Opportunities & Challenges in Multimodal Logistics An Indian Perspective
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1 Opportunities & Challenges in Multimodal Logistics An Indian Perspective
2 CONTENTS Logistics in India Current Status Multimodal Logistics Opportunities Challenges
3 Logistics in India Current Status
4 India at Lower end of Competitiveness Infrastructure Inadequate Inefficient Disjointed Fragmented Industry Multiple Controls and Check-Points Lack of skilled manpower Inadequate penetration of IT
5 Netherlands United States Hong Kong Japan Singapore Germany United Kingdom Canada South Korea Taiwan France Italy Spain Australia Indonesia Malaysia Philippines Thailand Vietnam Chile Brazil Venezuela Mexico Argentina Colombia Peru India China 8.3% 8.5% 8.5% 8.5% 8.5% 8.8% 8.8% 9.0% 9.0% 9.0% 9.5% 9.7% 9.7% 10.5% 10.7% 10.7% 10.7% 10.7% 10.7% 11.5% 11.6% 11.9% 12.0% 12.0% 12.5% 12.5% 13.0% 18.0% High Costs!! 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Logistics Cost / GDP (2013) Transportation Cost is 63% of Total Logistics Cost Rail Haulage Costs are the highest in the world. Road Transport- Fragmented & Costly Warehousing & Distribution is archaic
6 Why China scores over India? GDP Composition India USA China Agriculture and allied services 17% 2% 10% Industry 18% 33% 47% Services 65% 65% 43% Logistics Cost as a % of GDP 13.0% 8.50% 18.0% Transportation Cost as a % of GDP 8.2% 5.3% 9.4% Warehousing cost as a % of GDP 3.8% 2.8% 6.3% Other Logistics costs as a % of GDP 1.0% 0.4% 2.3% Total containers handled at ports 9.9mn TEU 42.9mn TEU 139.7mn TEU Containers handled by busiest ports 4.3mn TEU (43% share) JNPT 7.9mn TEU (18% share) Los Angeles Road Network 4.8mn Km 6.5mn Km 4mn Km Weight of goods moved annually per Km of road 1,173 1,727 7, mn TEU (23% share)shanghai Rail Network 64,000 Km 228,513 Km 66,239 Km Weight of goods moved annually per Km 14,750 8,293 59,331
7 Skewed Modal-Split 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% India China US Europe Air Water Rail Road Lack of holistic National Logistics Policy has led to sectoral approach Fragmented Modal approach instead of an Integrated Supply Chain Approach 9 ministries control logistics in India has led to skewed growth of modes of transport
8 Multimodal Logistics
9 Multimodal Logistics the chain that interconnects different links or modes of transport air, sea, and land into one complete process that ensures an efficient and cost-effective door-to-door movement of goods under the responsibility of a single transport operator, known as a Multimodal Transport Operator (MTO), on one transport document International Multimodal Transport Association The Container plays a pivotal role in Multimodal Logistics Multimodal Logistics has driven efficiencies in the developed countries and helped growth of global trade Multimodal Logistics can be a game changer for movement of goods in the Indian Subcontinent Need to look at Indian Sub-continent as one unit for Multimodal Logistics sans borders
10 Opportunities & Challenges
11 Potential for growth Current level of containerization is approximately 50% for Exim and much lower for Domestic segment advanced countries have containerization levels of over 70% Commodities that can be containerized still moving as Break-bulk cargo converting to containerized cargo possible with innovations in supply chain management Containerized traffic has grown at an annual average growth rate of 11% in the last 10 years with improvement in infrastructure and coordinated growth, we can better this rate of growth Domestic sector has larger potential for growth support from IR can lead to shifting cargo from road to rail Introduction of GST and growth of retail chains/ e-commerce will be major drivers in the future
12 Existing Supply Chain for South India Case Study-1 40 Locations 120 Customer Delivery Points Manufacturing Unit Direct deliveries by road from plant to the end customer Monthly- 300 Vehicles
13 Proposed Distribution System Case Study-2 Customer Delivery Points Manufacturing Unit ILP- Borkhedi Container Rail Terminal Proposed DC First Mile Pick-up in Containers Rail Transportation BOK to CRT Transportation CRT to DC Last Mile Deliveries JIT
14 GST Implications
15 Challenges Consolidation of industry Need for operational and commercial collaboration Requirement of Supply Chain approach Creation of national database and portal Current regulatory framework encourage eco-friendly and cheaper modes of transport Coordinated growth of infrastructure Removing interstate and inter-country barriers Need for National Logistics Policy
16 THANK YOU We Provide Logistics Eco-systems To Create Value
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