The supply chain is undergoing an unprecedented change on many fronts like policy, technology, verticalisation of services, and many more, where identifying the opportunity remains important
With intervention of technology and changing dynamics of domestic and global trade, it has become necessary to identify the evolution taking place in container supply network, thus finding clue to the future of the sector. The Session-II of the Containers India 2017 was focused on the essential aspect, ‘Future of Container Supply Chains.’ Moderator of the session Umesh Grover, Secretary General, CFSAI, said some of the major factors that will affect the container supply chain are advancement in technology like drones being used to deliver cargo; Data and information remain crucial to the supply chain; smaller operators would face difficult time with price negotiation as M&A among bigger companies lead to marketing consolidation; and warehousing sector empowered by GST.
Some of initiatives taken up at JN Port such as DPD have triggered a domino effect in the EXIM supply chain and divulging more details on reforms, Shankar Shinde, Member of Managing Committee, Brihanmumbai Custom Brokers Association said even with DPD in place the role of CFS would remain crucial. The infrastructure of CFS could be used to provide support to the DPD volume. With the new Finance Bill, the importer must file Bill of Entry and Duty on time as a result cargo would be shifted fast. Nityam Khosla, Director, TEAMGLOBAL Logistics, who has recently set up a CFS with a new industry model to suit the changing environment, explained that one should take business cue from the law of nature which constantly advocates change. With a deep study of CFS, one could find that the concept of CFS in the initial days was based on a model of a yard to store cargo which were stuck due to many of the infrastructure bottlenecks. But in current scenario, CFS needs to evolve and they might be part of 3PL activities, cold chain, and e-commerce. S. Padmanabhan of Sattva Group also reiterated a positive growth for CFS business. Enlightening the delegates about the development that could take place in the container supply chain scene, Prahlad Tanwar, Director, Transport and Logistics, KPMG Advisory Services said that there are five major factor that would influence the industry, which are verticalization of market, where one could develop business model built to serve a particular sector; polarization and consolidation of the sector; standardization; multimodal operation picking up; and lastly evolution of distribution with consolidation of cargo taking place in certain places where container service could be offered. Deliberating the impact of GST on supply chain, Nailesh Gandhi, Director, Express Global Logistics, said that though there would short-term challenges due to GST but in the long-run it would give new dimension to the supply chain industry, including contract logistics. However, he cautioned about the litigation that logistics industry dealt with in the form of litigations between 2011 and 2017 related to service tax where `500-600 crore were spent on legal fees. Moreover there were issues related parity with regard to earning in terms of Indian currency vis-à-vis foreign currency. Gandhi said that there are seven specific problems related to GST which if not addressed would lead to increase in transaction cost. He stressed that the biggest concern in the GST law is lack of clarity on mixed service and composite service. Dr Rakesh P Singh, Chairman, Institute of Supply Chain Management said that if one would look at the framework on which companies plan and executive their strategies in India, we should have clarity on it. Companies should look at the whole domain of supply chain as a strategy to excel in changing business environment.
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