News

2 Aug 2018

New law to regulate logistics players .. by TOI

 
Keen to lower the burden of high logistics cost for business estimated at around 14 per cent, the government is planning to enact a new law to regulate and make the sector more organised, besides putting in place a policy to simplify procedures and processes.

Sources told TOI that the proposed law on multi-mode transport will require all road transport operators, shipping lines, railways and airlines to register with a self-regulatory organisation so that the liability of the companies using the services is covered. Over a period of time, the plan is to track cargo movement.

The move will also help the government regulate shipping lines, which currently dock at Indian ports, often without being tracked. “Anyone who does not register will not be able to move goods,” said an officer.

While the government had enacted the Multimodal Transportation of Goods Act in 1993, the law only covers exports. The plan is to repeal the 25-year-old law as the new legislation will include domestic transport as well as exports and imports whenever a consignment is shipped using at least two modes of transport. “The government’s focus is to reduce the cost for all businesses and not just those engaged in international trade,” said an official.

Separately, a logistic policy is also being readied, with a proposal for the cabinet being drafted where processes ranging from registration of businesses to packing and warehouses are being addressed. “We need a complete overhaul in the way the sector works. Even packing needs to be standardised and the way we ship goods needs to be reworked so that there is more efficiency,” said a senior government official.

Expenditure on investment in logistics, including infrastructure, is estimated to touch $500 billion annually by 2025, commerce and industry minister Suresh Prabhu had said on Monday. The policy is an attempt to lay down the principles and clean up processes to enable the flow of investments.

While goods are being tracked on a limited scale and scanners being used, sources said the use of multiple standards for these devices, at least 14 on last count, is complicating the system. The plan is to have a single standard and over a period link the entire system with the GST architecture, where goods can be tracked using e-way bills.