Multimodal transport development

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Project on Multimodal development during the last two five year plan in India.

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Multimodal transport development

Transcript of Multimodal transport development

  • 1. We have seen Indias swift growth in last ten years. Despite the growth has come from the service sector but the manufacturing and the exports have also grown up to mark. Now a days manufacturers outsource the logistics increasingly. But however, the Indian logistics sector in different ways still wrap behind in performance with the global standards. This is obvious from the truth that India ranks as 46th of 155 countries in the World Bank International Logistics Performance Index. Relatively, our neighbor China got the 26th rank. 13% of GDP is the average cost of logistics in India. Hence, there is a considerable need to invest and advance efficiencies in the intermodal and multimodal logistics sector in order to prevent the friction cost to obstruct the preferred shifts. The main goal of the multimodal logistics is designed to reduce the transit times, and avoid the congestion in the overcrowded modes and lessen logistics cost.

2. Infrastructure development Containerization Dry ports Port sector Inland waterways Road transport Dedicated freight corridors Regulatory reforms Multimodal transport act Private freight terminal policy Draft coastal shipping policy Cabotage policy Policy to authorize MTOs FDI Investment in technology Cloud computing Global positioning system RFID ERP Mobile technology 3. 1) Containerization: Containerization is the most significant driver of growth of multimodal logistics. At the major ports the container traffic has nearly doubled in the last 5 years. Globally, container traffic has grown at approx 10% per year over the past 20 years. According to calculation, worlds container throughput will arrive at 1 billion TEUs by 2020, which is roughly double of the existing container traffic.The emerging Asian & African Countries are anticipated to be the chief movers in attaining this growth. Most of the shipyards are crammed with orders for container ships of capacity over 10,000 TEUs.These container ships will figure a major part of the world fleet in the approaching years. The advantages of containerization incorporate among others, least or no damage to goods, optimum utilization of storage & warehousing capacity, technology implementation due to mechanized handling requisite for containers, lessening in transport time and end-to-end delivery of goods, eventually leading to considerable cost savings. 4. 2) Dry ports: As on 30th June 2011, as per Ministry of Commerce a total of 247 CFSs/ICDs were approved by the Inter-Ministerial Committee out of which 73 were under accomplishment and the rest were fully operational.To hold up the planned container terminal projects at major and non-major ports CFSs/ICDs are expected to come up in their locality. According to a study, by the time all phases of the Vallarpadam ICTT are commissioned, it is expected to build a need for about 20 CFSs in the region. 5. 3) Port sector: India presently has 12 major ports & 187 minor ports. Port traffic grew at 7.66% p.a. between 2005-06 & 2010-11.While non-major ports registered a double digit growth at 13.55%, traffic at major ports grew only at 5.37%. Cargoes like the POL, iron ore, & coal represent a major portion of traffic at both major/ non-major ports. 6. 4)Inland waterway: Presently only 1% of total inland cargo transport is handled by the IWT.There is prospective for other cargo like coal, dry bulk, break bulk and containers to be transported economically and efficiently through IWT. India has traversable inland waterways of almost 14,500 km, out of which 5,200 km of major rivers and 500 km of canals are appropriate for automated crafts. 7. 5) Road transport: In India Roads has always been the primary mode of transport. India has approximately 42.36 lakh kms which is the largest road networks. Around 60% of the total freight and approximate 87% of passenger traffic is carried by Indian roads According to the Road Transport & Highways Department. Traffic is forecasted to rise about 8-10% p.a. The superiority of the road infrastructure remains a big apprehension. 8. 6) Dedicated freight Corridors(DFC): 9. A large portion of railway sidings is single line and is utilized by passenger as well as freight trains.The sharing of railway sidings amongst the passenger and freight trains causes disruption in the smooth functioning of the trains. Long waiting times and uncertainty of arrival are the two primary reasons for the delay in time of freight goods. The DFC project is expected to tackle some of these issues.The government has already sanctioned the Western Corridor (Mumbai to Dadri) and the Eastern Corridor (Dankuni to Ludhiana) projects which have a total cost in excess of Rs. 45,000 crores. Studies have also commenced to analyze the prospects of the East-West corridor (Kolkata-Mumbai), the North- South corridor (Delhi-Chennai), East Coast corridor (Kharagpur-Vijaywada) and Southern corridor (Chennai-Goa). The major objectives of the DFC project are: Increase the share of railways in freight transport. Build separate infrastructure for handling freight to enable a focused approach for developing both passenger and freight business. Provide seamless connectivity to customers. Reducing unit cost of transportation through use of a competitive tariff structure Work on both Western and Eastern corridors have started and both are expected to be fully functional by the end of 2017. The DFC project plans to provide new services including: Roll-on Roll-off for all types of road vehicles which can piggy-back on wagons Triple-deck automobile wagon on Western corridor and Double-deck on Eastern corridor. Movement of over-dimensional consignments from ports to construction sites Setting up of new terminals with a one-stop-shopsolution for all value added services like warehousing, packaging, custom bonding etc. 10. 1) Multimodal transport act 1993 The Indian government recognized the benefits of multimodal transport way back in the early 1990s and came up with the Multimodal Transportation of Goods Act in 1993 with the objective of encouraging growth of exports from India.Through the Act the government aimed at developing international multimodal transport which would reduce logistics costs and thus make Indian products more competitive in the global market.The Act established licensing requirements, contractual terms (through the Multimodal Transport Document) and liability regime.The Act was again amended in year 2000 to give more protection to exporters. There are still lacunae in the current version of the Act according to trade. Several amendments have been proposed by the Association of Multimodal Transport Operators of India, like obligatory registration of MTOs with DGS, modification to the Customs Act to enable seamless movement of goods, penalties for offences among others. It has been estimated that these changes should reduce the transit time for transport of goods by 40-50%. 11. 2) Private freight terminal policy: The policy aims to stimulate development of privately owned freight terminals on private land for dealing with break bulk goods, parcel traffic and containers. Indian Railways goods sheds are not in a good state, which is why they have gone for PPP mode of development. Under this policy, PFTs are expected to provide goods handling, warehousing and other associated logistics services to rail users and facilitate expansion of the 3PL sector. After the lukewarm response to its original policy the IR restored it recently. CWC (Central Warehousing corporation), CONCOR and several private players are looking to build and operate PFTs. If it succeeds,it is bound to increase the share of rail freight transport. 12. 3) Draft coastal shipping policy: Along with various support services the proposed coastal shipping policy is intended at enhancing the coastal trade with extraordinary spotlight on -coastal ships, River Sea Vessels (RSVs),Inland Vessels (IVs) and Cross trade compatible vessels. Infrastructure: Building up more minor ports along the coastline, promotion of Ro-Ro jetties, dedicated berths for coastal ships, ship repair facilities & dry-docks, LNG supply facilities, dedicated warehouses for coastal cargo, rail/ road connectivity & deepening of sea channels at minor ports. Financial incentives including subsidies:Implementing a hard line ship-building subsidy policy, exclusion from certain taxes, lesser tariffs than foreign ships, subsidies for Ro-Ro and repair jetties, fiscal incentives for small ports & setting up a Coastal Development Fund for coastal ships. Resolving manpower issues:Getting to the bottom of problems with regard to manpower and manning scales to organize for availability of sufficient and good quality manpower. Promoting modal shift from road and rail to coastal shipping: Improve cutthroat ability of coastal ships and encourage the Carbon credit scheme. Data base and communication infrastructure: Establishing & retaining a robust system/database for collection of precise data, publishing annual reports on coastal shipping, developing a freight exchange and streamlining the multi-modal transport operations.The above measures are expected to provide a boost to the coastal shipping in India. 13. 4) Cabotage policy: The Cabotage policy checks the coastal trade of a country. Few countries practice absolute Cabotage law while others practice a tailored one. In India, the Cabotage Policy is not absolute. It is regulated through provisions of sections 406 and 407 of the Merchant Shipping Act, 1958. The original Cabotage policy required foreign ships to take a license for plying on the coastline of the country. Coastal shipping thus had to be carried out only by Indian ships or ships chartered by Indian citizens. Due to this and several other reasons, a considerable part of Indian transshipment cargo was getting diverted to Colombo, Singapore & Jebel Ali Ports. Recently the policy has been relaxed specifically so that ICTT,Vallarpadam would attract transshipment cargo destined for Indian ports. It would allow containers arriving there to be shipped to other Indian ports.Traffic growth at ICTT, Vallarpadam, which was specifically developed to operate as a transshipment hub, has been lack luster till now and significantly below estimates.This policy change is expected to aid in growth of traffic at there and more importantly, reduce diversion of Indian cargo traffic to ports in other countries. However, the flipside is that domestic shipping companies may face severe loss of business. 14. 5) Policy to authorize MTOs: This policy was formulated to permit rail linking of ICDs by private parties other than CONCOR and to allow them to move container trains on the same lines as CONCOR for both international and domestic traffic. IR would provide the engine and crew but the private players would own the trains. Sixteen players were persuaded due to the privatization of container rail operation and brought in investments of approx Rs. 2,000 Crore. Nevertheless, limitations have been sited on private players to carry certain cargo such as coal, coke & some minerals.The private players have to depend on IRs infrastructure which, they argue, is not up to optimum standards.They have to face strict competition from CONCOR, which is an IR subsidiary and is present in this sector since a long time. In addition, haulage charges have been raised from time to time, the latest one being that for pig iron and sponge iron, squeezing out profit margins of private players. On the contrary side the IR keep up that it follows the cross-subsidization guidelines by trying to receive additional from freight transport so as to be competent to persistently providing cheap passenger transport. 15. 6) FDI: India allows 100% FDI in maritime infrastructure like ports, terminals, jetties, harbors, merchant shipbuilding as well as in support infrastructure like warehousing, roads and Inland Water Transport. Since, then there has been significant investment especially in the ports sector by foreign players the major ones being those by DP World, APM Terminals and PSA Singapore among others. 16. 1) Cloud computing Low cost footprint: Low up-front investment and small payback periods. Enables collaboration: It allows all the stakeholders in the supply chain to connect through this software to work together on different phases of logistics management like planning, forecasting & procurement efficiently and makes the system transparent & free from human errors. Scalable: Because of the ease and agility of deploying these solutions, they are scalable to meet volatile customer demands Integration: It increases supply chain efficiencies by integrating information on the same platform. Real-time visibility: With all data regulated precisely on single platform, its easier for the users to visualize real-time of inbound/outbound transportation and the prevailing shipments in movement. 17. 2) GPS: GPS technology gives the details of the origin and destination of a shipment. During transit, it helps in providing the exact position of a consignment.There are sophisticated GPS maps and technology available through which one can track the movement, and be proactive to customers by informing about the shipment status and expected delivery time.With the GPS systems becoming cheaper and more advanced, by the day, many of the large and medium sized logistics players have adopted GPS tracking systems for their truck. In addition to tracking, GPS systems have also been found to be useful to reduce truck breakdowns. In the event of a breakdown, it minimizes the amount of time spent in recovering the vehicle by sending service personnel located nearest to the vehicle to do the repair job. Also, certain GPS systems allow setting up of preventive maintenance alerts by calendar time, engine on-time or mileage to notify the operator when the vehicles are due for maintenance. 18. 3) RFID: Importance of RFID in logistics Allows the service provider to track items at each supply chain location, from plant to consumer Protects against copying and counterfeit of goods by embedding a unique Electronic Product Code into each item Proves the origin and improves handling of goods. Shippers can use RFID tags to show robustness of a supply chain and to ensure greater security in processes Tracks the amount of goods in the supply chain and helps to save capital required for distribution and warehousing storage costs RFID technology Reduces the manpower requirement considerably Saves time as scanning of cases/items takes place rapidly. RFID can scan upto 1,000 boxes per second whereas bar coding would take a few hours to scan the same number of boxes Has a high level of security as data cannot be hacked 19. 4) Enterprise Resource Planning ERP systems integrate several data sources and processes of an organization into a unified system. A typical ERP system uses multiple components of computer software and hardware to achieve the integration. ERP induces enough visibility in the supply chain so that an efficient work flow can be established. By pulling together and sharing information from functions such as purchasing, warehousing, and sales it helps to control costs.The only issue is that installation and upgrades of ERP systems are very costly. 5) Mobile Technology The recent developments in mobile technologies allow companies to stay connected anywhere, anytime. Many of the large logistics players have developed mobile applications to allow anytime-access to information through almost any mobile device. These tools provide immediate insight into the status of a shipment, making operations run faster and smoother.These applications function on Apple, Blackberry and Android platforms and are free-to-use. 20. Challenges like the Poor Road Infrastructure,Institutional Barrier, Financial barrier Policy Constraints impeding the development of intermodal transport. A need for Intermodal Linkage and Collaboration at national and regional levels Improve the Current aged Inter Modal Connections Promote co-operation between infrastructure planners Enhance the Use of Information Communication and Technology Enhance high rate of development in other sectors Modernize ports Role of Government in Facilitate multimodal Transport 21. several initiatives have already been taken by the Government and the private sector in developing intermodal/multimodal transport. However, many issues still remain to be embarking upon.Therefore the issues must be prioritized basing on whether they can be resolved in short term or long term. The containerization for both domestic and EXIM cargo needs a strong focus.There is need for accomplishment of Dedicated Freight Corridor project without delays. Consequently on a long run it will reduce logistics costs and increase railways market share in freight transport.The Inland Waterways and Coastal Shipping developments are to be focused and continuously improve to increase business and attract more shipments.This at the outset needs to come from the government by the way of policy reforms and the subsidies or other financial inducement. Therefore both the Governments right policy incentives and the private sectors interest should go parallel for a long way to stimulate the growth of the logistics and supply chain sector in India.