All Roads lead to Hinterland

Maritime Gateway - - From The Editor -

“The thirsty man goes to the well, the well doesn’t go to the thirsty man.”

This seems to be the new mantra for the ship­ping and lo­gis­tic in­dus­try in In­dia if its grand in­vest­ment plans is any in­di­ca­tion. All the ma­jor play­ers are mak­ing a bee­line to build in­fra­struc­ture deep into the hinterland and right at the doorstep of the ship­pers. The next phase of eco­nomic growth will be driven by con­sump­tion in Tier-ii, TIER-III cities and ru­ral mar­kets. Com­pa­nies who re­al­ized this are mov­ing ahead to in­vest in dig­i­tal and phys­i­cal in­fra­struc­ture in an ef­fort to reach out to the hith­erto ne­glected hinterland.

Un­der Sa­gar­mala Pro­gramme,

Govern­ment has made plans to pro­vide en­hanced con­nec­tiv­ity be­tween the ports and the do­mes­tic pro­duc­tion/con­sump­tion cen­tres. More than 150 con­nec­tiv­ity projects at an es­ti­mated in­vest­ment of more than `2 lakh crore have been iden­ti­fied. Lo­gis­tics com­pa­nies are plan­ning to lever­age on this by dove­tail­ing their fa­cil­i­ties in to this mega plan.

The con­cept of in­te­grated lo­gis­tics in­fra­struc­ture is don­ning on the in­dus­try. When you look at the lo­gis­tics land­scape of In­dia first-mile and last-mile con­nec­tiv­ity is what needed most. AP Moller-maersk has set up a chain of eight ICDS across In­dia. Sim­i­larly, CMA CGM has six CFS in

In­dia, mostly around port ter­mi­nals and it is look­ing to in­vest in the ware­hous­ing and cold chains. DP World has plans to in­vest around $1 bil­lion in In­dia with lo­gis­tics in­fra­struc­ture be­ing the ma­jor fo­cus area. Sim­i­lar trend has been wit­nessed in case of other in­dus­try heavy weights like APMT, All­cargo, JM Baxi and many other in­sti­tu­tional in­vestor backed in­vest­ments have am­bi­tious plans chalked out to in­vest into hinterland in­fra­struc­ture.

How­ever, these trends don't mean in­vest­ment in port sec­tor is get­ting dried up. A pos­i­tive sign is around 13.71 mil­lion teus of con­tainer­ized cargo was moved by In­dia in FY17, an im­pres­sive up­ward growth of 11 per cent vis-a-vis FY2016. In­dia’s to­tal in­stalled ca­pac­ity now stands at 21mn teus with av­er­age ca­pac­ity use of 65 per cent, on par with in­dus­try stan­dards. In the last few years ev­ery­one went ahead and built ports. Def­i­nitely it has slowed down but still both govern­ment and pri­vate sec­tor have grand plans to build more ports in fu­ture, which even­tu­ally we will need to keep pace with fu­ture growth. But for now, in­dus­try fo­cus seems to be on iden­ti­fy­ing gaps in hinterland in­fra­struc­ture and seize the op­por­tu­nity to built in­fra­struc­ture, which is ur­gently needed to sup­port the grow­ing needs of cargo move­ment.

This is def­i­nitely good news for ship­pers who of­ten suf­fer be­cause of poor in­fra­struc­ture and bad con­nec­tiv­ity. Mean­while, the buzz of In­dian lo­gis­tics sec­tor was also echoed at Davos World Eco­nomic Fo­rum where Prime Min­is­ter re­it­er­ated, “Our ob­jec­tive is to re­duce the lo­gis­tics cost and trans­ac­tion time for var­i­ous ac­tiv­i­ties.” R Ram­prasad Ed­i­tor and Pub­lisher ram­prasad@gate­way­

Am­bi­tious plans chalked out to in­vest into hinterland in­fra­struc­ture to serve the land locked re­gions.

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