Views of Industry Insiders
Seamless Logistics and Related infrastructure:
Challenges and The Way Forward
Road / Rail :
Better connectivity through more 4-lane expressways to high density corridors and last mile connectivity to ports and other centers of growth is needed. Another fact to be kept in mind is regarding optimum utilization of existing infrastructure. Instead of large scale expansion of road networks, existing road infrastructure and state highways need to be strengthened. The construction of the Dedicated Freight Corridor must be given the highest priority. Feasibility assessment should be conducted for implementation of rail doubling/ broad gauge conversion, and the same needs to be implemented for promising routes. To ensure availability of sufficient stocks of wagons by the industry, rail wagon ownership/ leasing needs to be encouraged and a proper policy framework has to be drawn up for the same.
Warehouses/Logistics Parks/SEZ :
For faster evacuation of cargo, port/airport based SEZ’s/industrial complexes needs to be established. India requires at least 15-20 large scale multi-modal logistics parks near major cities or along proposed DFC routes. The warehouses/ ICDs must be linked with ports/airports/industrial centers via Electronic Data Interface (EDI) systems for transmission of information about cargo in advance and to allow planning and preparation for receipt. Standardization in containers, pallets and cranes/systems must be brought in to aid intermodal transportation. To ensure maintenance of basic standards in warehousing, the facilities need to be periodically certified by a notified government agency.
Value Added Services including 3PL/4PL :
3PL/4PL players need to be promoted, and the focus needs to shift from simply warehousing to include value added services like packaging and labeling, reverse logistics and incorporating the latest supply chain and inventory management technologies. For services like 4PL which are still in its nascent stages in India, foreign players should be encouraged to set up operations in India and bring in their expertise.
Setting up more cold chain facilities can provide a strong impetus to the growth of the food processing and agri-based industries.
Gujarat - Its Initiatives and Answers to Seamless Logistics :
Gujarat has been at the forefront of India's rapid strides in the infrastructure sector, especially in the port sector.
With the highest nos. of operational and commercial cargo ports it contributes to 35% of the total national cargo and a mammoth share of over 72% of the total traffic handled at ports controlled by the maritime states of the country in FY 2010-11. As the maritime authority of the state, the onus is on the Gujarat Maritime Board to move forward and adopt strategies focused towards integrated port-led logistics development.
Understanding this fact early, GMB had started the move way back in 1995 with the announcement of the first Port Policy in the country, focusing on port privatization and integrated port development.
Coastal shipping is promoted in Gujarat via offering concession in fees for coastal shipping. A number of industries have also been allowed to set up their captive facilities at different parts in Gujarat facilitating coastal movement of cargo between the two. For example, for POL commodity, loading takes place at Sikka terminal of Reliance and it is unloaded at the Hazira terminal of Reliance for further movement to the hinterland. Similarly cement/ clinker is loaded at Jafrabad, and then unloaded at Magdalla, or onto Maharashtra.
Capacity at Gujarat non-major ports has been doubled in the last decade from 135 MMT in 2001 to 284 MMT in 2010-11. In 2010-11, 40 MMT of capacity was created. And capacity is expected exceed 500 MMT by 2015.
Bigger ports with modern technology were developed along the Gujarat coast like ports of Mundra, Pipavav, Dahej and Hazira. Regular dredging is undertaken to ensure adequate draft. Mundra for example, provides a draft of 17.5 meters, and Pipavav of 14.5 meters. Identifying the need for specialized facilities, Gujarat ports have created specialized terminals such as:
- The country's first dedicated chemical terminal at Dahej
- Country's first LNG Terminal at Dahej; followed by another LNG terminal at Hazira
- India's largest Coal terminal established for UMPP at Mundra
- Car Terminal at Mundra
- Largest SPMs for POL export at Sikka
- Container Terminals at Mundra and Pipavav
To increase shipbuilding in the country, Government of Gujarat announced shipbuilding policy, the first of its kind in the country. The policy focuses on the cluster based approach to develop shipbuilding yards in the state to achieve greater economies of scale and more inclusive development. Such clusters are being developed at Dahej and Bhavnagar as Marine Shipbuilding Parks which will provide common seaside as well as shore side infrastructure & facilities.
Importance will be given to environment friendly port management and enhanced security along the ports of Gujarat. The Vessel Traffic Management System (VTMS) in Gulf of Cambay is already operational and the same is almost complete in Gulf of Kutch as well. GMB also intends to be ISPS compliant for their ports.
Road / Rail :
Gujarat has one of the most extensive and traffic intensive road network in the country. The total road length in Gujarat currently stands at about 74500 km. Gujarat is the first State to initiate construction of an express way in the country. The Ahmedabad-Vadodara express way, which is 93 kms in length, is presently under operation. The state government has launched an ambitious 6000 km State Highway Development Program (SHDP) to address the core network’s need for up-gradation and maintenance. Four-lane road connectivity has been provided from Bharuch to Dahej (48 km), and Pragpur to Mundra port (9 km). Arterial network to augment road connectivity of DFC and DMIC areas with Ports and other growth centers has been identified.
Gujarat was the first to come out with privatization of rail linkages to provide last mile rail connectivity to the ports at Mundra, Pipavav and very soon to Dahej. In 2006, with public private partnership, double stack container trains were first started at Pipavav and then at Mundra.
BG connectivity to Gujarat ports is being undertaken by the State Government via the innovative idea of formation of SPVs with its own funds along with private sector participation and RVNL. Pipavav Railway Company was the first PPP partnership in the rail sector, and was a 50-50 partnership between Pipavav Port Pvt. Ltd, and Indian Railways. Rail Vikas Nigam Limited (RVNL) has participated with equity share in rail projects for the Gandhidham-Palanpur; Dahej-Bharuch; and Surat-Hazira lines. The SPV methods has helped overcome shortage of funds, lack of grants from the central government and the inability of the Railways alone to fund last mile connectivity projects to ports.
Connectivity to the DFC route is also being undertaken to link industrial clusters.
Warehouse/Logistics Parks/ SEZ :
Multi-modal logistics parks are being set up at 5 strategic locations namely Ahmedabad-Surendranagar, Palanpur-Mahsana, Gandhidham-Samakhiali, Bharuch-Dahej and Surat-Hazira. These are important industrial/manufacturing centers of petro-chemicals, pharmaceuticals, textiles, and dairy products.
A state logistics policy is under planning which aims to synchronize logistics development in the state under one framework.
Mundra port has also shown the way in successful development of a port-based SEZ. A port based SEZ is also under implementation at Dahej. These SEZs will enable the businesses located here to have a global reach, as well as provide the ports with a ready source of cargo.
Value Added Services incl. 3PL/4PL :
Dahej Petroleum, Chemical and Petrochemical Investment Region (PCPIR) is being developed as a hub for transport and logistics facilities. The project envisages services like 3PL for handling chemical and engineering products, warehousing, railway infrastructure, truck operation and port operations etc.
Continuing with the integrated development strategy, focus should not simply be on looking at development as an isolated project, and instead ports, highways, rail, logistics, land use should be looked at as an integrated manufacturing value chain that would surely make Indian logistics infrastructure truly competitive leading towards overall sustainable development.