CBIC report on EXIM time release highlights vulnerabilities in India’s logistics industry

The findings of a recent report from the Center of Indirect Taxes and Customs (CBIC) – the National Time Report Study 2023 – show that the Indian logistics sector faces major challenges in moving its exports efficiently. The report analyzes import and export turnaround times and highlights issues ranging from inadequate route planning and long turnaround times to restrictions at logistics hubs that are hampering the growth of the export sector.

The study includes seaports, inland container depots (ICDs), air cargo complexes (ACCs) and integrated control posts (ICPs) – the nodes that contribute nearly 80% of incoming invoices and nearly 70% of ship invoices submitted in India – showing that most goods these Places happen as they enter or exit the country.

It is confirmed that the supply chain industry is the backbone of a country’s economic growth and that any blockage or delay here can impact the entire logistics chain.

It should be noted that clearance time includes both regulatory and post-regulatory clearance time. Official clearance time includes the time it takes for exporters to obtain all customs-approved documents, while post-administration clearance time is the time it takes for goods to exit a customs station. The goal for both is 24 hours. A long release time means high export/import costs and thus high logistics costs. Ultimately, it becomes necessary to reduce estimated release times to reduce India’s logistic costs.

While regulatory clearance time has met its targets for seaports – from 29 hours and 47 minutes in 2022 to 19 hours and 34 minutes in 2023 – the post regulatory clearance has not. This process takes about 175 hours and 55 minutes, up from 191 hours and 41 minutes in 2022.

There are a number of changes that can be made to achieve further improvements.

According to industry players, the largely disorganized nature of India’s logistics industry is a major deterrent. “We don’t have any major freight forwarders in India. We don’t even have our own shipping company and we have full control over the local market, which is quite large and disorganized. Custom House Agents (CHAs) sometimes act as freight forwarders in addition to customs clearance. They’re also very disorganized,” said an industry representative.

In order to improve efficiency and reduce costs, a shift towards an organized and technology-driven ecosystem is required.

Another reason cited is compliance and regulatory requirements that delay the loading and unloading of cargo. For example, trucks that have a specific time slot to enter cities can get stuck due to traffic restrictions. When the time window closes for a day, a truck driver transporting goods for export has to wait somewhere, resulting in a delay of hours and sometimes a day or two before the truck just reaches the port.

In addition, certain ports have restrictions on the handling of some products. These restrictions force exporters to ship goods to distant ports, causing shipping delays and higher costs. Logistics efficiency can be significantly increased by improving the port infrastructure and optimizing container routes.

The logistics industry in India has also often underestimated the importance of route planning, leading to delays and increased costs. Effective route planning is essential for delivering goods on time, minimizing fuel and driver costs, optimizing truck utilization, reducing wear and tear, and increasing customer satisfaction.

The report also suggests that a shift towards digitalization can transform the logistics sector in India. A robust IT support structure can streamline processes, reduce paperwork and save time. This technology can also be used to pre-upload documents, perform real-time reviews and automate compliance, significantly speeding approvals and reducing delays. Implementing smart logistic solutions and adopting innovative practices will enable India to compete globally and attract investment in this sector.

Related Articles

Back to top button