Human Rights and Inclusive Growth in India’s Logistics Sector

The logistics sector in India is a cornerstone of economic growth and a critical contributor to employment and trade. However, its performance in fostering human rights and inclusive growth has revealed notable disparities. This article examines the dual challenges of ensuring equitable development and safeguarding human rights within the sector, highlighting their significance for achieving social sustainability.

Sustainability has become an important part of many organizations due to its influence on investment decisions, employee support, and customer choices. Sustainability is a broad concept comprising three main dimensions:

1. Social sustainability: Taking care of people and making sure everyone is treated fairly.
2. Environmental sustainability: Protecting nature and using resources wisely to keep the planet healthy.
3. Organizational sustainability: Running a business responsibly to benefit people, profit, and the planet.

India’s logistics sector has made little progress in recent years towards improving social sustainability. While there exists some empirical evidence of the progress made in the environmental sustainability dimension, their effort towards improving social sustainability remains grossly underexplored.

Social sustainability comprises practices such as the protection of human rights and ensuring inclusive growth and plays a pivotal role in the attainment of the United Nations’ Sustainable Development Goals (SDG).

Relevance of inclusive growth & human rights protection for social sustainability

Human rights practices have become an important part of corporate sustainability (Enact, 2018). The logistics sector has many risks associated with human rights due to: 

1. fragmented supply chain which results in downward pressure on fair wages and makes due diligence difficult,
2. cross-border operations resulting in adding difficulty in maintaining consistent wage standards,
3. labour exploitation is more seen due to labour shortages, and
4. most companies focus on maximizing productivity at the expense of labour standards and worker safety (Berthet & Hannegan, 2024).

Inclusive growth is an important component of social sustainability. Inclusive growth enables the creation of opportunities for all sections of society by reducing social inequalities, and income inequalities and promoting social inclusion by providing equal access to opportunities (Yatish, 2023). In terms of inclusive growth, the global logistics sector has focused on increasing workplace diversity and inclusion (FM Logistic, 2023). However, a preliminary look at the  Indian logistics sector’s sustainability and annual reports shows poor performance in terms of inclusive growth.

This results in restricting social development opportunities and creating the need for more policies directed towards promoting inclusive growth and equitable development for overall growth. A deeper examination of the collective performance of the logistics sector’s social sustainability is thus warranted, which is examined in this article.

Indicators of social sustainability for assessment of Indian logistics companies

To support this goal, the data was collected from 14 companies in the logistics sector:

1. Aegis Logistics Limited,
2. Agarwal Industrial Corporation Limited,
3. Allcargo Logistics Limited,
4. Blue Dart Express Limited,
5. Container Corporation of India Limited,
6. Delhivery Limited,
7. Gateway Distriparks Limited,
8. Mahindra Logistics Limited,
9. TCI Express Limited,
10. Transport Corporation of India Limited,
11. TVS Supply Chain Solutions Limited,
12. VRL Logistics Limited,
13. Reliance Industrial Infrastructure Limited, and
14. Sindhu Trade Links Limited.

Using their Business Sustainability and Responsibility (BSBR) reports for the years 2023 and 2024, the data retrieved helped in measuring inclusive growth and equitable development with objectives:

• Assessing the Indian logistics sector’s human rights performance by indicators listed under “Principal 5”.
• Assessing the Indian logistics sector’s inclusive growth and equitable development performance by indicators listed under “Principal 5” and “Principal 8”.

Overall company indicators

• Company name
• Year
• National Office
• International Office
• Total employees
• Total workers
• Total differently abled employees
• Total differently-abled workers
• Percentage of female in Board of directors
• % of females in key management personnel
• CSR expense (% of average profit)

Principle 5: Human rights performance, inclusive growth & equitable development

• Employees who have been provided training on human rights issues and policies of the entity
• Workers who have been provided training on human rights issues and policies of the entity
• Minimum wages paid to employees
• Minimum wages paid to workers
• More than min. wage paid to employees
• More than min. wage paid to workers
• Complaints filed for sexual harassment
• Complaints filed for discrimination at the workplace
• Complaints filed for child labour
• Complaints filed for forced labour
• Complaints filed for wages
• Complaints filed for other human rights issues
• Complaints filed on Health and Safety

Principle 8: Inclusive growth and equitable development assessment

• Job creation in rural areas: % of total wage cost
• Job creation in semi-urban areas: % of total wage cost
• Job creation in urban areas: % of total wage cost
• Job creation in metropolitan areas: % of total wage cost

Inclusive growth and equitable development performance towards social sustainability

After deriving the processed dataset, a basic overview of the data was derived to have a clear understanding of the overall inclusive growth and equitable development status. For this, a pivot table was generated using PowerBI.

The pivot analysis provides insight into the commitment of Indian logistics companies toward inclusive growth and equitable development, specifically through job creation in rural areas as a percentage of their wage costs. Except for TCI Express Limited (67.30% in 2023 and 65.41% in 2024), Transport Corporation of India Limited (70.97% in 2023 and 72.12% in 2024), TVS Supply Chain Solutions Limited (17-18%) and VRL Logistics Limited (10%), India’s logistics sector companies performed poorly when it concerns job creation in rural areas. This indicates a lack of focus on inclusive growth and equitable development, as these companies do not appear to invest in rural employment as part of their business strategy. A more equitable distribution of efforts towards rural employment is necessary for the sector to significantly impact regional economic disparities and support balanced national development.

A closer look at the percentage of job creation costs allocated to different regions showed that Aegis Logistics Limited was the worst performer with 100% of costs allocated to job creation in urban areas. Blue Dart and Reliance Industrial Infrastructure Limited exhibited less than average performance, ranging from 70 to 80% fund allocation to urban areas. TCI Express Limited, Transport Corporation of India Limited, TVS Supply Chain Solutions Limited, and VRL Logistics Limited displayed mediocre performance, while Transport Corporation of India Limited and VRL Logistics Limited, contributed more to inclusive growth by supporting employment in diverse regions and were the best social sustainability performers.

Human Rights Performance Assessment Towards Social Sustainability

To gain an overview of the human rights performance of India’s logistics sector, a pivot table was created using PowerBI, as shown in the figure below. It represents the number of employees who received training on human rights issues and company policies in 2023 and 2024 for the chosen logistics companies.

Delhivery Limited had the highest number of employees trained in 2023 (6,005) and also showed a significant increase in 2024, with 15,386 employees trained. Other notable performers were Aegis Logistics Limited and Sindhu Trade Links Limited which showed an upward trend from 2023 to 2024. However, TVS Supply Chain Solutions Limited trained 3,903 employees in 2023 but saw a slight decrease to 3,615 in 2024. Container Corporation of India Limited and VRL Logistics Limited reported no training conducted for both years.

To gain a deeper understanding of the logistics companies’ inclusive growth and equitable development performance for 2023 and 2024, a bar chart representing the number of complaints filed across different human rights issues was created using PowerBI. It showed that each colour represents a different category of complaints, and the values on the Y-axis show the number of complaints filed.

The visual shows that in 2023, there were 285 complaints related to wage issues and 32 complaints filed for Discrimination in the workplace. Other categories like child labour, forced labour, other human rights issues, and sexual harassment have no recorded complaints. However, in 2024, Complaints related to wages decreased significantly from 285 to 60, Discrimination at the workplace complaints slightly increased to 3, and for Complaints of sexual harassment, 49 complaints were reported. Other categories such as forced labour, child labour, and other human rights issues are still at zero.

Limited complaints for sexual harassment could be seen in 2024 for All Cargo, while Blue Dart, Gateway Distripark limited, Mahindra Logistics and TVS supply chain showed an increase in complaints rate in 2024. Container Corporation of India Limited showed a reduction in complaints in 2024 to 0. This analysis showed that overall, there was a notable decrease in wage-related complaints from 2023 to 2024. The emergence of complaints related to sexual harassment in 2024 indicates a shift in issues.

A deeper investigation into India’s logistics sector’s social sustainability performance is needed

In conclusion, the Indian logistics sector shows a mixed commitment to inclusive growth through regional job creation. While companies like TCI Express Limited and VRL Logistics Limited have made notable efforts by distributing job creation investments across metropolitan, semi-urban, urban, and rural areas, most companies remain focused on urban and metropolitan regions. This imbalance highlights a need for broader rural investment to support equitable economic development.

On the other hand, the logistics sector’s efforts toward addressing human rights and fair labour practices show both progress and challenges. There has been a significant increase in training programs for employees on human rights issues, indicating a growing awareness of critical policies and ethical practices. Additionally, wage disparities, as illustrated by the stable proportion of employees and workers receiving minimum and above-minimum wages, suggest a need for continued focus on equitable compensation practices. Despite improvements in employee training on human rights, concerns such as wage-related complaints and a rising number of sexual harassment cases underscore persistent gaps in adherence to ethical labor practices.

The study emphasizes the critical role of inclusive policies in bridging regional disparities and promoting equitable development. It advocates for a broader rural focus and stricter enforcement of human rights standards to align with the United Nations’ Sustainable Development Goals.

References

• Aegis Logistics Limited. (2024). Business Responsibility and Sustainability Reporting. https://nsearchives.nseindia.com/corporate/AEGISCHEM_28062024165715_ALL_BRSR_Signed.pdf
• Apiday. (2024). What is sustainability and what are its implications for companies. Apiday . https://www.apiday.com/blog-posts/what-is-sustainability-and-what-are-its-implications-for-companies
• Enact. (2018). Why human rights matter to business. https://www.enact.se/wp-content/uploads/2018/05/Human-Rights-and-Business-Practice-Group_Enact-Sustainable-Strategies.pdf
• FM Logistic. (2023). The logistics industry: a fertile ground for diversity and inclusion . https://www.fmlogistic.com/blog/the-logistics-industry-a-fertile-ground-for-diversity-and-inclusion/
• K, Y. (2023). What does it mean to accelerate sustainable and inclusive growth? https://www.linkedin.com/pulse/what-does-mean-accelerate-sustainable-inclusive-yatish-idxgf/
• Mahindra Logistics Limited. (2024). Business Responsibility and Sustainability Report for the financial year 2023-24 . https://nsearchives.nseindia.com/corporate/MAHLOG24_27062024103044_SEintimationBRSR2024Signed.pdf
• NBCC India. (2021). Business Responsibility Sustainability Reporting Policy [Report]. https://www.nbccindia.in/pdfData/policies/BRSR%20Policy_NBCC_12042023.pdf
• Thompson, A. (2024). Sustainability Trends in Logistics 2024 . DHL. https://www.dhl.com/discover/en-us/global-logistics-advice/sustainability-and-green-logistics/sustainability-trends-in-logistics