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Multimodal Transport in an Indian Perspective

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Multimodal Transport in an Indian Perspective

Multimodal Transport in an Indian Perspective

  1. 1. Multimodal Transport in an Indian Perspective Prepared by: Farhan Khan 25-Aug-2013
  2. 2. Multimodal Transport • Multimodal transport refers to the transport of good from one point to another via more than one mode of transport. • The chain that interconnects different links or modes of transport – air, sea, and land into one complete process that ensures an efficient and cost-effective door-to-door movement of goods under the responsibility of a single transport operator, known as a Multimodal Transport Operator (MTO)
  3. 3. Multimodal Transport Operator (MTO) Shipper Regulatory Authorities Single Multimodal transport contract Multimodal Transport Operator (MTO) Truckers / Indian Railways / Shipping lines CFSs / ICDs Ports / Airports Individual Contracts
  4. 4. Benefits of Multimodal transport Single Point of Contact Reduces burden of documentation and formalities Saves time and cuts pilferage at the points of transhipment: Reduces cost Makes the best of each mode Frees up working capital Better distribution of wealth MMT Infrastructure development Regulatory reforms Investment in technology Key focus areas:
  5. 5. Multimodal transport – Indian Perspective 0 1 2 3 4 5 Customs Infrastructure International Shipments Logistics Competence Tracking & tracing Timeliness Singapore United States China India As per the World Bank’s International Logistics Performance Index Global Ranking, India ranks 46th among 155 countries. Source: World Bank's International Logistics Performance Index Global Ranking http://lpisurvey.worldbank.org/
  6. 6. Containerization Source: Indian Ports Association http://www.ipa.nic.in/oper4d_2010.htm 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 0 20 40 60 80 100 120 2007-08 2008-09 2009-10 2010-11 MillionTonnes CAGR(%) Container Traffic (in MT) Growth in Container Traffic (in %) Port Name Planned Capacity creation (million TEUs) Estimated Project Cost (Rs. crores) JNPT – 4th container terminal 6.8 6,800 Chennai 4 3,686 Cochin (Vallarpadam) 4 2,118 Mumbai Port 1.2 1,461 Ennore 2.4 1,407 JNPT – 330m extension 0.6 600 Tuticorin 0.6 312 New Mangalore 0.37 270 Total 19.97 16,654 Source: Update on Indian Port Sector (31.03.11), Transport Research Wing, Ministry of Road Transport and Highways; Deloitte Research Container Traffic at Major Ports has grown at a CAGR of 12.97% over the last 5 years Over Rs. 16,000 crores are planned to be invested, adding almost 20 million TEUs of handling capacity at major ports in India
  7. 7. Indian Ports 0 100 200 300 400 500 600 700 800 900 1000 2009-10 2010-11 2011-12 2012-13 In‘000tonnes India's Port Sector Traffic Growth Major Ports Non Major Ports Source: Indian Ports Association (IPA), http://ipa.nic.in/e-magazine.pdf Capacity constraint Inefficient cargo handling & low productivity Inadequate drafts & poor connectivity with other modes Cumbersome institutional arrangements & other issues Technical and Institutional constraints
  8. 8. Other mode of transport Source: Update on Indian Port Sector (31.03.11), Transport Research Wing, Ministry of Road Transport and Highways; Deloitte Research Drivers •Custom clearance activities in ICDs / CFSs •Growth of port traffic •Higher margins in comparison with other logistics activities •Construction of Dedicated Freight Corridor Challenges •High cost of development facility •Archaic procedures for movement of cargo Dry Ports – Container Freight Stations and Inland Container Depots Offer services for handling and temporary storage of import / export laden and empty containers carried under customs control. Transshipment of cargo also takes place from such stations. Inland Waterways 0 20 40 60 80 100 120 Road Transport Rail Transport Inland Water Transport Tonne-kmperlitre IWT is more fuel efficient as compared to road and rail transport India has navigable inland waterways of almost 14,500 km, of which 5,200 km of major rivers and 500 km of canals are suitable for mechanized crafts. Currently, IWT handles only around 1% of total inland cargo transport. Particulars Budgetary Support (Rs in cr.) Private Funding (Rs in cr) Total (Rs in cr) On-going projects 4175 8400 12575 New Projects 6630 11505 18135 Total 10805 19905 30710
  9. 9. • India has one of the largest road networks of approximately 42.36 lakh kms. However, the quality of the road infrastructure remains a big concern. • As per the Road Transport & Highways Department around 60% of the total freight and around 87% of passenger traffic is carried by Indian roads. Traffic is forecasted to grow at around 8- 10% p.a. Road Transport Land Acquisition Environment and Forest Clearances Clearances from Railways Shifting of Utilities Law and order problems Poor performance of some contractors
  10. 10. Rail transportation 28 % of containers handled at ports represents rail share Over the last 10 years, traffic has grown at a CAGR of 6.27% Increase the share of railways in freight transport Build separate infrastructure for handling freight Reduce unit cost of transportation Provide seamless connectivity to customers MainObjectives
  11. 11. The DFC project plans to provide new services including: • Roll-on Roll-off for all types of road vehicles which can piggy-back on wagons • Triple-deck automobile wagon on Western corridor and Double-deck on Eastern corridor. • Movement of over-dimensional consignments from ports to construction sites • Setting up of new terminals with a “one-stop-shop” solution for all value added services like warehousing, packaging, custom bonding etc. Several multimodal logistics parks have been planned along the corridors including those at Delhi-NCR, Jaipur, Gandhidham, Ahmedabad, Vapi and Navi Mumbai on the Western corridor and at Kanpur and Ludhiana. Rail transportation
  12. 12. Developing the potential of Multimodal transport in India: 1. Developing Ports to Handle Larger Shipping Vessels 2. Developing Hub and Feeder Operations at Ports and Along the Coast 3. Development of Multi-Modal Logistics Parks 4. Development of Coastal Shipping and Inland Waterways 5. Goods Act and Customs Procedures 6. Measures for domestic containerization 7. Optimization Rail transportation
  13. 13. Developing Ports to Handle Larger Shipping Vessels • Increasing size of container ships: from present 4000 TEU to future 12000 TEU • The large ships would require drafts between 13–15.5 mtrs • Need to upgrade berthing facilities, higher crane handling capacity, and loading and unloading arrangements • Facilities to shift containers to feedering vessels
  14. 14. Developing Hub and Feeder Operations at Ports and Along the Coast At present there are no hub operations in India Estimated extra cost on account of delays is to US $ 70 per TEU10 Container traffic from and to India uses foreign ports like Colombo, Singapore, Dubai and Salalah Great chance to tap revenue from transshipment Potential Ports: JNPT, Visakhapatnam and Vallarpadam
  15. 15. • Inland Waterways comprises 20 % of the transport sector in Germany and 32 % in Bangladesh, but comprises less than 1 % in India • Benefits can be achieved by good connectivity between ports and the hinterland by rail or road • High growth in non-major ports since its introduction in the 1990s: 200+ • Shift of movement from present bulk commodity to future large size containers • Low fuel costs and pollution levels Development of Coastal Shipping and Inland Waterways
  16. 16. • Severe lacunae in legislation made in 1993 after introduction of MTO • industry expects a legislation to secure and facilitate regime for this sector to develop • Modernization of Customs procedures especially with the availability of new ICT is urgently required • Requirement of high speed checking and reduced delays, which are increasing with the increasing volumes of transactions • Introduce new methods of checking of container contents in view increasing security concerns for India Goods Act and Customs Procedures
  17. 17. Scope to increase domestic containerization is much higher Standard containers have two inherent limitations: • Underutilization of trailing loads and space on broad gauge railway system of Indian Railways • Inability to reach major production and consumption centers in urban areas and in rural areas with rudimentary road infrastructure For this it is necessary to undertake either one or all of the following: • Reduce the container size • Introduce pellets so that cargo reach the store shelves directly • Standardize the sizes of containers and pellets to Indian rail and truck conditions, redesign rail wagons Measures for domestic containerization
  18. 18. • Multimodal Transport Act, 1993 • Private Freight Terminals (PFT) Policy • Draft Coastal Shipping Policy • Cabotage Policy • Policy to permit Operators to move container trains on Indian Railways • Impact of GST • Foreign Direct Investment Regulatory Reforms
  19. 19. • Cloud computing and Software-as-a-Service • Global Positioning System (GPS) • Radio Frequency Identification (RFID) • Enterprise Resource Planning (ERP) • Mobile Technology Technology Trends in Logistics
  20. 20. • Multimodal Transport Models are complex simulation and optimization systems of different transport networks, infrastructure, transport operators and others • Model parameterizes multimodal freight services in order to apply optimization algorithms • Classical four step model: Trip Generation, Trip Distribution, Modal Split and Assignment • Model Parameters : Fare, Cost, Income , Intermediate Stops , Time, No. of routes, Ships etc • Objective functions: Cash flow, profit maximization, IRR etc Optimization Techniques
  21. 21. • Corporatization of all the major ports • Government to facilitate the development of sufficient CFS capacity in reasonable proximity to ports • Accord due priority to container trains’ timely movement of these trains by contractually binding obligations • Expedite draft-deepening of Major ports such as JNPT, Kandla channel • Reduce the cost of capital by lowering tax on Interest income to lenders of port projects • The service tax for coastal ships should be completely or partially exempted • Extend ‘Infrastructure’ status to Indian shipping industry for cheap loan and better D/E ratio Recommendations
  22. 22. Conclusions

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