LOGISTICS SECTOR
The Long Haul
Rohan Masakorala charts a course for the logistics sector going forward
“With the Fourth Industrial Revolution, the logistics sector was in the midst of transformation when the coronavirus pandemic hit the international economy,” explains Rohan Masakorala, who remarks: “I expect global markets to shift – and therefore, consumer trends will change dramatically.”
“In traditional retail business, we will witness serious challenges in the medium term. B2C businesses would enter the fray and eventually, more e-commerce platforms will reshape the logistics sector,” he declares.
Discussing how he views the sector in a post-COVID environment, Masakorala states: “Ocean shipping will be the main mode of transport for international shipping but that too will be digitalised to a great extent.”
“Whether international trade is shifted to near-shoring, offshoring or in-shoring, logistics is a business that will continue to play a vital role – i.e. from manufacturing supply chains to consumer supply chains. A paradigm shift in how the logistics field operates is expected over the next few decades and COVID-19 has only accelerated this process,” he asserts.
Masakorala is confident that opportunities exist in spite of recent events. He feels that the global logistics sector of the future will be increasingly technology driven with operational aspects of logistics and transportation evolving amid more machinery usurping the functions of people, which in turn will create more technology-based opportunities for workers.
“If Sri Lanka prepares for this new environment and trains its workforce accordingly, the country will benefit from new investment opportunities for global clients and consumers. With the necessary infrastructure set up to meet emerging demands, the sector can contribute significantly to the national economy,” Masakorala maintains.
He continues: “Sri Lanka’s location does have the advantage of capturing a large volume of regional cargo so long as confidence is built in our efficiency as a location in the subcontinent with quick turnaround times for inward and outward cargo… This includes high levels of trade facilitation at all levels of the supply chain where logistical movements are necessary.”
Elaborating on this, Masakorala states that if Sri Lanka can transform its location into catering to the changing demand, there are new opportunities to expand services such as e-commerce, air-sea transfers, crew transfers, entrepot trade and multi-country consolidation.
However, he notes that if such opportunities are to be fully realised, several bottlenecks must be addressed to meet the needs of the evolving landscape: “Sri Lanka remains very backward in terms of the legal structure that is required to be an active participant in the modern international trade and logistics sector. The country also lacks proper spatial planning for the logistics sector.”
“Additionally, the country needs to address its weaknesses in the context of global indices such as the Logistics Performance Index, Doing Business index and Corruption Perceptions Index,” he emphasises.
Masakorala – who is well versed in the ebb and flow of international trade through his many years in the logistics sector – also feels that it is imperative for the country to abandon its protectionist DNA as international investors are likely to consider the scope for competitiveness and freedom of doing business.
Without these fundamental changes in law, operations and infrastructure developments, he argues that Sri Lanka will face challenges in attempting to establish itself as a true global hub.
In his concluding remarks, Masakorala says that “the country also needs to have many FTAs and consistent laws that provide market access to both domestic and international players on the one hand; and on the other, maintain predictability in an evolving world. These are the cornerstones of a successful logistics hub.”
