Logistics Sector in India
Context:
- The Union Budget for 2023 planned an allocation of 2.4 lakh crore for the Indian Railways while tripling the PM Gati Shakti National Master Plan (NMP) to States. A “transformative approach for economic growth and sustainable development depends on the engines of roads, trains, airports, ports, public transportation, waterways and logistics infrastructure,” the plan states.
Buying railroad shares:
- Considering their enormous network throughout India, the railroads offer a practical and economical means of transporting goods, and they may play a significant role in a coordinated and integrated logistics system.
- The goal established by PM Gati Shakti is to enhance the railroads’ share of freight movement from 27% to 45% and to increase freight movement from 1.2 billion tonnes to 3.3 billion tonnes by 2030 in order to address the infrastructure problems that have hampered the transportation of freight by rail.
Choosing convenience over cost:
- Currently, 65% of freight is transported by road, heavily tilting the balance of modes for freight transportation in that direction. More traffic on the roads leads to severe congestion, increased pollution, and growing logistics costs. The usage of the railways for cargo transportation needs to increase if India is to improve its competitiveness in logistics.
- It is evident from comparing the costs of various modes of transportation that transporting freight by road is significantly more expensive than by rail. Yet, India’s railways have been losing out on freight to other, more flexible modes of transportation because road travel is more convenient than it is expensive.
The volume of containers has increased:
- While Indian Railways updates its infrastructure, the goals for rail freight flow can be met (PM Gati Shakti National Master Plan). This can be achieved by continually identifying new priority locations and monitoring ongoing projects. Compared to countries like China and the United States, they are currently substantially lower.
- Due to severe operational, connection, and infrastructure issues with the national transporter, freight traffic has shifted to highways. Longer transit durations and procedural delays that happen before and after the actual movement, such those brought on by waggon placement, loading and unloading operations, multimodal handling, etc., are obstacles to rail freight transportation.
- The maintenance of proper sheds and warehouses, the availability of waggons at unpredictable times, and the absence of necessary terminal infrastructure are only a few of the infrastructure problems that customers face. As a result, the network is severely congested, service quality suffers, and transit times increase. The cost of inventory storage and the danger of damage from repeated handling increase when first- and last-mile rail connectivity is not connected.
A distinct entity is needed:
- Upcoming Dedicated Freight Corridors (DFCs) and multimodal logistics parks along India’s eastern and western corridors will increase train synchronisation and reduce capacity constraints on overloaded lines. The Indian Railways must modernise the infrastructure, supported by appropriate legislative tools, and encourage private participation in the management and operation of terminals, containers, and warehouses in order to efficiently allocate resources.
- A new organisation under the railways will be established to manage multimodal logistics in cooperation with the business sector in order to address the first and last mile problem. Customers may use the company as a one-stop shop to move cargo and make payments.
- There are two freight waggons on every passenger train. Industry experts advise increasing the use of one of the two freight waggons by adopting an Uber-like business model that allows users to reserve the waggon online.
- The Indian Railways may continue to operate the other waggon in the same manner until the viability of the suggested technique is demonstrated. This might enhance freight traffic right away without additional infrastructure spending.
Conclusion:
- An integrated logistics infrastructure with first- and last-mile links is required to make rail transit competitive with roads and to facilitate the shipment of products by railway to neighbouring countries like Bangladesh and Nepal.
