Logistics Infrastructure is the Key to the Future

Logistics Infrastructure is the Key to the Future

In a talk with the Times Network, Karan Adani outlined the ambitious benchmarks and goals being set by APSEZ.

Logistics, Mr. Adani added, “encompasses” every single sphere of economic activity. “If you ask me,” he said to Mihir Bhatt, vice president and executive editor of the Times Network, the logistics industry in India is in a place where “we need to plan for the future demand not the current demand.” And the future, Mr. Adani argued, would be in the execution of huge infrastructure projects, along the lines of the under-construction Delhi — Mumbai Expressway, the 1,350-kilometre-long highway that will reduce travel time between the two metropolitan powerhouses of the country to just 12 hours from the current 24, passing through such major states as Delhi, Haryana, Madhya Pradesh, Gujarat, Rajasthan and Maharashtra.

Adani Logistics Limited | Catalyst in India's growth story

“We need more expressways,” Mr. Adani said. “More large ports, multiple airports in cities like Mumbai, Delhi, Kolkata, where you can’t have just the one airport.” Committing to a sizeable number of such projects, he pointed out, would drive down costs and increase efficiencies. Critics often point to the crippling logistics costs incurred in India, as much as 13% of GDP. Well, said Mr. Adani, “just by solving infrastructure problems, by having large infrastructure projects, you can bring that cost down to eight or nine percent.” This development activity can the catalyze the next steps in using logistics and technology to solve or improve outcomes for long-standing, sometimes intractable problems built into the economy.

“That’s the next level,” Mr. Adani said, “using logistics and technology” to tackle why, for instance, “around 40% to 50% of crops don’t reach the table because of storage concerns.” This, he emphasized, “is about logistics. Or why are trucking costs so high in India? It’s because 70% of the time, the truck is waiting, rather than on the road. These are the problems we need to solve, with logistics that are integrated, say from the factory gate to the export gate. We need an integrated view, rather than a piecemeal approach. Once we can do that, then India will really move ahead, will really start to become competitive in terms of manufacturing, agriculture and across services.”

In a wide-ranging conversation, Mr. Adani offered a glimpse into his analysis of the future. The world, he said, was transitioning “from globalization to regionalization and India has to play a leading role in integrating the region, from immediate neighbours such as Nepal, Bhutan, Bangladesh, Myanmar, Sri Lanka and then further afield to the Middle East and eastern African nations… how do we integrate the entire region’s needs, not just in terms of logistics but also energy, pipelines, roads, railway, so that goods can move freely and seamlessly across borders. That’s how trade will increase.”

Mr. Adani spoke also of customer centricity, of how logistics can enable a deeper understanding of what kinds of services to provide and how to provide them “better, faster, cheaper.”

Technology and a shift in emphasis, he said, had enabled APSEZ to become increasingly ambitious in its targets. Having just crossed a major milestone in handling over 300 million metric tonnes of cargo through its ports, APSEZ intends to raise that number to 500 MMT by 2025 and then double even those volumes by 2030. All this, while delivering on a promise to become a carbon neutral company by 2025. “Our journey is just beginning,” said Mr. Adani. Electric vehicles, he said, would become a major disruptor, transforming the trucking industry in ways that would be particularly good for India, eliminating its dependency on imported fossil fuels and bringing costs down “by as much as 90%”. APSEZ now must prepare for a future in which robotics technology and unmanned port operations and EV operations further disrupts the established way of doing business. “We’re looking”, he said, “at how to get ahead of the curve.”

Casting his eye over the history of Mundra port, Mr. Adani said having focused most recently on achieving world class “operational excellence”, the “next phase of Mundra’s development is a sort of port-led industrialization. Mundra’s growth now is going to come from how it attracts industries, and turns itself into an industrial town, a hub. We’re looking to develop Mundra so that it becomes, basically, an ecosystem for the future, in step with the transitional needs of the country.” Over the last decade, Mr. Adani added, APSEZ has grown to cover much of India’s coastline and hinterland. “Our idea”, he said, “is to put the customer and the needs of the nation at the centre and then to develop industry to revolve around and meet those needs.”