Outlook 2023 for the Freight Forwarding Sector

The freight forwarding sector is regarded as a crucial link in logistics. Therefore, any challenges experienced by the logistics industry as a whole, impact the freight forwarders as well. In the past, we have seen the logistics industry reeling under high costs, which was primarily due to inefficient value chain and of course the fragmented nature of the industry. In order to deal with logistical challenges, the Indian government has introduced two ambitious policies - PM Gati Shakti Master Plan and National Logistics Policy. With the policies getting implemented, it would be interesting to see how the industry performs in 2023. Let’s look at some anticipated industry trends in 2023.

Enhancement of cross-border trade - The government initiatives for the logistics industry would provide the required momentum to promote cross-border trade. The National Logistics Policy (NLP) was brought into force with a vision to lower logistics costs and streamline processes for seamless coordination. Development of multimodal connectivity is one of the primary focus areas of the initiatives which if implemented properly would facilitate Indian businesses to be globally competitive and create a robust logistics infrastructure for a hassle-free cross-border trade.

Digitalisation of processes - The digital approach of NLP will benefit the entire logistics sector including freight forwarders in Mumbai and the rest of India. The Unified Logistics Interface Platform (ULIP) will propel the logistics industry by providing an integrated and multi-pronged system driving unparalled ease and speed in processes and operations. Moreover, implementation of other digital initiatives such as Ease of Logistics (e-LOG), Integration of technology through Digital Systems (IDS), and System Improvement Group (SIG) will help reduce inefficiencies in the supply chain and aid paperless import and export. In order to drive timely deliveries, faceless assessments for customs and e-way bill provisions will be extremely beneficial. With the investments flowing in, the technological advancements seem promising which in turn give the MSMEs better control over the supply chain, thus giving a push to India’s exports.

Implementation of Dedicated Freight Corridors & Free Trade Agreements - The dedicated freight corridors have the potential to enhance the goods movement process and will help reduce logistics costs. They can do so by making the cargo transportation process more efficient and trustworthy. Hence, complete utilization of the freight corridors will benefit freight forwarders and Indian exporters/ importers. Freight forwarders in Mumbai will be able to avail benefits from the Western Dedicated Freight Corridor which is a 1,506 km long broad gauge corridor in India under construction. The Australia-India Economic Cooperation and Trade Agreement that got rolling from the 29th of December 2022, will give Indian businesses a duty-free access to the Australian market and a wide range of Indian industries will benefit from it.

With a myriad of initiatives in place, 2023 seems promising for the freight forwarding sector.