Multimodal transportation has become one of the most favourite topics of discussion during strategic meets. Rightfully so, it has the potential to truly transform the logistical landscape of the country by effectively utilizing all modes of transportation. But have we been able to fully realize its true potential? For sure… NOT! This was one of the major focus points of deliberation during our recent event where the expert panel explored ways to integrating road, rail, air, seaways, and waterways to create a seamless transportation network, boost economic growth, and pave the way for a sustainable and prosperous future. Through this Special Report, we discover innovative strategies and collaborative efforts needed to transform India’s physical infrastructure landscape.
Laying immense thrust on the importance of multimodal transportation, President of India Smt. Droupadi Murmu, during an address, highlighted that the country needs an efficient multimodal transport system for which rail, road, air and water transportation should be dealt with in a holistic approach rather than in isolation. This statement makes a strong case for realizing multimodal’s latent potential.
If the recent news around promoting the expanse of multimodal transportation is anywhere to go by, the Indian Railways is embarking on a significant initiative to establish mega railway terminals with multimodal connectivity in cities with populations exceeding 10 lakh. This effort aligns with Prime Minister Narendra Modi's 'Viksit Bharat' vision, aimed at bolstering national infrastructure.
In yet another update, Navi Mumbai international airport (NMIA) is set to become the first airport in the country with multimodal connectivity through metro, rail and road, once it comes to fruition. According to former Union Civil Aviation Minister Jyotiraditya Scindia, the PM wanted every airport to have multimodal connectivity as envisaged by the Gati Shakti Yojana. “NMIA will be the first airport in the country to have road, rail and metro connectivity, followed by water connectivity in the future. It will be connected by hovercraft to Colaba,” he said.
Our expert panelists elaborated on all these and more during the conference and offered ways to enhance the implementation of multimodal transportation. Let’s take a look at the interesting conversations that unfolded…
What is the current status of Multimodal adoption in India? Are we realizing its full potential?
Xerrxes Master, President, AMTOI: India is making significant strides in adapting multimodal logistics to enhance its transportation, infrastructure and reduce logistics cost. The basic tenet is that we must seamlessly move towards multimodal transportation, essentially entailing that road, rail, sea and air have to converge and work seamlessly to ensure the movement of goods in the most cost effective and timely manner. The Central Government has made great strides in the direction in the last decade with the development of multimodal logistics parks, special FTZs, government Sops, etc.
The Indian Government has launched several key initiatives such as the PM Gati Shakti National Master Plan (NMP) introduced in October 2021. It aims to provide Multimodal connectivity infrastructure to various economic zones such as textile clusters, pharmaceutical clusters and industrial corridors. Additionally, the National Logistics Policy (NLP) rolled out in 2022 aims to create a comprehensive logistics ecosystem that enhances its service efficiency, digital systems and regulatory frameworks. One of the critical components of these initiatives is the establishment of Multimodal Logistic Parks (MMLPs). The government plans to set up 35 MMLPs across the country to integrate various modes of transport including road, rail, air and sea to streamline the logistics processes.
Sanjay Kshirsagar, Head of Supply Chain – South Asia, Brenntag: We have seen rapid progress in infrastructure construction during the last decade. When it comes to the chemical business, we have an ambitious goal of achieving one trillion dollars by 2040. To reach this goal, we need cutting-edge infrastructure, without which it would be impossible to meet. We must also pursue development in a sustainable manner.
In this regard, I am pleased to inform you of the opening of our cutting-edge green warehouse, designed specifically for Brenntag India by Harshna Agro Fresh Pvt. Ltd (Harshna), a supply chain and logistics expert. Harshna has been awarded the renowned EDGE (Excellence in Design for Greater Efficiencies) Advanced Certification in recognition of its exceptional dedication to sustainability and environmentally friendly practices. The new warehouse is in Sonipat, about 50 kilometers from Central Delhi in the Northern State of Haryana, India. It will serve over 70% of Brenntag's customers in Northern India efficiently and sustainably, which were motivating factors for consolidating all three existing warehouses in North India under the new warehouse facility. During the conceptualization phase, we concentrated on finding the best location with strong transportation connections and including sustainability considerations. The warehouse has specially insulated walls to increase energy efficiency, and we make extensive use of natural illumination to reduce energy use. We implemented a well-designed natural ventilation system to reduce the demand for air conditioning, even in India's hot environment. In addition, we added solar panels and a water harvesting system to help conserve resources.
Rajat Sharma, VP - ISCM & Customer Service, at Hamilton Housewares: The current status in India is one of a developing phase where multimodal transport is being managed in an unorganized and inefficient manner. So, we’re surely not realizing anywhere near to full potential.
Major transport hubs globally are leading examples for us to imbibe and move ahead. Can you enlist some of them?
Xerrxes Master: Some global transport hubs are excellent examples of the efficient multimodal logistics and transport systems such as Port of Rotterdam, Netherlands; Port of Shanghai, China; Port of Singapore, Singapore; Port of Los Angelos & Long Beach, USA; Port of Hamburg, Germany; Dubai Ports (Jebel Ali, UAE), and Port of Busan, South Korea. Let me share with you some more interesting updates…
European Union: The EU’s TEN-T (Trans-European Transport Network) policy aims to integrate road, rail, air, and sea transport networks, promoting efficient multimodal logistics.
China’s Belt and Road Initiative: This initiative seeks to create a vast network of trade routes, enhancing multimodal connectivity between Asia, Europe, and Africa.
North American Free Trade Agreement (NAFTA): Enhanced cross-border logistics through multimodal transport, linking road and rail networks across the US, Canada, and Mexico.
Rajat Sharma: Very true, countries like Singapore, China, etc., have been able to capitalize on well-managed multimodal transport using water, road and rail in an integrated manner, allowing goods and even people to hop across multiple modes of transport, leading to better access for clients and higher revenues for service providers.
Multimodal transportation has always been an underutilized phenomenon for Indian companies. What are the challenges that the companies are facing in efficiently utilizing all modes of transportation rather than just road?
Xerrxes Master: There are various concerns that demand stakeholders’ attention. Some of them are:
Infrastructure Development: Significant investment in infrastructure, such as ports, railways, and intermodal terminals, is required to support multimodal transport.
Coordination Complexity: Managing the interfaces between different transportation modes requires robust coordination and communication systems.
Initial Costs: The initial setup costs for multimodal systems can be high, although they often lead to long-term savings and efficiencies.
While the above mentioned issues are related to implementation part, let me bring your attention to the policy side also… we are a very fragmented industry and a fragmented authority. As an association, we are still figuring out ‘who do we report to?’ For the past two years, we have been asking this question. I think the solution lies in forming a separate logistics ministry with the most qualified people having the finest brains in the industry taking the reins. The government should involve industry stakeholders because while the rules are being formulated, the ground reality is that these rules are impractical to follow. We must focus on skill development. Our national highways have actually become the death traps, recording the highest number of accidents globally. We seriously need to put our efforts into educating and training the drivers’ community. Our inland waterways remain a goldmine to be exploited. Local union bodies are becoming greater threat to the companies when it comes to ensuring proper functioning of warehousing and movement of goods. As an association, we are bringing up such issues and concerns of the industry to the government officials continuously. We have been struggling to get the Self- Regulatory Organization (SRO) to fast-track the development on this front and facilitate ease of business.
Sanjay Kshirsagar: Indian companies struggle to efficiently use all types of transportation beyond road transport. These difficulties are infrastructure, regulatory, operational, and market related…
Infrastructure Issues: India's rail and port infrastructure often can't handle high freight volumes. Inadequate terminal infrastructure, intermodal facilities, and warehousing limit smooth goods transfer across transport modes. Many industrial hubs and rural areas lack rail and waterway connectivity, making logistics challenging for firms.
Policy/regulation issues: India's logistics business has several regulations and government bodies, making multimodal transport difficult. Acquiring approvals and adhering to rules can be time-consuming and costly. The National Logistics Policy addresses some of these difficulties, but execution and coordination across sectors and jurisdictions remain challenging.
Operational Issues: India's logistics costs account for 14% of GDP, which is greater than many developed countries. This is mainly due to logistics inefficiencies and over-reliance on road transport. The Indian logistics business is fragmented with numerous small and unorganized firms. Fragmentation causes inefficiency and lack of uniformity in logistics processes.
Market Concerns: Companies prefer road transit due to its flexibility, speed, and reliability. Limited demand for multimodal solutions hinders logistics operators from investing in and developing them. Businesses are unaware of multimodal transport's benefits. Skilled individuals are in low supply for managing multimodal logistics operations.
Improvements to infrastructure, regulatory processes, and commercial promotion of multimodal transport are needed to overcome these hurdles. Investing in technology, skill development, and stakeholder coordination can make multimodal transportation more feasible and efficient for Indian companies (Drishti IAS, PW Only IAS).
Vishal Raskar, AVP – Warehousing, Delivery & Spot, MCX CCL: If you are a regular city commuter and using different metro lines, city bus, etc., on a daily basis, there are companies facilitating prepaid cards, which can be used for ticket payment at all metro lines and even bus service in city. Just imagine the comfort which commuter gets out of it, no need to be in queue for procuring ticket at any mode of transport, which saves time & energy. The same provision logistics industry is expecting while using multimodal logistics facilities in India.
There’s a classic case to discuss here… India exports US$11 billion worth of rice to Bangladesh a year through inland waterways under Indo-Bangladesh protocol route. Currently if anyone intends to transport parboiled rice from Chennai to Bangladesh, he has to prefer road transport all the way from South to Kolkata and then load barges for cross-border waterway transport. It involves inland documentations like, Local Mandi, GST, LR, cross-state documents, export declaration and cross-border clearance. There is no single window system to facilitate seamless movement of goods, which makes it highly inefficient both from the perspective of time and cost. The entire trade become unviable if there is less parity in trade.
There are issues like transport union, labour union at local level, which are strenuous to eradicate and manage for any organization. If heavy goods such as metals need to be transported from Orissa production plant to Bangalore base, local ecosystems don’t allow companies to load more than 10 MT trucks, just because they want to earn more profit and exploit companies. In such situation, beneficiary has to bring the stock at Raipur with 10 MT trucks and then load it in bigger trucks for further transit, which ultimately involves hefty handling cost. Knowing the nature of complexity, there are limited logistics players who facilitate end-to-end services in such trade model due to lack of volume and hassle in local and cross-state document compliance.
Rajat Sharma: The challenges lie in multimodal means not being integrated, and hence multiple partners managing the different legs. What it does is shifting of accountabilities and hence exceptions/ deviations, leading to conflicts which are difficult to manage. Secondly, involvement of multiple partners increases the documentation process and managing this needs more control, equaling more supervisory manpower. Thirdly, in the absence of a single digitized system, there’s a drop in visibility across the chain. A clear multimodal policy with single document interaction and complementing technology deployment to create the right visibility is the resolution of teething troubles.
What’s your take on the development of physical infrastructure in the country and how do you see it going ahead?
Xerrxes Master: The development of physical infrastructure in India is progressing steadily with significant investments and initiatives in enhancing connectivity and boosting economic growth. In road infrastructure, we have initiatives such as Bharatmala Pariyojana and Pradhan Mantri Gram Sadak Yojana. In rail, we have the Dedicated Freight Corridors (DFCs) & High-Speed rail projects. Port & Coastal infrastructure have initiatives like the Sagarmala Project and Inland Waterways. Airport infrastructure has UDAAN (Ude Desh Ka Aam Nagrik) & Expansion of major airports. The outlook would be implementation of multimodal logistics parks; smart cities and urban infrastructure; and sustainability & green infrastructure.
Vishal Raskar: There is an immense scope for authority on the infrastructure as well as implementation side. India is the growing economy with total yearly transport quantum of ~5 billion tons. Out of which 66% is encountered by road transport and 31% is through rail. There is considerable vision from respective ministries of road and rail with target of 12000 KM road construction in a year for 2024-25 and rail transport aiming to reach freight traffic to 3.3 billion tons by 2030.
There is considerable breadth to expand India’s inland waterways and domestic costal freight. India has coastline of ~7500 KM and navigable inland waterways of ~14500KM. Out of which, ~9200 KM waterways can be used for mechanized cargo crafts. But if we look the contribution of inland waterways in overall transport of India, it’s mere 0.1% whereas developed countries like the US contributes about 21%. India is operating with 12 ports on coastline of 7500 KM i.e. 1 port every 500 KM i.e. 10 hours of truck movement with standard average freight speed.
If we are able to harness the full potential of our coastline and inland waterways, it will be revolution in the India logistics story. There will be no congestion, so turnaround time will improve drastically with negligible carbon emissions as compared to road transport. The cost of transit will go down by almost 50%, which will ultimately fuel the economic grwoth. By announcing ‘Sagarmala’ project, we anticipate that authorities have already recognized the immense potential that it holds and has envisioned to develop 14 new major ports and 22 smaller ports, but the implementation is not at the desired speed, which currently road and rail infra segments are witnessing.
Rajat Sharma: Infrastructure is already taking shape; we now need policies and technology to be put in place in the best fit manner. Streamlined & improvised regulations and policies from the government side and efficient technology platforms with government alignment (private or joint undertaking) will make adoption faster and easier. This will boost confidence in realizing the benefits put forth. If we’re able to bring about unified digital platforms and organized way of working, then a lot of organizations would be able to take advantage of single window movements and dealing with single partner across the freight chain. This could benefit companies in terms of time and cost both. Perhaps it could also result in less congestion on roads and better availability of stocks across the country.
If multimodal transportation begins to appear in a customer – provider friendly manner, I see this to be the reason for huge boost in multimodal logistics parks that could easily convert to congregations of various value-added services across the manufacturing & consumption hot spots. These could attract aggregators & dis-aggregators of logistics, e-commerce fulfilment centres, large scale storage & distribution centres of perishable products and even commodities.
What do you have to say on the government interventions on the growth of multimodal alternatives in India?
Xerrxes Master: The government's interventions are set to transform India’s logistics landscape, making it more integrated, efficient and cost-effective. Continued focus on multimodal transport solutions, enhanced infrastructure and innovative policies will be crucial for sustaining this work and addressing challenges related to funding execution and technological integration would be the key to fully realizing the potential of these initiatives. Overall, these government initiatives are poised to significantly enhance India’s multimodal logistics capabilities, boosting trade, reducing cost and supporting economic growth.
Vishal Raskar: Managing logistics is a complex process in India—be it ensuring regular transportation of bulk raw materials, such as mineral ores and coal, or transportation of finished products from the centres to the ports. For instance, according to a NITI Aayog report, the freight cost of transporting one tonne of steel from Jamshedpur to Mumbai is an estimated US$50, against just US$34 for the same quantity from Rotterdam to Mumbai. This highlights India’s logistical inefficiencies, which is one of the main drivers of domestic production cost being 5 to 10% higher than the global average. In India, the bulk of metal-related logistical requirements are carried out by railways, which are currently facing infrastructural constraints. With the introduction of the National Logistics Policy (NLP), India’s transportation woes should improve with logistics costs. Timely implementation of action plans underlined under the NLP can reduce overall costs and make exports more competitive.
Rajat Sharma: I believe it is the right time to put up the right governing body that enables changes in policies and adoption. Also, it could be a great idea for the government to invest in such futuristic projects in partnership with private players and associations to realize the true and full potential of this huge country with a growing population and shifting spend dynamics.
There are various newer projects in the pipeline like Sagarmala and Bharatmala. How are they slated to shape the fortunes of multimodal in the country?
Xerrxes Master: India’s major infrastructure initiatives such as Sagarmala & Bharatmala are set to significantly enhance the company's multimodal logistics capabilities, reshaping the fortunes of the transport and logistics sectors. Sagarmala projects aims to modernize India’s port infrastructure, enhance port connectivity, and promote port-laid industrialization to reduce logistics cost and improve trade efficiency. The Bharatmala project focuses on developing a robust network of highways across India to improve road connectivity and integrate various modes of transport. Together the combined impact expects to streamline logistics; reduce logistics cost; Boost trade and investment; and Support sustainability development.
Rajat Sharma: I believe they will add significant infra and new developed routes and modes – saving on cost and time. Yet, without the right unified seamless technology, reaping benefits of such largescale infra projects would also be fraught with doubts and risks. With right digital platforms, many more such projects could come to the fore and add to the toplines and bottomlines of various partners in the ecosystem.
What is the way forward when it comes to multimodal?
Xerrxes Master: Multimodalism in global logistics brings significant advantages in terms of efficiency, cost reduction, environmental benefits, and reliability. It requires substantial investment in infrastructure and technology, as well as effective coordination between different transportation modes. As global trade continues to expand, the importance of multimodal logistics will only increase, driving innovations and improvements in the supply chain industry.
Sanjay Kshirsagar: To advance multimodal transportation in India and fully realize its potential, several key steps need to be taken. These include…
IMPROVED INFRASTRUCTURE
Finalizing Projects: We need to expedite Sagarmala projects such as DFCs, MMLPs, and port connectivity. These projects are essential for building a strong multimodal transport network.
Building New Infrastructure: To integrate various modes of transport, invest in infrastructure, including interior waterways, coastal shipping facilities, and rail/road connectivity.
CHANGES TO REGULATIONS AND POLICIES
Simplification of Procedures: By integrating logistics-related government agencies, we simplify approvals and decrease bureaucracy. This will improve corporate efficiency and promote private investment.
National Logistics Policy Implementation: Ensure the effective implementation of the National Logistics Policy, which provides a comprehensive framework for reducing logistics costs and improving efficiency through digital integration and coordinated planning across different sectors.
TECHNOLOGY INTEGRATION
Adopt Advanced Technologies: Encourage blockchain, AI, and IoT for transparency, tracking, and real-time product monitoring. These technologies have the potential to improve logistics operations by reducing delays, increasing security, and optimizing operations.
Digital Platforms: Develop and implement digital platforms like the National Logistics Information Portal to bring all stakeholders onto a single platform, facilitating better coordination and information sharing.
SKILL DEVELOPMENT
Training Programs: Invest in skill development programs to train a workforce proficient in advanced logistics operations. This includes training in areas like data analytics, supply chain management, and the use of digital tools.
Collaboration with Educational Institutions: Partner with educational institutions and industry bodies to create specialized courses and certification programs in logistics and supply chain management.
PROMOTION OF MULTIMODAL TRANSPORT
Incentives for Multimodal Use: Provide incentives for businesses to adopt multimodal transport solutions, such as subsidies, tax benefits, or reduced tariffs for using rail and waterways instead of road transport
Public-Private Partnerships (PPPs): Encourage PPPs to leverage private sector efficiency and innovation in developing and managing logistics infrastructure and services
SUSTAINABILITY PROJECTS
Green Logistics: Encourage electric and hybrid vehicles, solar-powered cold storage, and efficient waste management. This will reduce the carbon footprint of the logistics sector.
Renewable Energy: Integrate renewable energy sources into logistics infrastructure, such as solar panels at logistics parks and electric charging stations at key transport hubs
India can overcome its obstacles and create a more efficient, cost-effective, and sustainable multimodal transport system by focusing on these areas. These actions will boost logistics and boost the country's economic growth and global competitiveness.
Vishal Raskar: An integral part of any logistics model is its warehousing and storage facility. Building a warehouse is not only about developing a real estate project. It is much more than that as every commodity has its own specific requirement of storage. It could be Agri commodities, Pharma or chemicals, all require state-of-the-art tailor-made storage facilities. Though building such an infrastructure might not be the challenge but on the regulatory side, warehousing is a state subject, and every state has different authorities to acquire the license from the department. This creates huge challenge when you are operating in different states.
The central governing agencies are trying to fix these issues since recent past and make Warehousing Development and Regulatory Authority (WDRA) as central body to govern and uplift warehousing industry, but it’s a challenge for the government to shift the state subject to central because of a lot of resistance from all states. WDRA has simplified online system for warehousing license application and document upload, application can be tracked at different level of processes and once you get the license, it will remain valid for five years. It will surely give a boost to industry and restrict prevailing malpractices. Authorities must push this agenda for the benefit of industry.
Another reason for limited adoption of multimodal logistics is multi-level documentation. The single window system for multimodal transport documentation is the need of time. If organizations want to use road, rail and inland waterways for transport cargo, there must be a single document, which can be presented at all transport modes to clear the cargo end-to-end. It will ease the transit movement and save both cost and time.
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