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Curtailed logistics services resume, full ops may take time
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SME Times News Bureau | 04 Jun, 2020
Operations of logistics companies have resumed although in a limited
manner as the lockdown restrictions have been eased. Resumption of
complete operations, however, is likely to take some time.
Rajesh
Neelakanta, ED & CEO, BVC Logistics noted that the 35-40 per cent
of the general logistics operations have commenced, with a large part of
it being predominantly the export-import traffic which has resumed
since the past few weeks. Non-essential goods' warehouse operations have
also commenced in most locations with curtailed staff, he said.
"The
sector should start working at 80 per cent of pre-COVID volumes by June
end," said Pranshu Kacholia, Vice President, Business at Clickpost.
Kacholia was of the view that the sector will bounce back soon largely due to the e-commerce boom and demand in the sector.
He noted that limitations may be from the supply side rather than in demand.
Businesses across sectors will have to undergo several change and adoption of new technologies and logistics is no different.
Kacholia
noted that real-time shipment visibility driven by IoT devices has
become a necessity today, due to the large number of delivery exceptions
that happen daily.
Globally, some companies are piloting
crowd-sourcing models of deliveries, since there might be a shortage of
full-time delivery partners due to an increase in e-commerce volumes, he
added.
Neelakanta said: "I foresee an opportunity to create
'Transportation Collectives' - a cooperative of sorts for all small and
medium transportation businesses to come together, perhaps under the
banner of their local district or state level associations and pitch for
business opportunities by pooling in their resources and fleet assets
and meeting the user community as 'one entity'."
He said that such an initiative will ensure survival of this sub-set of the transportation industry.
Regarding
the challenges faced by the sector players, Neelakanta was of the view
that as is the case with all other industry segments, the logistics
industry too faces the eventuality of job losses, primarily from the
forecast of low demand for most products other than essentials.
"Also,
the migration of labour, skilled to some extent and unskilled to a
great extent, will have a telling impact on the productivity and
efficiencies of logistics service providers, as will be the case with
other industries," he said.
Some of the fringe and small players
in the logistics industry may face the unfortunate situation of business
closures and there is a strong opportunity and possibility of industry
consolidation expected to happen in the coming few months, in the near
to mid term, Neelakanta said.
"A very vulnerable section of the
logistics industry would be the small, individual transportation
providers, who may find it difficult to operate in these tough times of
poor liquidity and higher safety and security requirements," he said.
The
government should come out with practical solutions like tax payment
deferment without penal interest and fines, interest waiver or
subvention for those entities filing their tax returns promptly for the
past three years, he suggested.
Tax waiver for the next six
months on logistics services or at least a tax rate reduction, access to
low cost funds and toll fee waivers should be brought in among other
steps.
Clickpost's Kacholia said: "The issues in logistics can be
solved by enabling better communication and compliance by government
officials. Monetary support would do little help in logistics like it
would in other sectors.
Paperwork should be made smooth, he added.
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