Washington Post In India, industries boom, but logistics lag behind By _Rama Lakshmi_ (http://www.washingtonpost.com/rama-lakshmi/2011/03/02/ABjxvmP_page.html) , Monday, August 22, 2011 KAPASERA, India — In India’s burgeoning consumer economy, transporting items from factory to store is a painfully slow process. Shipping trucks jostle for space on pothole-filled roads that lack clear lanes, moving at an average speed of 19 miles an hour. India’s 28 states follow different tax systems, resulting in long bureaucratic delays at warehouses. The average turnaround time at ports is 84 hours, according to a report by KPMG and the Confederation of Indian Industry, compared to seven hours in Hong Kong and Singapore. India also urgently needs more skilled, blue-collar workers in the logistics business to fuel its frenetic manufacturing growth. By 2015, the country will be short about 25 million workers in this field, the Confederation of Indian Industry estimates. If urgent steps are not taken, experts say, the cost of waste and delays will increase from $45 billion annually to $140 billion by 2020. With global companies such as Ford and Siemens spending billions of dollars to turn India into a China-like manufacturing hub, the poor state of logistics poses expensive bottlenecks that may force them to look elsewhere. “For too long, logistics and supply-chain management in India meant two things — dark, shanty storage spaces, and old, dirty, dilapidated trucks moving goods on the road,” said Anshuman Singh, managing director of Future Supply Chain Solutions, a four-year-old logistics company that services large retail stores and international brands such as Hitachi and Skechers. “But now that the volume of goods produced and consumed has increased exponentially in the past decade, the old system is no longer adequate.” In recent years, a handful of Indian companies have seen an opportunity in the shortage and have set up new automated warehouses in the hinterlands. At one of the warehouses that Singh’s company runs in northern India, Joginder Dahiya, 20, spends his day scanning the labels of thousands of black pants with a hand-held device. Instantly, little red lights flash to tell him how many pairs to put into the different cartons marked for hundreds of stores across India. “There is no scope for mistake or confusion with this technology, and the goods go to the right store at the right time” he said proudly. Behind him, young men buzzing about in battery-operated pallet trucks moved cartons between rows of floor-to-ceiling racks of goods. But most companies still send goods to dank, poorly ventilated warehouses, where cartons are piled up on the floor. India’s rail lines, roads and waterways were developed in the colonial era to transport troops, farm products and raw materials. Though the government has built new highways and ports, it hasn’t kept up with the pace of growth generated by the industrial expansion of the last two decades. “To meet the estimated economic growth of the next five years, the logistics and supply chain infrastructure has to grow two and a half times. There is very little time to catch up,” said K. V. Mahidhar, the head of logistics at the _Confederation of Indian Industry_ (http://www.ciilogistics.com/research.htm) . About 57 percent of India’s goods move by road, 36 percent by rail. In contrast, China moves almost half of its goods by rail. In 2007, India’s government-owned railways began allowing private companies to operate freight container trains to shift the load from road to rail, said Sajal Mittra, chief executive officer of Arshiya Rail Infrastructure, a new logistics company that has warehouses and rail wagons. “But the average speed of our freight trains is about 14 miles an hour,” he said. Recently, his company bought 2,000 special rail containers from China because he said it would have taken more than a year to make them in India. China produced the containers in less than a week because it has skilled workers, he said. To address the skills gap, two new training institutes are trying to produce India’s first generation of trained workers for the logistics and supply-chain industry. On a recent day at the Gati Academy on the outskirts of New Delhi, two dozen students from far-flung farming villages engaged in a classroom discussion about the most efficient way of transporting washing machines, televisions, cellphones and computer keyboards. “Before I came to this course, I knew that the goods at my village shop came from a factory, but I never thought about the process in between,” said Kuldeep Singh Gaglan, the 20-year old son of a farmer. “Now I can monitor the movement of cargo anywhere in India sitting in front of a computer.” The institute also trains truck drivers; analysts say India will be short 5 million drivers over the next 15 years. “People are unwilling to be truck drivers because of the cultural stigma,” said Satish Kumar, head of education and development at Gati Academy. “ Families write you off because you are always away, people call you a drunkard, and the police harass you.” But at the academy, “We call them motor captains, give them a uniform, a cap and an identity card. We try to restore respect to that profession.”
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