Largest road network in the world -US’s 6.43 million km Compound annual growth rate (CAGR) Average speed on Indian highways is 30 km per hour, which is three times lower than the average speed on highways in developed countries.
India has the world’s second-largest network of roads (3.83 million km after US’s 6.43 million km)8; national highways form only 2% of the total roads by length and carry about 40% of the traffic. About 80% of the roads in India are village roads. The road sector is significant to India’s Transportation Segment as it accounts for nearly 65% of the freight and 85% of the passenger traffic in the country. This sub-segment is highly fragmented, with the truck operators owning less than five trucks estimated to account for over 75% of the truck fleet. It is estimated that 10% of the market belongs to those with 6-10 trucks; 4% to those with 11-15 trucks; 3% belongs to those with 16-20 trucks; and only 4% of fleet belongs to those with more than 20 trucks. This industry is also characterized by intense competition which is the result of relatively lower capital requirement, ease of obtaining driving licenses and permits. The small operators are involved mainly in the physical movement of goods and depend on brokers and other fleet operators who in turn depend on the booking agents for obtaining business. The small operators are not in a position to perform functions of aggregating, handling, delivering of cargo and marketing. Besides, they do not have the geographical reach and necessary infrastructure to tap business on a continuous basis, and thus rely on brokers. The National Highways are intended to facilitate medium and long distance inter-city passenger and freight traffic across the country. The State Highways are supposed to carry the traffic along major centers within the State. Other District Roads and Village Roads provide villages accessibility to meet their social needs as also the means to transport agriculture produce from village to nearby markets. Major District Roads provide the secondary function of linkage between main roads and rural roads. Road transport is vital to the economic development and social integration of the country. Easy accessibility, flexibility of operations, door-to-door service and reliability have earned road transport an increasingly higher share of both passenger and freight traffic vis-à-vis other transport modes. Transport sector accounts for a share of 6.4 per cent in India’s Gross Domestic Product (GDP). The composition of various sub-sectors of the transport sector in terms of GDP is given in Table -1.
The transport service could be undertaken by different modes such as road and rail which are primarily used for inland transport of goods or by water (ship) or air (express or courier), which are used mainly for inter-country exchange of material. The warehousing services are by large fragmented in India; individual set ups are controlled by local clearing and forwarding (C & F) agents while there are some special multi modal warehouses such as ICD or CFS centres often used by rail, ship, road modes of transport. There are various kind of value adding services such as packaging,labelling, cross bundling, track and trace which are common irrespective of modes of transport and some special services such as express, cold chain etc.The growth rates of the various segments of the Transportation, Logistics, Warehousing and Packaging Sector are as below:
Road Logistics in India History Roadways in India have come a long way. Starting from the pugdandies (a small path created naturally due to frequent walks) of earlier times to the present-day Rajpath of Delhi ,the country has crossed many spheres of road travel. The 'thread that binds the nation together' is truly a deserving metaphor for a road network that is one of the largest in the world. In the Atharva Veda, we find references to road construction and information on precautions to be taken. Kautilya's Arthasashtra mentioned about mechanism of roads for chariots and stresses upon the traffic rules and road safety. With the development of culture and trade, cities like Vaishali, Sravasti, Rajagriha, Kurukshetra, and Ujjaini had roads to facilitate socio-economic intermingling. Ujjaini, capital of Avanti, was an important trade center and connected with northern trunk routes to modern Bharuch, an important seaport. Development of roads took a new turn during Mauryan rule in the 4th century. The administration constructed Rajpath (high roads) and Banikpaths (merchant roads). Megasthenes, the Greek traveler, wrote that the Mauryan Empire took a big stride to develop roads for communication. He recorded a Rajamarga or the king's highway, which was also a trade route and a precursor to the modern Grand Trunk Road. This tradition continued and Chandragupta's grandson, Ashoka, who was a great and compassionate ruler, strengthened the system immensely. At time of Mauryan's , roads played a key role in military operations to keep the vast country united. Records reveal that during the Gupta era there was also a road connection with South India. There were three major routes-one was a connection with Northeast India via Didisa, the other connected to the seaport of the Western coast and the third connected to Pratisthana, the capital of Satvahana Empire. There are also evidences of a route facilitating trade with Iran and China. The Mughal era was the golden era for roads. India was effectively connected to control the vast empire. With the advent of the British, a new awakening dawned upon India. The East India Company revived ancient routes and renovation was initiated. The technology of the West came into play and linkages were well established which provided the British the inroad to rule India for over two hundred years.
To meet the infrastructural need, the National Highways Authority of India (NHAI) launched the National Highways Development Project. This project has three phases, which are meant to upgrade and widen the country‟s highway network. The first phase incorporates the development of the Golden Quadrilateral connecting Delhi, Mumbai, Chennai and Kolkata. The second phase involves the development of the North-South and East-West links, which runs from Srinagar to Kanyakumari and from Porbunder to Silchar. Phase III consists of the upgrade of existing national highways (Rastogi, A., 2006). The NHAi is also investing in the development of an Intelligent Transportation System (ITS) in order to increase the effectiveness of transport services on the highway and automate many processes such as toll collection (Chandra, P .and Jain, N., 2007). Given the important role of road transportation in supply chain efficiency, the ITS is expected to add significant value to logistics operations. Successful implementation of such a project will lead to better management of road infrastructure and transportation: traffic congestions will be significantly reduced, the average speed on Indian roads will increase, the average wait time on tollbooths will decrease, better fleet management and traceability of trucks will become possible, and information flow will improve. The Indian Road Freight Industry is highly fragmented and largely unorganized with many small operators. The industry is deregulated and its structure consists of transporters, broker agents and small operators – these are truck owners with a license to operate and a small fleet of up to five vehicles. The World Bank report titled Indian Road Transport Service Efficiency Study finds the Indian road freight industry structure to be an effective one, given the very low freight rates and despite the deficient infrastructure. In fact, “India has achieved a highly competitive, low-cost road freight transport industry for basic services, with highway freight rates among the lowest in the world”, the report states. Economic benefits The GQ project establishes better and faster transport networks between many major cities and ports. It provides an impetus to smoother movement of products and people within India. It enables industrial and job development in smaller towns through access to markets. It provides opportunities for farmers through better transportation of produce from the agricultural hinterland to major cities and ports for export, through lesser wastage and spoils. Finally, it drives economic growth directly through construction as well as through indirect demand for cement, steel and other construction materials.It gives an impetus to Truck transport throughout India. industrial and job development in smaller towns Kolkata – Chennai
To fill a significant gap in our range, we have joined hands with Nissan Motor Company, Japan, to develop and manufacture Light Commercial Vehicles, under both the Ashok Leyland and Nissan brands, in the 2.5 to 7.5 tonne segment. The JV resides in three separate companies for Vehicle Manufacturing, Power Train Manufacturing and Technology Development. The first offering from this stable, the 2.5 tonne DOST, has just hit the Indian market. With our JV with John Deere, USA, we aim to seize the opportunities of the robustly growing construction equipment sector with products like Backhoe Loaders, Four-wheel-drive Loaders, Skid Steers and Excavators under both the Ashok Leyland and John Deere brands. This is a JV with Continental AG, Germany to design, develop and adapt infotronics products and services for automotive customers and meet the requirements of our vehicles and, at the same time, avail of opportunities with other vehicle manufactures in India and overseas. Ashley Alteams is a JV with the Alteams Group, Finland, and is in the business of producing High Pressure Die Casting (HPDC) aluminum components pre-dominantly for telecommunications and automotive sectors.
SUPPLY CHAIN MANAGEMENT AT ASHOK LEYLAND It has been found that the Automobile Giant Ashok Leyland Ltd, Chennai, has got one of the very successful Supplier development Program as part of its World-Class Supply Chain Management. Mission Statement of the Company: "Our Vendors are our valued partners in our business development and we shall work with them in a spirit of mutual co-operation to meet our business objectives." * Vendor Development and Strategic Sourcing are handled by Corporate Materials Department (CMD). - CMD identifies the vendors, rates the vendors based on feedback received from Supplier Quality Assurance Cell, sends drawings / specifications, calls for quotes with detailed break-up of operation-wise costs, and negotiates the price at which the parts will be supplied. - In addition to CMD at Ennore, and the two Units at Hosur, there are Materials Management Departments (MMDs) for scheduling based on unit production plan. * Vendor Development of Strategic Sources - Strategic Sourcing is central to the integrated Materials Management function. Ashok Leyland's policy is to develop a vendor base committed to continuous improvement to meet quality, cost and delivery standards. - Ashok Leyland considers its vendors as partners in progress and believes in establishing mutually beneficial relationships. Ashok Leyland provides necessary technical assistance in the form of Project and Production Engineering, to maintain quality levels. In addition, where required, Ashok Leyland also helps vendors financially. SCM one of the important task to improve,because some time before,The company was facing the huge task of integrating its entire supply chain and at the same time it had to reduce its costs, inventory, and improve customer satisfaction. Rising raw material cost was a serious concern for the company. Therefore, Ashok Leyland decided to streamline its supply chain process and the company started its SCM project ‘Oscars’ to optimise its supply chain and rationalise its sources. The project ‘Oscars Inbound’ included supplier partnership, vendor base rationalisation, tiering of suppliers and cluster information, inventory optimisation through JIT and LCL, total cost management, logistics initiatives, e-sourcing and global sourcing.
Container Movement BLR moves more than 5000 containers on monthly basis between ICD-Port and (de)stuffing points. Full Truck Load (FTL) Transportation BLR can move your Full Truck Load Cargo all over India. Less than Truck Load (LTL) Transportation BLR has developed specific routes all over India to move small cargo loads to give customers flexibility and economic advantage. 32 feet Containerized Vehicles These trucks are specially designed by BLR to provide you with a very cost effective transport solution, leading up to a 30% saving on your transportation costs. Premium Car Transportation This custom built vehicle is specially designed for the transportation of Single Premium Cars from your doorstep to destination. Hazardous Cargo Transportation BLR can move your chemicals and inflammable materials to all destinations across India via ISO tank containers and specially designed vehicles. 24hrs Surface Express BLR provides you with a 24 hours service between Mumbai and Delhi and between Mumbai and Bangalore, with real time tracking of vehicle. COMPANY PROFILE As one of India's leading logistics companies BLR offers customized solutions to all industrial sectors with a focus on saving costs and providing world class services. BLR Logistiks (I) Ltd stands for globally competitive solutions within a trusting and service oriented environment. BLR offers truly integrated Logistics Services to its customers through its privately owned fleet of more than 500 vehicles and over 24 general and custom bonded warehouses in all major cities across India. With its 100 offices in India BLR can offer you an extensive network and overall coverage. Having grown 58% annually, and Reliance Capital Ltd taking on an equity stake of 31%, BLR Logistiks (I) Ltd has developed from a small trucking company to a 250 crore rupees (equal to 50 million US Dollars) turnover logistics provider
Key players in Indian Road Logistics Container Movement BLR moves more than 5000 containers on monthly basis between ICD-Port and (de)stuffing points. Full Truck Load (FTL) Transportation BLR can move your Full Truck Load Cargo all over India. Less than Truck Load (LTL) Transportation BLR has developed specific routes all over India to move small cargo loads to give customers flexibility and economic advantage. 32 feet Containerized Vehicles These trucks are specially designed by BLR to provide you with a very cost effective transport solution, leading up to a 30% saving on your transportation costs. Premium Car Transportation This custom built vehicle is specially designed for the transportation of Single Premium Cars from your doorstep to destination. Hazardous Cargo Transportation BLR can move your chemicals and inflammable materials to all destinations across India via ISO tank containers and specially designed vehicles. 24hrs Surface Express BLR provides you with a 24 hours service between Mumbai and Delhi and between Mumbai and Bangalore, with real time tracking of vehicle. Cosmetics Company in Pune Previous situation : The customer was using conventional 9MT and 16MT trucks, in which respectively 7MT and 10MT of cargo was loaded. The truck was covered with Tarpaulin and lashed with ropes. Main destinations were in Eastern India and the customer was using a transit time of 6-7 days. By the time the cargo arrived at Kolkata from Pune the top layer of the cargo was totally damaged due to the ropes used for lashing. This resulted in loss of cargo and therefore loss of sales. Solution provided by BLR : To reduce the damage to the cargo, BLR designed and built a 32ft container vehicle with 15MT carrying capacity and GPS tracking facility. The customer was able to load 15MT and therefore used full capacity of the trucks and thus reducing the amount of vehicles previously required. The transit time of the cargo also got reduced from 6-7days to 4 days and the customer no longer lost cargo due to damages. BLR’s solution increased efficiency and reduced the customers cost.
In spite of all these concessions, private sector exposure has been below the expected levels. This is primarily due to reasons like reluctance of the private sector to participate in long-term projects, land acquisition problems and difficulty in toll collection in the operating phase in certain stretches. Although the Indian transportation infrastructure is one of the largest in the world, it is far from being the best. The population of the country is almost four times that of the U.S. and A Report on Road Sector In India Group IX, Section B 15 has one of the highest growth rates in the world. The existing transportation system is not adequate to sustain the current rates of economic and industrial development in the country. Demand has constantly outstripped the supply of transportation over the last fifty years. Compared to the U.S., the amount of freight traffic carried by highways in India is quite meager. This is partially due to poor surface quality of the roads. The Indian automobile industry today manufactures a large variety of multi-axle vehicles with turbo charged engines, but most of these are currently exported. The Indian industry needs large freighters to transport goods. The automobile industry has necessary facilities to manufacture them in sufficient quantities. The inadequate road infrastructure hence acts as an economic bottleneck impeding growth of both these industries. Network Connectivity Achievement of high network connectivity is usually the first step in infrastructure development. However, while this is a major problem in a number of other emerging economies such as China, it is not a factor in the Indian context. India already enjoys one of the highest rail and road connectivities in the world. The current Road Plan aims at achieving a level of around 80 km per square km by 2011, which is primarily to achieve social equity. Travel Time The average speed on Indian highways is around 45 km/h, which is less than half of that on the U.S. Inter-State system. Coupled with this, there is a problem of low bearing capacities. Most road surfaces are flexible pavement bitumen, with bearing capacities one fourth of the U.S. Inter-State highways. There is a need for improvement in this area. However, it may not be desirable to go in for an intricate system of expressways for freight and passenger traffic. Due to a number of reasons mentioned earlier, it would be economically sound for the country to maintain a high share of railways in the overall surface transportation system. Also, construction and upgrading of roads requires major capital investments that may not be available. Hence, it might be better to go in for selective upgrading through identification of suitable higher priority corridors. The 2011 Road Plan proposes construction of about 12,000 km of expressways. Seven years after the plan commencement, India has yet to see this starting in any major way. A major factor hampering road construction is availability of funds. Maintenance The other major issue in freight transportation is increased use of containers. Larger sixteen wheel trucks and combination vehicles are replacing the old six wheel trucks. These heavier vehicles need higher bearing capacity of the pavement. Most roads in India currently have a bitumen pavement. This was initially adopted over concrete because high bearing capacity was not needed for passenger movement. Most military equipment in India is transported A Report on Road Sector In India Group IX, Section B 16 on rail, unlike the U.S., where the Inter-State roads were constructed to enable movement of heavy tanks and artillery. Use of heavy axle-load trucks has led to rapid deterioration in surface quality. Since immediate upgrading of all the major highways is neither required nor economical, there is a need for evolution of an adequate maintenance and monitoring system. Use of heavy axle trucks would have to be restricted to certain roads, where alternate rail facilities are not available. A suitable strategy might be to restrict such trucks to roadways identified for upgrading in the 2011 Road Plan. This would have to be coupled with improvement in the railway transportation system in areas where modal shift is desirable. An integrated approach would be necessary in this context. Reliability Due to increased scales of production and higher inventory costs, the Just-In-Time (J.I.T.) approach is becoming increasingly popular in India. A number of perishable commodities are being transported over longer distances. Hence there is a need to increase average speeds on highways through improvement in the surface quality and increase the existing capacity. Road transportation needs to be faster and more reliable. Addition of more lanes and removal of bottlenecks may solve the problem in some cases; alternate strategies may be required in others. The Government has to be more accountable in terms of the funds collected and spent on roads. Over the last financial year, the total Government expenditure on roads was just 10% of the total revenue earned from road transportation (including gasoline tax). This figure is very low compared to U.S. (85%) and most other countries. The industry that is responsible for the implementation of the road sector projects is the construction industry. However the construction industry is still plagued with an absence of regulatory framework, lack of proper financing mechanism for the contracting community and low levels of mechanization. These bottlenecks often result in problems during the execution phase leading to delays and time and cost overruns.
Further, the higher dependence on road transport is adverse for the environment as emissions from road transport are higher than emissions from rail and waterways. Road transport emits 84g of CO2 equivalent per ton-km compared to 28g for railways and 15g for waterways. Yet, India continues to transport a majority of its goods via roads including bulk materials like steel, cement and coal. A moderate shift from road to rail can help India save close to 0.7 per cent of its total commercial energy consumption
Road logistics india
AGENDA• Indian Logistics sector – Introduction – Comparison to the other countries• Road Logistics in India Agenda• Key players in Indian Road Logistics – Ashok Layland – BLR Logistics India• Key Issues faced by the road logistics in India – Network Connectivity – Travel time – Maintainance – Reliability• Final word...
Introduction – Indian Road Logistics Quick Facts India is having second largest road network in the world.(3.83 million km) Road network carry nearly 65% of freight and 85% of passenger traffic Average speed on Indian highways is 30 km per hour, which is three times lower than the average speed on highways in developed countries. Roads in India are divided into the following five categories: National Highways (NH) State Highways (SH) Major District Roads (MDR) Other District Roads (ODR) Village Roads (VR) National highways form only 2% of the total roads by length and carry about 40% of the traffic Out of total length of national highways: 27 % - single lane/intermediate lane 59 % - double-lane standard 14 % - four-lane/ six-lane/ eight lane standard
Introduction – Indian Road Logistics Quick Factsndian Road Network Share of Transport in India’s GDP
Introduction – Indian Road Logistics Key players in Indian Road Logistics Quick Factsndian Road Network –Annual Growth Rate
Road Logistics in IndiaMajor National Highways Major State Highways
Road Logistics in India Golden Quadrilateral The Golden Quadrilateral is a highway network connecting Indias four largest metros : Delhi, Mumbai, Chennai, Kolkata First phase of the National Highways Development Project . The project aims of building 5,846 km (3,633 mi) of four/six lane express highways at a cost US$12.2 billionAdvantages: Better and faster transport networks between many major cities and ports Industrial and job development in smaller towns & villages
Key players in Indian Road Logistics One of the largest commercial vehicle manufacturers in India with a turnover of US $ 2.5 billion Flagship of Hinduja Group, founded in 1948 ,headquarters – Chennai, India Annual sales of about 60,000 vehicles and about 7,000 engines Manufacturing Facilities: India ― Pantnagar- commercial vehicles ― Alwar - assembly part with focus on passenger chasis ― Bhandara - gearbox assembly ― Hosur— diesel and CNG engines, axles, gearboxes ― Ennore- axles, gearboxes Czech Republic — Letnany - D-Line series of AVIA trucks UAE — Ras Al Khaimah – Bus production line
Key players in Indian Road Logistics Joint Ventures Nissan Motor Company (Japan)-Light Commercial Vehicles John Deere (USA) - Construction Equipment. Continental AG (Germany) – Design and development of automotive Infotronics Alteams Group (Finnland) - Producing High Pressure Die Casting (HPDC) aluminum components Suppy Chain ManagementTo maintain a highly capable and competitive supply base, focus is on: Partnering best-in-class suppliers Conducting rigorous evaluation and improving supplier performance - measured on Quality, Cost, Logistics, Development and Management (QCLDM) Optimizing supplies in coordination with third party logistics (3PL) providers Vendor Development and Strategic Sourcing
Key players in Indian Road LogisticsTrucks Defence VehiclesLight Vehicles
Key players in Indian Road Logistics • A Logistic company specializing in road transport has experience of more than 40 years on Indian roads. • Has fleet of more than 500 different vehicles • Has annual turnover of 250 crore rupees (equal to 50 million US Dollars) • BLR provides services like – Container Movement – Full Truck Load (FTL) Transportation – Less than Truck Load (LTL) Transportation – 32 feet Containerized Vehicles – Premium Car Transportation – Hazardous Cargo Transportation – 24hrs Surface ExpressReference http://www.blrlogistiks.com/services/transportation.html
Key players in Indian Road Logistics • BLR has Fleet of different transport vehicles some of the variations are as below – Hydraulic axels – Semi - Low Bed trailers – LCV’s – MCV’s – 32ft containerized vehicles (6 and ten wheels) – 28ft containerized vehicles – 12 wheel trucks, open and full body – Full Body Truck (18-20-22-24 ft) – Open Body / 24ft Container – Half Body, Open, 20ft Container Carrier – 20ft Container Carrier (only frame) – High Bed Trailer with frame (20 and 40 ft) – High Bed Trailer with platform (20 and 40 ft) – 44ft Low Bed Trailer – 20ft HQ ContainerReference http://www.blrlogistiks.com/services/transportation.html
Key Issues – Indian Road Logistics • Lack participation of private sector • Network Connectivity • Travel time • Maintainance • ReliabilityReference KPMG analysis
Key Issues – Indian Road Logistics • High Co2 EmissionReference KPMG analysis
Key Issues – Indian Road LogisticsReference KPMG analysis
Final word… • Robust growth in road transport in recent years has been attained, But…. – India’s logistical cost as a percentage of total production cost is about twice the world average of 7%. – Estimated the economic losses from bad roads at anywhere up to Rs. 30,000 crore (4.2 billion EUR) a year, or around 1 to 2 percent of GDP each year – Out of total national highway length of 70,934 Km, it is estimated that only 14% is four lane • Golden Quadrilateral project showing ray of hope • About 50% FDI granted in Retail sector with mandatory investment in local infrastructure for the foreign investors.Reference KPMG analysis