Indo-German Logistics Forum

Logistics Sector In India: Logistics Sector In India: Present Scenario And Way Forward

PROF. T. G. SITHARAMCHAIRMAN, CISTUP

Presentation by:

FREIGHT TRANSPORTATION AND LOGISTICS

Freight - physical expression of th

FREIGHT TRANSPORTATION AND LOGISTICS

Transport/Carry

Change/Transfers

the economyEfficient economies need efficient freight systemsImpeding the flow of freight =

Store/Storage

Pickingogis

ticsp g g

Impeding economic activity1/4 of the employment in US is in freight transportation and logistics g

Packaging

DistributionL

ologisticsIt consumes 27.8% of total energy, and 70% of oil; and produces 53% of the carbon Distribution

Major Components

produces 53% of the carbon monoxide, 31.3% of the nitrogen oxide, 24.2% of volatile organic compounds, and 39.3% of the carbon dioxide; more than 25% carbon dioxide; more than 25% of these numbers correspond to trucking

COMPONENTS OF THE FREIGHT SYSTEMSShippers:

The agents that produce and ship the cargo

InfrastructureRegulatory agencies M l i l d

p gReceivers:

The agents that receive the cargo as an intermediate or

Multiple modesRailroads / Air transportHighway related: rickshaws, cargo as an intermediate or

final goodCarriers:

g way e a e : c s aws, trucks of all sizes, etc.Waterways/Marine

M lti l i tThe conduits between shippers and receiversFor-hire or private

Multiple environmentsUrban, suburban, regional national, internationalFor hire or private

3

origin consumer

INDIAN LOGISTICS SECTOR

Broad Classification – Courier Services, freight forwarding, 3-PL and Reverse LogisticsC l US $110 billi d d V l US $ 200 Current value - US $110 billion and expected Value – US $ 200 billion by 2020.Growth rate : 8-9%

Organized10%

Penetrating the

1 to 10 crore9%

10 to 100 crore2%

above 100 crore0.3%

10% the unorganized sector is very

difficult.

Unorganized90%

0.3 to 1 crore88.7%

Intense Competition.

Market Structure Competitiveness of Indian Logistics Industry

Rendering just basic services is

not sufficient

STRUCTURE OF INDIAN LOGISTICS SECTORLogistics Segment Growth Drivers

Projected Growth

Rate

Barriers to entry

Dominance of Players

CapexRequiremen

t

Nature of Competition

Courier Domestic growth 20-25% Low Unorganized Low Local

XPSFMCG, Retail, Auto & Auto

Ancillaries 20-25% High Organized High National

WarehousingAgriculture commodities, Manufacturing activity 16-18% Medium Unorganized High Regional to National

Agriculture Commodities Trucking

Agriculture Commodities, Manufacturing activity 10 -12% Low Unorganized Low Local

Container EXIM and domestic trade 12-15% Medium Organized High NationalInland Container

Depots / ContainerFreight Stations EXIM 15-20% Low

Organized /Unorganized High Local

Characteristics of Logistics SectorHigh costs of operations Low margins

Value Driver:

• Competiti e PricingShortage of talentInfrastructural bottlenecks Demand from clients for investing in technology and providing one-stop solutions

• Competitive Pricing• Safety• Customer Satisfaction• Wide Geographic Reach• Operational Efficiencytechnology and providing one stop solutions

to all their needs.Consolidation through acquisitions, mergers and alliances.

• Operational Efficiency• Time Factor• Value added services

INDIAN LOGISTICS PERFORMANCE(WORLD BANK)

3

4

5LPI Score

CustomsTimeliness

Year : 2012 (Out of 155 countries)

Parameter Score Rank

LPI Score 3.08 46

C t 2 77 51

0

1

2

3

InfrastructureTracking & tracing

Customs 2.77 51

Infrastructure 2.87 56

International shipments 2.98 54

International shipments

Logistics competence

2007 2010 2012

Logistics competence 3.14 38

Tracking & tracing 3.09 54

Timeliness 3.58 44

Indian Logistics performance comparison for 2007, 2010 & 2012

There is no much improvement in the last fi di t ld b k tTimeliness 3.58 44

Source : world Bankfive years according to world bank report

INDIAN LOGISTICS INDUSTRY: KEYISSUES

Cost of logistics in India: 13-14% of GDP.Due to inefficient InfrastructureDominance of unorganized playersPlanning, Policies and delayed projects

Shipping8%

Air<1%

Figure: Segment wise share

Only 10% of the sector is organized.Infrastructure bottlenecks.Only 30% containerized cargo RailOnly 30% containerized cargo. Lopsided modal mix of goods.Turbulent global conditions.

Road60%

31%

“Infrastructure stands out as the chief driver of progress in top f f ll d b i i l i i i dperformers followed by improvements in logistics services and

Customs & Border Management”World Bank’s International trade department

URBAN FREIGHT INDUSTRY

• By 2030, Indian middle class consumers increase by four folds.40% of the population will live in urban areas by 2030• 40% of the population will live in urban areas by 2030

• Warehousing and Inventory management are critical parametersTi i d f h f di d h • Time windows for the entry of medium and heavy commercial vehicles

About 80% of all the manufactures are produced in metropolitan areas

Drivers :-• Growing organized retail• FDI in multi-brand retail

produced in metropolitan areasLarge metropolitan areas produce major

amounts of products, all the transport of the cargo is undertaken by the freight system.

• FDI in multi-brand retail Raw materials to manufacturers, Intermediate inputs to further processing, & Final products to marketsmarkets

This sector is extremely important for the local, regional, and national economies

The Indian City: 18th -21st Century

Indian high density city – pre 1850

Present city

pre 1850

Colonial it 1850city 1850-

1950

INDIA’S CITIESBUILT AROUNDTRAINS FOR100 YEARS100 YEARS

Mature European Cities Post colonial Indian CityMature European Cities(19th and mid 20th century)

Post colonial Indian City(Late 20th – 21st Century)

Central business district critical Multiple business districts, cities Central business district critical within cities

Public transport (mainly rail) before cars

Motorcycles, inexpensive comfortable cars challenge role before cars of public transport

Manual labour in factories Service and informal sector

Car movement & speed concerns dominate

Safety, climate change & pollution

Management by mechanical systems Internet & ITS

Complexity of Trip Movements

MOBILITY CULTURE IN INDIA VERY COMPLEX

India shows a predominantly road focus for the future transport mode “freight & passenger”transport mode “freight & passenger”

Infrastructure Growth as key driver

Modal Split India • Continuous erosion of railways in

freight movementR d t t i th d i t

57%69%Road

Freight• Road transport is the dominant

mode of transport• Airline and costal shipping growing

– up to 30% annual growth rate for

36%25%

Rail

shipbuilding industry (POSRI 2011)

• Substantial shift from Rail to Road

1% 1%6% 5%

2007 2020

Water

Air

Passenger • Road transport is the most dominant mode of transport – over 85% of passengers are moved by road

Source: Mckinsey 2008, POSRI 2011, Planning Commision 2004, FDC Analysis.• Airline growing

IINDIANNDIAN TTRANSPORTRANSPORT PPOLICYOLICY

Bi l f PPP (30% f h d T l I i XI 5 Bigger role for PPP (30% of the reqd. Total Investments in XI 5 Yr. PlanTransport infrastructure accounts for approx. 34% of total investmentinvestment

Infrastructure Investment in XI 5

IrrigationWater

7%

Storage1% Gas

1%

Year Plan National Programmes:NUTP 2006 : Transportation policy with focus on moving

Telecom13%

g12%

Roads15%

Transport infrastructure

policy with focus on moving people

JNNURM : to finance urban

Electricity32%

Railways13%

Ports4%

34%JNNURM : to finance urban transportation initiatives with USD 20 Billion outlay to cover 60 cities with million + population in

Source: Projections in the XI 5 Year Plan – Investment in infrastructure. GoI

Airports2%

p pnext 7 years

THESE FORCES

GLOBALIZATION REVOLUTION THESE FORCESHAVE BEENEXPECTED TOINCREASE

TR

ATIO

N

URBANIZATION–RAPIDLY

AD

E RV

OL

UT

URBANIZINGINDIA

RE

VO

Y R

EVO

LU

TI

UST

RY

ION

IND

U

ICT REVOLUTIONSource: Mckinsey, India Report 2011

What it means to India?

Source: Mckinsey, India Report April, 2011

Alth h l th thi d f I di ’ l li i iti Although less than one-third of India’s people live in cities and towns, these areas generate over two-third of the country’s income and account for 90% of government revenues. (Singh 2012)

Although migration “rural to urban” takes place India will be empowered in 2030 still by a 60% rural

o latio population India’s population growth

(# of urban and rural habitants in Population growth inurban & rural regions

(# of urban and rural habitants in India)

1,447**1%

0,8%

• India is in 2011 and will be in 2030 still a country with predominantly Rural

1,210

1,336**1,6%

1% still a country with predominantly rural population and a very high village population

• United Nations projection estimates a total population of around 1 4-1 5 billion habitants in CAGR

Urban

1,0291,7%

around 1,4-1,5 billion habitants in the year 2030; however the population growth will constantly slow down

CAGR

40% • Rural to urban migration: From

867

28%(286)

31%(377)

35%(465)

(574)Rural to urban migration: From 377 million in 2011 to 574 million in 2031 - increase of around 200 million new city habitants

• Estimation of 50-60 urban cities above 1 million habitants today

• Source: UN (2011), World Bank (2012)  and FDC analysis (2012)**     CAGR Population India: a) 2010‐2020: 9%; b) 2020‐2030: 7%;

1991 2011 2031E2021E2001above 1 million habitants, today around 40 cities

• 60% GDP generation via urban areas

India’s challenge to transform itself in a global ICT and manufacturing leader huge investments are needed

Macro-Economical Growth 2010-2030

manufacturing leader – huge investments are neededDrivers for Indian Industry Growth 12000 Business Stagnation …

A2166 3879 895

• India is a global leading software/services/technology/ R&D country, today and still should be in 2030; however 75% of Indian Export in 2010 has been related to Industry Goods & Services

-8000

2000

1990 2000 2010 2020(E) 2030(E)

AgronomyIndustryService

** CAGR GDP 2010-2020: 7.4%; 2020-2030: 6%;*** CAGR M f t i / I d t GDP G th 2010 2020 7 4%

324 476 1632 2166

been related to Industry Goods & Services• Indian trade deficit jumped from 14.3 bi USD

in 2003 to 108 bi USD in 2009• High tech/ value added manufactured goods

& services, e.g. auto parts, globally2000

12000 Business Evolution …Agronomy

*** CAGR Manufacturing/ Industry GDP Growth: 2010-2020-7.4%; 2020-2030-6%

324 476 1632 25224725 1575

& services, e.g. auto parts, globally competitive can help to close the trade deficit

In order to grow the Industry GDP from a 15% GDP h i 2010 t 20% GDP h i

-8000

2000

1990 2000 2010 2020(E) 2030(E)IndustryService

** CAGR GDP 2010-2020: 9%; 2020-2030: 7%;*** CAGR Manufacturing/ Industry GDP Growth: 2010-2020-11%; 2020 2030 9%

324

GDP share in 2010 to a 20% GDP share in 2030 India has to generate an “Industry GDP” in 2030 of the size “GDP 2010” – merely a national “masterplan” investment initiative across industries leveraged by the IT/

10000

20000 Business Expansion Scenario

AgronomyI d t

2020-2030-9%

32 76 632

2867

5895 2162

• Source: IMF (2012) with FDC analysis (2012)

g ySoftware R&D competencies can reach this globally competitive level

01990 2000 2010 2020(E) 2030(E)

IndustryService

** CAGR GDP 2010-2020: 10.8%; 2020-2030: 8%;*** CAGR Manufacturing/ Industry GDP Growth: 2010-2020-12.8%; 2020-2030-10%

324 476 1632

The total road length in India increased more than 11 ti d i g th 60 b t 1951 d 2011times during the 60 years between 1951 and 2011

Total and surfaced length in India: 1951-2011

Total length of Roads India1951-2011, in 10.000 km

Total length of surfaced roads India1951-2011, in 10.000 km

34

474,2%

4,7%

9

34

1625

1951 1971 2001 2011

49

1,5 4

1951 1971 2001 2011Source: Ministry of Road, Transport and Highways, 2012.

India is heavily lagging in expressways, important to bl l g l t ti (i d t ) g th enable large scale automotive (industry) growth …

Total Roadways in BRICs and USin km (000‘s) | 2008

Length of Expresswaysin km (000‘s)

6506

in km (000 s) | 2008

75,2

in km (000 s)85

(2012) 75 (2012)

33203584

41,0

65,1

1752

9820,5 2.1

16,3 ~10

USChinaIndiaRussiaBrazil

0,5

USChina India1990 1995 2000 2005 2009 2008 2008

Source: Ford 2011, CEIC China Database, CIA Factbook 2008

India consists of approx. 10,000 km of four-laned highways/ expressways. Government of India plans to add an additional 18,637 km (11,580 mi) of expressways to the network by the year 2022

The length of National Highways rose from 19,811 km in 1951 to 70,934 km in 2011 with a CAGR of 2% for this period

Source: Ministry of Road, Transport and Highways, 2012.

Indian population growthd a popu a o g o

1991-2001 2001-2011

Source: Census, 2011

Indian population growthd a popu a o g o

Source: Census, 2011

The Middle Class Growth projection in India is based on a significant a ailable income shift of India pop lationa significant available income shift of India population

India’s middle class growth – based on Income shift 3 perspectives

43%50% India

Wo ld

93% population with income below 10k USD per year

(2010)

Trend: Shift from the bottom of the middle of

the Pyramid

Trend 2015: 55 million > 4000 USD income (2010: 11 million)

43%

6,6%0,4%

World

< 1k >1k<10k

> 10k<100k

> 100k

Income in USD

• Indian is undergoing a gradual shift in the composition of income classes. From a high concentration of people in the bottom segment of the pyramid (< USD 1.25 per day), a gradual shift has happened upwards transforming the income classes towards the middle income category (USD 2.5 – 5.0 per day)

• Rising per capita income improved affordability & changing lifestyles

Sources: Global Wealth Report, Research Institute Credit Suisse, 2011.* INR: 1 Indian rupee = 0.019535 U.S. dollars

• Rising per capita income, improved affordability & changing lifestyles• Urbanization: Shift from low productive farm jobs to manufacturing & Services.

India promised to be a worldwide leading middle class market ith iddl l d d f t USD 12 8 t illi i 2030

Total Middle Class ConsumptionSelected Countries [in USD bi PPP] Share Global Middle Class drives large

with a middle class demand of up to USD 12,8 trillion in 2030

Selected Countries [in USD bi PPP]

$ trillions| 2005 PPP

Share Global Middle Class

2030

12,8 India 23%

Middle Class drives large scale growth in India

• One of India’s key potential for consumption growth lies in its large

9,09,9

3 9

4,54,4

China

USA

18%

7%

population, estimated to increase to 1,4-1,5 billion by 2030

• The Wolfensohn Center for Development at Brookings estimates an Indian share of the global middle

2 0

4,0

2,3

3,9

2,2

3,7

1,8

USA

Japan

7%

4%

an Indian share of the global middle class segment up to 23% in 2030

• Overall, the young and growing population and growing working population in India will create large-

l d d th t 20 30

1,0

2,0

1,31,4

1,2 Germany

0,9< 0 6

2%

scale demand over the next 20-30 years for infrastructure, housing, and durable goods/ vehicles.

• The middle class population will account more than 40% of the total

Source: Wolfensohn 2010; OECD (2009): The Emerging Middle Class in Developing Countries FDC Analysis.

2009 2020 2030

< 0,6Indian population in 2030 between 500-600 million people.

LOGISTICS SECTOR IN INDIA -

……………………………………WAY FORWARD

INFRASTRUCTURE

AIR

PORTS

RAIL

Present Scenario &

ACTIONS REQUIRED ??

ROAD

WATER – IWT

Q

W W

WARE HOUSING

DESIRED “TO BE” STATE OF LOGISTICSINFRASTRUCTURE IN INDIA

GOVERNMENT INITIATIVES

Tax reforms like introduction of Goods and Service tax in place of multi layered indirect tax.100% FDI under automatic route is permitted in all logistics serviceAirports : Modernization of various airports and construction of new airports in key cities like Navi Mumbai, Noida, Mohalietc.Ports : Huge expansion of various ports (Maritime Agenda 2010-2020)24x7 customs operations in major airports (Bangalore Chennai Delhi Mumbai) and ports (Bangalore, Chennai, Delhi, Mumbai) and ports (Chennai, JNPT, Kandla, Kolkata) for all exports and imports. (w.e.f. 01.07.2013)Railways : Dedicated freight corridors (West and East)R d NHDP NS EW f l i f i hi hRoads : NHDP, NS-EW, four-laning of various highwaysDevelopment of Inland WaterwaysWare Housing

INFRASTRUCTURE : AIRAir cargo constitutes 1% of total trade by volume and 29% by trade value.Total air cargo is expected to grow at Total air cargo is expected to grow at a CAGR of 10.3% to 5.9 MMT (2020) from the present 2.7 MMT.Air cargo in tier-II cities witnessed a CAGR of 14.5%CAGR of 14.5%50% of India’s domestic and international air cargo is handled by Delhi and MumbaiIndia’s airports are primarily India s airports are primarily developed to cater to passenger traffic ,so cargo handling and storage infrastructure is a challenge.Infrastructure required : Satellite f i h i i i h l i d l freight cities with multi modal transport, cargo terminals, cold storage, automatic storage & retrieval systems and mechanized transportation of cargo.transportation of cargo.Vital link between domestic and international markets.

Air Cargo Operations in India Actions Required - Air

Most terminals do not offer separate facilities, except cold roomsInvestment in cold chain infrastructure to handle

Development of Air Freight Stations (AFS) to reduce congestion at airport premisesEstablishment of an Air Cargo

agricultural, pharma and other perishable commodities is inadequateCargo terminal operators need to have separate license handling

Establishment of an Air Cargo Promotion Board (ACPB) for development of air cargo hub airports and improve quality of Service.C f have separate license handling

areas for trucks, which leads to congestion.Cargo terminal land sides are used as parking/holding areas for

k hi h l d i

Consistent policy for dedicated freighter air craft, dedicated terminal space and facilities for express airlines should be provided to streamline operations.trucks, which leads to congestion

Agent warehouses are often located within the cityThere is no fixed model, and cargo handlers are dependent on the

to streamline operations.Professional training programs for air cargo industry human resource development and outsourcing.Circular flow of information handlers are dependent on the

decisions of individual airport operators. Very few dedicated freighter parking bays also exist at present.

Circular flow of information between airports, airlines, air freight stations, customs, banks and custom house agents to reduce unproductive delays.

INFRASTRUCTURE : PORTS13 major ports 176 non major

Western Coast Eastern CoastEastern Coast

Kandla(child of partition)

Kolkata-Haldia (riverineport)

M b i P di13 major ports, 176 non major ports, 7500 km coast lineFacilitates 90% by volume and 70% by value of India’s external trade.

Mumbai(busiest and biggest)

Paradip(exports raw iron to Japan)

JNPT(fastest growing)

Visakhapatnam (deepestport)

Mormugao Chennai

Port cargo has grown at a CAGR of 8.5% and reached 898 MMT in 2011-12 (Major ports – 560 MMT; Non-Major Ports – 338 MMT).

(naval base also) (oldest and artificial)

Mangalore(exports kudremukh iron-ore)

Ennore(most modern-in privatehands)

Cochin TuticorinVoC

Maritime Agenda 2010 – 2020INR 2870 billion investmentTotal port capacity: 3200 MMT

Cochin(natural Harbour)

TuticorinVoC(southernmost )

Cater to expected 2500 MMT by the end of 2020.

Private Investment : 66% in major ports and 98% in non major portsports and 98% in non major portsDevelopment of two new major ports and add 100 MMT capacity

Sagar, West BengalDugaraja patnam, Andhra Pradesh

Growth of non-major ports Containerization : Ports

Non-major ports cargo traffic is growing at a CAGR of 13%.Capacity overruns at major

EXIM container market has grown at a CAGR of 12%.Trends that will drive the containerized p y j

ports, significant increase in the cargo traffic of fertilisers, building materials and coal lead to the need for

cargo areIncreased containerization of break-bulk commodities such as rice, steel, cement, sugar etc.H l h h f i d i lead to the need for

development of non-major ports.Objective of maritime agenda f j

Healthy growth prospects for industries contributing to containerized traffic like textiles, paper, machinery, scrap, food products etc.Development of Dedicated Freight for non-major ports 2010-2020

Create additional capacity of 1290 MMT with an investment of INR 1680

Development of Dedicated Freight Corridors and Delhi-Mumbai industrial corridor.Development of container terminals on east and west coasts

billionMundra, Pipavav and Haziraports in Gujarath get more traffic and reduce the load on

Development of dedicated logistics parksEast coast ports generally handle bulk commodities and west coat ports handle POL and Container traffic.traffic and reduce the load on

JNPT and Mumbai ports. East coast ports role is going to be increased due to India’s look east policy.

INDIAN PORTS EFFICIENCY

Parameters Indian Ports International portsAverage number of containers handled per ship per hour

15-23 • Colombo – 25• Singapore - 30

Annual container throughput capacity

JNPT : 4.3 million TEUs

• Singapore – 30 million TEUs

• Hong Kong – 25 million TEUmillion TEU

Maximum crane productivity – per quay crane per annum

NSICT – 188000 TEUs • Hong Kong terminal 2,72,000 TEUs

• Hamburg – 2,52,000 c a e pe a a g ,5 ,000 TEUs

Maximum quay productivity

JNPT – 2000 TEUs per meter

Hong Kong terminal –3050 TEUs per meter

ACTIONS REQUIRED : PORTS

Integrated transport approach which has inter sector coordination of roads, railways and shipping department should be promoted.Ports with supportive high potential surroundings need to be developed as mega ports.Improve operational efficiency of ports that are potentially limited by hinterland.ySub optimal ports which are unviable, erode investor confidence, customer experience and the economy should not be focused.Port infrastructure like improved mechanisation, proper IT soluitons should be provided.Manpower skill enhancementManpower skill enhancement.

INFRASTRUCTURE : RAILWorld’s second largest rail Capital cost of setting up rail capacity World s second largest rail network with 64,456 km route lengthOn an average carries 2.65MMT of freight daily

Capital cost of setting up rail capacity is around 40% less than that of comparable modes such as express ways, when compared on a ton-kilometer basis.of freight daily.

Presently it has 31% share of total freight movement (Expected to touch 1billion tonne mark this year)

Passenger traffic enjoy significant priority over rail freight.Passenger rates are highly subsidized (Uses 60% capacity and generates 30% year).

Rail freight grown at a CAGR of 7%..Traffic on rail has grown more

(Uses 60% capacity and generates 30% revenue)Even though rail offers capacity and speed advantages for medium and long h l d i th f d d

gthan 10 fold from 1957 to 2001, but the route length has grown only 1.4 times.16% of the network is trunk

haulages, road is the preferred mode over rail.

Mainly due to the passenger rail priority which causes significant delay in transit time16% of the network is trunk

routes and carry more than 50% of trafficLow average speed of 25 kmphI di h 44 k t k l th f

time.Also, heavily congested arterial networks

To drive modal shift from road to rail for medium and long India has 44 km track length for

every 1000 sq.km arable land where as in US it is 137 km and 417 km in Germany.

for medium and long haulages, dedicated freight corridors are proposed to be developed.

DEDICATED FREIGHTCORRIDORS - RAILA t t l f 3 300 k t k l th ill b b ild A total of 3,300 km track length will be build in two corridors namely Western corridor and Eastern corridor.Envisaged to improve service delivery generate additional freight capacitydelivery, generate additional freight capacity.Expected to grow at a CAGR of 5.4%.Container traffic on western DFC is expected to grow from 3.8 million TEUs to 5.3 million TEUs by 2021 22

Parameters Conventional Rail

DFC

TEUs by 2021-22.Project is significantly behind it’s original time lines.

Approximately 35% of land is yet to be acquired

Height (m) 4.3 WDFC – 7.1 EDFC – 5.1

Width (mm) 3,200 3,600

Train length (m) 700 1500acquired.Sonagar-Dankuni section accounting for 29% of eastern DFC has seen 0% progressRewari-Dadri link accounting for 38% of western DFC has seen only 30% progress

g ( )

Train load (tonnes) 4,000 15,000

Axle Load (tonnes) 22.9/25 32.5/25

Track-loading density 8.67 12western DFC has seen only 30% progress.Lame behaviour of MoF to get funds from World BankProblems with environmental clearances as well as approvals from State Govts.

(t/m)

Max-Speed (kmph) 75 100

Grade (up to) 1 in 100 1 in 200

Curvature <10o <2 5opp Curvature <10o <2.5o

Traction 25KV 2x25KV

Station Spacing 7-10 km 40 km

ACTIONS REQUIRED : RAIL

Capacity Creation : 4 other DFCs (North-South, East-West, Southern and East Coast) would enhance the capacity and elevates the quality of service to international standards.Warehousing facility alongside railways should be provided. This avoids multiple handling costs to users and reduces transit time, holding time for the ware houses.PPP should be promoted for wagon modernization, freight terminals development etc.

INFRASTRUCTURE : ROADSA t f 60% f t t l f i ht Accounts for 60% of total freight movement.Increased from 6 billion tonne kilo meters (BTKMs) to 1250 BTKMsGrown at a CAGR of 9.14% and is expected to grow at an elasticity of 1.2 with GDP.Indian average trucking speed is 30-

Road sector is declared as an industry100% tax exemption in any Indian average trucking speed is 30

40 kmph compared to the global average of 60-80 kmphIndian road density 2.83 km per 1000 people and 770 km of road

p yconsecutive 10 years out of 20 yearsDuty free imports of certain id tifi d d t ti 1000 people and 770 km of road

length per 1000 sq. km as compared to 6.7 km and 840 km respectively, globally.National highway development

identified road construction equipmentsFDI of up to 100%I d i i d (U National highway development

program Develop 50,000 km of highways by 2015 in seven phases

2 2 times investment jump from 11th

Increased concession periods (Up to 30 years)

2.2 times investment jump from 11th

plan to 12th plan from INR 3394 billion to INR 7366 billion.

INFRASTRUCTURE : ROADS

Four laning of two lane

ROADS

Four laning of two lane roads mainly connecting state capitals and important tier-II, tier-III cities to GQ and NSEW corridor.

Upgrading of NHs to two lanes with paved shoulderslanes with paved shoulders.

NHDP Others (Ph.-I,

Ph.-II & Misc.)

NH(O) SARDP -NE NH-34 Total by

NHAIGQ NS – EWPh I&II

Port Connectivity

NHDP Phase

III

NHDPPhase IV

NHDP Phase V

NHDP Phase VII

NHDPTotalIII

Total Length 5,846 7,142 380 12,109 14,799 6,500 700 47,476 1390 69 388 5.5 49,328.50

Already 4/6Laned 100% 86% 98% 47% 2% 25% 3% 42% 82% 23% 18% 43%

Under Implementation (Km.) 0% 9% 2% 39% 28% 38% 3% 25% 16% 77% 11% 100% 25%

Balance length for award - 5% 0% 14% 70% 37% 94% 33% 1% - 71% - 32%

Road freight transport industry Actions required : Roads

Highly fragmented with 70-75 % own a maximum of 5 trucks each, 9-11% own more than 20 trucks

h d

Promotion of Fleet Exchange : Creation of a commodity exchange by bringing transport vendors and transport each and

15-20% own between 6-20 trucks2.6 million LCV and 2.8 million medium & heavy commercial

vendors and transport customers together on one platform. Road Traffic Offices can act as the platform and

d h iddl y

vehiclesFierce competition resulted in overloading, reduction in service quality and overall economics.

reduce the middlemen cost.Electronic Toll Collection (ETC): Application of ETC across the major 525 toll plazas q y

This also resulted in increased incidents of

Accidents,Break downs,

across the major 525 toll plazas will produce a fuel savings of INR 10 billion annually.Encourage use of large trucks : ,

Spoilage and Pilferage.

limited investment capacity resulted in high average age of trucks and low

Encourage use of large trucks : Larger trucks are cheaper to operate compared to small & medium trucks by 25%.in high average age of trucks and low

penetration of technology.

WATER TRANSPORTATIONB i t ff ti d Being a cost-effective and environmental friendly mode of transport, it’s share is only 8%Fuel consumption for every Fuel consumption for every ton-kilometer of freight shipped is just 15% by that of road and 54% by that of rail.Shi i t 21% b th t f Shipping costs 21% by that of road and 42% by that of rail.Domestic Shipping : Coastal shipping and Inland shipping and Inland Waterways Transportation (IWT).Domestic shipping is useful for b lk i b bulk transportation to nearby areas and along the coast.IWT cargo traffic is estimated as 79 MMT in 2011-12 and is as 79 MMT in 2011-12 and is growing at a CAGR of 7.2%

MODAL COMPARISON OF IWT

INLAND WATERWAYSTRANSPORTATION (IWT)

14,500 km of navigable inland waterways, 5200 km of rivers and 485 km of canals are conducive to

h i d hi l mechanized vehicle movement.6 national waterways across the nation

OPERATIONAL CHARACTERISTICS OF NWS 1,2 & 3,

Coastal Shipping Actions Required : Domestic Shipping

High road and rail congestion is a good driver of transport of goods by coastal shipping.

Incentives to ports to develop additional small berths for cargo Domestic ships waste g y pp g

POL, Iron ore and Coal are the bulk commodity categories in coastal shipping

cargo. Domestic ships waste 55% of total voyage time due to delays at portsI l it t pp g Increase vessel capacity to facilitate fewer vessel voyages.Maintain draft along important inland waterways.Development of domestic cargo corridors for first and last mile corridors for first and last mile connectivity.Allow co-loading of domestic and EXIM cargo on coastal and EXIM cargo on coastal vessels.

INFRASTRUCTURE : WAREHOUSINGD d f i d t i l Demand for industrial ware housing has grown from 391 million sq. ft. in 2010 to 476 million sq. ft. qin 2013.Grown at a CAGR of 6.8%Market value of warehousing is estimated to be INR 245-270 billion and is expected to grow at a CAGR of 16 18%a CAGR of 16-18%Modern ware houses are anticipated to grow sharply from 62 million sq.

Location attractiveness for Warehousing

sharply from 62 million sq. ft. to 178 million sq. ft.

FREE – TRADE WAREHOUSING ZONES (FTWZ)FTWZ ff i ifi t l dditi Shanghai Waigoqiao FTZ contains 9500 firms and FTWZs offers significant value addition opportunities to multiple industries by virtue of being deemed foreign territory.Jebel Ali Free Zone Area in Dubai, is h t 6500 i d b

Shanghai Waigoqiao FTZ contains 9500 firms and has become five fold in size compared to 1999.India is developing the supporting ecosystem and is just 5-10 years away from a favourable environment.

home to 6500 companies and became gateway to the Middle East Africa and Indian subcontinent.

FTWZ provides a world class, single window solution for multiple logistics activities with special focus on EXIM flow.

ACTIONS REQUIRED : WAREHOUSINGWith i l t ti f GST i ti l d f h i ill h With implementation of GST, existing landscape of warehousing will change. Large hubs in key locations, coupled with smaller spoke warehouses closer to production and consumption centres are expected to emergeRapid evolution of warehousing also needs skilled manpower.Emergence of next generation models such as Multi modal logistics parks, mega food parks and FTWZs must be aligned with key infrastructure projects.Technology (IT) should be adopted to encourage accuracy, inventory tracking and

ti l tlowered operational costs.Traditional vs. Modern Ware houses

FREIGHT CENTERS AND CONSOLIDATEDDELIVERIES FOR URBAN FRIEGHT SYSTEM

TECHNOLOGY-BASED SERVICEIMPROVEMENT AND DRIVER TRAINING

1. Web-based technology: services for shortestgypath finding, on-line vehicle routing, tracking/tracing systems, and fleet

management.2. Intelligent Transportation Systems: Travel

timetimeinformation systems, Electronic Toll Collection(ETC) and the Global Positioning System (GPS).( ) g y ( )

3. Driver Training: can result in up to an 18 percentsaving in fuel consumption.

CONCLUSIONS TRANSPORT AND LOGISTICS

India’s transport sectors are poised for huge growth, but they also pose big challenges. Th t ’ t bil d F i ht t t (l The country’s automobile and Freight transport (lorry industries) need advanced IT-based systems and capabilities, its road construction equipment and methods must be modernized to meet rising safety standards be modernized to meet rising safety standards. India's extensive though colonial-era rail network needs a complete overhaul.F I di i i d f i i l For India, improving road safety is crucial.

Whereas the number of fatalities in most European countries hovers between one and two per 10,000 vehicles, in India the annual rate is 14.5. This is far higher than other countries such as Mexico or Malaysia, where g y ,fatality rates per 10,000 vehicles are 4.6 and 5.6, respectively.

New materials research, telematics, radar technology and satellite-based positioning capabilities, collision-avoidance systems , fog vision - need of the hour

52

CONCLUSIONS AND RECOMMENDATION

The key idea for sustainable In city, road transport seems to be The key idea for sustainable freight transport is “to use road transport only when it is necessary”.The development of freight

the only delivery method attractive to transport operators due to its flexibility. The policies of urban f i ht t d lid t d The development of freight

centers concurrently with increasing the use of the more environmental friendly modes (including rail waterway and

freight centers and consolidated deliveries provide a way to reduce the number of truck trips entering cities.(including rail, waterway, and

coastal transport); especially, for long distance deliveries.Development of Multimodal f i h f ili i h

cities.Licensing and regulation should be carried out concurrently with the implementation of urban freight

freight facilities to support the flexible connection between railways, waterways, and coastal facilities, and concurrently i i h i i

p gcenters and consolidation schemes.Low-emission vehicles and alternative fuels for freight vehicles.

increasing their capacity.Most policies have different impacts on freight operators, the wider economy, and the

Technology based service improvement and driver training for better logistics management can wider economy, and the

environment, governments must choose where their priorities lie.

reduce costs and energy consumption.

h k fThank You for your attention !!!

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