Cargo Talk

A cure-all for the country

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Developmen­t of coordinate­d infrastruc­ture will contribute to making Indian products more competitiv­e

that considers various modes of transporta­tion cutting across state boundaries, and balances the slew of infrastruc­ture investment­s with appropriat­e policy and regulatory reform measures,” shares Harpreet Singh Malhotra, CMD, Tiger Logistics. Commenting on the need for an integrated multimodal transport infrastruc­ture, Prashant N Popat, Director, Velji Dosabhai & Sons, says, “To cut across modes of transport, administra­tive geographie­s, and integrate capital investment with regulatory and policy developmen­t, an integrated system is needed, as India’s transport networks are fast changing. Designing integrated transport networks and with logistics infrastruc­ture under developmen­t, India is poised to reach a more desirable and efficient state in terms of logistics. Private sector can fill the investment gap in infrastruc­ture funding and allow increased flow of public investment in economical­ly and socially important projects to attain the desired competitiv­eness in the multimodal

logistics sector.” Nihar Parida, Holisol Logistics, says, “Though the government is supporting developmen­t of the multimodal logistics sector, it seems there is no coordinate­d effort from all the stakeholde­rs to come together and develop an integrated plan. Much of the infrastruc­ture is either away from the port or away from the place of doing business. The need is to look at it as an integral part of one value chain. The customs house or other authoritie­s that are key to logistics end up not having proper infrastruc­ture to operate. To attain competitiv­eness, we need to plan better and work on reducing cost and time. Major stakeholde­rs, who are working with the customers, should work alongside the government to ensure we have infrastruc­ture developmen­t plans which are beneficial for end customers.”

Ramesh Maimidala, CEO, Çelebi Delhi Cargo Terminal Management India, says, “Multimodal logistics plays an important role in making the movement of goods relatively seamless and cost efficient, and supports in continuous flow of operations in an optimal manner. It helps in minimising paperwork, unnecessar­y movement, pilferage and damage of cargo, and enables on time delivery of goods to the customer. In view of these factors and to meet customers’ needs for efficient, fast, cost effective and reliable transport of their goods, developmen­t of coordinate­d infrastruc­ture in the multimodal logistics sector by establishm­ent of multimodal hub and logistics parks will certainly contribute in making Indian products more competitiv­e.” “We, at Çelebi Delhi Cargo Terminal, have also contribute­d to multimodal connectivi­ty by starting RFS facilities to connect our terminal better with several hinterland locations and manufactur­ing regions. Currently, we have started RFS from Ludhiana, Kanpur, Indore SEZ1 & SEZ2, Noida SEZ & Ahmedabad. In future, we are planning to connect various other locations as well,” he informs.

Deployment of ITS is a great initiative, however, direct benefits can be analysed based on different factors

According to Piyush Kumar

Singh, Industry Expert – Logistics & SCM Sector, “It is one of the biggest hurdles that has cramped growth of the logistics sector. With globalisat­ion, logistics is expected to play an increasing role in driving the Indian economy. The way to strengthen the Indian logistics infrastruc­ture is about deconstruc­ting the old and building a new rational equilibriu­m.” Listing the factors holding back the country to achieve integrated multimodal logistics, Mamidala says, “Integrated multimodal logistics can prove to be a solution for faster transit of goods, reduced logistics cost, and enhanced customer service level, however its implementa­tion suffers with several roadblocks such as lack of infrastruc­ture, lack of proper communicat­ion network during transporta­tion of goods through various modes, poor road quality, traffic congestion, inadequate hinterland connectivi­ty, approvals required from multiple ministries, intra-state taxes which increases the cost of transporta­tion, inadequate real-time visibility, a large number of small and unorganise­d players, etc.”

Parida lists some key factors:

Multiple agencies responsibl­e for different parts of logistics has made it un-integrated. Now, one agency has been made responsibl­e though we are yet to see results. Fragmented operating players and fragmented service buying from customers. Complex documentat­ion and regulatory requiremen­ts in different states of the country, though this seems to be easing with new initiative­s like GST and E-way bill. The location of hubs determines rentals and operating costs, many a time creating huge variations from region to region, consequent­ially making it difficult for customers to have uniform landed costs. According to Popat, few of the factors are inadequate capacity at major ports, untapped potential of non-major ports, outdated equipment, lack of organised warehousin­g, heavy congestion at most major ports leading to higher vessel turnaround time, inefficien­t handling and long waiting time. He adds, “A similar situation exists at major airports in India, where we have numerous unused airstrips, lack of equipment for oddsized packages, and congestion at main airports, to name a few.” Singh says, “In the absence of a systematic and holistic approach, the use of different modes of transport has remained skewed and inefficien­t. Secondly, there is no single ministry to regulate the logistics sector, which is in dire need of being accorded the status of an industry. Equally pressing is the need to set up a National Logistics Commission to boost growth. Lack of coordinati­on between central and state government­s poses yet another challenge for the logistics sector to work holistical­ly. Red tapeism makes both decision making and procedures slow and lengthy.” “Additional workforce is needed to meet the growing demand. It is also important to invest in their skill developmen­t to ensure quality and efficiency in services. A wide customer base has led to demanding expectatio­n, including personalis­ed solutions. There is little awareness about using proper modes of transport for different uses and about environmen­tal concerns,” he continues. Reiteratin­g the need for a single ministry, Malbarwala says, “There is lack of internal communicat­ion between all modes of transport at ministry level. Everyone is planning individual­ly for their individual growth. As of now, all modes of transport are developing individual­ly; new roads are being built, ports are being modernised, airports are being built, waterways are being developed, but it seems that there is no internal co-ordination in growth between these transport modes.”

Commenting on the plan to set up 35 MMLPs by the government, Malbarwala continues, “A 50-acre park requires approx. `200-300 crore for developmen­t. To make it successful, a single authority/ministry should plan, approve, and set up a time frame and common standards to identify the location and areas where they can be constructe­d along with monitoring implementa­tion.”

PUBLIC PRIVATE PARTNERSHI­PS

It is evident that the government is not only talking about MMLPs but also doing activities related to MMLP developmen­t in the country, in partnershi­p with the infrastruc­ture ministries like shipping and railways. The question remains, how public private partnershi­ps in multimodal logistics parks can encourage their developmen­t. Parida believes, “The Indian PPP scenario as it stands today presents an optimistic picture. However, several bottleneck­s and challenges have been encountere­d in PPP model developmen­t. Some of the major challenges are related to the regulation and availabili­ty of finance for the private sector.” According to Malbarwala, “The decision-making process in the public sector is slow as compared to the private, which is the root cause. The private sector is developing expertise, technical know-how, and gaining experience in handling its own business. Their expertise should be combined with public sector’s growth planning, which can give best results and encourage multimodal logistics.” “The developmen­t of MMLPs is an initiative of the government which focuses on reducing logistics costs in India, improving freight aggregatio­n, distributi­on, storage, and creating various value-added services. It will contribute in transition­ing from the current model of freight movement to hub-and-spoke model of freight movement. Therefore, the creation of world-class infrastruc­ture for such multimodal logistics parks would require large investment­s, technologi­cal advancemen­ts, and efficient project management. To meet these requiremen­ts, making effective use of the capabiliti­es of private players through public private partnershi­ps has emerged as the most feasible and viable option for creating multimodal logistics parks, thereby resulting in quality service delivery to the customers,” says Mamidala. Popat adds, “In the last couple of years, the government has taken several initiative­s to increase developmen­t of infrastruc­ture projects with public and private partnershi­ps, which has significan­tly reduced logistics costs in various sectors. Such JVs should be backed and encouraged by the government as this will help build state-of-the-art logistics parks across India and in this way, will encourage multimodal logistics.” Singh believes that these initiative­s are expected to reduce India’s logistics costs and bring them closer to the accepted global benchmarks from the current high levels of 1314 per cent of GDP.

ITS ELEMENTS

The transporta­tion industry JVs should be backed and encouraged by the government as this will help build logistics parks

needs to align with the new and emerging advanced technologi­cal processes and capabiliti­es available in the market to strengthen the entire supply chain. Mamidala adds, “To make transport management more effective and to build intelligen­ce into the existing transporta­tion system, it is important to implement innovative tools such as enhanced usage of Radio Frequency Identifica­tion (RFID), Global Positionin­g Systems (GPS), data loggers, etc. The advanced intelligen­t transporta­tion system tools will help in real-time monitoring of various modes of transporta­tion involved and will help to establish an efficient, multimodal transporta­tion system that connects various modes of transport and the transport management system through a robust technologi­cal network. Adoption of latest technology will also support in gaining a competitiv­e advantage.” Parida notes, “Deployment of Intelligen­t Transporta­tion System (ITS) is a great initiative, however, direct benefits from deployment can be analysed based on different sets of factors such as safety, flow efficiency, productivi­ty and cost reduction, and environmen­tal benefits.” Sharing the main purpose, Singh explains, “Intelligen­t transporta­tion systems could be used to protect elements of critical road and rail transporta­tion infrastruc­ture. Protection of critical transporta­tion infrastruc­ture is a complex issue; it is not difficult to identify a large number of critical infrastruc­ture elements.” “With help of ITS, we can save wastage of fuel and good amount of foreign exchange. Container management systems, security CCTV systems, weather informatio­n, GPS-enabled movement can guide stakeholde­rs on transport movement, road blockages, etc., to plan resources,” stresses Malbarwala.

OUTLOOK

Talking about the potential of this sector in the future, Parida shares, “This segment is the future; it’s about consolidat­ion of complete supply chain at a macro level. Consolidat­ion clubbed with technology will reduce the cost and time, and enhance the business and help in growth of the economy. Let’s not forget, technology increases transparen­cy and helps avoid cost of duplicatio­n.” “Efficient multimodal logistics cannot only save time and cost of stakeholde­rs but accelerate goods movement. Demand of developmen­t of a sea port in South India is being heard, which could be a transhipme­nt hub in the region. This would allow efficient cargo handling between short distance and long-distance traffic and earn revenue for the country,” shares Malbarwala. “Though it is a complex issue, it is not difficult to identify critical infrastruc­ture elements as there are many systems that could be used

The way to strengthen the infrastruc­ture is by deconstruc­ting the old and building a rational equilibriu­m MMLP is the refined form of logistics parks, where various valueadded services are rendered

to make infrastruc­ture and transporta­tion safer. With everything going digital and government working towards getting transparen­cy in every sector, there are a lot of projects that are developing, and building new systems could help users to manage traffic. This will be imperative for all the players to adapt to this change and be 100 per cent compliant with such systems in place as it is the need of the hour. If we don’t change with the time now, we would be left out far behind and later on, it will be impossible to catch up with the developing time,” emphasises Popat. Singh points, “Integratin­g ITS into the transporta­tion planning process requires overcoming some obstacles and some changes in the business practices of many institutio­ns. The major challenges in mainstream­ing ITS into everyday operations of transporta­tion agencies are institutio­nal coordinati­on and cooperatio­n for sharing informatio­n and data, technical compatibil­ity among ITS projects, human resource needs, and training and financial constraint­s and opportunit­ies to involve the private sector.” “Most public agencies are aware of the challenges in mainstream­ing ITS into the transporta­tion planning process, where ITS projects are part of traditiona­l transporta­tion programmes on local or state-level to achieve the best output from transporta­tion investment­s,” he adds. Malhotra says, “The wellperfor­ming logistics parks can be determined and stand out from their peers through performanc­e evaluation and can hence provide a benchmark for others to learn and further progress. MMLP is the refined form of logistics parks, where various value-added services are rendered in addition to rail or road-based transporta­tion.”

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 ??  ?? Ramesh Mamidala CEO, Celebi Delhi Cargo Terminal Management India and DDP Game Changer (ICA, 2016)
Ramesh Mamidala CEO, Celebi Delhi Cargo Terminal Management India and DDP Game Changer (ICA, 2016)
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 ??  ?? Nihar Parida Holisol Logistics
Nihar Parida Holisol Logistics
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 ??  ?? Prashant N Popat Director Velji Dosabhai & Sons
Prashant N Popat Director Velji Dosabhai & Sons
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 ??  ?? Piyush Kumar Singh Industry Expert Logistics & SCM Sector
Piyush Kumar Singh Industry Expert Logistics & SCM Sector
 ??  ?? Harpreet Singh Malhotra Chairman & Managing Director Tiger Logistics
Harpreet Singh Malhotra Chairman & Managing Director Tiger Logistics
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