How India Can Respond to the Demand for Greener & Sustainable Supply Chain

The logistics sector is the backbone of any economy as it facilitates the movement of goods and connects producers and consumers. In India, the logistics sector makes an impressive contribution of 14.4% to the nation’s  GDP, making it a significant player in the country’s overall economic success. However, recent reports and statistics highlight that the logistics sector in India is facing significant challenges related to sustainability and high costs. According to a report by the World Bank, logistics costs in India are among the highest in the world,  accounting for almost 14% of the country’s GDP. This is significantly higher than the global average of around  8%. The high cost of logistics is a major barrier to trade and competitiveness, and it is a significant burden on the economy. In addition to high costs, the logistics sector also has a significant environmental impact. To address these challenges, the logistics sector needs to adopt practices that reduce costs and environmental impact while improving efficiency and competitiveness. 

Prioritizing Electric Vehicles and Alternative Fuels 

To promote sustainable logistics, businesses can prioritize the use of electric vehicles (EVs) such as batteries and green hydrogen-powered trucks due to their cost-efficiency, lower emissions, and higher efficiency. However, EV  adoption in India is hindered by inadequate charging infrastructure and high initial purchase costs. Overcoming these obstacles requires investment from both public and private sectors in establishing a large network of EV  charging stations. Additionally, the government can offer incentives or subsidies to facilitate the adoption of EVs. 

Further, India can cater to the demand for eco-friendly transport by encouraging the use of alternative fuels. Apart from EVs, biofuels like ethanol and biodiesel are renewable energy sources that can power vehicles with significantly lower emissions than conventional fossil fuels. Furthermore, domestic production of biofuels can reduce our reliance on imported oil and boost energy security. 

Promoting Multi-Modal Connectivity for Sustainable Transport 

Road freight is a significant contributor to greenhouse gas (GHG) emissions in the freight sector, accounting for almost all (95%) of such emissions. On the other hand, rail transport emits significantly fewer GHG emissions than trucks, producing only about one-fifth of the emissions per ton-kilometre. With the Indian Railways committing to becoming net-zero carbon emitters by 2030, this presents a great opportunity to reduce carbon dioxide and other greenhouse gases by 7.5 million tons annually. 

The Indian government is taking action to foster multi-modal connectivity and green logistics. The National  Logistics Policy has been designed to construct an integrated logistics network and augment the utilization of rail,  water, and air transport to reduce pressure on road transportation. Furthermore, the Sagarmala Program intends 

to advance the ports and coastal shipping to boost the share of water transport. The private sector must shift their logistics operations to rail and water transport, reducing their dependence on road.  

Smart and Sustainable Warehousing 

Beyond transportation, logistics operations such as warehousing and distribution centers also have a significant impact on the environment. These facilities consume large amounts of energy for lighting, heating, and cooling,  and generate waste from packaging materials and other activities.  

Businesses seeking to adopt sustainable practices in their warehouses and distribution centers can invest in energy-efficient lighting and heating systems such as LED lights and insulation. They can also opt for sustainable packaging materials, like biodegradable or recyclable items, to reduce waste and conserve resources.  Additionally, implementing waste reduction and recycling initiatives such as separating recyclable materials and composting organic waste can help achieve sustainability and also benefit financially by reducing waste disposal costs. 

Tech Investment in Logistics: A Path to Long-Term Success 

Companies that are investing in technology to improve their logistics operations will create a strategic differentiation in the marketplace and unlock long-term success. By embracing the latest innovations in logistics technology, we can enhance our operational efficiency, reduce costs, and provide our customers with faster and more reliable delivery services. 

AI-driven tools and platforms help businesses plan the most efficient routes and minimize fuel consumption. By reducing fuel consumption and emissions, businesses can also contribute to reducing the carbon footprint of their logistics operations while also achieving cost savings.  

In conclusion, promoting sustainable logistics in India requires active participation along with a shared sense of responsibility from both the private and public sectors. Adopting a holistic approach that encompasses various aspects of the supply chain, such as implementing green technologies, reducing waste and emissions, promoting the use of alternative fuels and modes of transport, and adopting circular economy practices, is crucial to make logistics more sustainable. Collaboration between stakeholders is also essential to develop sustainable policies,  research and development, and knowledge sharing. By working together, the private and public sectors can drive significant changes in the logistics sector and pave the way for a more sustainable future for India.

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