Modern large-scale warehouse facilities are expected to be developed as part of the Multi Modal Logistic Park project. It is establishing itself as a one-stop shop for all services associated to cargo transit, such as warehousing, customs clearance, parking, truck repair, etc., for all sorts of commodities. It will feature all the necessary amenities, including warehouses, rail sidings, cold storage, a customs clearing house, yard space, workshops, gas stations, truck parking, office space, boarding houses, restaurants, a water treatment facility, etc. The MMLP, which is being created according to a “Hub and Spoke” model, will integrate several modes of freight transportation via inland waterways, railroads, and roadways. The MMLP’s installation of a cutting-edge freight management system will be driven by technology. These projects will include many value-added services, including packaging, repackaging, and labeling. The MMLP will be a facility for handling freight that can be reached by both rail and road.
In order to build Multi Modal Logistics Park (MMLP) as part of the Bharatmala Pariyojana, the National Highways Logistics Management (NHLML), Inland Waterways Authority of India (IWAI), and Rail Vikas Nigam (RVNL) inked a tripartite Memorandum of Understanding. Under the Bharatmala Pariyojana, a tripartite MoU was inked to hasten the establishment of a contemporary Multi Modal Logistics Park (MMLP). The Bharatmala Pariyojana, an initiative of the Indian government, calls for the rapid creation of sophisticated Multi Modal Logistics Parks (MMLP) throughout the nation. The goal is to consolidate freight centrally and lower logistics spending from 14% of GDP to less than 10%, in line with international standards.
Developed under: “Hub & Spoke”
According to the MoU, a Hub and Spoke paradigm will be used to build the MMLPs. The Hub and Spoke distribution strategy is one. There is a central hub in the model. Either the hub serves as the origin or distribution point for the items. The center then distributes them to smaller businesses. Spokes are the names for these more compact businesses or places. The products are processed or supplied to towns and villages at spoke locations.
It will integrate several means of freight transportation through highways, railroads, and inland waterways and was developed using a “Hub & Spoke” paradigm. The agreement highlights the three organisations’ concepts of collaboration and cooperation for achieving efficiency in domestic logistics movement. Dedicated Freight Corridors (DFCs), roads, and waterways would all be used for the swapping or shifting of freight. Through Gati Shakti, the nation is being built in this way. The pact is a sincere effort to achieve this goal. The establishment of such effective stations will be extremely beneficial for India. MMLPs are intended to unravel the web of logistics activity and animate the logistics industry in order to propel the economy into a faster-growing phase. To become a one-stop shop for all services linked to cargo movement, such as storage, custom clearance, parking, truck repair, etc., the MMLP project is prepared to create cutting-edge large-scale warehouse facilities for various types of commodities.
Bharatmala Pariyojana:
The Ministry of Road Transport and Roads has envisioned Bharatmala Pariyojana as an umbrella program for the highways industry. It urges the creation of Multimodal Logistics Parks and the removal of choke points in order to increase the efficiency of current corridors. It sharpens the focus on boosting North East connectivity and utilizing Inland Waterways synergies. The North East Economic Corridor improves connection to important towns and state capitals. For project planning and asset monitoring, it places a strong emphasis on the use of technology and scientific planning. It needs constant communication with surrounding nations: To promote North East connectivity, 24 Integrated check points (ICPs) were designated as transit via Bangladesh.
combining the passageways between Bangladesh, Bhutan, Nepal, and Myanmar and Thailand to create the North East Asia hub. Satellite corridor mapping to determine the need for upgrades.
Objectives of Multi Modal Logistics Park (MMLP):
- To increase the amount of direct and indirect jobs available in the infrastructure and construction industries, as well as to contribute to the increased economic activity brought on by improved road connections across the nation.
550 districts in the nation will be connected via national highway links. - To bridge crucial infrastructure gaps with efficient interventions in order to increase the effectiveness of freight and passenger mobility across the nation. The creation of economic corridors, inter-corridors, feeder routes, increased efficiency of national corridors, border and international connection roads, coastal and port connectivity roads, and greenfield expressways are examples of effective interventions. These are comprehensive networks of infrastructure within a region created to promote economic growth. They are not restricted by earlier work that was done there. Usually, it involves building on an entirely empty site, and the architects start from scratch. They come with restrictions based on the site’s current condition and may be contaminated or have existing structures that architects must remove or modify in some way before the project can proceed.
Functions of Multi Modal Logistics Park (MMLP):
A plan to construct 35 MMLPs was authorized by the Indian government in July 2017. The projects will be carried out through public-private partnerships when the state governments provide the land needed for them.
- Distribution and aggregation of freight
- Transportation of goods using various means
- Combined warehousing and storage
- Technical support for information systems
- Added-value services
Government Initiatives:
- The Ministry of Commerce and Industry’s logistics division: It was recently created to coordinate the sector’s integrated development through changes to policies, enhancements to current practices, detection of bottlenecks and gaps, and the introduction of technology-based solutions.
-
Portal for integrated logistics: To establish contact between buyers, logistical service providers, and pertinent government organisations.
Increased credit availability: Reclassification of the logistics industry to become a portion of the infrastructure industry has given it access to long-term funding. - Streamlining procedures: The approval procedure for MMLP construction is made simpler, and the regulated sector’s market accountability would attract debt and pension funds to engage in approved logistics projects.
Significance of Multi Modal Logistics Park (MMLP):
- The government intends to create 35 MMLPs (Multi-Modal Logistics Parks) as part of the PM Gati Shakti-National Master Plan for Multi-Modal Connectivity and the Bharatmala Pariyojana project in order to improve logistics and construct transportation hubs in the nation for seamless connectivity via road, rail, and water.
- The MMLP projects would provide over 2 lakh job opportunities in the upcoming years.
- They seek to lower logistics costs from 13–14% of India’s GDP to roughly 8–10%, which is the level seen in wealthy nations.
- The MMLP is anticipated to be a state-of-the-art facility equipped with cutting-edge technologies to solve the long-standing “last-mile” delivery challenge.
- The MMLP’s development would give shippers the freedom to select from a variety of transportation options.
- The country’s economy will be strengthened by this project, which will also make exports easier and more encouraged. We will be able to provide the crucial support and direction on projects of this size and scope thanks to our global perspective and specific understanding of the logistics sector.
- One of the government’s most ambitious programs, aimed at making India a more resilient, competitive, and active economic hub, will be implemented with CBRE’s help.
Need of Multi Modal Logistics Park (MMLP):
- In line with the nation’s rapid economic growth, India’s logistics sector is developing. The volume of freight transported across the country than quadrupled from 1,200 billion ton-kilometers in fiscal year 2008 to over 2,300 billion ton-kilometers in fiscal year 2015.
- The government projects that freight movement will increase in the country at a typical pace of 8% to 10% over the next ten years.
- The logistics sector is expected to expand overall through 2032 at a rate that is nearly 1.2 times that of India’s gross domestic product growth, rising from $115 billion in 2017 to $360 billion in value-added.
- The Road Transport and Highways, Shipping, Railways, Civil Aviation, Commerce and Industry, Finance, Home Affairs, and Department of Posts are just a few of the ministries that currently oversee various facets of the logistics value chain. Moreover, a sizable number of government organisations, such as the Central Drug Standard Control Organization, the Food Safety and Standards Authority of India, and the Plant and Animal Quarantine Certification Service, offer pertinent trade approvals and have an effect on the value chain. Leading nations that have excelled in logistics have a fully integrated strategy, and the government coordinates monitoring of the entire logistical value chain.
Challenges of Multi Modal Logistics Park (MMLP):
- Cost: Compared to affluent nations, India’s logistics expenses are quite expensive, accounting for 13% of GDP in 2015 vs 8% to 10% in such nations. India has a road freight cost per ton-kilometer of 1.90 ($0.03) when adjusted for purchasing power parity, which is over twice as much as the US. The five crucial reasons stated below are what mostly contribute to India’s higher logistics costs:
- Negative inter-modal mix: Despite the lower freight cost of rail transport, automobile transportation accounts for 60% of freight travel.
- Unproductive fleet mix: Trucks are more inefficient and smaller.
- Infrastructure is underdeveloped: A disconnected sector of the economy characterized by tiny, haphazard warehouses with scant mechanization. There aren’t many four- and six-lane interstates.
- Regulatory and institutional bottlenecks: India’s high logistical costs are a result of convoluted paperwork and toll collection systems, for instance.
Conclusion:
A cutting-edge freight management system will be implemented with a technology-driven focus. These initiatives will also provide a wide range of value-added services, such as packing, repackaging, and labeling. Making the freight transportation system more affordable, effective, and clean is crucial because it forms the foundation of India’s expanding economy. In order to fully reap the rewards of current government efforts like Make in India, Atma Nirbhar Bharat, and Digital India, efficient freight transportation will also be crucial.