Connecting India With Multi-Modal Logistics

Today, logistics cost in India accounts for 13-17 percent of the Gross Domestic Product (GDP) which is nearly double (6-9 percent) the logistics cost to GDP ratio in developed countries such as the US, Hong Kong and France. Much of these escalating costs are due to the absence of efficient intermodal and multimodal transport systems. But with the government giving infrastructure status to the logistics sector, development of multimodal transport networks and initiatives to set up industrial corridors and logistics parks, a massive transformation of the country’s logistics landscape is underway.

- Surya Kannoth

Be it an aircraft manufacturer shipping critical aeroparts from Bengaluru to Seattle in the US, or a farm engaged in poultry and feeds transporting its fresh produce from Allepey to Mumbai, the role of logistics and transportation is of the essence. Bridging the gap between the producer and the consumer has many actors along the way comprising the entire gamut of transportation and material handling solutions, ranging from road, rail, air, port, trucks, shipping, containers, and extending to customs, warehousing, and many more elements.

India has traditionally had a tough ride when it comes to transport logistics, which is a direct result of poor connectivity between road, rail, air and port. While transport infrastructure is a critical component of industrial growth, for India to become the third largest economy by 2028, a lot needs to be achieved. According to the World Bank, logistics cost in India is rated among the highest in the world, a weak spot that the Indian government is looking to address with the Logistics Efficiency Enhancement Programme (LEEP), by which multi-modal logistics hubs will be developed throughout the country.

Within India, roads continue to be the most popular form of transportation accounting for over 60 percent of total freight movement. The country's rail network — fourth largest in the world —carries only 32 percent of cargo. Inadequate rolling stocks, non-availability of cargo hubs and capacity constraints are a major hindrance for the rail network from achieving its full potential.