Supply Chain Resilience Key to Overcoming COVID-19 Crisis

SUPPLYCHAINTRIBE.COM
May - June 2020
Volume 4 Issue 3
For private circulation only
FIGHTING the COVID-19 BATTLE
Making SUPPLY CHAIN FUTURE READY
CIRCULAR KARMA
INSIDE
Greater shifts are required in business
models as Multi-modal logistics takes
centre-stage
WHEELS OF
FORTUNE

MOVING FROM FAGILE
TO ANTI-FRAGILE
Dear Readers,
It has been a tough month for everyone. Unprecedented in nature. We all are a part of and witnessing history
in the making. How the history pans out is upto us and our resilience. Easier said than done though.
The consequences of the lockdown have been severe. It has exposed our fragility. In our efforts to balance
lives v/s livelihood, stringent clauses have been enforced which has left MSMEs and manufacturing as a sector
in the lurch. These clauses have made it unviable to open factories.
While the next few months also may look bleak, this adversity had brought with it many opportunities for
India. China’s loss could be India’s gain. The government, MSMEs, industry leaders, bankers, lenders and civic
authorities need to come together to provide the support required for India to be able to fill the void left by
China.
As we near May 03, there could be an extended lockdown especially in red zone areas. We all must make the
efforts to ensure that our economy does not become supine. After all, we must look at this as a short-term
aberration. Once this passes, a lot of global manufacturing should move to India, thus generating greater
employment opportunities. We simply must come up with smarter solutions because the light is brighter at the
end of the tunnel.
I am reminded of Nissim Taleb’s book on Anti-fragility. Yes, the same person who made Black Swan famous.
Antifragility is beyond resilience or robustness. It is like our very own demon Ravana, you cut-off one head and
another one would grow. By grasping the mechanisms of anti-fragility, we can build a systematic and broad
guide to decision making under uncertain conditions. Similarly, we need to make our mind-sets such that we
thrive in uncertainty and not make it a constraint.
Stay Healthy, Stay Safe!
Charulata Bansal
Publisher
Charulata.bansal@celerityin.com
www.supplychaintribe.com
Published by Charulata Bansal on behalf of Celerity India Marketing Services
Edited by: Prerna Lodaya • e-mail: prerna.lodaya@celerityin.com
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Logistics Partner: Blue Dart Express Limited
PUBLISHER’S NOTE

CONTENTSMay - June 2020
Volume 4 Issue 3
DISCLAIMER: This magazine is being published on the condition and understanding that the information, comments and views it contains are merely for guidance and
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Editor: Prerna Lodaya
16
COVER STORY
WHEELS OF FORTUNE
Logistics is a $3.4 trillion industry globally
and a robust channel of transport supported
by infrastructure, technology & innovation in
multimodal transport can substantially reduce
cost and increase competitive advantage
for exports. A Multimodal Transport System
uses a combination of more than one mode
of transport and integrates the scope and
viability of simultaneous use of various inter-
linked network of distribution and logistics
channels. This cover story delves with all such
myriad challenges and present companies an
opportunity to introspect and transform their
supply chains…
10 OPINION
Fighting The Covid-19 Battle
“The COVID-19 outbreak has shown the industry how
delicate the supply chain has become,” stresses Senthil Kumar
Subbiah, Senior Research Analyst, Transportation & Logistics
Practice, Frost & Sullivan.
INTERVIEWS
6 From Mines to Markets
Sukanta Das, Chief Logistics Officer, Hindalco Ltd., shares that
Hindalco aspires to excel in the effective management of
resources while minimizing our ecological footprint through
improved supply chain operations.
12 Building a Resilient Supply Chain
Rajeev Ranjan, Supply Chain & Route to Market (RTM)
Consultant, believes that business costs of events like
Covid-19 and few other unforeseen events in recent past,
has made it clear that investing in resilient supply chain is an
absolute must.
26 Creating the Necessary Standards
Ravi Mathur, CEO, GS1 India, highlights that GS1 is working
to achieve fully accurate, real-time visibility throughout the
supply chain, from source to consumer.
32 FOCUS
Circular Karma
Artificial Intelligence is helping supply chains to be
economically circular, writes Raghavan Santhanam, Senior
Consultant, Stratadigm.
FEATURE
30 Audit in Logistics & Supply Chain
Objective of Logistics Audit is to examine organization’s
competitiveness and robustness of logistics operations,
efficiency and cost, states Vikash Khatri, Founder, Aviral
Consulting Pvt Ltd.
36 The Supply Chain Leader of Tomorrow
It is a time to adopt a different perspective on managing
business functions, stresses Alagu Balaraman, Director &
Founder, Augmented SCM and MD, CGN Global India.
4 CELERITY May - June 2020

“As one of the world’s largest aluminium producers,
Hindalco aspires to excel in the effective management
of resources while minimizing our ecological footprint
through improved supply chain operations,” Sukanta
Das, Chief Logistics Officer, Hindalco Ltd., during an
interview…
FROMMINES
TOMARKETS
Sukanta Das has over 22 years of experience
in back and front-end operations, encompassing
logistics, retail, media, e-commerce and the
manufacturing industries. After completing his
graduation in Commerce, he pursued a post-
graduation diploma in Logistics from IISWBM,
Kolkata.
I think a logistician’s core KRA has always been to work at a
war footing. Nothing can illustrate this statement better than
the current scenario of a nation-wide lockdown. The work
doesn’t stop and we have to manage the entire supply chain
while working from home. As a continuous process industry,
our refineries and smelters need to run even during the
lockdown. We have to ensure that all input materials reach
the plants and finished goods are evacuated for exports. It is
heartening that even in this volatile period, we have managed
to ensure seamless production and higher export sales.
Digitalization is going to be the big
game changer. It will make the
entire supply chain more visible,
flexible and agile. Organizations
will need to understand the extent
of digitalization they need in order to
harness optimal benefits. Adoption and
adaption are both critical and that’s
where companies will face the greatest
headwinds.
How does the Hindalco aluminium
value chain work?
Hindalco runs fully integrated aluminium
operations in India, from mining to
aluminium semi-fabricated products.
Apart from aluminium ingots, sheets,
wire rods and billets, we also make
aluminium foil for food and pharma
packaging, and branded roof and
window solutions. Hindalco produces 1.3
million tons of aluminium per annum.
Our operations are spread across the
country based on where our key inputs
and markets are located. The key inputs
for aluminium production are bauxite
and power. We operate bauxite mines
and coal-based captive power plants
that supply our aluminium smelters.
One ton of aluminium will need about
6 tons of bauxite and roughly 12 tons
of coal (for power generation). Most of
the bauxite is sourced from our captive
mines, the rest from outside suppliers.
Coal is sourced mostly from Coal India
and some from our own mines. So
that is the scope of our supply chain
footprint.
As a thumb rule, producing and
selling one ton of aluminium calls
for transporting 22 tons of material,
including solid wastes generated in the
process. At Hindalco, we use a variety of
transportation solutions such as long-
distance conveyors (LDC), ropeways,
road, rail and coastal. Since our markets
are both domestic and international, we
use multi-modal transportation to reach
to our customers.
The coronavirus outbreak has hugely
affected global supply chains. We
face the challenge of keeping human
lives safe and protected while trying
to secure our economic lifelines. At
Hindalco, we always have a business
continuity plan in place. We were ready
for the challenge, otherwise it would
have been a huge problem. There is no
room for errors when you are dealing
with continuous process plants like an
aluminium smelter.
How do you manage the daunting
task?
I believe any logistics operation,
irrespective of the industry or sector,
requires agility and flexibility. To handle
challenges and market pressures, you
need to have a robust monitoring
mechanism and stay ahead of the curve.
The complexities in our operations arise
in terms of handling different types
of products, modes of transportation
and large volumes. We have plants
situated in remote locations to be close
to the mines. In such locations, major
movement is through rail. Most of our
plants have their own railway sidings.
We have laid about 10-12 km of track
to connect plants with the main line
and we have our own fleet of rakes,
BTAP rakes for Alumina and a BTCS
rake for Caustic soda.
There is always an element of
uncertainty and delay when it comes
to moving goods through rail. We have
deployed our own traffic managers
across railway divisions to ensure
smooth movement and rigorous
monitoring during transit. These
traffic managers co-ordinate with
railway divisions where our rakes are
in operation so as to get real-time
information.
Our other major product Copper
is a valuable commodity. Copper
is transported in convoys, and we
deploy pilot cars that travel with the
consignment. The point I am making
is that there is no ‘One Size Fits All’
scenario.
In many of our operations, we are
setting supply chain benchmarks. We
have segregated the supply chain into
streamlined subsets to deal quickly
even with unforeseen complexities. In
continuous process industries, we need
to always have a Plan B ready, while
keeping a firm eye on what’s happening
on the ground and staying in touch with
our people to manage any eventualities.
Please enlighten us about your
endeavors towards streamlining
supply management globally.
As one of the world’s largest aluminium
producers, Hindalco aspires to excel in
the effective management of resources
while minimizing our ecological
footprint through improved supply
chain operations. To give you a sense
of the numbers, till last year, we were
associated with more than 11,220
suppliers in the Aluminium Business and
about 2,450 in the Copper Business.
Most of our suppliers are based in
India, the rest are spread across China,
Japan, Togo, Indonesia and South Africa.
Currently 34% of our suppliers have
ISO 14001 certification. We intend to
increase this number by 5% to 10% by
next year.
We have a screening process for
all suppliers. There is due diligence
to look at the commercial feasibility
of collaboration and to evaluate
suppliers on parameters such as price
competitiveness, quality, response time,
Environmental, Social and Governance
(ESG) criteria such as health and safety,
environmental standards, working
conditions, labor rights, and so on. The
ESG parameters constitute a weightage
of a minimum of 25% in our supplier
evaluation process. Based on the score
received, suppliers are categorized as
Identified Vendors (those willing to work
with us), Empanelled Vendors (those
eligible for trial orders) and Approved
Vendors (those who are approved after
evaluation).
Our sustainability framework
involves future proofing by creating
value for all our stakeholders. Suppliers
are a key part of our ecosystem and
we lay great emphasis on sustainable
supply chain management. This has
been a priority in our materiality matrix
and our customers also understand
this. We have framed our Supply Chain
and Procurement Policy such that our
suppliers can align themselves with
us on sustainability aspects such as
resource conservation, use of alternative
materials and renewable energy, water
stewardship, safety, health, adherence
to human rights across the supply
chain. In short, we are creating an
environment that supports our supply
chain partners in their sustainability
journey.
How are you planning to drive
efficiency through technology?
At Hindalco, we have been adopting
best-in-class digital technologies to
achieve higher visibility, speed and
efficiency across our processes. We are
leveraging analytics for data-driven
process management. For instance, we
have GPS-based logistics solutions for
finished goods. This entails tracking
truck movements starting from the
refineries to smelters to downstream
plants to warehouses and customers.
This technology has provided greater
visibility on finished goods to both
internal and external customers. Other
benefits include better operational
control, faster damage control in case of
accidents and optimal route usages. We
have also deployed Blockchain for smart
contracts at the foils plant. Workers,
suppliers and Hindalco are connected on
a single, transparent and incorruptible
digital ledger of economic transactions,
which records financial transactions and
other important developments through
a smart contract. This helps users to
identify and mitigate inefficiencies
across the value chain.
Share with us your green trailer
strategy.
Hindalco's aluminium trailers and
bulkers are the greener, stronger and
smarter alternative to conventional
transportation. The idea began as a
small discussion to explore the benefits
of aluminium in the transportation and
logistics industry. Within ten months,
the green trailer became a big step
towards revolutionizing the transport
industry.
The Hindalco trailer is made
from high strength aluminium alloy.
This means that a 34-foot long
aluminium trailer is actually 50%
lighter and weighs 2.5 tons less than
an equivalent-sized steel trailer. The
lighter weight makes it highly fuel-
efficient with each trailer saving up to
15,000 litres of fuel. Each trailer can
potentially carry a corresponding extra
INTERVIEW INTERVIEW
6 CELERITY May - June 2020 7supplychaintribe.com

load of 2.5 tons per trip, thus providing
additional revenue and other business
benefits to the operator. It can ferry a
wide range of materials such as cement,
alumina, fly ash, grains, flour, and even
heavier material such as steel coils and
cylinders.
The reduction in total weight also
makes it environment-friendly as it
gives off 25 tons less GHGs and helps in
achieving BS-VI emission targets. Plus,
aluminium is entirely recyclable, which
means the trailer can be recycled over
and over again. It has a 70% higher
scrap value, which makes it more cost-
advantageous over its lifecycle. It’s the
unbeatable combination of improved
vehicle efficiency and reduction of
carbon footprint that makes the
aluminium trailer a smart, truly
sustainable product.
How did this idea strike you?
Over the past decade, India has seen
improvements in the road network
and rapid growth in the logistics and
freight industry. A big component of
the freight industry are the trailers that
ply the roads 24x7. Today, domestic
trailer production is estimated to be
around 20,000 units per annum. Most
of these are made of steel. The heavy
weight makes them slow and increases
fuel consumption which leads to more
greenhouse gas (GHG) emissions, and
therefore a higher carbon footprint.
The domestic trailer market is expected
to grow at 10-12% annually. All of
this meant there was an urgent need
to design a sustainable alternative to
traditional commercial vehicles.
We first started exploring the idea of
an indigenously built aluminium bulker.
Like the trailer, the aluminium bulker
is lighter in weight and enjoys a longer
life with a low cost of maintenance. For
instance, a 30 cubic meter bulker is two
tons lighter than an MS bulker of the
same size. The bulker is 100% recyclable
and also eco-friendly. The lighter
weight puts less strain on the engine
and tyres, making it more fuel-efficient,
adding to the eco-friendly properties of
the bulker. Plus, it is corrosion resistant
which increases its longevity and
reduces maintenance costs.
While the aluminium bulker costs
twice as much as a traditional bulker,
it is able to earn this back quickly
because it can transport an extra 2
tons of material in every trip. This
translates into extra earnings which
are almost three times the investment.
By developing the aluminium bulker,
Hindalco showed that the transport
fleet operators could enjoy the same
benefits of aluminium usage that high-
end passenger vehicles have enjoyed for
years.
What were the challenges that
came your way?
The green bulker and trailer initiative
started with Hindalco exploring ways to
increase India’s per capita consumption
of aluminium. When we looked at
transport solutions, we met a lot of
roadblocks. A big challenge was the
low-risk appetite of auto OEMs. To
get beyond this, Hindalco decided to
fast-track product development by
working with unorganized players in the
commercial vehicle segment. But this
was easier said than done as we had
no expertise in developing transport
solutions.
The first challenge was to
identify a fabricator. The company
needed someone willing to work with
aluminium fabrication, as it requires
a different kind of expertise. Hindalco
spoke to several fabricators and then
shortlisted a few who were willing to
take the big leap.
We partnered with UltraTech
Cement, another Aditya Birla Group
company, who helped these fabricators
get firm orders from transporters and
logistics companies. Since these were
first-of-their-kind products, the idea
was to get users on board for testing
and checking the commercial viability.
Hindalco worked behind-the-scenes
to ensure that the fabricators had no
problems with product development and
supply of aluminium. We were hand-
holding whenever required. To make the
development process easier, Hindalco
created a kit of various aluminium
components and delivered it to the
fabricator in the requisite shapes and
sizes.
The contribution of these fabricators
cannot be overemphasized. They
were new to aluminium welding and
did not have the infrastructure for it.
Hindalco introduced these fabricators to
processes such as inert gas welding and
plasma /laser cutting – prerequisites to
working with aluminium. We arranged
for the first aluminium welding machine
to be imported and also the training of
the fabricator’s teams.
Handling aluminium alloy is not
easy. Improper handling leads to
scratches and dents. The fabricators
were trained on how to work with
aluminium to preserve its metallic
lustre. An entire ecosystem comprising
fabricators, welding expertise, vendors
for aluminium joineries (nuts/bolts)
and service support was created so that
buyers would have no concerns around
timely repairs and availability of spares.
It was a long hard grind, but all
the effort has now started showing
Over the past decade, India has
seen improvements in the road
network and rapid growth in the
logistics and freight industry. A
big component of the freight
industry are the trailers that
ply the roads 24x7. Today, domestic trailer
production is estimated to be around 20,000
units per annum. Most of these are made of
steel. The heavy weight makes them slow and
increases fuel consumption which leads to more
greenhouse gas (GHG) emissions, and therefore
a higher carbon footprint. The domestic trailer
market is expected to grow at 10-12% annually.
Hindalco’s aluminium trailers
and bulkers are the greener,
stronger and smarter alternative
to conventional transportation.
The idea began as a small
discussion to explore the benefits
of aluminium in the transportation and logistics
industry. Within ten months, the green trailer
became a big step towards revolutionizing the
transport industry.
results. We are seeing a continuous rise
in orders and enquiries. In less than a
year, over ten bulkers and four trailers
have been sold. Now we are looking at
recreating this ecosystem across India.
It’s an exciting initiative. The
indigenously developed aluminium
trailer and the bulker are a testament
to Hindalco’s commitment to introduce
sustainable, engineered transport
solutions. More importantly, these
products exemplify Hindalco’s purpose
of making products that are greener,
stronger and smarter.
Your stint in supply chain as
you have been a part of various
challenging sectors…
Challenges excite me and keep me
going. If there is nothing new to learn
in my job, then it doesn’t help me
grow or give back to the organization.
In logistics, every product and industry
comes with inherent challenges and
nuances. One needs to understand
what’s required for that product to be
moved in a seamless manner.
Before joining Hindalco, I had never
worked in a manufacturing organization,
so there was a lot of learning and
evolving here. I had a 3-month
induction period to understand the
manufacturing process, which helped
me immensely in devising a product-
driven supply chain. I experienced a
similar learning journey years ago when
I saw the logistics dynamics relating
to retail and e-commerce boom from
close quarters. So at every juncture, you
experience newer paradigms in order to
evolve as a professional and that’s how
it should be.
Your most challenging project at
Hindalco…
I think a logistician’s core KRA has
always been to work at a war footing.
Nothing can illustrate this statement
better than the current scenario of a
nation-wide lockdown. The work doesn’t
stop and we have to manage the entire
supply chain while working from home.
As a continuous process industry, our
refineries and smelters need to run even
during the lockdown. We have to ensure
that all input materials reach the plants
and finished goods are evacuated for
exports. It is heartening that even in
this volatile period, we have managed to
ensure seamless production and higher
export sales.
And yet, every day has been
challenging – there were times when
we couldn’t move anything. There was
confusion on the ground as there were
multiple directives from the central and
state governments. In such a situation,
we had to quickly find alternative
solutions to overcome unexpected
obstacles. We made maximum use of
railways because inter-state movement
on roads is very limited. We had to go
that extra mile and get things under
control in the shortest time possible
by liaising with government officials
and local administrations. One must
remember that tough times call for
tough measures and we need to be
ready for it.
Going forward, how do you see
India’s supply chain evolving?
Digitalization is going to be the big
game changer. It will make the entire
supply chain more visible, flexible
and agile. Organizations will need to
understand the extent of digitalization
they need in order to harness optimal
benefits. Adoption and adaption are
both critical and that’s where companies
will face the greatest headwinds.
INTERVIEW INTERVIEW

“The COVID-19 outbreak has shown the industry how
delicate the supply chain has become. During this difficult
time, it essential for logistics companies to have an
immediate focus on enabling end-to-end visibility, process
flexibility, and collaboration to support their customers
in anticipating disruptions and mitigating the respective
impacts,” stresses Senthil Kumar Subbiah, Senior Research
Analyst, Transportation & Logistics Practice, Frost & Sullivan.
COVID-19BATTLE
Fighting the
Senthil Kumar Subbiah has over 7 years
of operational and strategic consulting
experience across a multitude of industries
including automotive, retail, eCommerce,
transportation, and healthcare.
With China being one of the major suppliers of intermediate
goods, disruptions in the supply chain had an adverse
impact on some of its major trading partners. Several
global companies are seeking to diversify their sourcing
requirements by shifting a part of their supply chain from
China (to other low cost countries).
S
TRICT containment measures
imposed by governments due
to COVID-19 have resulted in
plant closures, reduction in
ports operations, travel restrictions, and
affected both International and cross
border trade. As per Frost & Sullivan
analysis, trade contributes to nearly
20% of India’s GDP; the disruption
caused by the pandemic across the
supply chain has emerged as the key
challenge facing the Indian logistics
industry.
Due to a combination of factors
such as global supply chain disruptions,
the economic slowdown in Europe,
and North America, strict containment
measures and the lockdown has taken a
significant toll on the economy reducing
the GDP growth rate projections to
1.9% in 2020, according to recent IMF
estimates.
Workforce shortage and closed
borders impact the road freight
services
Social distancing and economic
lockdown are proving to be a nightmare
for road freight transportation and
distribution services. As per the
notification issued by Union Ministry on
April 15, 170 districts across the country
have been identified as COVID-19
hotspots, where strict containment
measures will be adopted. Due to the
lockdown, people’s movement by any
mode of transport remains suspended.
Distribution challenges were
intensified for the consumer goods
supply chain due to panic-purchase
behavior, resulting in constrained and
out-of-stock supplies as only the
movement of essentials was allowed
through roads earlier. As part of the
relaxation, cargo movement for all types
of goods has been allowed throughout
the country.
Even though the movement of
goods has started, there is a significant
shortage of vehicle availability on
account of driver shortages. Most of
the impact of driver shortage is felt on
the long and regional haul movements.
Driver shortage in the trucking industry
and reduced fleet deployments have
led to supply chain bottlenecks across
the country. The vehicle availability for
intra-city goods movement is expected
to improve in the next 10 to 15 days
across all major industrial areas as the
travel restrictions are relaxed, enabling
drivers to return to work. The pandemic
also induced a rapid and unexpected rise
in demand for online grocery, creating
a tailwind for domestic road freight and
distribution channels.
India is dependent on the road as
a primary mode of transportation, and
road transport acts as a lifeline to clear
the goods from airports and seaports.
The disruption in road freight caused by
driver shortages and fleet unavailability
is having a ripple effect on the clearance
of cargo in airport and seaports, leading
to congestion at terminals.
Ocean freight transportation
takes the slow lane
The maritime industry is both directly
and indirectly impacted by the
COVID-19 outbreak. Strict containment
measures imposed by the Indian
Government and preventive measures
to mitigate the outbreak impact have
led to a significant port calling, driving
a knock-on effect with declined
trade and cargo volumes. Weakening
manufacturing confidence and low
demand for commodities and raw
materials due to plant shutdowns result
in uncertainty for the ocean freight
transportation industry.
The economy shutdown has led to
supply shortages, and the pandemic
situation is significantly impacting the
maritime segments, from oil tankers
to container lines. Decreased cargo
volumes have impacted the volume
throughput at ports. According to Indian
Ports Association (IPA), between April
and February of this FY20, major Indian
ports have recorded a mere growth of
2.8%. A major share of this growth
is also attributed to coal shipments,
whereas other cargo categories like
containers and bulk cargo experienced
some slowdown in growth. IPA had also
mentioned that the overall container
volume slowed down to 3.5% in April-
February as against 11% growth in the
corresponding period of FY19. A backlog
of delayed orders, port calls, and blank
sailings have escalated volume pressures
on the containerized supply chain.
Significant reduction in cargo
volumes has forced major carriers to
announce service cancellations and
delays, and blank sailings from/to
India and the Middle East, Europe, and
the Mediterranean. Considering the
uncertain market conditions, the trend
is likely to continue and measures need
to be taken to address the supply/
demand imbalance. If the situation
prolongs, carriers are expected to opt
for heavy capacity reduction measures,
which would impact the fleet-to-order
book.
The major container carriers are
at low risk for bankruptcy with this
COVID-19-induced downturn as they
use blank sailings to counter the impact.
However, the small and medium-
sized carriers are highly exposed and
vulnerable to this unprecedented
situation. But, following the oil price
crash, the extra cost of the IMO 2020
rule will be deferred until the global
economy normalizes, posing a short
-term relief for the carriers hit by
slumping cargo volumes.
Airlines as a lifeline during
COVID-19
The airfreight industry has been a vital
partner in keeping the global supply
chain functioning for critical and time-
bound shipments. While COVID-19 is
spreading at a rapid rate around the
world, Airports Authority of India (AAI)
said that over 80% of Indian aircraft
have been grounded, responding to
the plummeting demand and travel
restrictions.
As no ban has been implemented
on the movement for air-cargo,
India-based airlines are operating their
freighters and passenger planes (for
cargo only) in/out of India. Despite
government orders, few airlines are
refusing to temporarily convert their
passenger flight to cargo planes (by
moving the seats that would maximize
the cargo carrying capacity) as the
airlines believe it will involve significant
time and costs. The air-carriers
prioritize on transportation of essential
cargo and critical pharma/medical
equipment.
Dedicated Indian freighters only
have a 15% share in the domestic air
freight market, according to Directorate
General of Civil Aviation, and as a major
chunk of the international volumes is
handled by their international peers,
while the Indian airliners operate on
shorter distances. However, in the
medium term, a sudden drop in capacity
expansion and grounding of flights has
resulted in increased demand for air
freight. With severe capacity constraints,
air carriers are spot rating all shipments,
and the rates are expected to rise
with demand. Few Air cargo freighters
have replaced scheduled flights and
introduced charter flight services to
cater to the increasing demands.
India likely to benefit from supply
chain disruptions
Under the current business scenario,
dramatic contraction in Chinese output
has hampered the global manufacturing
supply chain. Industries that rely
heavily on the Chinese supply base for
intermediate and finished products,
with lean and just-in-time inventory
models have suffered severe supply
chain disruptions. With China being one
of the major suppliers of intermediate
goods, disruptions in the supply chain
had an adverse impact on some of its
major trading partners. Several global
companies are seeking to diversify their
sourcing requirements by shifting a
part of their supply chain from China
(to other low cost countries). With
relatively lower labor costs and a huge
domestic market, India has emerged
as a contender for companies that are
looking for alternate supply sources.
Mitigation measures and
contingency planning
The COVID-19 outbreak has shown
the industry how delicate the supply
chain has become. The heightened
safety precautions have required the
logistics industry to work in emergency
services, as governments and logistics
associations work hard to keep the
essential supplies flowing. During this
difficult time, it essential for logistics
companies to have an immediate focus
on enabling end-to-end visibility,
process flexibility, and collaboration to
support their customers in anticipating
disruptions and mitigating the
respective impacts.
With the maritime and air freight
industry experiencing capacity
constraints, logistics service providers
should drive transparency by assessing
“what-if” scenarios with customers
to understand planned volume and
strategic needs. Advanced capacity
bookings for air cargo could mitigate
supply risks for customers on emergency
shipments. Freight forwarders and small
and medium-sized freight operators
should emphasize building digital
capabilities to evaluate alternate route-
to-market models and address potential
operational gaps.
Digital logistics is essential to drive
the adoption of e-freight to combat
the spread of the virus through paper
documentation. In the retail industry,
order backlogs are creating inventory
stocking issues. However, the adoption
of the Internet of Things (IoT) in
warehousing and distribution operations
would facilitate inventory accuracy,
ensuring the placement of the right
products in the right place at the right
time.
In the long term, robotics
systems for warehouse operations,
SaaS platforms for transportation
management and control tower
operations, and artificial intelligence-
powered technology platforms for
customer management will allow
logistics companies to anticipate supply
chain risk and promote sustainability
goals with enhanced operational
efficiency.
OPINION OPINION

“Building a resilient supply chain is as important, if not
more, as building and running an efficient supply chain.
So far investments and efforts have been in building
efficiency, with resilience at the back burner. Business
costs of events like Covid and other unforeseen
events in recent past, has made it clear that investing
in resilient supply chain is an absolute must,” believes
Rajeev Ranjan, Supply Chain & Route to Market (RTM)
Consultant.
RESILIENT
SUPPLYCHAIN
Building A
Rajeev Ranjan is a supply chain leader with 15+
years of FMCG and Food & Beverage experience.
He has held leadership positions with Marico,
Hindustan Coca-Cola Beverages and YHS
Singapore Pte in India, China and South East Asian
countries. His area of expertise is Supply chain and
Route to Market. Views expressed are personal.
The challenges supply chains
face today, be it ensuring
food safety across end-to-end
extended supply chain, plastic
waste, carbon footprint, etc.,
cannot be solved within the
four walls of company alone. In addition to
leadership commitment, co-working with an
ecosystem of external partners, governments,
nongovernmental organizations (NGOs),
academia, start-ups and solution providers is
an absolute must. Solution driven boundaryless
collaboration mindset is a growing need. Building
a team that believe in ‘There is always a better
way of doing things’ and supporting them with
a culture of bold intelligent risk taking and
constant introspection around are we doing
enough to make our supply chain a source of
competitive advantage for the business.You have wide & varied experience
in managing F&B supply chain.
What are the peculiar complexities
you have observed over the years?
The needs and wants of consumers
have changed. Consumer toady is
asking for speed, convenience, variety
as well as flexibility. In F&B space, the
customer is looking for healthy, fresh,
natural, no preservative, high shelf
life, organic, non-GMO, environment-
friendly, farm to fork visibility and more.
The challenge (and opportunity) is to
provide all these at prices sustainable
to organizations and affordable to
consumers. Progressive organizations
are reassessing and realigning supply
chain and business models to meet
these emerging needs of consumers in
the best possible way. For organizations
servicing cross-border markets of US,
Europe, Asia, frequent changes and
increasing stringency in regulatory
requirements of different countries,
especially on permitted ingredients and
certifications of facilities, pose other set
of complexities on supply chain.
How can companies successfully
overcome these challenges and
design a full-proof supply chain?
Businesses strategy outlines which
brand pack of the portfolio is to be
sold at what price thru which channel
to which profile of consumers for what
consumption occasions. Supply chains
are designed to enable this price-pack-
channel architecture with best in class
cost to serve, delivered product quality
and delightful consumer experience.
Assessing suitability of existing supply
chain (with respect to footprint, flow,
capacities, processes, technology,
and people capability) to be able to
profitably and sustainably meet the
above needs provides the opportunity
map. Meticulous planning and effective
execution of transformation initiatives
laser focused on tailoring different
supply chain for meeting needs of
different Brand Pack Price Channel
(BPPC) segments of consumers is
how these challenges can be met in a
robust, sustainable, and agile manner.
The tailored supply chains would differ
on service levels, order to delivery
lead times, inventory levels, product
freshness, cost to serve, extent of
customization, etc.
You have got an extensive
experience in managing supply
chain in India and now you are
overseas. What are the major
differences you have witnessed
in these countries in efficiently
managing supply chains?
While each geography has its own set of
strengths and opportunities, I observed
following differences:
 Upfront investment in high quality
supply chain infrastructure as a
cost of doing business overseas Vs
a much more calibrated nuanced
short period ROI driven proved
investments in supply chain
infrastructure and technology in
India
 Premium on deep knowledge of few
specialized skills in overseas market
Vs Premium on overall knowledge
of a wider canvas of skillsets back
home in India
 Substantially higher focus
on innovation, new product
development and effort on
sustainability along with a culture
that encourages intelligent and bold
risk taking
 Sourcing contracts (incl few
commodities) inked for reasonably
long term in overseas market I had
the opportunity to work for. Both
parties take associated risks and
honor contract terms, irrespective.
 Robust, well-functioning reliable
3PL ecosystem with clear deliverable
and symbiotic working relationships,
which leads to higher adoption of
3PL services by companies.
What are the supply chain best
practices being implemented
by leading South East Asian
companies?
1. Leading South East Asian (SEA)
companies have figured out the
secret sauce of optimally managing
scale and complexity in supply
chain. SKU addition to portfolio
is done only till and only if it is
helping in demand disaggregation.
Well established SKU rationalization
protocols are in place, which run
annually.
2. Inventory management is done by
aggressively looking at all ways to
reduce lead times not so much thru
inventory norming.
3. These markets are gradually
shifting from demand forecasting
to increased frequency of planning
and faster speed of and agility in
execution processes. This is achieved
through frequent synchronization
of demand signal with sourcing,
production, distribution plans and
execution.
4. Brand owners manufacture and
supply products directly from
factory to retail outlets in markets
like Singapore with full control
on outlet relationships, order
generation, merchandizing, delivery
and collection, thereby sustaining
healthy margins.
5. Volume aggregation driven long-
term sourcing contracts.
How complex and difficult are the
import and export scenarios?
Since a significant portion of economy
in many SEA countries is dependent
on cross-border movement, import
& export processes and procedures
are much simpler. They are online
and require fewer form filling and
intervention from government
machinery is usually not a worry.
Government machineries’ speed of
action and efficiency of execution is
superb and is designed to ease and
speed up trade.
How can companies achieve
significant cost savings on the back
of an efficient supply chain?
At a strategic level, critical review of the
following levers has served me well in
leveraging big cost opportunities:
1. Product flow path optimization -
Which factory should make which
SKU and supply to which market so
that total cost to serve is optimal.
2. Production and distribution
footprint analysis – How many
suppliers, factories, warehouses,
distributors, trucks, etc., should
be there, what should be their
capacities and where geographically
should these be located.
3. Demand segmentation and
inventory right-sizing – How
much inventory must be kept at
each node and location in the supply
chain to deliver the desired service
level at the lowest cost factoring in
the inherent variability at demand
and supply nodes.
4. Transportation and distribution
route optimization – Algorithms
to minimize the cost of inbound
or outbound shipments, while
considering realistic cost and
constraints.
However, often these levers are
tough painful decisions, it requires
first principle approach and significant
reallocation of capital and changes in
operating models.
How is technology aiding the
growth of supply chain? What are
the latest tech tools that are slated
to dominate the segment?
Technology is helping supply chain
primarily in following four areas:
 Providing visibility across the supply
chain
 Helping execution team improve
efficiency using Real-time,
Actionable Data
 Enhancing Customer
Communication, improving
consumer experience and
 Simplifying Supply Chain processes
by automating/reducing/optimizing
number of nodes/ transactions/
players in end to end supply chain.
We have multiple supply chains
tech tools today viz., no touch order
processing tool, transport management
INTERVIEW INTERVIEW

systems with track & trace and shipping
status alerts, control tower, dynamic
routing, supply chain network design
tools, warehouse management and
control systems, lean inventory tools,
digital factory, bid & spend tools,
supplier management, integrated
planning tools, collaboration portals, etc.
One needs to pick the ones basis value
it can add to their respective businesses.
Share your views on ‘Efficient
Supply Chain and route to market
design for competitive advantage’.
RTM
 Direct distribution, maximizing reach
and numeric availability
 Pull based replenishment of real
consumption demand
 Order generation / merchandizing to
be in direct control of organization
 Sustainable, best in class, margin
to efficiency run dedicated channel
partners, ensuring low attrition.
In addition to the supply chain
design levers (product flow, footprint,
demand segmentation, inventory
rightsizing and transport optimization),
which we spoke earlier, specifically for
F&B supply chain, differentiation can be
achieved from
1. Strong product and packaging
development capability; and
2. Capability to telescopically track
health, safety, and inventory of
food products across all nodes of
supply chain real-time and ability
to execute with speed basis insights
gathered from data analytics.
What is the mantra to meet high
demands in peak seasons and how
can companies ready their supply
chains to meet the same?
Pre-building inventory in pre-season
periods, factoring in the freshness of
products as desired by consumers, food
safety and costs, keeping inventories
at one or two nodes before the last
point of sale/consumption, building
flexibility to move/sell inventories to
multiple consumption points quickly
with little or no incremental costs,
smart and flexible data driven planning
of consumer promotions to flatten the
likely peak requirement curve, changing
SKU mix while balancing market share &
profitability needs, investing in flexible
manufacturing lines that can make
two or more category of products with
different seasonality and dedicating
them for respective category’s peak
period demand and a process of
daily/weekly/frequent gauging of
real demand and synchronization of
sourcing-production-shipping cycle
to speedy replenishment, are some of
the potential ways that come to my
mind. Of course, these would need
customization in specific business
context. In addition, there are, at
times, opportunities to collaborate with
partners outside the organization with
respect to uberization of manufacturing,
storage, and distribution capacity.
What are the upcoming trends in
supply chain in general and F&B
supply chain in particular?
F&B supply chains:
1. PACK LEVEL REAL TIME VISIBILITY
ALL THRU THE LENGTH OF
EXTENDED END TO END SUPPLY
CHAIN
2. PRODUCT FORMULATIONS
TRANSITIONING TO
 low to NO use of three S – Sugar,
Salt, Saturated fat
 Low to no preservatives
 Health and nutrition taking
precedence over taste
 Packaging aesthetics and
convenience taking back seat over
low/no harm to environment
 clean label with honest and
complete declarations
 More and more plant-based
products and ingredients vs animal-
based sources
3. MANUFACTURING
 Reducing lot size of production,
faster changeover times, lower
losses
 Flexible capacities capable to make
multiple SKUs per line/plant
 Increasing manufacturing complexity
and customization, increasing
automation and controls, shorter in-
plant quarantine quantities
4. SOURCING
 Supplier role changing from provider
of a bill of material (BoM) to
strategic contributor in new product
formulation
 Supplier reliability, quality and
traceability will take precedence over
cost/unit
5. LOGISTICS
1. Speed to reach destination and real
time status en-route
2. No breach (of temperature, pressure,
humidity, etc.) will be basic non-
negotiable
3. Time stamp wise digital visibility all
thru delivery chain
6. DEMAND
1. Multiple in and out SKUs, lower
product life cycles
2. Premium on personalization
3. Sustainable packaging
Besides these trends, the
differentiating factors would be
product innovation, speedy & agile
execution and segmented supply
chains.
What are the sustainable supply
chain initiatives that we can look
forward to?
Sustainable supply chain initiatives are
focused on reducing energy, water and
carbon intensity. This is being achieved
through absolute and production-
adjusted reductions in waste, water,
energy, and greenhouse gas emissions.
Solar panels on majority of factories and
warehouses, higher % of renewables
in energy mix, super-efficient lighting,
reduce-reuse-recycle initiatives,
non-hazardous ETP waste, higher %
of electric delivery vans, recycling of
returns is becoming norm. Some of
the trends that I can foresee include:
Gradual re-emergence of glass (lowest
carbon footprint vis-à-vis PET, Tetra,
can) as primary packaging, massive thin
gauging of PET and Cans+lids primary
containers, increasing percentage of
recycled resin in Preforms, very high
collection of used PET/Cans/tetra
containers for recycling, biodegradable
straws, bagasse based caps replacing
PP caps, fully recyclable and/or
compostable fiber cup solutions, primary
packaging redesigned to lower/eliminate
secondary packaging Ex. Tide -Eco-Box.
How do you see Supply Chain 4.0
catapulting the domain in years to
come?
Undoubtedly Supply Chain 4.0 has
immense potential. In short term,
1. Machine Learning (ML) based
planning algorithms will help
significantly understand and reduce
demand supply variability, smarter
changeovers, optimal lot size of
manufacturing and reliable predictive
shipping will reduce replenishment
times, thereby helping improve
inventories significantly.
2. Cross-functionally integrated
Supply chain planning will become
automated, granular and decisions
will be based on multiple what
ifs and scenarios with execution
monitored and adjusted real time.
3. Track and trace, dynamic routing
and uberization in transport,
efficiently minimizing touch points,
gaining item level visibility, faster
TAT of pick-pack-ship-thru
smart automation in warehousing
and algorithm-led supply chain
footprint and supply network
redesign to meet emerging needs of
customers will help chisel out costs
significantly.
What are the necessary aspects
that companies need to imbibe to
enhance their supply chain game?
Supply chains need to be agile enough
to orchestrate a profitable response
to frequently changing demands,
personalize offering at scale and quickly
offer products & services to consumers.
The challenges supply chains face
today, be it ensuring food safety
across end-to-end extended supply
chain, plastic waste, carbon footprint,
etc., cannot be solved within the four
walls of company alone. In addition to
leadership commitment, co-working
with an ecosystem of external partners,
governments, nongovernmental
organizations (NGOs), academia,
start-ups and solution providers is
an absolute must. Solution driven
boundaryless collaboration mindset is
a growing need. Building a team that
believe in ‘There is always a better
way of doing things’ and supporting
them with a culture of bold intelligent
risk taking and constant introspection
around are we doing enough to make
our supply chain a source of competitive
advantage for the business.
Are the global supply chains
prepared for unforeseen
disruptions? If not, then how can
companies work towards the same?
Building a resilient supply chain is as
important, if not more, as building and
running an efficient supply chain. So far
investments and efforts have been in
building efficiency with resilience at the
back burner. Business costs of events
like Covid and other unforeseen events
in recent past, has made it clear that
investing in resilient supply chain is an
absolute must.
Comprehensive understanding
of risks (in parent organization and
their suppliers’ supply chain), their
significance, and their likelihood is key
to start with. Decisions on which all
risks one is ok to live with is a tough
but an unavoidable business leadership
decision. Working on multiple what
ifs scenarios on each of the risks and
possible ways to offset those, along
with diversification in manufacturing
facilities, diversification in supplier base,
building capability to move production
among plants by using interchangeable
and generic ingredients/components
and processes, flexibility in using
standard packaging combinations,
multi-skilling of talent, agile planning
and fulfilment capabilities and a culture
of distributed decision making power
are directionally some of the ways we
work towards building resilient supply
chain while balancing cost to serve.
Businesses strategy outlines which brand pack of the
portfolio is to be sold at what price thru which channel
to which profile of consumers for what consumption
occasions. Supply chains are designed to enable this
price-pack channel architecture with best in class cost to
serve, delivered product quality and delightful consumer
experience. Assessing suitability of existing supply chain (with respect to
footprint, flow, capacities, processes, technology, and people capability) to
be able to profitably and sustainably meet the above needs provides the
opportunity map.
Comprehensive understanding
of risks (in parent organization
and their suppliers’ supply chain),
their significance, and their
likelihood is key to start with.
Decisions on which all risks one
is ok to live with is a tough but an unavoidable
business leadership decision.
INTERVIEW INTERVIEW

WHEELS OF
FORTUNE
Nothing could best describe the growing importance of multimodal transportation than
the current situation where companies could no longer depend on their favorite mode of
transportation – ROADS with the interstate borders sealed and the movement of goods
coming completely to standstill. Yes, these are challenging times for not only industries but
for every human being. But the way Indian Railways and Indian Post have set an exemplary
model before all of us, will actually change the way we see our modes of transportation.
At a time when commercial airlines used to only focus on passenger movements, today
they have become the most important carriers of essential goods & lifesaving medicines as
well as PPEs. Such times call for a great shift in the mindset and a greater shift in business
models as the Hon’ble PM aptly called ‘Jaan bhi aur Jahaan bhi’ to devise the most efficient
multimodal transportation model that is safe, sustainable, and fast enough to deliver to
people’s demands in times of crisis and otherwise. This cover story delves with all such
myriad challenges and present companies an opportunity to introspect and transform their
supply chains…
L
OGISTICS is a $3.4 trillion
industry globally and a robust
channel of transport supported
by infrastructure, technology
& innovation in multimodal
transport can substantially reduce cost
and increase competitive advantage for
exports, states a recent report by Grus &
Grade. A Multimodal Transport System
uses a combination of more than one
mode of transport and integrates the
scope and viability of simultaneous
use of various inter-linked network of
distribution and logistics channels. “An
efficient and sustainable model, which
uses various channels of transportation
for efficient allocation and use of
resources. This helps not only to reduce
the lead time for delivery of goods &
services but also encompasses financial
and cost efficiency, on time delivery,
warehouse and storage efficiency,
information and communication flow
as well as environmental protection
(by reduced use of energy and fuel).
The model also helps to contain risk
of damages, wastage and pilferages,”
remarks Ravi Soni, CEO, Grus & Grade.
Dr. KK Sharma, Head of Centre
for Surface & Air Transport, Adani
Institute of Infrastructure, elaborates,
“Mckinsey & BCG reports noted in 2017
that based on the then growth rates,
India could become the 5th
largest
economy by 2025 and the consumption
expenditure would grow over 3 times.
This would mean a huge growth in
demand & hence economic activity
COVER STORY COVER STORY

that would require efficient logistics for
smooth internal & external trade. The
large Indian population & increasing
incomes leading to greater demand
would also attract a lot of global
companies with consumption of goods
& services. However, Indian logistics
sector performance has not been up to
the mark, inefficiencies are widespread,
and the logistics costs and freight rates
are one of the highest in the world as
reported by World Bank. Multimodal
logistics offers huge potential to
reduce the logistics cost and make the
economy more efficient.”
Offering another perspective, Ravi
Soni adds that as per World Bank
Logistics Performance Index Report, all
is not well as India slipped in the league
from 35th
position to 44th
position in
year 2018. The logistics performance
index (LPI) is the weighted index of
the country scores on the six key
dimensions:
♦ Efficiency of the clearance process
(i.e., speed, simplicity, and
predictability of formalities) by
border control agencies, including
customs
♦ Quality of trade and transport
related infrastructure (e.g., ports,
railroads, roads, information
technology)
♦ Ease of arranging competitively
priced shipments
♦ Competence and quality of logistics
services (e.g., transport operators,
customs brokers).
♦ Ability to track and trace
consignments
♦ Timeliness of shipments in reaching
destination within the scheduled or
expected delivery time.
The county faces multi-variant
challenges in all the six parameters
mentioned above. The bureaucratic
hurdles supplemented with non-
congruous legal framework are major
roadblocks that are a hinderance to
efficient model development. Apart
from these challenges, the policy
implementation, corruption and multiple
state laws apart from central laws are
key challenges. The sector also lacks
appropriate investments as thee mega
projects are capital intensive with long
gestation period for being a profitable
institution.
Sharply pointing the reason behind
the limited adoption of multimodal,
Rajeev Vijay, Executive Director
- Government and Infrastructure
Advisory, Knight Frank, said,
“Multimodal transportation requires
parts of journey to be carried in the
most efficient way, efficient in terms
of cost and time. Any interchange
imposes a delay and cost penalty, which
if significant, discourages people to use
multimodal transportation. In India, the
biggest multimodal park opportunity
remains between road and rail for
inland transport. Because of Railways’
tendency to encourage only Full rake
loads, the market for less than train
loads and less than wagon loads died
decades ago; resulting in all that traffic
shifting to roads. Owing to regulations
in India (particularly prior to GST), the
companies in corporate sector always
found smaller consignments, smaller
warehouses at multiple locations a
better option than to consolidate
freight and use a bulk mode to reduce
cost of transportation. Hence the
impetus or multimodal operation was
not evident from both supply and
demand side, other than for some select
commodities.”
According to Eshaan Lazarus,
Executive Director, Angre Port
Pvt Ltd., currently, the share of rail
transport is around 30-35% and
road transport is around 60%. Water
transport and air transport constitute a
meagre 6-8% and 1-2% respectively.
Multimodal is still at an evolving
solution in India with different modes
of transport at different stages of
evolution. This share of rail, water and
air must increase for Indian Multimodal
Logistics to be utilized effectively.
The biggest challenge is availability
of reliable service providers who are
willing to take the end to end supply
chain within their scope which would
then free up client time to focus on
other functions more core to their
business. In turn, this has resulted in a
hesitation on the part of logistics teams
to fully outsource key parts of their
value chains.
There is a need for development
of infrastructure like Dedicated Freight
Corridors (DFCs) in the country to
improve hinterland connectivity and
utilizing this capacity in the most
efficient manner possible. For instance,
Angré Port is facing issues with rail
connectivity in the Konkan region as it
is currently restricted to only north and
south. Therefore, the connectivity for
west and east of the region needs to
be developed. In addition, rail head is
required to be closer to the Port, as the
current one is 50 km away at Ratnagiri.
Solving these issues will enable efficient
cargo transportation and a significant
reduction in cost for our customers.
Dr. KK Sharma highlights that it is
well recognized that movement of long
haul bulk traffic by road is less efficient
than by rail. However, multimodal
transportation especially through rail
has always been an underutilized
phenomenon for Indian companies for
the following reasons:
♦ Poor first-mile, last-mile & port
connectivity: While the road network
is ubiquitous, rail stations that have
capacity to handle goods loading/
unloading operations may not be
nearer to the customer locations.
Same argument holds true at the
destination locations, which could
be a dry port or a seaport that
is not served through a rail link.
Multimodal transport in such cases
would require multiple handling
of cargo, thereby increasing costs,
transit time and risk of mishandling.
♦ Oversaturation of important rail
networks: Against a CAGR of over
50% of freight and passenger traffic
growth over the decades, the Indian
railway track infrastructure has just
grown at about 3% CAGR for route
kms and 6.6% CAGR for track kms.
Even the high-density corridors
have become oversaturated despite
addition in track km.
♦ High rail freight tariffs as the Indian
railways follows a policy of cross-
subsidization of passenger tariff
by freight tariff. Progressively over
the years, Indian rail freight rates
have become one of the highest
in the world. Further there is
rigidity in freight rates that do not
change with the changing economic
dynamics.
♦ Transit times are long and uncertain
with freight train taking even up to
6-8 days for a journey of 2000kms.
This happens because freight
traffic is frequently subordinated to
passenger traffic.
♦ Poor customer service – Over &
above the already known poor
transit times, Railways does not
guarantee on the transit time for
freight trains. Often wagons are not
available on demand and hence it is
exceedingly difficult to plan finished
good dispatches being dependent
only on rail. Some goods require
special wagons for transit that may
not be available like project cargo,
high value cargo, etc. Further, since
Railways is a highly bureaucratic
organization, the interfaces
are difficult and often mired in
procedures & poor customer service
mentality. There are often issues of
cargo security & theft in yards and
en-route to destination.
♦ Poor Rail terminal (Goods Sheds)
quality: Infrastructure is old and
hence quite often material waiting
to be loaded or for last mile dispatch
after unloading could be damaged
because of heat or rains. In a lot of
cases, they also suffer from issues of
access and evacuation of traffic.
♦ Railways mostly promotes rake
loading due to issues of operational
efficiency. Given the nature of
fragmented, small size plants and
distributed production capacities,
most companies including the MSME
sector are not able to order rake-
loads. There are other associated
problems of requirement to keep
high inventory in storage and
waiting for transit goods.
Coastal shipping & inland water
transportation is still in its nascent
stages, hence poor in infrastructure
and does not serve a lot of production
locations. The destination location could
be away from the water port and the
goods may not be amenable to multiple
handling. There are other issues of
unpredictability of transit times as well.
More than the shortcomings of other
modes, the road transport is preferred
for its own positives including door-to-
door deliveries, minimal handling, easy
availability of trucks in most cases, easy
access to good storage points, greater
predictability, better customer services,
etc.
Vibhore Khandelwal, Manager –
SCM, Hafele India Pvt Ltd., is of the
view that every transportation company,
regardless of vehicle type, is dealing
with network saturation. New solutions
are necessary to advance transportation
methods, particularly when it comes to
capacity.
♦ Ocean freight makes up for more
than 90% of international trade
and is the cheapest mode of
transportation today. But it is losing
touch with current trade challenges
due to a capacity crisis causing
delays which themselves entail
negative consequences.
♦ Increasing the capacity of container
ships is no viable solution to the
problem because it also limits port
capacity to receive larger volumes of
cargo. It is rare to find infrastructure
that caters to jumbo vessels with
adequate installations for loading
and offloading freight.
♦ As for door-to-door deliveries, road
transportation is by far the go-to
option for flexibility and cost-
effectiveness. A shortage of truck
drivers in both Europe and North
America is, however, hindering
development opportunities in the
sector.
♦ Rail freight has also reached its
peak with high damage rates due
to disparate infrastructure across
Europe. A trade route world war
is currently at play, backed by
substantial financial investment.
EMULATING GLOBAL
BEST PRACTICES
Global logistics hubs are along the
major trade corridors in their regions,
connected to major international
transport networks, and contain
highest concentration of prime
logistics space in the region. Of the
identified 30 global logistics hub some
of them are New Jersey (US), Toronto
(Canada), Mexico City, Sao Paulo
(Brazil), Tokyo, Hong Kong, Shanghai
(China), Singapore, London (UK), Paris,
Dubai, Moscow, Rotterdam, Hamburg,
Milan, Antwerp, etc. Many of these
hubs lead the way when it comes to
efficiency and automation, with entire
container terminals, for example, end
to end working with minimal human
intervention, thereby minimizing
downtime, errors, delays, etc., shares
Eshaan Lazarus. “I hope that India can
reach that level soon.”
Elaborating further, Rajeev Vijay,
states, “The global experience suggests
that such logistics facilities are not pure
play logistics only but are dovetailed
with light manufacturing, trading
firms, company offices, educational
and training facilities, etc. To enhance
viability of logistics parks, it can be
integrated with office and retails
facilities to allow regular leasing
income and at the same provide much
more integrated environment to the
companies operating in that area. This
is important particularly in initial years
as it can provide much needed income
before the logistics operations ramp
up.”
LOGISTICS POLICY DRAFT
AND ITS SLATED IMPACT ON
MULTIMODAL
Industry leaders hail the announcement
of National Logistics Policy draft in
unison as Eshaan Lazarus remarks,
“The draft National Logistics Policy
is a step in the right direction to
transform the overall logistics industry.
Eshaan Lazarus, Executive Director, Angre Port Pvt Ltd.
The draft National Logistics Policy is a step in the right direction to transform the overall
logistics industry. The decision to develop multimodal logistics parks (MMLPs) will pave way
for reducing costs by integrating all modes of transport and storage for different kinds of cargo
– liquid, bulk, container as a one stop solution. An ecosystem of MMLPs can effectively work
as a hub and spoke model for cargo movement and address issues of incorrect and inefficient
modal movement, fleet optimization, and practically develop a competent material handling
infrastructure. All of these are indirect costs that the customer and economy bear today. It is high
time that the current mode of point-to-point movement transforms to a supply chain visualized
by hub and spoke freight model with MMLPs at the core of their design.

It aims to optimize the multimodal
mix at par with global standards and
ensure development of multi-modal
infrastructure. The decision to develop
multimodal logistics parks (MMLPs)
will pave way for reducing costs by
integrating all modes of transport and
storage for different kinds of cargo –
liquid, bulk, container as a one stop
solution.”
“An ecosystem of MMLPs can
effectively work as a hub and spoke
model for cargo movement and address
issues of incorrect and inefficient modal
movement, fleet optimization, and
practically develop a competent material
handling infrastructure. All of these are
indirect costs that the customer and
economy bear today. It is high time that
the current mode of point-to-point
movement transforms to a supply chain
visualized by hub and spoke freight
model with MMLPs at the core of their
design,” he adds.
Dr. KK Sharma seconds, “India has
one of the largest and unfortunately
highly fragmented transport & logistics
sector. There is a silver lining there
that every intervention has scope
to bring about a very large positive
effect. Multimodal logistics serves
to interconnect different modes of
transport – road, rail, air, water – and
therefore improve efficiency and speed
of goods movement. The economic
growth in India has increased the
demand for practically all transport
services and further underlines the
importance of providing an efficient
multimodal logistics infrastructure
in India that has a huge potential
to provide the most efficient way of
transporting goods over long distances.”
Giving statistical insights, he
highlights, “Due to India’s industrial
growth, there is an increasing demand
for container transportation. This should
progressively lead towards increased
penetration of containers into the break
bulk cargo segment. The Indian ports
handle around 9% of global container
traffic and the domestic containerization
level stands at around 40%. The Indian
Ministry of Shipping estimates that
the container traffic in the country
would double in seven years from 15
Million TEUs in 2018 to 30 Million
TEUs in 2025. It is important to note
that containers have standardized
dimensions. They can be loaded
and unloaded, stacked, transported
efficiently over long distances, and
transferred from one mode of transport
to another like container ships, rail
flatcars and trailer trucks without the
need to open. The handling system is
also completely mechanized so that all
handling can be done by cranes and
special forklift trucks. All containers are
numbered and can be tracked using
RFID, IOT & computerized systems.
Increasing use of containers through
multi-modal transport would help
Indian economy and allied sectors grow
faster.”
Further, setting up of multimodal
logistics parks would increase trade,
improve quality & cost of services
and create employment opportunities.
Multimodal transport would also pave
the way for a gradual shift from road to
more efficient & less costly rail, marine
& pipeline-based transport which
would reduce environmental pollution
as well as unit costs of transport. It is
also expected that there will be more
transparency and predictability for
better planning across the logistics
sector.
TECHNOLOGY PLAYING AN
ENABLING ROLE
Technology is changing the traditional
way of operations in most industries,
not just ports and logistics. Digitizing
the end to end workflow of cargo
movement into and out of facilities will
help eliminate all internal paperwork
associated with this process thereby
speeding up turnaround time and
driving up efficiency. “At Angré Port, we
have accomplished this by developing
a cloud-based app, customized to our
requirements. This app is extremely
easy to create and train staff on, even
shop floor staff who have never utilized
any kind of software before, with the
result that the entire development and
training phase was completed in only 45
days. The takeaway is that now, more
than ever, there are such tools available
that can easily work in plug and play
mode, to improve specific areas of the
business quickly. This is a much better
way of working rather than waiting for
a full-fledged ERP to be implemented,
for example, a process that often, fails,”
shares Eshaan Lazarus.
Offering operational nuances,
Dr. KK Sharma states, “Multiple
characteristics of each transport mode
places constraints on goods during
transportation such as packaging,
transportation conditions and storage.
In a multimodal transport case, an
added complication is the complex
management of the whole process that
involves different players such as freight
forwarders, third-party logistic service
providers, couriers, carriers of different
modes of transport, MTOs, rail, sea
carriers, port and intermodal terminal
operators. Different technologies are
deployed by each of these and that
increases the importance of managing
the communication process for proper
coordination and the accuracy, flow
and timeliness of information to
ensure a smooth logistic delivery
process. The range of activities that
varies from resource management and
port operations to fleet and freight
management processes need to be
supported by appropriate ICT solutions
both on the hardware as well as
software side.”
He adds that the need for real time
and extended visibility across supply
chains in a world of rising uncertainty
and complexity in a multimodal
environment is critical. ICT has a
huge potential for efficient, effective
and reliable real-time management
and operations of multimodal freight
transport. From the historic use of
inventory management systems,
transport routing, scheduling and billing
systems, the increasing sophistication
led to development of company specific
Enterprise Resource Planning (ERP)
systems in the 1990s which is now
giving way to web-based systems
designed for multiple participants to
share a single system. ICT can address
the needs of the various components of
the multimodal transport through four
groups of interventions as follows:
♦ freight resource management
systems and applications for
better operational efficiency,
scheduling, fleet movement & route
optimization
♦ terminal and port information
and communication systems and
applications for better network
design, efficient operations &
coordination at interchange points
♦ freight and fleet tracking and
management systems and
applications for better operations,
inventory management and
customer services
♦ integrated operational/
information exchange platform/
portal/ marketplace for better
communication between
stakeholders on a one-stop shop
More recent technological advances
including cloud computing, IOT, RFID,
Data Analytics etc., are helping in:
♦ Complete node to node vehicle/
consignment tracking through
wireless communication technologies
& devices such as smart mobile
phones, QR code, RFID & IOT based
smart container tracking
♦ Big data, data analytics-based
decision support systems that rely
on real-time analysis
♦ Better customer servicing through
dynamic information sharing
and improved compatibility &
interoperability of different ICT
systems
♦ Data confidentiality issues through
cloud storage and better software
capabilities
♦ Reduction in cost of ICT adoption
like cloud computing that enables
the ICT systems to be hosted by
a third party and user companies
irrespective size of business, can just
“plug in and play”.
♦ Use of private social networks with
all stakeholders for a more efficient
one to many communication
On the hardware front, newer
engine developments, better fuel
mix to reduce on sea pollution,
better communication devices, waste
management technologies, intelligent
port handling equipment can be
adopted limited only by the cost that
the organizations can bear v/s the value
derived. Raising a very importance
point, Dr. KK Sharma asserts that while
the technologies are developing at a
fast pace, skilling of employees and
finding new skilled employees both have
challenges. Further, just knowing is not
good enough, it is the practice that will
lead to performance and there lies the
importance of technologically aware and
trained manpower.
According to Ravi Soni, on account
of increase in transportation and
logistics cost supplemented by a
pressure to reduce greenhouse gases
(fuel efficacy increase) technological
innovation in rail transport becomes
imperative. An innovation in IOT,
ICT, AI, Digitalization, Blockchain,
Augmented Realty is thus the need
of hour for developing a sustainable
multimodal transport network. For
Instance, semi-Trailers dominate
with more than 66% of transport
volume, but less than 2% of these are
equipped with vertical handlers and
robotic cranes. There is a vast scope
for development of material handling
and automated crane in Semi-Trailer
segment. Though many technological
thought process has done research
in the segment, but none has gone
beyond pilot test stage. Generation
of e-Challans for faster movement
of invoices, lorry receipts, shipment
documents, bill of lading, etc. This
improves efficient delivery of goods and
service, improves quality check as well
as reduces hassles to all parties involved
in the transaction.
♦ Blockchain technological application
in intermodal transport system
can be the next generation game
changer. This will induce reliability,
appropriateness and trust ability
of real time data transmission for
super-fast information flow and
decision taking matrix generation.
♦ Augmented Realty Glass is another
technological revolution that will
redefine the way logistics are staked,
loaded and transported. This will
reduce warehouse searching time
and cost, damages and pilferage loss
as well as timely delivery of orders.
♦ Artificial Intelligence through its
predictive and prescriptive analogies
can determine demand and supply
forecast, inventory movement
vs container availability, pre &
post shipment transportation gap
analysis etc. This technology can
be extensively used to create a
harmonious inter-relationship
between various modes of transport.
Space availability, dock availability.
♦ Internet of Things (IoT) can be used
to track inventory, suppliers and
buyers’ stocks, in transit inventory
tracking mechanism, GAP analysis
and foundation for logistical
connectivity on real time basis.
♦ Cloud Technology will help in
accessibility of data on multiple
platform and vendors through
one source. This improve data
transferability while maintaining
security and confidentiality.
NEW PROJECTS
IN THE OFFING
The port sector is expected to get a
boost with government’s emphasis on
sea route under Sagarmala programme.
India has one of the largest coastlines in
the world and this has the potential of
contributing significantly to the nation’s
economic growth. Adds Eshaan Lazarus,
“The primary objective of Sagarmala is
to leverage the country's coastline and
inland waterways to reduce logistics
cost for all industries. If implemented
effectively, the Sagarmala project
will bridge the connectivity issues of
the ports and help move the needle
towards a true multi-modal cargo mix.
Bharatmala, on the other hand, will
ease congestion that has resulted due
to over-dependence on road transport.
It will further improve the efficiency of
Dr. KK Sharma, Head of Centre for Surface & Air Transport,
Adani Institute of Infrastructure
India has one of the largest and unfortunately highly fragmented transport & logistics
sectors. There is a silverlining there that every intervention has scope to bring about
an exceptionally large positive effect. Multimodal logistics serves to interconnect
different modes of transport – road, rail, air, water – and therefore improve efficiency
and speed of goods movement. The economic growth in India has increased the
demand for practically all transport services and further underlines the importance
of providing an efficient multimodal logistics infrastructure in India that has a huge
potential to provide the most efficient way of transporting goods over long distances.

existing corridors through development
of Multimodal Logistics Parks and
bridge critical infrastructure gaps. Of the
Projects under Bharatmala – ‘Economic
Corridors’ has Mumbai (Panvel) -
Mahad - Chiplun - Panjim - Karwar –
Bhatkal section and in ‘Port Connectivity
Roads’ Karad – Chiplun - Jaigad port
road enhancement (SH-78) will benefit
enhancing road connectivity to Angré
port.”
Seconding his thoughts, Dr. KK
Sharma, elaborates, “The focus of
Bharatmala Project is on optimizing
efficiency of freight and passenger
movement across the country by
bridging critical infrastructure gaps
including development of Economic
Corridors, Inter Corridors and Feeder
Routes, National Corridor Efficiency
Improvement, Border and International
connectivity roads, Coastal and Port
connectivity roads and Green-field
expressways. First & foremost, this will
lead India to be a country with world-
class road infrastructure with building of
over 35000 km of highways at a cost of
Rs.5.35 Trillion by 2022. For multimodal
logistics in India, this is a huge step
forward. The project will enlarge
options, improve planning, access,
flow, speed, predictability and reduce
bottlenecks & logistics costs.”
He adds, “Absence of adequate
logistics infrastructure is the biggest
impediment to economic growth of a
country. Bharatmala project will improve
connectivity, average speed on road &
life of vehicles thus leading to better
predictability & planning of goods &
passenger movement in India. This will
help on both the demand and supply
side of the growing Indian economy.
Faster, farther & better reach to the
difficult hilly region of the Indian North
East region will significantly improve
trade access to/from and socio-
economic development of that part
of India. The more cost effective but
hitherto heavily underutilized Inland
waterways will be better connected to
the larger road network thereby leading
to great synergy.”
According to Dr. KK Sharma, setting
up of Multimodal Logistics Parks will
smoothen the Inter-Modal transition of
goods. A larger & better road network
will improve the traffic flow and thence
speed of delivery by generating more
options to travel and reduced load at
the choke points at the geographical
boundaries or nearer to larger
consumption centres. The evacuation
from airports, seaports and rail-road
loading/unloading points would be
faster thereby improving predictability
of inter-modal goods movement. There
are significant allied benefits including
employment generation and positive
externalities for the environment owing
to using a lot of greenery, EV vehicles,
solar energy & use of household &
industrial wastes for road construction.
The 'Sagarmala Project' is going
to complement the Bharatmala with a
network of good-quality roads in coastal
areas and areas adjoining seaports.
It may be noted here that maritime
logistics that includes goods moving
by sea and inland water route could
significantly reduce costs of bulk goods
transport for internal consumption &
external trade. An efficient maritime
logistics network of well laid out
ports along India’s vast coastline,
commensurate port infrastructure and
rail-road access through Sagarmala
would also mean a multimodal transport
network that would lead to huge
savings in infrastructural investments
that would otherwise be needed for
achieving the logistics targets in the
Indian economy.
CAPTURING IMMENSE
OPPORTUNITIES
Expanding the consideration set
of logistics options beyond simple
road transport can throw up huge
opportunities for cost saving, believes
Eshaan Lazarus. Illustrating this with an
example, he adds, “At one of our client
locations in Goa, their raw material can
either come from Factory A that is 30
km away or Factory B that is 400 km
away. But the road freight difference
between the two locations to our client’s
site is hardly 50%, even though there
is a 13X difference in distance between
the two options. This is due to Factory
A being in the midst of villages that
do not allow for free cargo movement
and transport unions that maintain a
fixed freight. However, Factory A is on
the riverfront, which enables the cargo
to be loaded into barges, and thereby
transported most of the distance by
waterway, and the last 3 km by road.
Adopting this multimodal approach has
caused the freight from Factory A to
come down by another 60%, thereby
making it a much more economical
option to source from.”
Eshaan Lazarus believes that having
a single provider with a long-term
contract and guaranteed service levels
across the value chain allows supply
chains to be immune to transportation
rate fluctuations, frees up the supply
chain team’s time to focus on other
higher priority areas, and greatly
reduces the need for storage space at
client locations, since clients can stock
cargo at the port, and the 3PL can
supply it to them within a guaranteed
lead time.
According to Rajeev Vijay,
implementation of DFC gives railways
an opportunity now to encash upon this
opportunity to wean traffic at least on
the DFC corridors. What it does require
is timely and efficient movement of
cargo/ container trains – all being
tracked through technology to give
certainty to logistics companies and
users. The big question is if Railways is
working to give comfort to the users of
timeliness and reliability on delivery.
There has been interest expressed
towards certain logistics park projects
for e.g. the one closer to Dadri being
implemented by DMICDC. It is in a good
hinterland from market perspective, has
direct access to Western DFC and to
Eastern DFC through a short spur link, is
fairly large in size and sits in an already
established logistics ecosystem. What
private players desire is unencumbered
land, trunk infrastructure connectivity to
the park including rail connections and
more importantly certainty in policy. For
them, the biggest setback is rules of the
government change after a few years
and they are left with a fait accompli
to accept it. For private logistics park
players, it is much easier to acquire
private land, use road as an access and
not be bound by any extra regulations.
For them to develop larger logistics
park, government should provide initial
time bound support while it is under
implementation and let private sector
manage to exploit potential as per
market forces. The government and
in particular, Railways, will have to
open up on this PPP approach; where
Railways still continues with its legacy
practices on having a control and multi-
layered decision matrix on every issue.
“Other than core economics of scale
and distribution efficiencies advantage
that logistics players and companies
enjoy, the value adds are the biggest
facilities that logistics parks offer
compared to company owned or leased
logistics facilities. The multi-modal
logistics park environment allows users
to consolidate supplies from several
sources and turn it into a produce for
market delivery pretty quickly. Sitting
right within the market. Facilities like
banking, insurance, legal, finance, IT,
software, packaging and labelling,
warehouse retail add significantly to
the requirements. It allows logistics
companies to use technology and
skills ecosystem to operate in a highly
enabled and competitive environment
to deliver immediate, effective and
efficient operations. The key is to
have ability to deliver to customer on
demand at the earliest,” adds Rajeev
Vijay.
A PARADIGM SHIFT
IN THE MAKING
Accelerated completion of the Dedicated
Freight Corridors (DFCs) will enhance
the share of rail freight in the country
from the current 30% to around 60-
70% as in developed countries. Hence,
making them available to trade as early
as possible will be a big boost. For
Eshaan Lazarus, “The involvement of
private players in multimodal logistics
will help in efficient delivery of services.
Specifically, players like ports that have
traditionally worked in areas they are
comfortable in within their four walls
should step out and start offering
multi model solutions to their clients.
This approach will no doubt result in
benefits for clients, as well as ports, in
the form of sticky, long term business,
as a supply chain manager likes nothing
more than having a hassle-free solution
he can rely on. Also, the demand
from clients for single window end
to end solutions will motivate service
providers to enhance their efforts in this
direction.”
According to Dr. KK Sharma,
multimodal logistics by its very nature
involves using of more than one mode
of travel to help the goods, mostly
packed in standard sized containers,
reach from door to door in national
as well as international trade. At each
point where the goods move from one
mode of transport to another, there
is a requirement of goods unloading,
checking that requires opening up the
packages, repackaging, preparation of
new documents, loading & dispatch. The
same process may have to be followed
at the point of the next point of change
of transport mode.
The Multimodal transport addresses
this complexity as it provides for the
transportation of goods under a single
contract document irrespective of the
number of different modes of transport
and the carrier is legally liable for the
entire carriage. The process ensures
reduction of the overall cost to the
goods-owner making his products more
competitive at the point of delivery.
The Indian Multimodal Transportation
of Goods Act, 1993 precisely facilitates
the exporters on this front and give
them a sense of security in transporting
their goods. The Act lays down the
standard terms and conditions so that
only those who have the necessary
expertise infrastructure and financial
capability are allowed to undertake
Multimodal Transportation in order
that the interests of shippers are fully
protected. Container transportation has
become the most preferred multi-
modal transport candidate because of
standardization in handling & moving.
Multimodal logistics requires support
in order to deliver the value it is capable
of. Adequate Logistics including rail-
road infrastructure is just a part of it.
Other very important factors include
availability of containers road-trailers
& empty rail-wagons; coordinated port
operations; speed of custom clearances
at interchange points; proper unloading-
return coordination through use of IT &
IOT; appropriate financial support to the
sector; compliance & legal guarantees
to contract & sub-contracts and
speedy support by respective judicial
institutions; and appropriate regulatory
& ease of doing business & trade
facilitation support.
Rajeev Vijay, Executive Director - Government and
Infrastructure Advisory, Knight Frank
Multimodal transportation requires parts of journey to be carried in the most efficient way,
efficient in terms of cost and time. Any interchange imposes a delay and cost penalty, which if
significant, discourages people to use multimodal transportation. In India, the biggest multimodal
park opportunity remains between road and rail for inland transport. Because of Railways’
tendency to encourage only Full rake loads, the market for less than train loads and less than
wagon loads died decades ago; resulting in all that traffic shifting to roads. Owing to regulations
in India (particularly prior to GST), the companies in corporate sector always found smaller
consignments, smaller warehouses at multiple locations a better option than to consolidate
freight and use a bulk mode to reduce cost of transportation. Hence the impetus or multimodal
operation was not evident from both supply and demand side, other than for some select
commodities.
SUCCESS STORY
In Varanasi, a freight village is being developed along the river to enhance the
potential of Eastern DFC and to augment traffic capacity along the National
Waterway 1. Inland waterways cargo movement has already started from NW
1 by PepsiCo, Dabur, Emami, IFFCO from Kolkata to Varanasi where a freight
village is being developed to connect it to the eastern DFC.

PAVING THE WAY TO
NEXT GEN MULTIMODAL
TRANSPORT: A STEP
TOWARDS TRANSPORT 5.0
Vibhore Khandelwal provides futuristic
avenues to adopt multimodal,
“Succeeding in tomorrows’ multimodal
transport will be a collaborative game.
From the start, organizations must
think about ecosystems and multi-sided
platforms.” The prima facie the factors
need to critically evaluated and focused
are as follows:
♦ Workforce (Skill development): Shift
to lighter and smarter work load
and handing strenuous workloads to
machines
♦ Technology and IT infrastructure
♦ Flexible supply chain to address
dynamic and vulnerable consumer
trends
♦ Business strategies, models and
tailored supply chains
♦ Future readiness i.e. scalability
The last 100 years have brought
multiple innovations to the transport
industry. Each day, a billion people
take a car, bus or subway, around
11 million passengers fly and nearly
200 million parcels are delivered.
Everywhere, new entrants are
challenging existing transport practices.
Online providers leverage mobile to
create new relationships with travelers.
Marketplaces exploit peer-to-peer to
move from a world of vehicle possession
to one based on usage. New players
use the power of real time data to
offer personalized door-to-door travel
and logistics services. Today’s changes
represent immense opportunities for
organizations to place themselves at the
heart of next-generation multimodal
transport ecosystems. Opportunities
and focus for 2020 to next five
years are more towards collaboration
working and knitting people, processes
and technology in one basket. More
disruptive technologies will emerge.
While some may only appear as dots
on the horizon today, they will turn out
to be transformational in the years to
come. What could Multimodal look like
in next 5-10 years to come? The mantra
is going to be ‘Mobility-as-a-service’ or
‘Commuting-as-a-service’:
♦ Putting a strong focus on Omni
channel and multimodal customer
experience 540°
♦ To attract consumers, transportation
will have to be more personalized.
♦ Streamlining punctuality,
serviceability and reducing costs
♦ Not only transportation, rather the
entire supply chain model has to be
multimodal
♦ Hyperloop trains/submarines and
autonomous robot-taxis.
♦ Building platforms and marketplaces
for multi-sided collaboration (Cloud
concept)
♦ Enforcing trust & compliance (cyber
securities, fraud reduction etc.)
GOVERNMENT INTENT &
ACTION
While the gaps remain, industry leaders
are of the view that the Government
has shown real intent towards
bringing down overall logistics costs
by enhancing the use of the country’s
waterways. However, while coastal
movement takes care of the long-
distance port to port movement in
the supply chain, robust first and last
mile systems are required in the form
of DFCs. Giving an example, Eshaan
Lazarus highlights, “In the Konkan
region, DFCs that connect west to east
are the need of the hour. Additionally,
having wide and smooth roads,
especially in the mountainous sections
that are common in Konkan hinterland
would reduce logistics costs for all
players in the region. Lastly, creating
a port led industrial zone which has
concessional water supply, power supply,
as well as land availability and perhaps
even low interest rate funding for capex
would really accelerate development in
the region.”
According to Dr. KK Sharma,
Nitin Gadkari, Cabinet Minister for
Road Transport & Highways, while
addressing India Integrated Transport
& Logistics Summit 2017 had stated
that high logistics cost is one of the
major impediments to India’s economic
growth. Inefficiency led high operational
costs and resultant high freight rates
lead to this poor state. On the positive
side, the Logistics sector was granted
infrastructure status in 2017 that is
helping larger investments and more
infrastructure lending at betters
terms. The rail-road infrastructure
projects like Bharatmala, Sagarmala,
Setu Bharatam, Rural Infrastructure
development, Dedicated Freight
Corridors, Inland water transport etc.
are getting implemented. On the softer
side, the Indian bridge management
system for upkeep of bridges, Indian
Customs EDI System (ICES) for
automation of customs documentation
process being operational at 134 major
custom locations handling more than
98% of India’s international trade of
import and export are all very laudable
initiatives. The Kandla- North India
& Kolkata- Guwahati-North East are
great examples of the potential of
multi-modal transportation. The private
sector participation in port & airport
development in the recent times has
already started bearing fruits in terms
of improving efficiency and augmenting
capacity.
However, a lot more can be done
by the government either through its
own agencies or through private sector
participation. Government needs to
address the lack of appropriate logistics
infrastructure including warehousing
& cold chains, transport hubs through
private sector participation. Better
interconnectivity & integration
would further reduce time & cost of
multimodal transportation. Private
businesses have the capacity to produce
more wagons and trucks but the road
conditions, excessive time on road, poor
average speed of vehicles on the move,
multiple checkpoints (road worthiness,
weight checks, toll/tax collections etc.)
& inordinate waiting time at inter-
state border check points all add up to
inefficiencies that need to be addressed
to improve load bearing capacity of
road infrastructure. The insufficient and
inefficient urban as well as rural public
transport system also puts pressure on
road and rail infrastructure which needs
sure and urgent government attention.
Indian infrastructure users have been
poor in using information technology &
other technology means to modernize
its infrastructure and reduce life-
cycle cost of operations. The RFID &
FASTags based toll collection itself took
a lot of time to get adopted when the
technology was existing for decades.
Appropriate policy push & institutional
interventions are needed. For longer
distance movement of bulk goods,
railways need to increase their share.
The Eastern (1856 km) & Western (1504
km) Dedicated Freight Corridors need to
be operational on priority.
Though about 15 Private Freight
Train Operators (PFTOs) are in the
business, which can lease or build
train rakes and also run their own
Private Freight Terminals (PFTs), more
investment in multimodal logistics
parks, ICDs, CFS, Private Freight
terminals are needed to augment
loading capacity. Better incentive
structure could induce more private
investments here. The physical
infrastructure at existing ports &
airports in government domain need
to be augmented. The private sector
participation in ports and airports
development has to pick up pace
including more investments in logistics
infrastructure including warehousing/
cold chains and private freight stations.
Government can also contribute to
Vibhore Khandelwal, Manager – SCM, Hafele India Pvt Ltd.
Transportation is undergoing major disruption and striving towards becoming more organized
sector. To succeed and sustain, organizations need to understand and adapt to fast-changing
ecosystems, focusing on customer-driven market, reflexive supply chain and multimodal value
chains. The entire economy is struggling today due to ‘COVID’. The COVID-19 outbreak has
led to blank sailings and a reduction in imports, which translates to less container volume for
intermodal businesses. As shippers see demand for their products shrink, this will be passed along
to carriers in the form of decreased demand for freight. However, looking at the brighter side, it
is the right time when organizations can ideate and develop ‘Collaborative model – COBOT’, a
start towards Industry 5.0 and more resilient supply chain, to be future ready and withstand these
pandemic events.
KEY RECOMMENDATIONS
A. Investment Environment
• Design robust routes for demand-responsive transport system
• Initiate policy guidelines to allow hundred percent foreign direct
investment through automatic route
• Improve Ease of doing business for Multimodal transport operators
• Establish regulatory bodies in the segment to mitigate buyer supplier
conflicts
B. Infrastructure Development
• Develop SEZs for MMT Hubs
• Robust Road, Rail & Port infrastructure for multi-factor transport
network.
• Build up dry ports, inland ports, logistical hubs to decongest ports
and supplement movement of goods through various models of
transportation.
C. Technological Development
• Technological interventions and innovation in the sector for efficiency
• Incentivize investment in technology, research & development
activities
• Set up MML data and logistic centres
• Introduce industry 4.0 interventions
D. Environmental protection for sustainability
• Improve fuel economy through MMTS
• Reduce CO2 emission by reducing burden on roads and transport
cargos through rail or water.
E. Policy framework
• Make a coherent state and central law for all clearances. Custom
checks, inter state border checks ets needs to be made more
transparent
• Simplification of laws and rules
• Decomposing bureaucratic hurdles
Ravi Soni, CEO, Grus & Grade
expediting utilization of coastal shipping
& Inland water transport ways and
ameliorating the sectoral challenge of
non-availability of adequately trained
manpower.
Rajeev Vijay concludes, “For the
government to bring down logistics
costs, particularly post GST, it is
important some of the landmark
logistics parks be developed in India
at right locations. There are many
markets where there is a need for
such facilities to make our industries
more competitive. For anything to
be successful in logistics, the primary
requirement from such facilities
though remains is the agility to meet
the market requirements, which any
successful logistics park must deliver.”

Supply Chain Resilience Key to Overcoming COVID-19 Crisis

Supply Chain Resilience Key to Overcoming COVID-19 Crisis

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