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Logistics Ease Across Different States (LEADS) Index

  Jun 11, 2020

Logistics Ease Across Different States (LEADS) Index

What is logistics?

Logistics is the process of planning and executing the efficient transportation and storage of goods from the point of origin to the point of storage and consumption. The goal of logistics is to meet customer requirements in a timely and cost-effective manner. It is a key parameter in deciding the trade competitiveness of a state or country.

What is LEADS?

The Logistics Ease Across Different States (LEADS) index is a composite indicator to assess international trade logistics across states and Union territories. It is based on a stakeholders’ survey conducted by Deloitte for the Ministry of Commerce and Industry. 

Which states topped the ranks?

While Gujarat topped the first-of-its-kind index, Punjab and Andhra Pradesh took the second and third positions, respectively.

Does it follow the World bank’s index?

LEADS is influenced by the World Bank’s biannual Logistics Performance Index (LPI).

What parameters make up the index?

LEADS is based on eight parameters 

  1. Infrastructure, 
  2. Services, 
  3. Timeliness, 
  4. Track and trace,
  5. Competitiveness of pricing, 
  6. Safety of cargo, 
  7. Operating environment and 
  8. Regulatory process. 

It is a perception based survey. What does it mean?

The study is based on a perception-based survey of 2,885 respondents across the country over a six-week period.

What did the study report?

The study found that supply chain efficiencies and economies of scale are yet to be unlocked, mostly due to suboptimal investment in building scale in infrastructure, automation, human capital and technology. It highlighted problems such as inadequate terminal capacity, poor last-mile terminal connectivity and issues in regulatory services provided by government agencies, among others. It also underlined issues specific to certain states. For example, respondents reported that labour unions created impediments for trade efficiency in states like West Bengal, Kerala, Maharashtra and Himachal Pradesh.

Indian logistics costs are said to be among the highest in the world—in the vicinity of 13% of gross domestic product (GDP). Germany’s costs in comparison average just above 8% of its GDP, providing its industry a huge competitive edge in the global market.