The Central Warehousing Corporation is a public warehouse operator established by the Government of India in 1957, with the aim to provide reliable, costeffective, value-added, integrated warehousing and logistics solutions in a socially responsible and environment friendly manner. Its operations include scientific storage and handling services for more than 400 commodities including Agricultural produce, Industrial raw-materials, finished goods and a variety of hygroscopic and perishable items. In this conversation with their Managing Director Amit Kumar Singh, we got him to divulge his thoughts on the Indian warehousing sector and a little more about the organization.
Q] How has 2022 been for the warehousing sector in India?
There are a lot of figures floating around when it comes to the CAGR – somewhere it is 13%, somewhere else it is 26%. But the fact of the matter is there has been tremendous growth in this sector in the last few years. Particularly in the last year despite COVID period, there has been tremendous consolidated growth in the e-commerce sector. The demand from that sector suddenly shot up. There has been a lot of demand coming in from various e-commerce players panIndia, national level and regional players, as well as 3PL companies.
We have also seen at CWC that the shift which we were making from our traditional food-grain business, a lot of change has taken place in the last one year. But having said that, if you see in the current year, the sentiment is not the same as it was till last financial year. They have taken the capacity last year, but this year, they are trying to make a better use of it, reconsidering their business strategy. The demand is not as much even though the trend is upwards.
There is a definite trend in terms of ‘modern structures’, particularly metro cities. A recent study projects the demand for warehousing at 220 million sq.ft of capacity in next 3 years. How much that will materialize is very difficult to say, but the Indian economy is on a strong footing, and a lot of companies are looking for manufacturing capabilities here. So logistics, and in that warehousing, will definitely have a prime role to play.
Q] The NLP 2022 aims at creating world-class warehousing in India. How far are we in achieving that goal?
I think NLP has come at an opportune time and it has given a very important direction. It talks about integration, standardization and modernization of the supply chain, formalization of the sector, breaking the silos and bringing synergy into various departments. The e-Handbook for Warehousing is the first attempt to consolidate the standards in the warehousing domain, and a good one at it. It covers all aspects of warehousing – not only the warehouse structure, but also what goes inside it. It talks about racking systems, palletization and even AI and other technology integrations. The target for 2030 is pretty ambitious but also achievable.
Q] How important is private equity investment in the development of modern warehouses?
We can definitely achieve the 2030 targets. Given the kind of investments driving the sector, mostly from the private sector, and the kind of synergies that the government is now brought in, combined with the work being done under the Gati Shakti NMP – all these are the facilitating factors which will work towards achieving the target. Of course it will require a lot of concentrated efforts and a focused approach from everyone. If I may say so, we at CWC are also focused in that direction. We have in fact, in the last year, created record capacity in the history of the organization. In the next 2-3 years we have planned to generate enough capacity to commensurate with the growth rate we are observing in the industry. Not only around warehousing but MMLPs and transportation links.
There is no second thought about inviting private investment to develop the sector. The government has its own limitations in terms of resources.
This is an abridged version of the original interview published in the December 2022 issue of Logistics Insider magazine. Click here to read the complete interview.