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Seamless Logistics and Related infrastructure : Challenges and The Way Forward
Logistics is defined as the management of flow of goods between the point of origin and the point of destination in order to meet the requirements of the customer. It encompasses the integration of information, transportation, inventory, warehousing, material handling, packaging, and even security.
India today is one of the fastest growing economies in the world. Over the past decade, it has grown at a CAGR of almost 7.5%. The growth has spurred improvements in infrastructure and helped significantly by increasing private sector participation. Many new ports, roads/highways, airports etc. have been built. India, in fact has the second highest road network in the world (3.3 million kms) after the US. Ambitious projects like the Golden quadrilateral linking the four metropolises of Delhi, Mumbai, Chennai and Kolkata have been planned and executed. In ports too, India has a wide network with 13 major ports and over 200 non-major ports. India is also served by more than 130 airports, as well as the world’s fourth largest rail network of approx. 63,000 kms.
However in spite of all these achievements, if we look at the overall scenario, India’s is still lagging behind in its logistics infrastructure. It currently ranks 47th on the 2010 Global Logistics Performance Index calculated by the World Bank. Issues being faced by ports sector relate to the topics like :
- Coastal Shipping which has not yet been leveraged to its maximum and has tremendous untapped potential for becoming a solution to reduce the pressure on current rail and road infrastructure.
- Capacity Constraints being faced by major ports which are highly congested leading to delays and poor turnaround times. As per studies, capacity utilization at major ports during 2005-2010 was in the range of 91-97%. Moreover, the Maritime agenda 2020 spells that the average dwell time at major ports in India was 3.78 days compared to 0.5 days at international ports.
- Low levels of Mechanization has led to poor movement of cargo resulting in overall delay in the logistics chain ultimately increasing the total logistics cost. Average container moves in India are around 20-25/hr and crane rate is 60-70/hr compared to 25-30 and 100/hr respectively for international ports. Moreover, equipments available at many ports are outdated and need replacement.
- Unavailability of Specialized berths has raised yet another barrier for Indian ports. Even today ports in India continue to be dominated by multi-purpose berths, with their share being almost 60% in 2009-10 for major ports. The lack of specialized berths leads to low efficiency on account of higher pre-berthing detention times for vessels again pointing towards their contribution in increasing logistics cost.
Industry Ponders
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(Retired CEO, Dublin Port Company)
Director,
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Hemant B. Bhattbhatt
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