated Platform (ULIP) launched last year has integrated 33 logistics-related digital systems/portals across Ministries/Departments and over 590 industry players have registered on ULIP.
- Ministry of Civil Aviation is in the process of developing an Integrated Cargo Management System (ICMS) with ULIP, Air Freight Station (AFS) guidelines, Standard Operating Procedures (SOP) for standardising airport processes for control of freight movement, etc.
What are the current laws governing freight transport in India?
Have a look at a few laws regulating the transport of goods in India:
- National permit/ All India permit
A national permit is a document issued by the transport authority to indicate that a commercial vehicle is authorised for goods carriage across the country. State governments can issue two different permits for goods carriage: state permits and national permits.
- Shipping bill
Shipping bill is mandated by the Shipping Bill and Bill of Export (Forms) Regulations, 2019. This document must be submitted by the exporter to the customs officer before exporting goods via land or sea to legally export goods.
- Commercial vehicle registration
According to the Carriage by Road Act of 2007, a carriage owner who has started carrying goods on his vehicles must apply for a commercial vehicle registration within ninety days from the date of commencement.
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