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Multimodal Logistics in India: A Reality Check

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As shared by one of the industry leaders we approached, with the massive growth in containerisation and the great  shift in thinking from a conventional unimodal to a system concept multi-modal transport approach, multimodal is currently the main method used in the international transportation process. The reason being, its tendency to enable the optimisation and organization of all transport modes into an integrated continuous system, to achieve operationally efficient and cost-effective delivery of goods in the supply chain. In the last 5 years, there has been a tremendous push towards making India a transshipment hub and multimodal has been pitched as ‘THE’ way to go about it. We took it on ourselves to get feedback from various industry stakeholders and understand the current situation on that front.

Multimodal logistics isn’t a new concept to most of us – it basically connects all the different modes of transportation for efficient and speedy movement of goods, with add-ons like handling,  warehousing, and distribution from the point of origin to point of consumption.

With the spurt of economic growth witnessed by India in the last decade or so, multimodal transportation has become even more indispensable.

While explaining the meaning of multimodal logistics in a simplified manner, V Raju, Business Head & Senior Vice President (3PL Contract Logistics), Avvashya CCI Logistics enumerated a few benefits of it as follows:

• Agile and shared mobility with low asset utilization
• Seamless connectivity and end to end visibility: The connected experience
• Unified payments system basis last mile delivery concept
• Institutionalizing ‘One Transport’ concept, thereby contributing in reduction of carbon footprints.

COST-EFFECTIVE

While we say that India spends around 14% of its GDP as logistics cost, multimodal transportation has proven elsewhere in the world as a solution to reduce these costs. No wonder the current government touted it as a solution to our woes of high logistics costs.

Even though the Multimodal Transportation Act was passed by the Indian government in 1993, the progress on that front has been rather slow.

“If we talk about manufacturing, there has been a demand for complete and comprehensive logistics solutions at their end from the very beginning – even before we conceived the term Multimodal Logistics Parks. However, it involved government support, resources and investments. And rightly so, the government has come out in support of multimodal logistics by embracing the PPP model,” said Dr Surendra Ahirwar, Joint Secretary, Logistics Division, DPIIT, Ministry of Commerce and Industry 

The Prime Minister Gati Shakti National Masterplan has been a sort of much needed revolution.

Raaja Kanwar, MD at Apollo LogiSolutions and Apollo International, shares a similar thought,  “The Gati Shakti programme launched last year is a step in the right direction, especially in light of the proposed Multi-Modal Logistics Parks (MMLPs). Improved and integrated connectivity will be instrumental in not only reducing logistics costs but also the time taken in delivering goods, leading to improved productivity.”

ADOPTION AND IMPLEMENTATION

But how have users of multimodal logistics warmed up to the idea of it over the period of time? Well, by majority opinion, quite well. Logistics is lately being recognized as a core ingredient in economic progress of India, thereby receiving a higher level of attention from industry players, regulatory bodies and the government, in terms of improvement in logistics efficiency. With major industrial and manufacturing hubs situated deep into the hinterland, the potential of multimodal logistics has increased multifold, for both long and short haul transportation.

In an appropriate example, the Indian Railways had opened container transportation to private players in 2006 with the intention of bringing in more cargo to rail from road. Once the private rail operators stabilized themselves from the uncertainties in the formative years, more and more container cargo is shifting from road to rail, thus, increasing the scope for multimodal transportation.

On being asked about the adoption of multimodal logistics in India, APR Abhishek, President – Meesan India, RSA Global defined it as phenomenal.

He cited the recent example of Maersk successfully completing first India-Bangladesh cross border logistics of containerised cargo via the Indo-Bangladesh Protocol route for Coca-Cola Bangladesh Beverages. In this perfect example of multimodal logistics, the cargo could be moved from origin to destination using firstmile and last-mile services, including landside transportation by road or rail, customs clearance, warehousing and distribution, supply chain management etc.

“The eco system has done substantial work on impediments in the last few years to ease out bottlenecks to minimize cost and lead time for movement of goods. Industry in the last few years has matured to accepting, or at the least exploring, end to end solutions from service providers (supported by right policy interventions by the Government). Specifically, from the Automotive industry standpoint, Inbound and outbound logistics have started moving to multimodal transportation including Road, Rail, Air, Waterways etc. However still it is at a very nascent stage and requires a lot of work to be done by the ecosystem to mature and do it at mass level,” Kalpesh Pathak, independent automotive supply chain expert says, as he appreciates the work of policymakers and regulators towards simplifying and facilitating multimodal transportation.

“The GoI has introduced key projects that could push multi-modality in logistics and enable growth in the sector. Gati Shakti is by far the mightiest push by any government to break departmental silos and push for infrastructureled growth. One of the major pillars of Gati Shakti is identification of connectivity and infrastructure gaps that could be suitably addressed by multi-modal infrastructure projects. In addition to that, the Logistics Division, DPIIT led efforts have also culminated in positive synergy across various States and UTs to focus on multi-modal  transport infrastructure creation.” says Ankur Kumar, Project Manager (Logistics, CFS/ICD, Container Shipping), EY.

“Setting up of Multi-Modal Logistics Parks is part of the transport ministry’s Logistics Efficiency Enhancement Program (LEEP) that will improve the country’s logistics sector. Further, the Logistics Division proposed under the Ministry of Trade and Commerce, and the National Logistics Policy and Portal are expected to drive synergies for multimodal transportation,” Prakash Tyagi, Senior General Manager (Operations), Gateway Rail Freight  

“We have to adopt and implement effective multimodal transportation for the sake of our own existence and profitability. We can learn from western countries on building sustainable infrastructure at optimal costs,” Anil Chinnabhandar, Senior VP – Retail Planning and Supply Chain, Landmark Group

“Complexity with local regulation needs to go away to have ease of operations. It also needs to digitize the flow so that people need not travel to submit the data or documents,” Kartik Shah, Regional Manager APAC – Logistics, Sennheiser Electronics India

“Our TMT bars are transported from Jamshedpur to Haldia by rail, then via inland waterways to Pandu Port and finally towards the last point of delivery by road. Similarly, from Jamshedpur to Port of Damra or Paradip, then using coastal shipment to the west coast of India and then local movement through road. These routes make the logistics process truly multi-modal,” Peeyush Gupta Vice-President, Supply Chain, Tata Steel


This is an abridged version of the original story that was published in the August edition of the Logistics Insider magazine. To read the complete article, click here.

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