Teamlease Regtech, a regulatory technology (regtech) solutions company, has released its report titled ‘Simplifying Compliance Management for The Logistics and Supply Chain Industry’. The report examines sectoral concerns and gives an overview of the regulatory environment for the logistics and supply chain industry. It suggests specific action items that can help enterprises manage their compliance requirements more effectively.
The report highlights the role of the logistics industry in the economy. It employs 22 million people and is on track to reach a valuation of $215 billion in the next two years. The National Logistics Policy (NLP) was recently introduced to address the infrastructure and policy gaps in the industry. The objective of this policy is to reduce the cost of logistics from the current 14 per cent of gross domestic product (GDP) to 8 per cent of GDP by 2030.
In addition, there has been a renewed focus on implementing technological solutions to push paperless trade operations and place India within the top 25 on the Logistics Performance Index (LPI).
While there has been steady progress, Teamlease Regtech’s report demonstrates how the lack of an accurate and updated list of applicable compliances impedes the industry’s growth. There is an overlap of documentation in the form of multiplicity of registrations, approvals, licenses, permissions, consent orders and certifications among others, required for every warehouse.
Companies operating in a single state with just one warehouse and a corporate office are required to comply with 648 regulations. These obligations rise significantly and ad-hoc, paper-based and people-dependent processes fail to keep up as the company expands its scale and geographical footprint. In addition, businesses are also required to adhere to regulations related to the collection, transit and delivery of products.
The report also reveals that three major regulations of the industry, such as the Multimodal Transportation of Goods Act of 1993, the Carriage of Goods by Road Act of 2007, the Carriage of Goods by Sea Act of 1925, the Merchant Shipping Act of 1958 and the Carriage by Air Act of 1972 all required updation.
It also revealed that around 91 per cent of surveyed logistics and supply chain companies agreed that they have paid fines and penalties in the last 12-month period. Only by streamlining compliance by conducting a baseline applicability assessment, creating a central paperless compliance document repository, subscribing to real-time national and personalized regulatory updates and digitising end-to-end compliance management can a business stay on the right side of the law.
“It (report) highlights the limitations and inefficiencies in the current compliance practices used by these businesses. It also makes recommendations that will allow these businesses to efficiently manage their compliance requirements through the use of digital procedures,” said Rishi Agrawal, chief executive officer (CEO) and co-founder, Teamlease Regtech.