For any organization looking to expand its warehousing operations in North India, the National Capital Region (NCR) is an obvious and profitable choice given the strong transportation network to and from the area, along with significant industrial hubs in the periphery. From electronics manufacturing to automobile manufacturing, food processing, and heavy engineering, occupiers from all sectors have developed production facilities in this region, resulting in a boom in warehouse demand. And the most recent addition to occupiers of warehousing space in the region are an array of medium as well as giant e-commerce players, eyeing smooth logistics mechanism to various consumer bases.
The 135-kilometre long Kundli-Manesar-Palwal Expressway (or the Western Peripheral Expressway) is a fairly new yet highly profitable investment prospect that has resulted in locations like Farukhnagar, Bilaspur, Tauru, Sohna, Pataudi and Luhari gain the advantage in warehousing markets. In fact, the KMP region accounted for 78 percentage of all warehouse leases in the NCR during FY2019 as a result of better road infrastructure, relatively lesser rental value range and fewer challenges than those presented on the Eastern front. On the other hand, the Eastern Cluster – Delhi, Ghaziabad, Noida, Greater Noida and Faridabad – has not been the first choice for many since a long time now, majorly because of connectivity issues with other strategic locations.
The industrial setups in this cluster are well within the urban area unlike the Western Cluster, thereby negatively impacting the vehicular movement. Adding on is the inferior quality of roads as compared to national highways, which has also restricted warehousing activity in the area to a large extent. Another factor holding back growth on the eastern side has been the ambiguity of land laws which make it difficult for agricultural land to be converted to land to be used for warehousing.
A NEW ROAD TO BETTER PROSPECTS
The upcoming Jewar International Airport will be developed as a multi-modal logistics hub and is being touted to fix the supply chain leakages with lesser time taken and distance travelled, as the Ground Transportation Center will be offering various public and private modes of transport. To ease logistics to and from the region, the UP Government has also given a green signal to the proposal for connecting Delhi-Mumbai Expressway to the Yamuna Expressway, and further to the Jewar International Airport, via interchanges and viaducts. The spur will provide direct access for vehicles to and from the Airport terminal to the Delhi–Mumbai Expressway and the task to build this connecting link will be designated to NHAI.
The spur and interchanges between the two expressways and their further connection to the Jewar International Airport will also result in better connectivity between the hinterland and JNPT in Mumbai, and there will also be an added integration with the Delhi-Mumbai Industrial Corridor and the Dedicated Freight Corridor. It is also evident that with the increased connectivity of the hinterland, there will be a boost in warehousing along the expressways and the Airport in the long run. This will also result in the collective development of the Ghaziabad-Noida-Dadri industrial cluster. The airport has a lot of hopes pinned on it from the supply chain perspective. Industry experts have predicted that the project will help Noida to grow as the logistics hub in the Eastern Cluster, similar to the existing set-up in the Western Cluster around Gurugram.
This is an abridged version of the article which was originally published in the January issue of the Logistics Insider Magazine. To read the complete interview, click here.