Government plans warehousing policy to ease the logistics cost

The center plans on introducing a warehousing policy that lays the roadmap for developing exclusive warehousing zones through public-private partnerships to ease transportation and logistics costs.

TO be set up with proper storage facilities the zones will be on the outskirts of major cities to avoid traffic congestion within city limits.

The policy will be framed by the National Highways Authority of India (NHAI) that will also be the implementing agency.

NHAI member Manoj Kumar said the policy is at the final stages and will be out in the public domain before the year-end.

The zones will use land banks along highways and expressways available with the NHAI. Under the public-private partnership (PPP) model land will be offered to private developers for constructing warehousing zones on a revenue-sharing basis or for a fixed fee. The terms of the agreements will be finalized later.

The fast-moving consumer goods companies along with steel and cement makers will benefit from the warehousing zones as they will be able to stock inventory efficiently near major hubs.

While the location to set up the zones are yet to be finalized, the industry suspects the first such facility to come up near road transport mister Nitin Gadkari’s hometown Nagpur.

In addition to the warehousing zones, the multi-modal logistics parks, which are also being set up by the NHAI, will help reduce the overall logistics costs.

India’s Logistics cost remains high, 14-16% of gross domestic product (GDP) compared to 8-10% of GDP in China and 12-13% in the US.

With the operationalization of the warehousing zones, the carrying capacity of trucks will also be almost doubled as large goods vehicles will no longer be needed to ply on city roads, which in turn will help ease major traffic congestions.

The proposed warehousing zones are part of the government’s initiatives to reform the transport sector that accounts for a majority of goods movement across India.

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