Multi-modal transport to move goods faster

Seamless movement of trade could get another impetus from a multimodal transportation system, after the goods and services tax (GST) removed barriers across the country.

The first multi-modal facility would be up and running before December 2018, Road Transport, Highways and Shipping Minister Nitin Gadkari said. The ~170-crore terminal at Varanasi is likely to emerge as a major logistics gateway connecting north to the east and Northeast, going up to Bangladesh.

The construction of the Varanasi terminal, which is underway, will have waterway, rail and road connectivity options, as part of the government's ~5,369-crore Jal Marg Vikas Project (JMVP).

Multi-modal transportation is the transfer of goods from a factory to a customer involving various means of transport. For example, the cargo leaves a warehouse in a truck, is loaded on to a train or plane to cover a longer distance. Last-mile delivery is via smaller commercial vehicles. Use of waterways or sea routes are also used. The key challenges for road and rail freight were inadequate infrastructure such as poor roads and network connectivity, and delays at check posts. The second issue was addressed to a large extent by the roll-out of the GST. The government has claimed the indirect tax has reduced transportation time. Municipal levies, however, are causing some delay in transit.

Logistics companies are hoping multi-modal transportation would improve their business prospects. There are last-mile connectivity issues, especially in the air freight segment, because of lack of hinterland connectivity.

The Associated Chambers of Commerce and Industry of India said the annual logistics cost globally was estimated at $3.5 trillion. India spends around 14.4 per cent of its gross domestic product on logistics and transportation as compared to less than 8 per cent by developing countries. According to a World Bank report, India has one of the highest logistics cost among developing nations. To solve such issues, Gadkari had said at a summit in May, the government was working towards an integrated, multi-modal logistics and transport policy. This would reduce logistics costs by nearly half, making products more competitive. The minister had said the policy would include construction of 50 economic corridors. Key feeder and inter-corridor routes would be upgraded and 35 multi-modal logistics parks developed to become centres for freight aggregation and distribution. The government also plans to construct 10 intermodal stations to integrate various transportation modes — rail, road, mass rapid transit system, bus rapid transit, autorickshaws, taxis and private vehicles. GoBolt, a logistics technology start-up, said GST gave industry an opportunity to work more efficiently. Its rollout was being seen as a primary candidate to attract more foreign and domestic money, Sumit Sharma, co-founder of GoBOLT, said.