Is there any specific extra service your company usually asks of the logistics provider?
Amazon is e retail, which, operates on the online platform, hires a third party company, which provides a shipping of the products of that the company sell through its Platform. Amazon is a global competitor and it dominates its suppliers as well as keeps a viable relationship to go on. To keep its customer happy and satisfied the company asks its supplier service to use an attractive packaging. In addition not just dropping the parcel delivery in the door, they go with the package to deliver to the confirming person’s identity. This is a different from other logistics service giving company. They are also courteous in behaviour to handle customer grievance on face to face as given training on the department before recruiting. In addition, Amazon contains the high standard shipping service for their customer (Zhang & Zhao,2012).
What are your company’s criteria for selecting third party Logistics Service Providers as its customers after the implementation of the Goods and service tax in India?
The biggest challenge in shipping is to get the culture alignment with the logistics shipment company with the parent company keeping in mind the lead times, landing costs, inventory carrying costs. Another is the company infrastructure of the 3PL company and determining the accessibility to shipment data. The IT capabilities and handling real-time data and responsiveness of the supply chain also needs to be kept in mind. The ease of doing business with the partner, the relationship with the supplier and importance of participation is also a criterion to do business (Zhang & Zhao,2012). The value-addition in customer service is also criteria to follow through selecting a third party logistics provider.
After the implementation of the GST in India what effects have you seen in the third party logistics sector?
Before the implementation of GST in India, there was different tax not under the same central government regulations. GST has influences every sector in the economy but Logistics sector is one of the most important sector that has been affected. First, the whole infrastructure will be affected being able to pay tax digitally. The networking between the different warehouses needs to be co-ordinated. The logistics sector was a fragmented sector in the transportation sector. The tax credits will push companies to develop its own sectored supply chain management or tying up with the third party logistics sector (Zhang, 2013). The tax rate reduction of 200-250 base points will also ensure the lowering the prices of goods and services.
Is there any impact on the extra services provided by the company to the customers?
There have been a good impact of having GST implemented and that has also directly or indirectly has been affecting the service that a customer gets from the company. There have been many response and feedback that the company gets regarding delivery time extending (Schönsleben, 2016). After GST, there has been response that is quick and reliable. The response report has recorded smaller lead-time. Fixing the mistake where the customer is concerned Amazon always thinks of the delivery option to be smooth among their customers. Not only short-term relationship building but also the long-term method they also think of the importance of providing excellent service (Lai & Wong, 2012). The value addition service has a separate cost involved in business and that does needs investments. The money saved from the different intermediate tax expense will add to the benefit of the organisation expansion.
Is the cost coming up or down by the implementation of the GST?
The single tax will remove all the cascading effect of different tax system. The Central GST will eliminate the Additional Excise duty, services tax, countervailing duty, entertainment tax, central sales tax, purchase tax, luxury tax, Octroi and Entry tax and other taxes will be subsumed. GST has good and bad both influences in different industry. The warehouses in the area, which will be getting in the idle list for the GST process, are in the smaller cities and suburbs of India. These are expected to be put to residential use. The gathering of the products warehousing sector will lead to cost efficiency of labour, transportation and real estate sector costs will reduce. The cost benefit analysis of the company in logistics sector has shown increment in tax saving field. The single CGST and SGST is shown among the balance sheet and shown a drastic change in the tax savings increment. The input tax credits in the sector have increased due to GST. The transparency in the credit system has provided relief to the people in the company (Dekker et al., 2013). The analysts in the sector have provided the growth of 21.6% in the recent years and are optimised about the positive impact after 1st of July. The intermediate tax credits will be subsumed by the CGST. The importance of warehousing consolidation in an e-commerce company is very essential for the sector therefore; this consolidation will ensure the cost efficiency among the transportation cost. It can be concluded safely that GST will have a positive impact on the 3Party Logistics services or the warehousing sector in India.
Dekker, R., Fleischmann, M., Inderfurth, K., & van Wassenhove, L. N. (Eds.). (2013). Reverse logistics: quantitative models for closed-loop supply chains. Springer Science & Business Media.
Lai, K. H., & Wong, C. W. (2012). Green logistics management and performance: Some empirical evidence from Chinese manufacturing exporters. Omega, 40(3), 267-282.
Schönsleben, P. (2016). Integral logistics management: operations and supply chain management within and across companies. CRC Press.
Zhang, G., & Zhao, Z. (2012). Green packaging management of logistics enterprises. Physics Procedia, 24, 900-905.
Zhang, X., Zhang, Z., Zhang, Y., Wei, D., & Deng, Y. (2013). Route selection for emergency logistics management: A bio-inspired algorithm. Safety science, 54, 87-91.