CARGOCONNECT-AUGUST2024 - Flipbook - Page 12
PURPOSEFUL
MMLPS SHIFT
TO HUB-AND-SPOKE
EFFICIENCY
I
ndia9s manufacturing industry or the production sector
has signiocant opportunities
for improvement in leveraging the advantages of
transitioning goods eïciently and
sustainably across diferent modes
of transportation. For many years,
a signiocant challenge has been
the insufficient infrastructure
that hinders smooth transitions.
The government9s objective is to
tackle this issue by implementing nationwide infrastructure
expansions. For instance, In India,
freight vehicles typically travel at
speeds averaging 25 to 30 km/h,
considerably slower than those in
the US. This slower speed contributes to higher costs per tonne
per kilometer (ptpk). Before 2015,
adjusted for purchasing power
parity, India9s road freight costs
were twice as high as those in the
US. This disparity was primarily
attributed to factors such as an
unfavourable inter-modal mix and
underdeveloped infrastructure.
Key policy initiatives,
including the establishment of
35 multimodal logistics parks
(MMLPs) under projects like
Sagarmala and Bharatmala, aim
to rectify these issues. MMLPs,
launched by the government in
2019, are integral components
of the National Logistics Policy
(NLP). The Ministry of Road
Transport and Highways leads
this effort with support from
National Highways Logistics
Management Ltd (NHLML), collaborating with Inland Waterways
Authority of India (IWAI) and
Rail Vikas Nigam Ltd (RVNL)
through a tripartite agreement.
Currently, most MMLPs
integrate road and rail transport.
Future plans include partnerships
with entities like Airports Authority of India (AAI), Inland Water12 | CARGOCONNECT AUGUST 2024
ways Authority of India (IWAI),
and Indian Ports Association (IPA)
to scale up parks, reduce logistics
costs, and promote sustainable
transport options.
MMLPs facilitate seamless
intermodal freight movement and
ofer various functional beneots
and services. Key prerequisites
for establishing an MMLP include
a minimum 100-acre area (40.5
hectares), high cargo volumes,
and connectivity to rail, ports,
or airports, along with logistics
services such as aggregation, processing, storage, and distribution.
India's investment in multimodal logistics infrastructure
is exemplified by the National
Industrial Corridor Development
and Implementation Trust. This
initiative focuses on developing
dedicated freight corridors such
as the Western Dedicated Freight
Corridor (WDFC) and the Eastern Dedicated Freight Corridor
(EDFC). These corridors aim to
connect major manufacturing
hubs with key ports and consumption centres across the country.
The WDFC spans 1,504 km
from the Jawaharlal Nehru Port
Trust near Mumbai to Dadri near
Delhi. It is designed to reduce congestion and enhance the eïciency
of freight movement by incorporating dedicated freight tracks,
advanced signalling systems, and
logistics hubs. This infrastructure
improvement facilitates faster
and more reliable transportation
of goods between western and
northern India.
Similarly, the EDFC stretches
1,840 km from Ludhiana to
Dankuni near Kolkata. It aims
to alleviate congestion on existing
rail networks and improve connectivity between northern and
eastern India, thereby stimulating
regional economic growth.
These initiatives are expected
to result in a signiocant reduction
in the number of freight vehicles
required and a corresponding
decrease in transportation costs.
By leveraging these MMLPs, the
government aims to reduce the
country9s logistics costs to 8-10%
of GDP by 2030, aligning with
international benchmarks.
Expected Benefits
Logistics parks or MMLPs, for
instance, are positioned to signiocantly lower overall freight
costs by facilitating transportation using large-sized trucks
and rail. They also contribute
to mitigating vehicular pollution
and reducing congestion in major
urban centres. Strategically situated in areas with substantial
freight activity, these parks aim
to decrease logistics costs to less
than 10% of the Gross Domestic
Product (GDP). Key anticipated
beneots of logistics parks include:
* Cost Reduction: By enabling
the use of larger trucks and
rail for freight transportation,
logistics parks are expected
to lower transportation costs
by approximately 10% across
the top 15 nodes. Larger
trucks signiocantly reduce
ptpk freight costs by about
60% compared to smaller
trucks. Rail freight costs are
also approximately 45% ptpk
compared to average road
freight costs.
