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India is targeting to enhance its logistics sector performance and, in that endeavor, it is adopting the same path as the rest of the world – bringing in multimodality. While the journey of building an efficient logistics industry began years ago, it was recently that the gaps between the developed and developing infra, and policies were identified. Proactively addressing these gaps, the government along with the logistics industry, is now transforming the unimodal initiative and infra to multi-modal in hopes of reducing the logistics cost, raising the all-around efficiency of the sector, and bringing India at par with other nations. This special feature is an attempt to highlight the journey that the nation has been through so far in building a multimodal ‘Bharat’.
Logistics is the barometer of any country’s economic growth. The sector carries the burden of ensuring unhindered and smooth movement of goods and essential items, both within and outside the national borders despite unprecedented disruptions caused by the pandemic, geopolitical tensions, or any other reasons.
In India, the logistics sector stands at a disadvantageous position when compared to other leading nations, as it faces concerns like clogged transport networks, a skewed mix of transport modes, and inefficient storage facilities. While initiatives such as the Bharatmala, Sagarmala, and UDAN were put in action by the government to create a chain of the infrastructure network, for a nation that spans millions of miles and was sizeably increasing its market capabilities, these series of unimodal networks were not enough.
Although accepted and largely appreciated by the industry, concerns for a well-connected, quality infrastructure were voiced, and the poor connectivity between different modes of transport, along with infra gaps, was highlighted by the logistics fraternity.
Addressing the concerns of the industry, the government envisioned and initiated the process of building a ‘Multimodal Bharat’, that would address the infrastructure gaps ranging from multi-modal connectivity to warehousing facilities and much more.
According to Sanjay Gupta, Managing Director, AVG Logistics, “Various initiatives have been launched to promote multi-modal transportation, with the goal of developing a platform for businesses to integrate these approaches into their operations. These efforts have had a significant impact, as they help to reduce transportation costs and enhance the overall efficiency of the industry.”
INITIATIVES TAKEN SO FAR
The multi-modal network is characterized by integrated and seamless end-to-end or last mile connectivity that reduces the logistics costs and boosts export competitiveness. To be at par with the rest of the world, India is targeting to enhance its logistics sector performance by building a robust multi-modal network.
“India is constructing the largest road-rail-waterways network in the world, which will play a key role in ensuring seamless movement of freight and complement the Multimodal Logistics Parks in order to bring down the logistics cost, and catapult India into the top 25 of the Logistic Performance Index (LPI) rankings,” said Xerxes Master, President, Association of Multimodal Transport Operators of India (AMTOI).
Gati Shakti National Master Plan (NMP):
The government of India launched the ambitious Gati Shakti NMP, aiming at coordinated planning and execution of infrastructure projects. It will incorporate infrastructure schemes of various Ministries and State Governments (like Bharatmala, Sagarmala, inland waterways, dry/land ports, UDAN, etc.), Economic Zones (like textile clusters, pharmaceutical clusters, defense corridors, electronic parks, industrial corridors, fishing clusters), and Agri Zones, to improve connectivity & make Indian businesses more competitive. The initiative will focus on reducing logistics and project costs, expediting the work, and creating jobs. It will increase cargo handling capacity and reduce turnaround time at ports to boost trade.
Prime Minister Narendra Modi, in a post-budget webinar, hailing the PM Gati Shakti NMP as a critical tool for integration of economy and infra planning with the development said, “Gati Shakti NMP is going to change the face of India’s infrastructure and multimodal logistics. The transformation of India’s supply chain sector is evident on the back of the NMP,” and the industry couldn’t agree more.
Hailing the PM Gati Shakti as the global best practice, Dr Surendra Ahirwar, Joint Secretary – Logistics Division, DPIIT, Union Ministry of Commerce & Industry, said, “We are definitely the leader today in adopting such an approach which is very tech-enabled, and which is enabling the government at any level and every level to take decisions on the basis of data. Today the decision on infra development are not just taken on subjective basis or the understanding of an individual but on the basis of data, and on the basis of the suggestions generated by the technology enabled platform.”
Under the initiative, a digital platform will be created, bringing together 16 ministries and government departments including railways and roadways. “The PM Gati Shakti NMP is exactly the initiative needed to ensure that the various ministries work with cohesiveness and proper planning to avoid duplication of work and efforts to complete infrastructure projects in a time based manner,”
Mr Master says. Traditionally, the sector was plagued by the lack of coordination between different Departments, delaying the implementation of projects. Now, with Gati Shakti NMP, the coordination between different departments will be increased. Further, it also addresses other issues like time-taking approval process, the multiplicity of regulatory clearances, etc.
Explaining the same, Dr. Ahirwar says, “With NMP, we have the GIS coordinates of every infrastructure asset in the country whether created on the ground (roads, rails, terminal depots or even social infra) or lying underground (all the pipelines including waterlines, cables etc.). Besides the digital platform, we also have an institutional arrangement of an empowered group of secretaires headed by the cabinet secretary and the involvement of 24 ministries represented by their principal secretaries deliberating on this aspect and taking policy decisions on infra development. And, below that there is a critical level called Network Planning Group, where 7 infrastructure ministries departments have come together represented by their planning heads. This group evaluates every plan having a value or estimated cost of more than 500 crores, being proposed by any one infra department.
He adds, These projects are dissected, evaluated and in a very time bound manner the suggestions and modifications are suggested to the approving authority and then the projects are being called as confirming the Gati Shakti principals.
Complying with Gati Shakti principles means, they are more multimodal, providing last mile connectivity, and have effective and efficient implementation plan.
Multi Modal Logistic Parks (MMLPs):
Launched in 2017 under Logistics Efficiency Enhancement Programme (LEEP) of Ministry of Road Transport and Highways, and recommended by the National Logistics Policy 2022, the MultiModal Logistics Parks enable continuous transfer of freight between different modes of transports.
MMLPs will cut logistics costs and minimise delays in transportation and will have logistical facilities with integrated freight handling facilities.
Developed with support from the State and Union governments, and the private sector, MMLPS will function as central warehouses for freight operations from surrounding regions.
To be governed by the State Industry Development Board, which will act as nodal agency for acquiring land, providing infrastructure and utilities, the MMLPS will not only enhance value-added services to make supply chain efficient, but It will also enhance competitiveness of our production systems and economy. It will boost India’s export competency, accelerate trade and reduce regional disparities, while also consolidating fragmented warehousing in India to achieve benefits of scale and attract private investment into it.
The launch of Gati Shakti NMP has determined the successful implementation of MMLPs. It can be used to identify optimal site locations for MMLPs and link existing or proposed assets like ports and rail terminals.
The immediate benefits of MMLPs will include reduction in transport cost as it will enable a seamless transfer of load from small trucks to larger ones (which have 60% lower freight cost per tonne per kilometre when compared to smaller-sized trucks), reduction of carbon emissions and congestion (as freight movement from rail has 65% lower CO2 emissions and reduce congestion on the road by 20% when compared to trucks), and will also improve warehousing (as warehouses operating in cities will stand to benefit after shifting to MMLPs with low rentals and modern, mechanised storage solutions provided by logistics parks will enable reduction in storage and handling losses).
Dedicated Rail Freight Corridors (DFCs):
Under the Ministry of Railways, the Dedicated Freight Corridor Corporation of India Ltd. (DFCCIL) is constructing six Dedicated Freight Corridors (DFCs). Aimed at prioritizing freight trains without hampering passenger movement, the DFCs are a crucial example set by India to bring down the logistical cost and boost the development of new industrial hubs and townships. Up until February 2023, the Indian Railways has commissioned 1,724 km out of 2,843 km of DFCs.
The railways is constructing two DFCs, namely Eastern Dedicated Freight Corridor (EDFC) and the Western Dedicated Freight Corridor (WDFC). The 1,337 km long EDFC connects Ludhiana to Sonnagar, while the 1,506 km long WDFC connects Jawaharlal Nehru Port Terminal (JNPT) to Dadri. So far, only 861 km of the EDFC and 863 km of the WDFC have been completed.
This is an abridged version of the feature story published in the April edition of the Logistics Insider Magazine. To read the full story click here.
