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CURRENT STATUS OF LOGISTICS IN INDIA
                                                                       by



                  G.Vaidyanathan
                  Deputy Manager (PP&D) JNPT
                  Administration Building JNPT, Sheva, Navi Mumbai – 400707
                  Tel.: + 22 27 24 41 60 (O) and 22 27 47 31 53 and 27 47 14 13 (R); Fax: 22 27 24 41 50
                  E-mail: vaidyanathan@jnport.com and vaidya3291@yahoo.com



                                             KEY WORDS                      Transaction cost

                                                                            Administration costs including insurance and government
Logistics, cost, road, rail & sea                                           taxes continue to be very high. The logistics cost could rise
                                                                            further due to supply and demand factors.
                                           MOTS-CLEFS
                                                                            Demand and supply factors

Logistique, coût, route, rail, mer                                          The continued rise in container traffic is leading to increased
                                                                            traffic congestion in the rail and roads network, as exports
                         1. COST OF LOGISTICS                               and imports are growing 22 % to 25 % annually.

                                                                            The high cost of terminal development along with relatively
A World Bank Study conducted recently says that the Indian                  latest innovation in finalizing strategies result in only
logistics cost is one of the highest in the world. This study               moderate pace in the supply chain addition. There is also
shows that as far as developing countries are concerned,                    lack of proper road infrastructure in the Class-B & Class-C
these costs are 6 % to 8 % of the total value of goods. In                  towns. The lack of specific logistic professionals is also
China the cost is estimated at 10 % of total value of goods.                hampering the growth.
By comparison, the cost of logistics in India is 14 % of the
total value of goods. The freight costs for rail and road are                                              2. RAIL LOGISTICS
quite high, for example:

                                                                            The domestic cargo container movement is still at a very
  France                           5.5 cents/km
                                                                            initial stage in India. The road transport is mainly in the
  Japan                            3.7 cents/km                             hand of highly unorganised players. Further rising fuel
  Canada                           2.0 cents/km                             prices and axel load reduction are making road transport
                                                                            uneconomical over a long haul. There is a movement of 30
  India                            7.0 cents/km
                                                                            percent of exim containers by rail, and the remaining is
           Table 1: Comparison of cost of logistics                         transported by road. Till 2005 CONCOR was a sole service
                 between different countries                                provider for rail transportation of containers.


The following three factors are primarily responsible for                                2.1 Container Rail Logistics – SWOT
the high cost of logistics in India:
                                                                            Strengths
Congestion cost
                                                                            There is a consistent growth over a CAGR of 25 % with
Congestion at ports, inland and roads have rapidly increased                a potential of 100 mmt in the year 2005-06. A total of 1.7
– thus directly augmenting logistics cost and also resulting                MTEUs were rail borne, out of which the North contributed
in overall high inventory cost as delivery time increases.                  0.71 MTEUs and the West 0.23 MTEUS.


                                                                       13         PIANC Magazine n° 126, February 2007, février
Weakness                                                                                   2.3 Inherent advantages of the
                                                                                                 rail container transport
This is a highly capital intensive business and the cost
of rolling stock is around Rs.13 crores/rail. The cost of             i)     Lower transportation cost
operating an inland container depot is around Rs. 100                 ii)    Higher reliability
crores. The entire infrastructure such as yard/containers/            iii)   Relatively safer and secure
signals are still provided by one service provider namely             iv)    Very environmentally friendly
Indian Railways.                                                      v)     Reduced accidents.

There is a long gestation period and the project may take
sometimes up to 10 years to achieve break even. There is
high concentration of traffic at selected port/hinterland.
78 % of the total container cargo is handled by west coast
ports. 70 % of total traffic at the west coast is handled by
a single port, i.e. Jawaharlal Nehru Port Trust (JNPT).
60 % of the traffic of the west coast moves to the northern
hinterland, which leads to a heavy congestion along the
routes.

Opportunities

With the growth of containerization due to growing
GDP, there exists huge potential in the form of a largely
virgin market. With the congestion at the existing road
linkage ICDs and limited scope for excavation, there is an
opportunity for development of competing facilities. There
is a potential for running double stacked trains with the                          Fig. 1: Comparison between rail and
lower haulage charges and better utilisation of rolling stock                             road accidents in India.
and track capacity.
                                                                      As can be seen from the graph above, the number of
Threats                                                               accidents in rail traffic during 2004 are 2.34 lakhs as
                                                                      compared to 4.29 lakhs in road transport – which is far less
This industry is highly dependent on external agencies                in comparison.
such as Indian Railways, port terminal operators and
shipping lines. There are still several unresolved issues
on operational matters, such as stability of rakes, service                               2.4 Dedicated Freight Corridor
guarantee and dedicated freight corridors. With regards to
double stacked operations due to the lack of a developed              This corridor will enable the rail infrastructure to carry
infrastructure, this may take time to take off in a larger            very high levels of freight leading to a reduction in unit
way. There exists fragmentation on volumes due to multiple            cost of transportation and inventory. This will also achieve
operations and there is no control on haulage cost.                   greater customer satisfaction an increase the Indian
                                                                      Railway’s share in the freight market. This shall also provide
                                                                      increased throughput by higher axel loads increasing the
2.2 Potential for domestic container movement                         moving dimensions, track loading density, improve pay
                                                                      load ratio.
Due to the expected growth in the trade of readymade
garments, textiles, handicrafts, processed an packed foods
etc., a greater demand for containerization is anticipated.                                                   2.4.1 Initial routes
Further developments of larger SEZs and industrial parks
is likely to boost the industrial development in the country.         Rites, which prepared the initial feasibility report, has
The additional container handling capacity would result in            been commissioned to prepare detailed plans for two main
a higher penetration of containers in the break bulk cargo            corridors. These are aimed at easing capacity constraints
segment, thus helping container trade to grow further.                on the so-called Golden Quadrilateral routes linking the
Private container trains would also assist in providing               metropolitan regions of New Delhi, Kolkata, Mumbai
sufficient hinterland connectivity for ports, thus facilitating        and Chennai, which at present carry around 80 % of IR’s
handling increasing volumes of container traffic.                      traffic.


     PIANC Magazine n° 126, February 2007, février               14
• The 1.493 km double-track western corridor will run                • A new line is to be built between Rewari and Dadri to
  from Jawaharlal Nehru Port in Mumbai via Ahmedabad,                  bypass the congested Delhi metropolitan area.
  Palanpur, Phulera and Rewari to Dadri in Uttar Pradesh,
  close to New Delhi. This will handle the rapidly-
  growing container traffic between the ports of Gujarat                                 2.5 Double Stacked Containers
  and Maharashtra and the hinterland in northern India,
  cutting the Mumbai - Delhi time from 60 to around 36 h.            The ports in India handle around 5 MTEUs in 2005-06.
  There will be a feeder route to serve the container depot          The number of trains required will go up from 25 to 137
  at Tughlakabad.                                                    per day assuming a 30 % rail share. By aiming at a 50 %
                                                                     rail share, 225 trains/day will be required. This magnitude
• The 819 km double-track eastern corridor between                   cannot be handled with the regular practice. For increasing
  Sonnagar and Khurja runs parallel to the existing                  the rail share, the haulage cost should come down. The
  Howrah - Delhi main line via Mughalsarai, Fatehpur and             double stacked containers can also match throughput for
  Etawah. Bypasses are planned around the urban areas at             larger ships, thus leading to lower turn around time for
  Allahabad, Kanpur, Tundla, Hathras and Aligarh, and                the vessels. The table showing the savings achieved due to
  the corridor will be grade-separated from intersecting             double stacked containers is given below this page.
  branch lines.
                                                                     A comparative table between the railways in India,
• A single-track extension of the eastern corridor will run          Australia, USA, Europe is as on next page.
  to Ludhiana in Punjab via Khurja, Meerut, Saharanpur
  and Ambala. Consultants are currently examining the                It can be seen from Table 3 that Indian Railway carries
  technical and economic feasibility of extending the route          450 kg of wagons dead weight for every 1000 kg of freight
  to Gomoh and the ports in western Bengal.                          carried, compared to only 170 kg in the US.

• The western corridor will also have a feeder route to
  Dandarikalan container depot near Ludhiana, running
  via Rewari, Hissar and Jakhal.


                                                                      2005-06          2007-08         2009-10        2014-15

 Projected TEUs                                                       200.959*         326.671         483.557       1.239.285

 No of trains with SSC                                                  6.5              10.5            15.6          39.9

 No of trains With DSC                                                  3.4               5.6            8.3           21.2

 Saving in rakes 17 % extra transit time for DSC trains                 7.4              12.0            17.8          45.6

 Saving in cost of rakes ( Rs. In Crs.)                                 88.7             144.1          213.3          546.7

 Saving in locos assuming 17 % extra transit time                       2.5               4.0            5.9           15.1

 Saving in expenditure on loco account in Rs Crs.) / annually           1.20             1.95            2.88          7.39

 Saving on account of maint of rakes in Rs Crs. / annually              4.43             7.21           10.67          27.34

 Saving in fuel in Crs of Rs                                            9.1              14.8            22.0          56.3

 Saving in crew in Crs.of Rs.                                           2.4               3.8            5.7           14.6

 Total saving in revenue Expenditure                                   17.13             27.85          41.22         105.65

 *Actual figure is Nil because no movement started till February 2006. There was negligible movement in March 2006.

                                   Table 2: Savings achieved due to double stacked containers



                                                                15        PIANC Magazine n° 126, February 2007, février
COUNTRIES                                                  INDIA                           AUSTRALIA / EUROPE / US
 AVG SPEED (kmph)                                             23.3                                        100
 CAPACITY (TEUs)                                               90                                         150
 AXLE LOAD OF WAGONS (TONS)                                    22                                          30
 LOAD CAPACITY PER WAGON (TON)                                 88                                         120
 PAY LOAD: TARE WEIGHT OF                                    2 - 2.6                                   4.5 - 5.5
 WAGON                                      Thus Indian Railway carries 450 kg of wagons dead weight for every 1000 kg of freight
                                            carried compared to only 170 kg in the US.
                                Table 3: Comparison of load capacities in various countries

                       2.6 Scheme of private sector                                                  3. SEA LOGISTICS
                       participation in the railways
In this scheme of private sector participation in the railways        Transportation by sea is less expensive than transportation
which has been announced in February 2006 by the Indian               by road or railways. The secondary port development
government, the Indian Railways will provide the track,               requires less infrastructure. Terminal development can
locomotive, signal, train crew for running container trains.          easily be handled by private operators.
The train operator is to procure wagons and his own
terminal. He can also use other terminals. The lane for the
                                                                      A policy supporting sea transportation in the country, has
terminal will also be made available. The maintenance of
                                                                      to take into account the following issues:
the wagons will be done by the railways. Railways will
collect the train haulage charges. Train operators shall also
be free to charge their own tariff from the customer.                 i)   Developing secondary gateways along with the coast;
                                                                           hinterland to be encouraged to use the nearest coast;
Even though the rail logistics sector is opened for the                    developing SEZ in the immediate vicinity of these ports.
private sector, following challenges will have to be met by                Feeder cargo should be sent to the nearest main line
this sector:                                                               port. As the cargo starts moving through the secondary
                                                                           ports, the volumes will increase and secondary ports
• Procurement of the wagons, ICD, trained manpower,                        will slowly graduate to become the main line ports.
  monitoring machinery for movement of trains en route,
  detachment of wagons, exchange of information with                  ii) Size and growth rate of the Indian logistics industry is
  railways.                                                               varying from USD 15 billion to USD 50 billion, with
• This shall immediately lead to escalation of land price,
                                                                          7 % to 8 % growth per annum.
  costlier wagons, costlier handling equipment and costlier
  manpower.
                                                                      iii) As regards the logistics service providers, quality
• Long term challenges to be faced shall be evacuation, as
  bigger vessels discharge larger volumes.                                 infrastructure support is not always available on time,
• Port rail terminal capacity will also challenge the new                  due to the high pace of economic development. This
  operator. There shall be imbalance between the import                    includes airport infrastructure, seaports, highways and
  and export.                                                              express ways.
• The end cost will also have to be kept under control.
  The hub and spoke model of operation shall have to                  iv) Cumbersome procedures lead to a lack of focus on the
  be optimized. This shall also lead to consolidation of                  part of policy makers. The logistic costs in the Indian
  hinterland volumes.                                                     economy is higher than in other countries, due to
                                                                          infrastructure bottlenecks.
In the current Indian market, the exim trade is looking
for reliability and predictability of services, hinterland            v) The price of fuel forces the users to shift from road
penetration and capability of costs. As regards the new
                                                                         transport to alternative transport modes. Only a very
private players in the rail transport logistics sector, they
                                                                         small and limited number of logistics service providers
should collaborate and cooperate which existing players,
avoiding attrition, duplication of structural infrastructure             are providing end-to-end logistics chain in a true sense.
and working together to bring about reduction in logistics               A large number of fragmented service providers aspire
cost for customers. This shall only be possible with                     to cover all services. However, an integrated approach
improvement of the process, exchanging of information as                 is lacking.
much as possible and sharing each others structures and
wagons.


     PIANC Magazine n° 126, February 2007, février               16
Fig. 2: Commodity traffic growth in India during 2004-05




         Fig. 3: Traffic growth in Indian ports


                          17      PIANC Magazine n° 126, February 2007, février
SUMMARY
The paper analyses the traffic growth in India and                  country in the form of double stacked containers, creation
its consequent effect on the modes of transport such as            of dedicated freight corridors connecting the hinterland
rail, road and sea. This paper also analyses the SWOT of
                                                                   to the ports, and also the private participation scheme,
the various modes of transport, with figures and tables. An
analysis is also made of the various measures being taken          announced by the railways when inviting private players to
by the Indian Railways to enhance the rail logistics in the        the business of container handling.

                                                      RÉSUMÉ
L’article analyse la croissance du trafic de marchandises           pour favoriser la logistique ferroviaire dans le pays sous la
en Inde et ses conséquences sur les modes de transport             forme du double stack, de la création de voies dédiées au
ferroviaire, routier et maritime. Cet article propose              fret reliant les hinterlands aux ports et également du plan
également une analyse SWOT (forces, faiblesses,
opportunités, menaces) des divers modes avec l’appui de            de participation privée annoncé par les chemins de fer afin
chiffres et de schémas. Une analyse est également faite des        d’inciter les investisseurs privés à prendre part au secteur
diverses décisions prises par les chemins de fer indiens           de la manutention de conteneurs.

                                            ZUSAMMENFASSUNG
Der Artikel analysiert das Verkehrswachstum in Indien und          im Land zu verbessern: Verwendung von Doppelstock-
den sich daraus ergebenden Effekt auf das Transportwesen           Containern, Bildung speziell dafür vorgesehener
wie Eisenbahn, Straße und Schifffahrt. Der Beitrag                 Frachtkorridore, die das Hinterland mit den Häfen
analysiert ebenfalls das SWOT der verschiedenen
Transportarten in Zahlen und Tabellen. Es werden auch              verbinden, und ein privates Beteiligungsschema, das von
die verschiedenen Maßnahmen analysiert, die die indische           der Eisenbahn angekündigt wurde, um private Investoren
Eisenbahngesellschaft ergreift, um die Schienenlogistik            aufzufordern, sich am Containergeschäft zu beteiligen.




     PIANC Magazine n° 126, February 2007, février            18

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Current status of logistics in India

  • 1. CURRENT STATUS OF LOGISTICS IN INDIA by G.Vaidyanathan Deputy Manager (PP&D) JNPT Administration Building JNPT, Sheva, Navi Mumbai – 400707 Tel.: + 22 27 24 41 60 (O) and 22 27 47 31 53 and 27 47 14 13 (R); Fax: 22 27 24 41 50 E-mail: vaidyanathan@jnport.com and vaidya3291@yahoo.com KEY WORDS Transaction cost Administration costs including insurance and government Logistics, cost, road, rail & sea taxes continue to be very high. The logistics cost could rise further due to supply and demand factors. MOTS-CLEFS Demand and supply factors Logistique, coût, route, rail, mer The continued rise in container traffic is leading to increased traffic congestion in the rail and roads network, as exports 1. COST OF LOGISTICS and imports are growing 22 % to 25 % annually. The high cost of terminal development along with relatively A World Bank Study conducted recently says that the Indian latest innovation in finalizing strategies result in only logistics cost is one of the highest in the world. This study moderate pace in the supply chain addition. There is also shows that as far as developing countries are concerned, lack of proper road infrastructure in the Class-B & Class-C these costs are 6 % to 8 % of the total value of goods. In towns. The lack of specific logistic professionals is also China the cost is estimated at 10 % of total value of goods. hampering the growth. By comparison, the cost of logistics in India is 14 % of the total value of goods. The freight costs for rail and road are 2. RAIL LOGISTICS quite high, for example: The domestic cargo container movement is still at a very France 5.5 cents/km initial stage in India. The road transport is mainly in the Japan 3.7 cents/km hand of highly unorganised players. Further rising fuel Canada 2.0 cents/km prices and axel load reduction are making road transport uneconomical over a long haul. There is a movement of 30 India 7.0 cents/km percent of exim containers by rail, and the remaining is Table 1: Comparison of cost of logistics transported by road. Till 2005 CONCOR was a sole service between different countries provider for rail transportation of containers. The following three factors are primarily responsible for 2.1 Container Rail Logistics – SWOT the high cost of logistics in India: Strengths Congestion cost There is a consistent growth over a CAGR of 25 % with Congestion at ports, inland and roads have rapidly increased a potential of 100 mmt in the year 2005-06. A total of 1.7 – thus directly augmenting logistics cost and also resulting MTEUs were rail borne, out of which the North contributed in overall high inventory cost as delivery time increases. 0.71 MTEUs and the West 0.23 MTEUS. 13 PIANC Magazine n° 126, February 2007, février
  • 2. Weakness 2.3 Inherent advantages of the rail container transport This is a highly capital intensive business and the cost of rolling stock is around Rs.13 crores/rail. The cost of i) Lower transportation cost operating an inland container depot is around Rs. 100 ii) Higher reliability crores. The entire infrastructure such as yard/containers/ iii) Relatively safer and secure signals are still provided by one service provider namely iv) Very environmentally friendly Indian Railways. v) Reduced accidents. There is a long gestation period and the project may take sometimes up to 10 years to achieve break even. There is high concentration of traffic at selected port/hinterland. 78 % of the total container cargo is handled by west coast ports. 70 % of total traffic at the west coast is handled by a single port, i.e. Jawaharlal Nehru Port Trust (JNPT). 60 % of the traffic of the west coast moves to the northern hinterland, which leads to a heavy congestion along the routes. Opportunities With the growth of containerization due to growing GDP, there exists huge potential in the form of a largely virgin market. With the congestion at the existing road linkage ICDs and limited scope for excavation, there is an opportunity for development of competing facilities. There is a potential for running double stacked trains with the Fig. 1: Comparison between rail and lower haulage charges and better utilisation of rolling stock road accidents in India. and track capacity. As can be seen from the graph above, the number of Threats accidents in rail traffic during 2004 are 2.34 lakhs as compared to 4.29 lakhs in road transport – which is far less This industry is highly dependent on external agencies in comparison. such as Indian Railways, port terminal operators and shipping lines. There are still several unresolved issues on operational matters, such as stability of rakes, service 2.4 Dedicated Freight Corridor guarantee and dedicated freight corridors. With regards to double stacked operations due to the lack of a developed This corridor will enable the rail infrastructure to carry infrastructure, this may take time to take off in a larger very high levels of freight leading to a reduction in unit way. There exists fragmentation on volumes due to multiple cost of transportation and inventory. This will also achieve operations and there is no control on haulage cost. greater customer satisfaction an increase the Indian Railway’s share in the freight market. This shall also provide increased throughput by higher axel loads increasing the 2.2 Potential for domestic container movement moving dimensions, track loading density, improve pay load ratio. Due to the expected growth in the trade of readymade garments, textiles, handicrafts, processed an packed foods etc., a greater demand for containerization is anticipated. 2.4.1 Initial routes Further developments of larger SEZs and industrial parks is likely to boost the industrial development in the country. Rites, which prepared the initial feasibility report, has The additional container handling capacity would result in been commissioned to prepare detailed plans for two main a higher penetration of containers in the break bulk cargo corridors. These are aimed at easing capacity constraints segment, thus helping container trade to grow further. on the so-called Golden Quadrilateral routes linking the Private container trains would also assist in providing metropolitan regions of New Delhi, Kolkata, Mumbai sufficient hinterland connectivity for ports, thus facilitating and Chennai, which at present carry around 80 % of IR’s handling increasing volumes of container traffic. traffic. PIANC Magazine n° 126, February 2007, février 14
  • 3. • The 1.493 km double-track western corridor will run • A new line is to be built between Rewari and Dadri to from Jawaharlal Nehru Port in Mumbai via Ahmedabad, bypass the congested Delhi metropolitan area. Palanpur, Phulera and Rewari to Dadri in Uttar Pradesh, close to New Delhi. This will handle the rapidly- growing container traffic between the ports of Gujarat 2.5 Double Stacked Containers and Maharashtra and the hinterland in northern India, cutting the Mumbai - Delhi time from 60 to around 36 h. The ports in India handle around 5 MTEUs in 2005-06. There will be a feeder route to serve the container depot The number of trains required will go up from 25 to 137 at Tughlakabad. per day assuming a 30 % rail share. By aiming at a 50 % rail share, 225 trains/day will be required. This magnitude • The 819 km double-track eastern corridor between cannot be handled with the regular practice. For increasing Sonnagar and Khurja runs parallel to the existing the rail share, the haulage cost should come down. The Howrah - Delhi main line via Mughalsarai, Fatehpur and double stacked containers can also match throughput for Etawah. Bypasses are planned around the urban areas at larger ships, thus leading to lower turn around time for Allahabad, Kanpur, Tundla, Hathras and Aligarh, and the vessels. The table showing the savings achieved due to the corridor will be grade-separated from intersecting double stacked containers is given below this page. branch lines. A comparative table between the railways in India, • A single-track extension of the eastern corridor will run Australia, USA, Europe is as on next page. to Ludhiana in Punjab via Khurja, Meerut, Saharanpur and Ambala. Consultants are currently examining the It can be seen from Table 3 that Indian Railway carries technical and economic feasibility of extending the route 450 kg of wagons dead weight for every 1000 kg of freight to Gomoh and the ports in western Bengal. carried, compared to only 170 kg in the US. • The western corridor will also have a feeder route to Dandarikalan container depot near Ludhiana, running via Rewari, Hissar and Jakhal. 2005-06 2007-08 2009-10 2014-15 Projected TEUs 200.959* 326.671 483.557 1.239.285 No of trains with SSC 6.5 10.5 15.6 39.9 No of trains With DSC 3.4 5.6 8.3 21.2 Saving in rakes 17 % extra transit time for DSC trains 7.4 12.0 17.8 45.6 Saving in cost of rakes ( Rs. In Crs.) 88.7 144.1 213.3 546.7 Saving in locos assuming 17 % extra transit time 2.5 4.0 5.9 15.1 Saving in expenditure on loco account in Rs Crs.) / annually 1.20 1.95 2.88 7.39 Saving on account of maint of rakes in Rs Crs. / annually 4.43 7.21 10.67 27.34 Saving in fuel in Crs of Rs 9.1 14.8 22.0 56.3 Saving in crew in Crs.of Rs. 2.4 3.8 5.7 14.6 Total saving in revenue Expenditure 17.13 27.85 41.22 105.65 *Actual figure is Nil because no movement started till February 2006. There was negligible movement in March 2006. Table 2: Savings achieved due to double stacked containers 15 PIANC Magazine n° 126, February 2007, février
  • 4. COUNTRIES INDIA AUSTRALIA / EUROPE / US AVG SPEED (kmph) 23.3 100 CAPACITY (TEUs) 90 150 AXLE LOAD OF WAGONS (TONS) 22 30 LOAD CAPACITY PER WAGON (TON) 88 120 PAY LOAD: TARE WEIGHT OF 2 - 2.6 4.5 - 5.5 WAGON Thus Indian Railway carries 450 kg of wagons dead weight for every 1000 kg of freight carried compared to only 170 kg in the US. Table 3: Comparison of load capacities in various countries 2.6 Scheme of private sector 3. SEA LOGISTICS participation in the railways In this scheme of private sector participation in the railways Transportation by sea is less expensive than transportation which has been announced in February 2006 by the Indian by road or railways. The secondary port development government, the Indian Railways will provide the track, requires less infrastructure. Terminal development can locomotive, signal, train crew for running container trains. easily be handled by private operators. The train operator is to procure wagons and his own terminal. He can also use other terminals. The lane for the A policy supporting sea transportation in the country, has terminal will also be made available. The maintenance of to take into account the following issues: the wagons will be done by the railways. Railways will collect the train haulage charges. Train operators shall also be free to charge their own tariff from the customer. i) Developing secondary gateways along with the coast; hinterland to be encouraged to use the nearest coast; Even though the rail logistics sector is opened for the developing SEZ in the immediate vicinity of these ports. private sector, following challenges will have to be met by Feeder cargo should be sent to the nearest main line this sector: port. As the cargo starts moving through the secondary ports, the volumes will increase and secondary ports • Procurement of the wagons, ICD, trained manpower, will slowly graduate to become the main line ports. monitoring machinery for movement of trains en route, detachment of wagons, exchange of information with ii) Size and growth rate of the Indian logistics industry is railways. varying from USD 15 billion to USD 50 billion, with • This shall immediately lead to escalation of land price, 7 % to 8 % growth per annum. costlier wagons, costlier handling equipment and costlier manpower. iii) As regards the logistics service providers, quality • Long term challenges to be faced shall be evacuation, as bigger vessels discharge larger volumes. infrastructure support is not always available on time, • Port rail terminal capacity will also challenge the new due to the high pace of economic development. This operator. There shall be imbalance between the import includes airport infrastructure, seaports, highways and and export. express ways. • The end cost will also have to be kept under control. The hub and spoke model of operation shall have to iv) Cumbersome procedures lead to a lack of focus on the be optimized. This shall also lead to consolidation of part of policy makers. The logistic costs in the Indian hinterland volumes. economy is higher than in other countries, due to infrastructure bottlenecks. In the current Indian market, the exim trade is looking for reliability and predictability of services, hinterland v) The price of fuel forces the users to shift from road penetration and capability of costs. As regards the new transport to alternative transport modes. Only a very private players in the rail transport logistics sector, they small and limited number of logistics service providers should collaborate and cooperate which existing players, avoiding attrition, duplication of structural infrastructure are providing end-to-end logistics chain in a true sense. and working together to bring about reduction in logistics A large number of fragmented service providers aspire cost for customers. This shall only be possible with to cover all services. However, an integrated approach improvement of the process, exchanging of information as is lacking. much as possible and sharing each others structures and wagons. PIANC Magazine n° 126, February 2007, février 16
  • 5. Fig. 2: Commodity traffic growth in India during 2004-05 Fig. 3: Traffic growth in Indian ports 17 PIANC Magazine n° 126, February 2007, février
  • 6. SUMMARY The paper analyses the traffic growth in India and country in the form of double stacked containers, creation its consequent effect on the modes of transport such as of dedicated freight corridors connecting the hinterland rail, road and sea. This paper also analyses the SWOT of to the ports, and also the private participation scheme, the various modes of transport, with figures and tables. An analysis is also made of the various measures being taken announced by the railways when inviting private players to by the Indian Railways to enhance the rail logistics in the the business of container handling. RÉSUMÉ L’article analyse la croissance du trafic de marchandises pour favoriser la logistique ferroviaire dans le pays sous la en Inde et ses conséquences sur les modes de transport forme du double stack, de la création de voies dédiées au ferroviaire, routier et maritime. Cet article propose fret reliant les hinterlands aux ports et également du plan également une analyse SWOT (forces, faiblesses, opportunités, menaces) des divers modes avec l’appui de de participation privée annoncé par les chemins de fer afin chiffres et de schémas. Une analyse est également faite des d’inciter les investisseurs privés à prendre part au secteur diverses décisions prises par les chemins de fer indiens de la manutention de conteneurs. ZUSAMMENFASSUNG Der Artikel analysiert das Verkehrswachstum in Indien und im Land zu verbessern: Verwendung von Doppelstock- den sich daraus ergebenden Effekt auf das Transportwesen Containern, Bildung speziell dafür vorgesehener wie Eisenbahn, Straße und Schifffahrt. Der Beitrag Frachtkorridore, die das Hinterland mit den Häfen analysiert ebenfalls das SWOT der verschiedenen Transportarten in Zahlen und Tabellen. Es werden auch verbinden, und ein privates Beteiligungsschema, das von die verschiedenen Maßnahmen analysiert, die die indische der Eisenbahn angekündigt wurde, um private Investoren Eisenbahngesellschaft ergreift, um die Schienenlogistik aufzufordern, sich am Containergeschäft zu beteiligen. PIANC Magazine n° 126, February 2007, février 18