Multimodal transport refers to the transportation of goods using multiple modes of transportation, with a single operator arranging the transport under a single contract. In India, multimodal transport is growing due to increasing container traffic at ports and planned investments in port infrastructure. However, India faces challenges like infrastructure constraints at ports and for other modes of transport, as well as regulatory and institutional issues. Developing multimodal transport further in India requires improvements in areas like ports, coastal and inland shipping, customs procedures, and the use of technology.

1. Multimodal Transport in an
Indian Perspective
Prepared by:
Farhan Khan
25-Aug-2013

2. Multimodal Transport
• Multimodal transport refers to the transport of good from one
point to another via more than one mode of transport.
• The chain that interconnects different links or modes of
transport – air, sea, and land into one complete process that
ensures an efficient and cost-effective door-to-door movement
of goods under the responsibility of a single transport operator,
known as a Multimodal Transport Operator (MTO)

3. Multimodal Transport Operator (MTO)
Shipper
Regulatory
Authorities
Single
Multimodal
transport
contract
Multimodal
Transport
Operator
(MTO)
Truckers /
Indian
Railways /
Shipping lines CFSs / ICDs
Ports /
Airports
Individual Contracts

4. Benefits of Multimodal transport
Single Point of
Contact
Reduces burden
of
documentation
and formalities
Saves time and
cuts pilferage at
the points of
transhipment:
Reduces cost
Makes the best
of each mode
Frees up
working capital
Better
distribution of
wealth
MMT
Infrastructure
development
Regulatory
reforms
Investment in
technology
Key focus areas:

5. Multimodal transport – Indian Perspective
0
1
2
3
4
5
Customs
Infrastructure
International
Shipments
Logistics
Competence
Tracking &
tracing
Timeliness
Singapore United States China India
As per the World Bank’s
International Logistics
Performance Index Global
Ranking, India ranks 46th
among 155 countries.
Source: World Bank's International Logistics Performance Index Global
Ranking http://lpisurvey.worldbank.org/

6. Containerization
Source: Indian Ports Association http://www.ipa.nic.in/oper4d_2010.htm
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
0
20
40
60
80
100
120
2007-08 2008-09 2009-10 2010-11
MillionTonnes
CAGR(%)
Container Traffic (in MT) Growth in Container Traffic (in %)
Port Name
Planned Capacity creation
(million TEUs)
Estimated Project Cost
(Rs. crores)
JNPT – 4th container terminal 6.8 6,800
Chennai 4 3,686
Cochin (Vallarpadam) 4 2,118
Mumbai Port 1.2 1,461
Ennore 2.4 1,407
JNPT – 330m extension 0.6 600
Tuticorin 0.6 312
New Mangalore 0.37 270
Total 19.97 16,654
Source: Update on Indian Port Sector (31.03.11), Transport Research Wing, Ministry of Road Transport and Highways;
Deloitte Research
Container Traffic at Major Ports has
grown at a CAGR of 12.97% over the
last 5 years
Over Rs. 16,000 crores are
planned to be invested,
adding almost 20 million
TEUs of handling capacity at
major ports in India

7. Indian Ports
0
100
200
300
400
500
600
700
800
900
1000
2009-10 2010-11 2011-12 2012-13
In‘000tonnes
India's Port Sector Traffic Growth
Major Ports Non Major Ports
Source: Indian Ports Association (IPA), http://ipa.nic.in/e-magazine.pdf
Capacity constraint
Inefficient cargo
handling & low
productivity
Inadequate drafts &
poor connectivity
with other modes
Cumbersome
institutional
arrangements & other
issues
Technical and Institutional constraints

8. Other mode of transport
Source: Update on Indian Port Sector (31.03.11), Transport Research Wing, Ministry of
Road Transport and Highways; Deloitte Research
Drivers
•Custom clearance activities in ICDs / CFSs
•Growth of port traffic
•Higher margins in comparison with other
logistics activities
•Construction of Dedicated Freight Corridor
Challenges
•High cost of development facility
•Archaic procedures for movement of cargo
Dry Ports – Container Freight Stations and
Inland Container Depots
Offer services for handling and temporary
storage of import / export laden and
empty containers carried under customs
control. Transshipment of cargo also takes
place from such stations.
Inland Waterways
0
20
40
60
80
100
120
Road Transport Rail Transport Inland Water
Transport
Tonne-kmperlitre
IWT is more fuel efficient as compared to road
and rail transport
India has navigable inland waterways of almost
14,500 km, of which 5,200 km of major rivers
and 500 km of canals are suitable for
mechanized crafts. Currently, IWT handles only
around 1% of total inland cargo transport.
Particulars
Budgetary
Support (Rs in
cr.)
Private
Funding (Rs in
cr)
Total (Rs in cr)
On-going projects 4175 8400 12575
New Projects 6630 11505 18135
Total 10805 19905 30710

9. • India has one of the largest road networks of approximately 42.36 lakh kms. However, the
quality of the road infrastructure remains a big concern.
• As per the Road Transport & Highways Department around 60% of the total freight and around
87% of passenger traffic is carried by Indian roads. Traffic is forecasted to grow at around 8-
10% p.a.
Road Transport
Land
Acquisition
Environment
and Forest
Clearances
Clearances
from Railways
Shifting of
Utilities
Law and order
problems
Poor
performance of
some
contractors

10. Rail transportation
28 % of containers handled at ports represents rail
share
Over the last 10 years, traffic has grown at a CAGR of
6.27%
Increase the share of railways in freight
transport
Build separate infrastructure for handling
freight
Reduce unit cost of transportation
Provide seamless connectivity to
customers
MainObjectives

11. The DFC project plans to provide new services including:
• Roll-on Roll-off for all types of road vehicles which can piggy-back on wagons
• Triple-deck automobile wagon on Western corridor and Double-deck on Eastern
corridor.
• Movement of over-dimensional consignments from ports to construction sites
• Setting up of new terminals with a “one-stop-shop” solution for all value added
services like warehousing, packaging, custom bonding etc.
Several multimodal logistics parks have been planned along the corridors including
those at Delhi-NCR, Jaipur, Gandhidham, Ahmedabad, Vapi and Navi Mumbai on the
Western corridor and at Kanpur and Ludhiana.
Rail transportation

12. Developing the potential of Multimodal transport in India:
1. Developing Ports to Handle Larger Shipping Vessels
2. Developing Hub and Feeder Operations at Ports and Along the Coast
3. Development of Multi-Modal Logistics Parks
4. Development of Coastal Shipping and Inland Waterways
5. Goods Act and Customs Procedures
6. Measures for domestic containerization
7. Optimization
Rail transportation

13. Developing Ports to Handle Larger Shipping Vessels
• Increasing size of container ships: from present 4000 TEU to
future 12000 TEU
• The large ships would require drafts between 13–15.5 mtrs
• Need to upgrade berthing facilities, higher crane handling
capacity, and loading and unloading arrangements
• Facilities to shift containers to feedering vessels

14. Developing Hub and Feeder Operations at Ports and Along the
Coast
At present there are no hub operations in
India
Estimated extra cost on account of delays
is to US $ 70 per TEU10
Container traffic from and to India uses
foreign ports like Colombo, Singapore,
Dubai and Salalah
Great chance to tap revenue from
transshipment
Potential Ports: JNPT, Visakhapatnam and
Vallarpadam

15. • Inland Waterways comprises 20 % of the transport sector in Germany and
32 % in Bangladesh, but comprises less than 1 % in India
• Benefits can be achieved by good connectivity between ports and the
hinterland by rail or road
• High growth in non-major ports since its introduction in the 1990s: 200+
• Shift of movement from present bulk commodity to future large size
containers
• Low fuel costs and pollution levels
Development of Coastal Shipping and Inland Waterways

16. • Severe lacunae in legislation made in 1993 after introduction of MTO
• industry expects a legislation to secure and facilitate regime for this sector
to develop
• Modernization of Customs procedures especially with the availability of new
ICT is urgently required
• Requirement of high speed checking and reduced delays, which are
increasing with the increasing volumes of transactions
• Introduce new methods of checking of container contents in view increasing
security concerns for India
Goods Act and Customs Procedures

17. Scope to increase domestic containerization is much
higher
Standard containers have two inherent limitations:
• Underutilization of trailing loads and space on
broad gauge railway system of Indian Railways
• Inability to reach major production and
consumption centers in urban areas and in rural
areas with rudimentary road infrastructure
For this it is necessary to undertake either one or all of
the following:
• Reduce the container size
• Introduce pellets so that cargo reach the store
shelves directly
• Standardize the sizes of containers and pellets to
Indian rail and truck conditions, redesign rail wagons
Measures for domestic containerization

18. • Multimodal Transport Act, 1993
• Private Freight Terminals (PFT) Policy
• Draft Coastal Shipping Policy
• Cabotage Policy
• Policy to permit Operators to move
container trains on Indian Railways
• Impact of GST
• Foreign Direct Investment
Regulatory Reforms

19. • Cloud computing and Software-as-a-Service
• Global Positioning System (GPS)
• Radio Frequency Identification (RFID)
• Enterprise Resource Planning (ERP)
• Mobile Technology
Technology Trends in Logistics

20. • Multimodal Transport Models are complex simulation and optimization
systems of different transport networks, infrastructure, transport operators
and others
• Model parameterizes multimodal freight services in order to apply
optimization algorithms
• Classical four step model: Trip Generation, Trip Distribution, Modal Split
and Assignment
• Model Parameters : Fare, Cost, Income , Intermediate Stops , Time, No. of
routes, Ships etc
• Objective functions: Cash flow, profit maximization, IRR etc
Optimization Techniques

21. • Corporatization of all the major ports
• Government to facilitate the development of sufficient CFS capacity in
reasonable proximity to ports
• Accord due priority to container trains’ timely movement of these trains by
contractually binding obligations
• Expedite draft-deepening of Major ports such as JNPT, Kandla channel
• Reduce the cost of capital by lowering tax on Interest income to lenders of
port projects
• The service tax for coastal ships should be completely or partially exempted
• Extend ‘Infrastructure’ status to Indian shipping industry for cheap loan and
better D/E ratio
Recommendations

22. Conclusions