Bringing down the logistics cost to single digits, as envisioned by the government, will only be possible if more organised players are brought into the sector, said Uddhav Poddar, Chairman and Managing Director of Kaushalya Logistics Limited (KLL).
“I think on the government’s part, they are doing a lot of work. In infrastructure, a lot of work is happening. The challenge is that it’s a very unorganised sector. The organised players are still very limited. It is (logistics) one of the most unorganised sectors. If the more organised players come into this, the costs are going to go down because organised players are able to invest in infrastructure, which will help in reducing the costs,” he said.
In 2022, the Union government 2022 launched the National Logistics Policy (NLP) to reduce logistics costs and improve the competitiveness of Indian goods both in domestic and export markets.
The policy works to ensure quick last-mile delivery, end transport-related challenges, and save time and money for the manufacturers.
The government is working towards bringing the logistics cost to global standards of around 8 per cent from the existing 13-14 per cent.
In January, Union Minister of Commerce and Industry, Piyush Goyal, urged the states, along with the private sector, to develop action plans for better logistics business to attract investments.
There is a need to develop regional and city-level logistics plans as well for last-mile connectivity, he asserted.
Going further, Poddar highlighted the high cost of handling operations in some states which poses a significant challenge to the logistics players.