“While the global container demand was lower in 2019 due to weaker growth in the global economy, India witnessed a broad-based slowdown in its import export trade as well after a growth of several years. This is aligned closely with the weaker domestic demand, tight liquidity and working capital as well as a reflection of the overall cyclical weakening of the economic environment in all the main global economies. The escalating trade restrictions led to reduced bilateral trade between the United States of America and China, the two major manufacturing economies, resulting in shifts in the trade structures, with some sourcing moving away from China to South East Asian countries.
The Government’s ambitious target of making India a USD 5 trillion economy requires focused approach in implementing reforms and measures in the logistics sector. This may be feasible provided infrastructure and technological investments can be progressed across the country, further supported by robust policy reforms towards strengthening connectivity, especially towards the hinterlands and coasts. With cargo successfully being transported via Inland waterways 1 this year, we hope to see even more increase in multimodal transport routes, aided by the efforts of Sagarmala project.
Digitization has been paramount in propelling the logistics & shipping industry forward. We see great opportunity in investment in technology start-ups focused on developing solutions backed by Artificial Intelligence, Machine Learning, Blockchain and similar technologies to help address challenges prevalent in the industry. Government policies such as Digital India as well as their investment in the start-up and SME space is a push in the right direction. TradeLens, a neutral and open solution platform, developed through a collaboration between Maersk and IBM, demonstrates strong acceptance and viability of the concept of a blockchain-based ecosystem for digitizing global shipping. More than 100 participants from around the world and from multiple points in the supply chain are piloting the solution. It provides an excellent opportunity to the country for digitizing traditional paper-based processes and has the potential to stimulate the Indian economy and create billions of dollars’ worth of value for the entire logistics industry.
Moving forward, the basic requirement we see in the shipping & logistics sector in the upcoming year is the need to reduce the cost of logistics in the overall GDP and facilitating faster adoption of technology by Government and other key industry stakeholders. The problem can be resolved by developing logistics hubs at various strategic locations across the nation. While the focus should be on modernising existing port infrastructure and creating new ones, we should keep a keen eye on initiatives aimed to develop sustainable development in the industry including promoting green technology and most importantly skilling the talent to endure the evolving operation structure. The International Maritime Organisation (IMO) adopted a new regulation effective globally from January 01 2020 for reducing emissions from vessels. This will contribute significantly to making our industry more sustainable in the future, as it will bring substantial improvements to human health in coastal areas. India’s recent ratification to the Hong Kong Convention, is another such example that will set global standards for safe and environmentally-sound ship recycling in the country.
Furthermore, the overall supply chain integration will help companies be more efficient and in turn pass on the benefits to their customers. Maersk enables its customers to trade and grow by transporting goods anywhere in the world with focused efforts towards reducing the logistics costs. Maersk works to provide customers with a simple end-to-end offering of products and services, coupled with a robust delivery network, taking the friction & complexity out of global supply chains.”
