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7/26/2019 multimodaltransportdevelopment-140529161730-phpapp02

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We have seen Indias swift growth in last ten years. Despite thegrowth has come from the service sector but the manufacturing andthe exports have also grown up to mark. Now a daysmanufacturersoutsource the logistics increasingly. But however, the Indian logisticssector in different ways still wrap behind in performance with the

global standards. This is obvious from the truth that India ranks as46th of 155 countries in the World Bank International LogisticsPerformance Index. Relatively, our neighbor China got the 26thrank.13% of GDP is the average cost of logistics in India. Hence, there isa considerable need to invest and advance efficiencies in theintermodal and multimodal logistics sector in order to prevent the

friction cost to obstruct the preferred shifts. The main goal of themultimodal logistics is designed to reduce the transit times, andavoid the congestion in the overcrowded modes and lessen logisticscost.


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Infrastructure development Containerization

Dry ports

Port sector

Inland waterways

Road transport

Dedicated freight corridors

Regulatory reforms Multimodal transport act

Private freight terminal policy

Draft coastal shipping policy\

Cabotage policy

Policy to authorize MTOs

FDI

Investment in technology Cloud computing

Global positioning system

RFID

ERP

Mobile technology


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1) Containerization: Containerization is the most significant driver of growth of multimodal

logistics. At the major ports the container traffic has nearly doubled inthe last 5 years. Globally, container traffic has grown at approx 10% peryear over the past 20 years.

According to calculation, worlds container throughput will arrive at 1billion TEUs by 2020, which is roughly double of the existing containertraffic. The emerging Asian & African Countries are anticipated to be thechief movers in attaining this growth. Most of the shipyards arecrammed with orders for container ships of capacity over 10,000 TEUs.These container ships will figure a major part of the world fleet in theapproaching years.

The advantages of containerization incorporate among others, least orno damage to goods, optimum utilization of storage & warehousingcapacity, technology implementation due to mechanized handlingrequisite for containers, lessening in transport time and end-to-enddelivery of goods, eventually leading to considerable cost savings.


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2) Dry ports: As on 30th June 2011, as per Ministry of Commerce a total of 247 CFSs/ICDs were

approved by the Inter-Ministerial Committee out of which 73 were under

accomplishment and the rest were fully operational. To hold up the planned container

terminal projects at major and non-major ports CFSs/ICDs are expected to come up in

their locality. According to a study, by the time all phases of the Vallarpadam ICTT arecommissioned, it is expected to build a need for about 20 CFSs in the region.


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3) Port sector: India presently has 12 major ports & 187 minor ports. Port traffic grew at 7.66% p.a. between

2005-06 & 2010-11. While non-major ports registered a double digit growth at 13.55%, traffic at

major ports grew only at 5.37%. Cargoes like the POL, iron ore, & coal represent a major portion of

traffic at both major/ non-major ports.


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4)Inland waterway: Presently only 1% of total inland cargo transport is handled by the IWT. There is prospective

for other cargo like coal, dry bulk, break bulk and containers to be transported economically

and efficiently through IWT.

India has traversable inland waterways of almost 14,500 km, out of which 5,200 km of

major rivers and 500 km of canals are appropriate for automated crafts.


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5) Road transport: In India Roads has always been the primary mode of transport. India has approximately

42.36 lakh kms which is the largest road networks. Around 60% of the total freight and

approximate 87% of passenger traffic is carried by Indian roads According to the Road

Transport & Highways Department. Traffic is forecasted to rise about 8-10% p.a. The

superiority of the road infrastructure remains a big apprehension.


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6) Dedicated freight Corridors(DFC):


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A large portion of railway sidings is single line and is utilized by passenger as well as freight trains.The sharing of railway sidings amongst the passenger and freight trains causes disruption in thesmooth functioning of the trains. Long waiting times and uncertainty of arrival are the two primaryreasons for the delay in time of freight goods.

The DFC project is expected to tackle some of these issues. The government has alreadysanctioned the Western Corridor (Mumbai to Dadri) and the Eastern Corridor (Dankuni toLudhiana) projects which have a total cost in excess of Rs. 45,000 crores. Studies have alsocommenced to analyze the prospects of the East-West corridor (Kolkata-Mumbai), the North-Southcorridor (Delhi-Chennai), East Coast corridor (Kharagpur-Vijaywada) and Southern corridor(Chennai-Goa).

The major objectives of the DFC project are: Increase the share of railways in freight transport. Build separate infrastructure for handling freight to enable a focused approach for developing both

passenger and freight business. Provide seamless connectivity to customers. Reducing unit cost of transportation through use of a competitive tariff structure Work on both

Western and Eastern corridors have started and both are expected to be fully functional by the endof 2017.

The DFC project plans to provide new services including: Roll-on Roll-off for all types of road vehicles which can piggy-back on wagons Triple-deck automobile wagon on Western corridor and Double-deck on Eastern corridor. Movement of over-dimensional consignments from ports to construction sites Setting up of new terminals with a one-stop-shop solution for all value added services likewarehousing, packaging, custom bonding etc.


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1) Multimodal transport act 1993 The Indian government recognized the benefits of multimodal transport

way back in the early 1990s and came up with the MultimodalTransportation of Goods Act in 1993 with the objective of encouraginggrowth of exports from India. Through the Act the government aimed atdeveloping international multimodal transport which would reduce

logistics costs and thus make Indian products more competitive in theglobal market. The Act established licensing requirements, contractualterms (through the Multimodal Transport Document) and liability regime.The Act was again amended in year 2000 to give more protection toexporters.

There are still lacunae in the current version of the Act according totrade. Several amendments have been proposed by the Association of

Multimodal Transport Operators of India, like obligatory registration ofMTOs with DGS, modification to the Customs Act to enable seamlessmovement of goods, penalties for offences among others. It has beenestimated that these changes should reduce the transit time fortransport of goods by 40-50%.


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2) Private freight terminal policy: The policy aims to stimulate development of privately owned freight terminals on private land for

dealing with break bulk goods, parcel traffic and containers. Indian Railwaysgoods sheds are not

in a good state, which is why they have gone for PPP mode of development. Under this policy,

PFTs are expected to provide goods handling, warehousing and other associated logistics services

to rail users and facilitate expansion of the 3PL sector. After the lukewarm response to its originalpolicy the IR restored it recently. CWC (Central Warehousing corporation), CONCOR and several

private players are looking to build and operate PFTs. If it succeeds, it is bound to increase the

share of rail freight transport.


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3) Draft coastal shipping policy: Along with various support services the proposed coastal shipping policy is intended at enhancing

the coastal trade with extraordinary spotlight on -coastal ships, River Sea Vessels (RSVs), InlandVessels (IVs) and Cross trade compatible vessels.

Infrastructure: Building up more minor ports along the coastline, promotion of Ro-Ro jetties,dedicated berths for coastal ships, ship repair facilities & dry-docks, LNG supply facilities,dedicated warehouses for coastal cargo, rail/ road connectivity & deepening of sea channels atminor ports.

Financial incentives including subsidies: Implementing a hard line ship-building subsidy policy,exclusion from certain taxes, lesser tariffs than foreign ships, subsidies for Ro-Ro and repairjetties, fiscal incentives for small ports & setting up a Coastal Development Fund for coastal ships.

Resolving manpower issues: Getting to the bottom of problems with regard to manpower andmanning scales to organize for availability of sufficient and good quality manpower.

Promoting modal shift from road and rail to coastal shipping: Improve cutthroat ability ofcoastal ships and encourage the Carbon credit scheme.

Data base and communication infrastructure: Establishing & retaining a robustsystem/database for collection of precise data, publishing annual reports on coastal shipping,developing a freight exchange and streamlining the multi-modal transport operations. The abovemeasures are expected to provide a boost to the coastal shipping in India.


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4) Cabotage policy: The Cabotage policy checks the coastal trade of a country. Few countries practice

absolute Cabotage law while others practice a tailored one. In India, the CabotagePolicy is not absolute. It is regulated through provisions of sections 406 and 407 of theMerchant Shipping Act, 1958.

The original Cabotage policy required foreign ships to take a license for plying on thecoastline of the country. Coastal shipping thus had to be carried out only by Indian

ships or ships chartered by Indian citizens. Due to this and several other reasons, aconsiderable part of Indian transshipment cargo was getting diverted to Colombo,Singapore & Jebel Ali Ports.

Recently the policy has been relaxed specifically so that ICTT, Vallarpadam wouldattract transshipment cargo destined for Indian ports. It would allow containers arrivingthere to be shipped to other Indian ports. Traffic growth at ICTT, Vallarpadam, whichwas specifically developed to operate as a transshipment hub, has been lack luster tillnow and significantly below estimates. This policy change is expected to aid in growth

of traffic at there and more importantly, reduce diversion of Indian cargo traffic to portsin other countries. However, the flipside is that domestic shipping companies may facesevere loss of business.


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5) Policy to authorize MTOs: This policy was formulated to permit rail linking of ICDs by private parties other than

CONCOR and to allow them to move container trains on the same lines as CONCORfor both international and domestic traffic. IR would provide the engine and crew butthe private players would own the trains. Sixteen players were persuaded due to theprivatization of container rail operation and brought in investments of approx Rs.2,000 Crore. Nevertheless, limitations have been sited on private players to carry

certain cargo such as coal, coke & some minerals. The private players have todepend on IRs infrastructure which, they argue, is not up to optimum standards. Theyhave to face strict competition from CONCOR, which is an IR subsidiary and ispresent in this sector since a long time.

In addition, haulage charges have been raised from time to time, the latest one beingthat for pig iron and sponge iron, squeezing out profit margins of private players. Onthe contrary side the IR keep up that it follows the cross-subsidization guidelines bytrying to receive additional from freight transport so as to be competent to persistently

providing cheap passenger transport.


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6) FDI: India allows 100% FDI in maritime infrastructure like ports, terminals, jetties, harbors,

merchant shipbuilding as well as in support infrastructure like warehousing, roads and

Inland Water Transport. Since, then there has been significant investment especially in the

ports sector by foreign players the major ones being those by DP World, APM Terminals

and PSA Singapore among others.


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1) Cloud computing Low cost footprint:Low up-front investment and small payback periods.

Enables collaboration:It allows all the stakeholders in the supply chain to connect through this

software to work together on different phases of logistics management like planning, forecasting &

procurement efficiently and makes the system transparent & free from human errors.

Scalable: Because of the ease and agility of deploying these solutions, they are scalable to meet

volatile customer demands

Integration: It increases supply chain efficiencies by integrating information on the same platform.

Real-time visibility: With all data regulated precisely on single platform, its easier for the users to

visualize real-time of inbound/outbound transportation and the prevailing shipments in movement.


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2) GPS: GPS technology gives the details of the origin and destination of a

shipment. During transit, it helps in providing the exact position of aconsignment. There are sophisticated GPS maps and technologyavailable through which one can track the movement, and be

proactive to customers by informing about the shipment status andexpected delivery time. With the GPS systems becoming cheaperand more advanced, by the day, many of the large and mediumsized logistics players have adopted GPS tracking systems for theirtruck.

In addition to tracking, GPS systems have also been found to beuseful to reduce truck breakdowns. In the event of a breakdown, it

minimizes the amount of time spent in recovering the vehicle bysending service personnel located nearest to the vehicle to do therepair job. Also, certain GPS systems allow setting up of preventivemaintenance alerts by calendar time, engine on-time or mileage tonotify the operator when the vehicles are due for maintenance.


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3) RFID:

Importance of RFID in logisticsAllows the service provider to track items at each supply chain location, from plant to

consumer Protects against copying and counterfeit of goods by embedding a unique Electronic

Product Code into each item

Proves the origin and improves handling of goods. Shippers can use RFID tags to showrobustness of a supply chain and to ensure greater security in processes Tracks the amount of goods in the supply chain and helps to save capital required for

distribution and warehousing storage costs

RFID technology Reduces the manpower requirement considerably Saves time as scanning of cases/items takes place rapidly. RFID can scan upto 1,000

boxes per second whereas bar coding would take a few hours to scan the samenumber of boxes Has a high level of security as data cannot be hacked


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4) Enterprise Resource Planning

ERP systems integrate several data sources and processes of an organization into a unifiedsystem. A typical ERP system uses multiple components of computer software andhardware to achieve the integration.

ERP induces enough visibility in the supply chain so that an efficient work flow can beestablished. By pulling together and sharing information from functions such as purchasing,warehousing, and sales it helps to control costs. The only issue is that installation and

upgrades of ERP systems are very costly.

5) Mobile Technology

The recent developments in mobile technologies allow companies to stay connectedanywhere, anytime. Many of the large logistics players have developed mobile applicationsto allow anytime-access to information through almost any mobile device. These toolsprovide immediate insight into the status of a shipment, making operations run faster andsmoother. These applications function on Apple, Blackberry and Android platforms and are

free-to-use.


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Challenges like the Poor Road Infrastructure, Institutional Barrier, Financial barrier Policy

Constraints impeding the development of intermodal transport.

A need for Intermodal Linkage and Collaboration at national and regional levels

Improve the Current aged Inter Modal Connections

Promote co-operation between infrastructure planners

Enhance the Use of Information Communication and Technology

Enhance high rate of development in other sectors

Modernize ports Role of Government in Facilitate multimodal Transport


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several initiatives have already been taken by the Government andthe private sector in developing intermodal/multimodal transport.However, many issues still remain to be embarking upon. Thereforethe issues must be prioritized basing on whether they can beresolved in short term or long term.

The containerization for both domestic and EXIM cargo needs a

strong focus. There is need for accomplishment of Dedicated FreightCorridor project without delays. Consequently on a long run it willreduce logistics costs and increase railways market share in freighttransport. The Inland Waterways and Coastal Shippingdevelopments are to be focused and continuously improve toincrease business and attract more shipments. This at the outsetneeds to come from the government by the way of policy reformsand the subsidies or other financial inducement.

Therefore both the Governments right policy incentives and theprivate sectors interest should go parallel for a long way to stimulatethe growth of the logistics and supply chain sector in India.

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