Indian logistics infrastructure faces several challenges. Seaports can only handle containers at 60% of the rate of international ports like Rotterdam due to inadequate berths and poor rail/road connectivity. For rail, freight and passenger trains share tracks, limiting freight trains to 22 kmph on average versus 100 kmph in countries like the US. Most trucks are owned by small flees of 2-5 trucks, limiting transparency and cost savings. Only 50% of Indian roads are paved compared to 68% in the US. Air cargo in India also significantly trails major Asian airports. To overcome these challenges, India must improve infrastructure like dedicated freight corridors and develop the logistics management industry through companies like 3PLs.

1. INDIAN LOGISTICS INDUSTRY – Challenges
In India considering expected growth in coming years across different sectors which will indirectly derive
the demand for logistics we will need a better infrastructure, for example Indian cement industry is
expected to double its production by year 2030. Let us see at major logistics infrastructure challenges
India must act on:
Seaports:
 When we look at our seaport facilities, on an average 18 containers can be handled per ship on
per hour basis which is just 60% of the capability of most well-known international sea ports like
Rotterdam, Singapore etc. Other factors include inadequate number of berths to handle ship
traffic, and adding to that, rail and road connectivity is insufficient.
Railways:
 Indian railways is named among the world largest rail network, but unlike US, freight and
passenger trains share the common tracks in India and that is one of the big reason for low
average speed of 22kmph for freight trains (for US it is approx. 100kmph). Other constraints are
improper utilization of wagon’s available capacity. Indian railways payload to tare ratio is 2.5 while
in developed nations in Europe and USA this ratio is 3.5 to 4 that shows the improper utilization of
wagon’s available capacity in India. Other constraints are maximum moving dimension (MMD)
limit which completely removes the possibility of running Double Decker freight trains. To
overcome these hiccups, India must have dedicated freight corridors. Understanding the current
deficiency in infrastructure, Indian government has taken some initiatives to improve logistics:
currently Dedicated Freight Corridor Corporation of India is expected to complete western corridor
by March 2017 (Dadri-UP and JNPT-Mumbai-Maharashtra) and eastern corridor (Ludhiana-
Punjab and Dankuni-West Bengal) by December 2016. These corridors will have wagons with
axle load of 25 tones (current axle load is 20.3 tones) thus increasing capacity by 19 tones (one
wagon has 4 axles) per wagon.
Road network:
 Turning our attention to road statistics, approx. 70% of the total trucks in India are owned by
owners operators, who have average fleet of 2 to 5, which gives a clear indication that managing
accounts with so many transporters for a shipper would be a cumbersome task and thus
transparency is at minimal level and so would be cost savings. In developed economies like US
and Europe truck covers on an average 400 km on daily basis, this figure is just half for Indian
trucking industry. In India only 50% of roads are paved while figure stands at approx. 68% for
USA. Indian current national highways have a span of approx. 66,000 km which is mere 2% of
total road network which consists of 38% single lane, 50% two lane and rest forms four lane.
Traffic load on national highways is 40% of total road network which gives clear picture about
amount of congestion it can create thus increasing lead time. Like railways dedicated road freight
corridors would be the best solution.

2. Airports:
 Indian airports are also lagging behind in development as compared to international airports. In
India in 2011 all airports together handled approx. 2.3 MMT (million metric tons) of freight which is
much lower than the other Asian airports like Shanghai-China (2.6 MMT), Dubai-UAE (3.0 MMT),
Incheon-South Korea (2.7MMT), Hong Kong (4.6 MMT). This makes it very apparent that air
cargo in India has significant untapped potential.
 India must also improve warehouse management services in order to meet retail and
manufacturing needs. Comparing India with developed countries, spending on warehousing is
just 9% as compared to US spending of 25% of total logistics spending.
Conclusion:
Considering current infrastructure capabilities, India need an investment boost, not just from government
but also through FDI. Second to that in order to boost the bottom line and bring in more transparency to
the cost saving opportunities for shippers there is a need for logistics management companies, that is
3PL (Third part logistics company) players. As of now there are very few 3PL companies in India, TNT
express, DHL, Kuehne+Nagel are foreign MNC’s in India, DHL acquired Bluedart and TNT express
acquired Speedage in order to enter India. Gati and Safex are the only Indian 3PL’s who have national
coverage. Logistics infrastructure development coupled with world class management practices of
International 3PL MNC’s would help country to overcome its challenges and meet it needs in most
efficient manner.