83% logistics firms missed at least one critical compliance, 91% paid fines in last 12 months: Report
Teamlease Regtech releases ‘Simplifying Compliance Management For The Logistics & Supply Chain Industry’ report that provides an overview of the logistics and supply chain industry's regulatory environment and challenges
Teamlease Regtech, India’s leading Regulatory Technology (Regtech) solutions company, has recently released its report titled ‘Simplifying Compliance Management for The Logistics & 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 crucial role of the logistics industry in the economy.
The logistics sector 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% of GDP to 8% 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.
The report found that there is an overlap of documentation in the form of a 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.
In a staggering revelation, around 91% 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 digitizing end-to-end compliance management can a business stay on the right side of the law.
Some key data points from the report are:
- 92% (of companies) believed that they do not have the required visibility and control in their organization's compliance program
- 85% (of companies) agreed that their compliance needs a serious rethink
- 73% of compliance officers believe that third-party consultants have better liaisoning experience than they have internally
- 67% (of companies) agreed to have poor control over their compliance documents
- 32% - The average cost of compliance consultants stood at approximately INR 100,000 per month, of which labour contributed approximately 32% of the cost
- 51% (of companies) believed that keeping track of regulatory updates is challenging
Rishi Agrawal, CEO and Co-Founder, of Teamlease Regtech, said, “A robust logistics and supply chain industry is the key to India’s transformation as the factory of the world. The report looks into the logistics industry's regulatory environment to provide readers with an understanding of the complexities of the compliance landscape. It 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”.
Founded in 2015, Teamlease Regtech is India’s leading regulatory technology company helping corporate India stay on the right side of the law. It enables a transparent, timely, and accountable compliance program for over 1500 entities across 40 industries in India.