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Institute for Studies in Industrial Development4, Institutional Area Phase II, Vasant Kunj, New Delhi - 110 070Phone: +91 11 2676 4600 / 2689 1111; Fax: +91 11 2612 2448E-mail: info@isid.org.in; Website: http://isid.org.inInstitute for Studies in Industrial DevelopmentNew Delhi175Working PaperDecember 2014Arvind KumarFREIGHT LOGISTICS & INTERMODAL TRANSPORTImplications for CompetitivenessAbout the InstituteThe Institute for Studies in Industrial Development (ISID), successor to the Corporate Studies Group (CSG), is a national-level policy research organization in the public domain and is affiliated to the Indian Council of Social Science Research (ICSSR). Developing on the initial strength of studying Indias industrial regulations, ISID has gained varied expertise in the analysis of the issues thrown up by the changing policy environment. The Institutes research and academic activities are organized under the following broad thematic areas:Industrialization: Land acquisition, special economic zones, encroachment of agricultural land, manufacturing sector, changing organized-unorganised sector relationship, rise of service economy in India, training and skill formation etc.; Corporate Sector: With special emphasis on liberalization-induced changes in the structures of the sector, corporate governance, individual firms/groups, emerging patterns of internationalization, and of business-state interaction;Trade, Investment and Technology: Trends and patterns of cross-border capital flows of goods and services, mergers & acquisitions, inward and outward FDI etc. and their implications for Indias position in the international division of labour; Regulatory Mechanism: Study of regulatory authorities in the light of Indias own and international experience, competition issues;Employment: Trends and patterns in employment growth, non-farm employment, distributional issues, problems of migrant labour and the changes in workforce induced by economic and technological changes;Public Health: Issues relating to healthcare financing, structure of health expenditure across states, corporatisation of health services, pharmaceutical industry, occupational health, environment, health communication;Media Studies: Use of modern multimedia techniques for effective, wider and focused dissemination of social science research to promote public debates;Other Issues: Educational policy and planning, role of civil societies in development processes etc.ISID has developed databases on various aspects of the Indian economy, particularly concerning industry and the corporate sector. It has created On-line Indexes of 210 Indian Social Science Journals (OLI) and 18 daily English Newspapers. More than one million scanned images of Press Clippings on diverse social science subjects are available online to scholars and researchers. These databases have been widely acclaimed as valuable sources of information for researchers studying Indias socio-economic development.FREIGHT LOGISTICS AND INTERMODAL TRANSPORT Implications for Competitiveness ArvindKumarInstituteforStudiesinIndustrialDevelopment4,InstitutionalArea,VasantKunjPhaseII,NewDelhi110070Phone:+911126764600/26891111;Fax:+911126122448Email:info@isid.org.in;Website:http://isid.org.inDecember2014 ISIDWorkingPaper175 Institute for Studies in Industrial Development, 2014 ISID Working Papers are meant to disseminate the tentative results and findings obtained from the ongoing research activities at the Institute and to attract comments and suggestions which may kindly be addressed to the author(s). CONTENTS Abstract 11. Introduction 22. LogisticsCost,StructureandFreightFlows 3 LogisticsCosts/GDPRatio 43. MarketConditionsforLogisticsDevelopment 74. StructureofLogisticServiceProviders 8 IntegratedTransportandLogisticsServices 105. StructureandCompositionofFreightFlows 11CompositionofFreightFlowshasImplicationsforLogisticCosts 13TransportEfficiencyandCosts:ImplicationsforLogistics 136. TimeCostofTransport 16 CostofDetentiononInterstateCheckPosts 177. RoleofMultiAxleVehicle(MAV) 188. EfficiencyofIndiasPortSector 199. DraftandVesselsize 2010. CargoEvacuationbyTransportModes 2011. HubandSpoke 21 12. DevelopmentofIntermodalTransportandKeyIssues 2113. NeedforanAlternativetoPureRoadTransport 2214. TrendsinIndiasIntermodalTransport 23EconomiesofIMT 24ProblemsinIntermodalTransport 25BarrierstoIntermodalTransport 2615. ConceptofDryPort 2716. ContainerFreightStations(CFS)/InlandContainerDepots(ICD) 29NumberandGeographicalspreadofICDs/CFS 29PricingandStructureofCFS 3017. Conclusion:NeedforaCoordinatedApproachtoIMT 32References 33ListofBox(s)Box1 CategoriesofLogisticServiceProviders 9Box2 BenefitsofIntermodalTransport 24ListofFigure(s) Figure1 TheRelationshipbetweentheLPIandtheLevelofLogisticsCosts 7Figure2 ElementsofLogisticCostinIndia 14ListofTable(s) Table1 India:StructureofLogisticsSectorinTermsofGDP 5Table2 LogisticsPerformanceIndex(LPI):Scores 6Table3 TradingAcrossBorders 7Table4 LevelofInventoryHoldinginManufacturingSector 10Table5 ModalSplit:InterregionalFreightFlows 11Table6 ModalMix(BTKM):Rail,RoadandWaterborne 12Table7 FreightYieldsinMajorEconomies 12Table8 LogisticsCostfortheMovementof20FeetTEU 15Table9. TransitTimeforVariousTripLengths 17Table10 MajorPorts:SelectEfficiencyIndicators 20Table11 NumberofContainersEximandDomesticHandledbyCONCOR 23Table12 InlandContainerHandlingFacilitiesinRepublicofKorea 31FREIGHTLOGISTICSANDINTERMODALTRANSPORTImplicationsforCompetitivenessArvindKumar*[Abstract:Indiasplacementbehindmanyofitslogisticscomparatorsraisesconcernsonthestateofpreparednessofthecountrytoprovidethedesirablelogisticsenablingenvironmenttoserveaneconomywhichisexpectedtogrowintherangeof8percentto9percentoverthemediumterm.Inadequatelogisticsinfrastructureandsupplychainproceduresmaybecomeaseriousbottleneckinpreventingtimelydeliveryofgoodsandgeneralcargotothemainports.The focusof thispaper is to (a) lookat the statusof Indias transport sectorand logisticssystem and how it functions, and (b) offer recommendations on how to improve Indiaslogistics system. The regional distribution of gains from reform is an important issue.Transportdistanceswithin Indiaareconsiderableandwithoutcosteffective transportationand logistics,thegains fromtradecouldbedistributedunevenlyacrossdifferentregionsofIndia.Forinstance,goodsproducedintheWesternorSouthernregionsofIndiadestinedforuse/consumptionintheEasternorNorthEastregionstobecosteffectivecouldusetransportcombination of rail, road, inlandwaterways or coastal shipping. Thiswould help reducedependence on road transport. Lack of an integrated transport policy and skewed freightmodalstructurecanpenalizeindustrialproducts.TheappropriationofFDIbyafewStatesintheWesternandSouthernregionsreflectstosomeextenthightransportcostsinotherregionsof the country.Thedifferent levels of infrastructure amongst thevarious regions arewellrecognizedasasourceofvariationinregionalperformance.Transportefficiencyislow.Thecostofrailandcoastalshippinginthecountryishigherthanmanyeconomies.Eventheroadcostsandtransittimeacrossdifferentmodesarehighandunpredictable.Partly,itisbecauseof the differing average speeds ofmovement across the variousmodesRail, Road, andCoastalShipsarelowerthanthoseinmoreefficienteconomies.Theothertypeofefficienciesarisedue tohigh turnaround time of railwaywagons/trucks ,pre berthingdetention time,container/bulkhandlingratesofequipmentattheports,inadequaterailinfrastructure.Logistic deficienciesmust be tackled by policymakers in order to successfullymove itsindustriesupthevaluechain.Otherwise,withthedispersalofmanufacturingactivitiesintothe interiors and further away from its seaports, Indias already high logistics costwill * (IES Retd), Former Senior Adviser (Transport Research), Ministry of Road Transport andHighways; and,Member, TariffAuthority forMajor Ports,Ministry of Shipping.An earlierversion of thepaperwaspresented in theNationalConference on Indias Industrialization:HowtoovercometheStagnation?organisedbytheISID,duringDecember1921,2013.2escalatefurther,puttingthecountryatacompetitivedisadvantage.LogisticscostinIndiaiscomparatively high, and is estimated to be around 11 per cent of the nationalGDP andinventoryholdings fororganizedmanufacturingcomprisearound18percentof thevalueaddedoftheorganizedmanufacturing.Areductioninlogisticscostsbyevenonepercentagepointwill result innoteworthy savings annually.Besides, significant benefits can also bereaped through the multiplier effect of having a better logistics infrastructure, thusaccelerating Indias economicgrowth.Transportand logistics scene in the country revealsthat despite substantial improvement of national highway network and addition to portcapacity,thegapbetweenIndiaandEastAsiancountriesinthedomainoflogisticsefficiencypersistswhichprovidesimmensescopeforimprovement.Indias transportmodalmix isheavily skewed towards road freightwith all its attendantnegative externalities. This provides ample scope for rebalancing the modal mix to cutlogisticscosts.Definingandenforcingrules formultimodaltransportoperationswhich fostercompetition,promoting the standardizationof equipmentand electronicdata interchange formats,andestablishing an effective conflict resolution mechanism would help promote multimodaltransport. Important constraints impeding costeffective transport options and reducedlogisticscostsincludemissinginfrastructureandoutdatedinterstatecheckposts.Therearetwomainreasonswhymultimodaltransport(MMT)needstobeakeyelementofanystrategy in India.One,MMT impacts internationalcompetitivenessofgoodsexportedandregionaldevelopmentwithinthecountry.Inthebackdropoflowerlevelsofimporttariffsonmanufacturedgoodsindevelopedcountrymarkets,hightransportcostshaveemergedasasortofsignificantnontariffbarrier.Second,lowertransportcostsformanybulkcargoescanonlybeachievedbyreducingtheroleofroadtransportthroughbetteruseandcombinationofrail,inlandwaterwaysand/orcoastalshipping.Thispaperisamodestattemptataddressingaverycomplexproblem.Itdoesnotaimatbeingexhaustive,whichwouldbequitechallenginginthebackdropofinfiniteregulationsandthefederal structure of the Indian economy. The main focus is to identify areas that havecontributedtowardsmanyofthepresentproblemsandconstraintswhichhavedistortedthemodal mix in the transport sector, and to recommend options for addressing theseconstraints.]1. IntroductionMovementofgoods requiresatransportchain,which isaseriesof logisticalactivitiesthatorganizesmodesand terminals, suchas railway,maritime,and road transportationsystems,forcontinuityalongthesupplychain.Transportterminalport,railorairportisthekey infrastructurewhere thephysical flows are reconciledwith the requirementsofsupplychainmanagement.They also facilitatemovementsof containers efficiently fromship to truck to rail.Facilitiessuchasdistributioncentresoftenplayasignificant role insupplychainmanagementnotwhentheyactasmorethanbuffers(warehousing),butasactiveelementsinthephysicalflows.Freightterminalshavebecomeimportanttradeandlogisticsplatformswhose levelofactivitynotonly reflects the intensityof infrastructure3utilization, but also the logistical capabilities to support its operations. In the light ofintense global competition, supplychain efficiency remains one of the few strategiesavailable to promote competitiveness.Global production networks are enhancedwhensupportedbyefficientlogistics.Productionnetworksneedsufficienttransportcapacityaswellastheabilitytomanagetheseflowstoinsurereliabilityandtimeliness.Freightlogisticssystemismuchmorethanmerelytransportinfrastructure;itinvolvessubsectoraltransportoperatorsandmultimodaltransportoperators.Afreightlogisticssystemalso consists of the following components:warehousing services, inland terminals, andintermodal transfer terminals that facilitate the transfer of freight from one mode toanother. Inaddition, it involvesgovernmentagenciessuchascustomsandrevenue,andotherserviceswhichareinchargeofverifyingifallthedocumentsrequiredforexportingandimportingcomplieswiththelaw.Freightlogisticsisthesourcing,purchasing,packaging,transport,storageanddeliveryoffreightaround Indiaand theworld.An efficientand effective freight logistics system isessentialtothecompetitivenessofthenationaleconomy.Itisakeytoachievingeconomicandefficiencyobjectives.Logisticsisavitalvalueaddedservicetothebusinesscommunityand an essential enablerofdomestic andglobal trade.Efficient logistics services extendmarket reach by giving manufacturers access to a wider range of raw materials andsuppliesfromdifferentsources. Logisticscanbeunderstoodastheprocessofplanning,implementing,andcontrollingtheefficient, cost effective flow and storageof rawmaterials, inprocess inventory, finishedgoods and related information from point of origin to point of consumption for thepurpose ofmeeting customer requirements(USCouncil of SupplyChainManagementProfessionals, Council of Logistics Management). Freight logistics involves differentphysical and economic activities, which are more commonly categorized as: 1) CoreLogistics Services: linehaul transport, pickup and distribution, storage,loading/unloading, stuffing/stripping, load consolidation; 2) Value Adding Services:packaging,qualitycontrol,product testing/repair,assembly, installation, informationandinventory control; and, 3) Support Services: equipment hiring/leasing, equipmentmaintenance, sanitary services, security services, trade insurance and finance.As such,logistics is one of themost important aspects for accessingmarkets, affecting both thevolumeandvalueofinternationallytradedgoods.Thefocusofthispaperisontransportinfrastructure.2. LogisticsCost,StructureandFreightFlowsToday, logistics costs are amore important component of total trade costs than tariffbarriers.The gradual unilateral tariff reduction implemented in recent years by a largenumberofcountries,togetherwithfreetradeagreements,broughtaboutanincreaseintherelative share of logistics costs in total trade costs. Both physical and regulatory orinstitutional shortcomings in the transport sector translate into high logistics and4transportation costs that constrain development and competitiveness of the economy.These costs often overshadow traditional trade barriers. This situation has at least twoconsequences:(a)itisdetrimentaltotheparticipationofthecountryinworldtradesinceitmakesproducers less competitive andpushesup thepricesof tradedgoods; and, (b) iterodesthecapacitytoboostfactorproductivity.The purchasing power parity (PPP) adjusted benchmark of transportation costs bymodewiththeUSshowsthatIndiaslogisticsinfrastructureisinefficient.Forinstance,railandcoastalshippingcostsinIndiaareapproximately70percenthigherthanthoseintheUS.Likewise,roadcostsinIndiaarehigherbyabout30percent.Thisnotonlyresults in higher prices and lower competitiveness, but also hampers economicgrowth..poorlogisticsinfrastructurecoststheeconomyanextraUSD45billionor4.3per cent ofGDP each year.Twothirds of these costs are hidden i.e., not generallyregarded as logistics costs. These hidden costs include theft and damage, higherinventoryholdingcosts,facilitationandtransactioncosts.1LogisticsCosts/GDPRatioThissectionexaminesIndiaslogisticssystemagainstitsglobalcompetitors.ThreelogisticsmeasuresareusedforthiscomparisontorankIndiaincomparisonwithothercountries:a)EstimateoflogisticscostsasaproportionofGDP;b)theWorldBankLogisticsPerformanceIndex;and,c)theWorldBankDoingBusiness.Theremainderofthesectionelaboratesontheresultsofthefourmeasures.A countrys logistics cost to GDP ratio is a commonlyusedindicatortogaugecountryslogisticefficiency.Crosscountrycomparisonsbasedonthis ratiohidedifferences indata included in the estimationof logistics costsaswellasdifferences in methodology adopted in different countries. Logistics cost in India iscomparativelyhigh,andisestimatedat10.7percentofGDPintheyear201112(Table1),comparedtootherdevelopedcountrieswherethelogisticscostisrestrictedtosingledigitpercentage.IncaseofUSA,logisticscostsasapercentageofGDPwereestimatedat8.3percentbytheCouncilofSupplyChainManagementProfessionals(CSCMP);logisticscostasaproportionofGDPareestimatedatmuchhigherlevelsat17.8percentforChinain2009and18.6percentforThailandfortheyear2008,butmuchlowerforUSAandCanadaat4.7percent,Europe7.0percent(RantasilaandOjala,p.20,ITF,2012).Areductioninlogisticscosts by even one percentage point will result in noteworthy savings annually.Nevertheless,high logisticscostsGDP to ratio in Indiaprovideamplescope to improvelogisticsefficiency.SomeofthefactorsresponsibleforhighlogisticscostsinIndiaare:i) Resources are unevenly distributed and often located far fromproduction/consumption centres, requiring long distance transportation of rawmaterials. 1 BuildingIndia:TransformingtheNationsLogisticsInfrastructure,McKinsey&Company,p.13.5ii) Atthepresentstageofindustrialdevelopment,goodsinIndiahaveahigherweightvalue ratio, resulting in a higher transport cost relative to total product costcomparedtoothercountries.iii) Comparedwithothercountries,Indiahasalargeshareofruralpopulation,whichisgeographically dispersed and more expensive to serve. This results in transportdemandwhichisfragmented.iv) Larger percentage of logistics cost in GDP for India compared to the developedcountriescanbeexplainedbythedifferentstructureoftheeconomy.2Thedevelopedcountries, with much higher share in services sector as a percentage of GDPcomparedwith India,generate far less freightmovement. Inaddition, theaveragevalueofproductsmanufactured inIndia iswellbelowthecorrespondingvalues inthe United States and Japan which are light weight and technologyintensiveproducts. Thus, Indias logistics costs constitute a larger share of GDP andconsequently,a largerpartof thedeliverypriceofmanufacturedgoods. Indiawillneed tomoveup thevaluechain,graduallyreducing theratioof transport to finalpricesandhenceitslogisticstoGDPratio.Table1.India:StructureofLogisticsSectorinTermsofGDP 199900 200001 200506 200708 200809 201011 201112AspercentageofGDPatFactorCostLogistics(I+II+III) 7.4 7.8 8.7 9.1 9.5 10.5 10.7I.Transportofwhich 5.7 5.8 6.7 6.7 6.6 6.5 6.6a)Railways 1.1 1.1 1.0 1.0 1.0 1.0 1.0b)OtherTransport 4.6 4.7 5.7 5.7 5.6 5.5 5.6II.Storage 0.1 0.1 0.1 0.1 0.1 0.1 0.1III.Communication 1.6 1.9 1.9 2.4 2.8 3.9 4.0Source:BasedonNationalAccountsStatistics(variousissues),CentralStatisticalOrganization(CSO).Thereport,ConnectingtoCompete2012:TradeLogisticsintheGlobalEconomy,providesdataontheLogisticsPerformanceIndex(LPI)anditssixcomponentindicators(Table2).TheLPImeasureof logisticsefficiency isnowwidelyrecognizedasvitalfortradeandgrowth.Acountrys ability to trade globally depends on its traders access to global freight andlogistics networks.And the efficiency of a countrys supply chain (in cost, time, andreliability)dependson specific featuresof itsdomestic economy (logisticsperformance).Betteroveralllogisticsperformanceandtradefacilitationarestronglyassociatedwithtradeexpansion,exportdiversification,attractivenesstoforeigndirectinvestment,andeconomicgrowth.TheLPIprovidesanindepthcrosscountryassessmentofthelogisticsgapamongcountriesbydrawing information fromprofessionaloperatorsandusers involved in thelogisticssector.Itusesa5pointscale(1forthelowest,5forthehighest)whichenablesthe 2 ShareofServicesinGDPis79%,72%and55%forUSA,JapanandIndiarespectivelyaspertheTable4.2,WorldDevelopmentIndicators20126Table2.LogisticsPerformanceIndex(LPI):ScoresCountry/(OverallRank)LPI Customs Infrastructure InternationalShipmentsLogisticscompetenceTracking&tracingTimelinesSingapore(1) 4.13 4.10(1) 4.15(2) 3.99(2) 4.07(6) 4.07(6) 4.30(1)Germany(4) 4.03 3.87(6) 4.26(1) 3.67(11) 4.09(4) 4.05(7) 4.32(2)USA(9) 3.93 3.67(13) 4.14(4) 3.56(17) 3.96(10) 4.11(3) 4.21(8)France(12) 3.85 3.64(14) 3.96(14) 3.73(5) 3.82(14) 3.97(12) 4.02(23)Australia(18) 3.73 3.60(16) 3.83(18) 3.40(28) 3.75(16) 3.79(19) 4.05(17)S.Africa(23) 3.67 3.35(26) 3.79(19) 3.50(20) 3.56(24) 3.83(16) 4.03(20)China(26) 3.52 3.25(30) 3.61(26) 3.46(23) 3.47(28) 3.52(31) 3.80(30)Malaysia(29) 3.49 3.28(29) 3.43(27) 3.40(26) 3.45(30) 3.54(28) 3.86(28)Brazil(45) 3.13 2.51(78) 3.07(46) 3.12(41) 3.12(41) 3.42(33) 3.55(49)India(46) 3.08 2.77(52) 2.87(56) 2.98(54) 3.14(38) 3.09(54) 3.68(44)Source:ConnectingtoCompete2012TradeLogisticsintheGlobalEconomy;FigureswithinparenthesisindicateRank.showofdisparitiesaswellastobenchmarkagainstacountryscompetitors.LPIcomparesthetradelogisticsprofilesof155countriesandratesthemonascaleof1(worst)to5(best).The LPI evaluates performance in terms of six parameters viz. customs procedures,infrastructurequality,easeandaffordabilityofinternationalshipments,domesticlogisticsindustry competency, tracking and tracing, and timeliness in reaching the destination.Indiaisrankedatthe46thpositionamongatotalof155countries,laggingbehinditsmaincompetitorsChina,Malaysia,SouthAfrica,BrazilSingapore,Australia, theUnitedStatesand Germany. The Index reveals that on a global scale, for India, customs (includingphytosanitary) performance, infrastructure, tracking and tracing and internationalshipmentsareperceivedmoreasaproblem than logisticscompetenceand timeliness. IncomparisonwithChina,BrazilandSouthAfricaasawhole,Indiaperformsbelowpar.There is a relationship between a countrys LPI ranking and its level of logistics costs:countrieswithalowLPIscoretendtohavehighcosts.Inparticular,socalledinducedcosts(related tonondeliveryor theavoidanceofnondeliveryandstorage) tend tobe low incountrieswithahighLPIscore,anddirectcosts(freightandothershipmentrelatedcosts)tendtodecreaseuntiltheLPIscorereachesavalueofaround3.3(Figure1).TheCostofTradingAcrossBorders:AccordingtotheWorldBank(DoingBusiness2014),thecostofdoinginternationaltrade,intermsoftime,costanddocumentationtoexportorimportproducts,ranksIndiaat132ndpositionoutof189countries(Table3).Incomparison,theoverallrankforSingaporewas1,followedbyKoreaat3,Malaysiaat5,Thailandat24,Indonesiaat54,andChinaat74,thusputtingtheEastAsiancompetitorsmuchaheadofIndia.Indiastillhasalongwaytoimproveefficiency,ascomparedtotheOECDandEastAsiancountries.Resultsindicatethatthecostsofexportingacontainer(TEU)areUS$1170forIndiaandUS$620forChina.It takesthriceas longforIndiatoexportas itdoesforSingapore,andfivetimesaslongasittakesSingaporetoimportgoods.However,thetimetoexportand import isbetter in India than inChina, though the costsare considerablyhigher in India.However, there is still scope for improvement to bemade on the cost7structure (as comparedwithOECD,Korea,Malaysia andChina,). Specifically, the porthandling charges (vessel related and cargo related tariffs) are much higher in IndiacomparedtohercompetitorsinAsia.Inconclusion,Indiaslogisticssystemrelativetothecountrysmain competitors, for example China, Thailand, Korea,Malaysia andOECDcountries,hasgenerallybeenunderperforming.Thepresentlyhighlevelsoflogisticscostscouldaffectthecompetitivenessofthecountry,andparticularly,productswithhighvalueadded.Figure1.TheRelationshipbetweentheLPIandtheLevelofLogisticsCostsSource:Arvis,Mustra,Panzer,OjalaandNaula2007.Table3.TradingAcrossBordersRegion(Rankoutof189countries)Export ImportDocuments(Number)Time(Days) Cost(US$container)Documents(Number)Time(Days) Cost(US$container)OECD(31) 4 11 1070 4 10 1090Singapore(1) 3 6 460 3 4 440Korea(3) 3 8 670 3 7 695Malaysia(5) 4 11 450 4 8 485Thailand(24) 5 14 595 5 13 750Indonesia(54) 4 17 615 8 23 660China(74) 8 21 620 5 24 615India(132) 9 16 1170 11 20 1250Source:DoingBusinessReport,2014,WorldBankFigurewithinparenthesisindicatesrank.3. MarketConditionsforLogisticsDevelopmentMarket environment is not conducive towards growth of logistics and transport sector.First,marketforlogisticsandtransportoperatorsisunorganisedduetopreponderanceof8large number of small operators. Second, the framework of rules and regulationspertaining to logistics, different segments of logistics operations are under differentMinistries/Departments.Transportsectorgovernanceisfragmentedduetothepresenceoftoomanyplayers.Forinstance ,thereareeightdifferentMinistrieslookingafterthekeytransportsectors,namelysMinistryofShippingforPortsandShipping,MinistryofRoadTransport andHighways forHighwayDevelopment,Road transport andRoadsafety,MinistryofCivilAviation looksafterAirportsandAirlines,MinistryofRuralDevelopmentlooksafterRuralRoadswhichformalmostthreefourthofroadnetwork,Ministry of Urban Transport after Urban roads, Urban transport and Metro Rail,MinistryofRailwaysafterallaspectsofRailways,MinistryofCommerce looksafterCFS/ICD,andPlanningCommissionwhichmainlylooksafterallocationofinvestmentacrossallMinistriesdealingwith the transportsector.In thismilieucoordinationandintermodality issuesare relegated to thebackground.Further, it ishard to identifyanodalagency responsible for logistics.Third,barriers to freight/truckmovementacrossthe States are subject to en route checks enforced byvarious state jurisdictions.Besides,movementofheavyvehicles in theurbanareas issubject torestrictions in the interestofurbantrafficmanagement.Theseareinthenatureoflimitingthehoursoffreightcarriersandclosingaccess tourbanareasduring theday time.Fourth,effectiveuseofoperatingstrategies,suchashubandspokenetwork,dropandpulloperationshaveyettomaketheirpresence felt.Suchsystemsareextensivelyused in thedevelopedcountriesandsupportmultimodaltransport.4. StructureofLogisticServiceProvidersOnlyasmallnumberof large, fullservice logisticscompaniesoperate in India.Theyaremultinationalcompanies (e.g.,APL,DHL,Maersk), togetherwitha fewprivatelyownedcompanies. Large private logistics companies have succeeded in providing efficientservices with minimal assets. Foreign logistics companies possess advanced logisticsknowledge,strongoperatingcapabilities,and leading information technology toprovidecustomerswithaonestopservice.Theirmarketshareistoosmalltodrivethemarket.Major stateowned logistics enterprises, such as CONCOR are well capitalized, wellstaffed,andpossessanetworkofContainerFreightStations(CFS)/InlandContainerDepots(ICDs) which serve as intermodal transport and storage nodes. They also have goodrelations with all levels of government. Central Warehousing Corporation offerswarehousingservicesbutdoesnot focusonhighendvalueadded logisticsservices. It isimportant for theseenterprises to embrace the conceptofmodern logisticsmanagementandprovidemoresupplychainmanagementservices.The many small and mediumsized logistics enterprises handle most of the logisticsvolume. They provide lowcost services to countless small and mediumsizedmanufacturers.Smallandmediumsizedlogisticsenterprisestendtobeundercapitalized,with inadequate riskmanagement capability and lack ofmodern technology aswell as9informationtechnology.Themarkethasanabundanceofdomesticfreightforwardersandtruckbrokersprovidinglocalwarehousing,distribution,lessthantruckloadtransport,andexpressparcel servicesoperators.Owneroperatorsproviding lowvalueaddedpoint topoint transport services are also key players in the domestic logistics market. Theirbusinessmodel is singlegood carrierwithminimal and inexpensive services.On theother side, themanufacturing landscape isdominatedby small tomediumsized firms.Due to their size and inadequatemanagement capabilities these firmsdo not require asophisticated logistics systemand carrier selection ismainlydrivenbyprice. In suchanenvironment,logisticsprovidersfocusoncostcuttingandnotonservicequality.Therefore,advancedlogisticsmanagementisnotadoptedonalargescale.Box1providesaglimpseofvariouscategoriesoflogisticsserviceproviders.Logisticsservicescomprisephysicalactivities(e.g.,transport,storage)aswellasnonphysicalactivities(e.g.,supplychaindesign,selectionofcontractors,freightagenegotiations).Transportsystem is themost importanteconomicactivityamong thecomponentsofbusiness logisticsBox1.CategoriesofLogisticServiceProvidersInrecentdecadestherehasbeenaprofoundchangeinthewaycompaniesorganisetheirphysicalflowofgoods,withthedevelopmentofmodernbusinesslogisticsthatintegratemovementsoverdistance(transport)andtime(storage),fromsupplytodistribution.Theprocessofchangeintheorganisationofphysical flowofgoodsbegan in themoredevelopedeconomies,andhasbeenextendinggraduallyintotherestoftheworld.Untilthe1980s,companiesmanagedthetransportof their inputs,distributionof finalproducts, and storage systems in a relatively independentmanner.Inrecentyears,companiesbegantointegrateprocesses,consideringlogisticstobethecompletecycleofmaterials,documentationand information, frompurchase to finaldelivery totheconsumer,coveringtransport,storage,inventorymanagementandpackagingprocesses,andthe administration and control of these flows. The transformation of logistics from inhousemanagementtooutsourcinganditsevolutiontohigherlevelsiscapturedbelow.1PL or first party logistics: the client irregularly subcontracts a very limited number oftransport tasks, the providers assignment being limited to transport of goods from origin todestination;2PLorsecondpartylogistics:theserviceproviderisinchargeofoperationalactivities,rangingfromgoodstransporttowarehousingbutnotofvalueaddedlogistics;theclientanditssuppliermayhaveacontractualrelation;3PLor thirdparty logistics:2PLplusvalueadded services covering the flowofgoodsandincreasingly,ofinformation;theclientanditssupplierdohaveacontractualrelationinthiscase;and,4PL or fourth party logistics: 3PL plus design, control andmanagement towards servicesintegration,whoseaimistomaximizethevaluegeneratedinthelogisticschain.Themissionoftheleadlogisticsprovider,i.e.supplychainintegrator,istomanagealloraconsiderablepartofthelogisticsoperationsprovidedbyspecializedsubcontractorsunderitscontrol,fortheaccountofitsclientwhodecidestooutsourcetheirintegration.Source:NationalBankofBelgium(2012)10systems.Aroundonethirdtotwothirdsoftheexpensesofenterpriseslogisticscostsarespenton transportation. The transportation cost includes themeans of transportation, corridors,containers,pallets,terminals,labours,andtime.Hence,itisimportanttocomprehendtransportsystem operation thoroughly.Transportation is central to thewhole productionprocedure,frommanufacturingtothedeliverytothefinalconsumer.IntegratedTransportandLogisticsServicesEfficient logistics is an important determinant of a countrys competitiveness. Efficientlogisticsdonotjustreducecostsoftransportandtransittime,butalsodecreasethecostsofproduction.Iflogisticsservicesareinefficient,firmsarelikelytomaintainhigherinventoriesat each stage of the production chain, requiring additional working capital (biggerwarehousestostorelargerinventories).GaushandKogan(2001)estimatedthatdevelopingcountriescouldreduce theunitcostofproductionbyasmuchas20percentbyreducinginventoryholdingsbyhalf.Atthesectorallevel,logisticsismostimportantfortheelectronic,pharmaceutical,automotive,andfashionclothingsectors,wheretimelinessisimportant.Manystudiesat themicro levelhave illustrated theeffectof infrastructureonunitcosts.Forexample,infrastructurelevelsandqualityarestrongdeterminantsofinventorylevels.The impact of inventory levels on firm unit costs and on country competitiveness andproductivity is extraordinarily significant. First are the financial costs associated withinventories,and thosecanbequitehighbecause the costofcapital inmanydevelopingcountriesincludingIndiaisusuallywellabove15percent.Secondaretheotherassociatedcostsofinventories,suchastaxes,insurance,obsolescence,andstoragethatcanaddafewpercentagepoints.Giventhehighcostofcapital,theimpactofthatquasideadcapitalthevalueofthoseinventoriesonunitcostsandproductivityorcompetitivenessisenormous.And a key determinant is not interest rates, as classical models predict, but poorinfrastructure(roadsandports).Thus,infrastructurematterssignificantlyforproductivityor competitiveness and growth. In case of India, the level of inventory holdings formanufacturingsector,particularlyregisteredmanufacturing,arequitehigh(Table4).Table4.LevelofInventoryHoldinginManufacturingSector200405 200506 200607 200708 200809 200910 201011 201112InventoryholdingsinManufacturingSectorasapercentGDPinManufacturing12.3 14.2 10.4 18.6 4.9 14.8 18.8 8.6InventoryholdingsinManufacturing(R)SectorasapercentGDPinManufacturing(R)17.5 20.7 14.2 26.9 7.2 20.8 26.1 11.9InventoryholdingsinManufacturing(UR)SectorasapercentGDPinManufacturing(UR)2.8 1.6 2.8 2.5 0.2 1.4 1.9 1.1RealAnnualGrowthinGDPatfactorcost7.1 9.5 9.6 9.3 6.7 8.6 9.3 6.2Note:R:Registered/organizedsector;UR:UnregisteredorunorganizedRatioshavebeenderivedbasedonStatementNo.10Grossvalueaddedbyeconomicactivity (200405prices)andStatementNo.20Capitalformationbyindustryofuse(at200405prices).Source:NationalAccountsStatistics2013,CSO.11Duringthe8yearstheaveragelevelofinventoryholdingsinorganisedmanufacturingasaproportionofmanufacturing(organised)valueaddedhasbeenaround18percent,whichismorethantwiceformanyofthedevelopedcountries.5. StructureandCompositionofFreightFlowsTotal Transport System Study (TSS) conducted by Rail India Technical and EconomicServices(RITES)[RITESTSS]forPlanningCommissionfortheyear200708,roadfreighttransportwasestimatedat706billion tonnekilometres (BTKM).Asaproportionof totaltransportsectorfreightflowat1409BTKM,shareofroadtransportwasabout50percent,rail36percent,pipelines7.5percent,coastalshipping6percent,inlandwaterways0.2percent,andairways0.01(Table5).Railmarketsharehasgraduallydeclinedovertheyears.Freightisaderiveddemand,thereforelandplanningdecisions,suchaspermittedlocationsforindustryandresidenceshaveacriticalimpactonfreightactivitiesandtheroutesusedbytrucksandtrains.Anyexistinginefficiencyispassedonthroughthesupplychainandresultsinthelossofnationalcompetitiveness.Table5.ModalSplit:InterregionalFreightFlows(200708)Mode MillionTonnes BTKMRail 768.72(30.1) 508.10(36.1)Road 1558.87(61.0) 706.16(50.1)CoastalShipping 59.10(2.3) 85.70(6.1)Airways 0.28(0.01) 0.29(0.01)IWT 54.88(2.2) 3.38(0.2)Pipelines 113.59(4.4) 105.45(7.5)Total 2555.35(100.0) 1409.08(100.0)Figure in parenthesis indicate percentage share;Average lead inKMs:Coastal Shipping: 1450;Airways1027;Rail661;Highways453.Source:TTSRITESComparisonofDomesticFreightFlows (Road,RailandWaterborne) for theyear20072008withChina reveal thatChinas gross national income (GNI) in purchasing powerparity(PPP)termswaslargerbyafactorof2.5whilethevolumeofdomesticfreightflowwasalmostfourtimeshigher.ThehighervolumeofdomesticfreightflowsincaseofChinareflectshighershareofitsindustryinGDPat47percentcomparedwithIndiasat26percent.Asaproportionof total freight flows (rail,roadandwaterborne), theshareofrail,roadandwaterbornemodewas47percent,22percentand31percentrespectivelyintheyear2007(Table6).However,shareofroaddoubledto49percentandthatofrailfellto28percentinChinastotaldomesticfreightflowsin2011.IncaseofIndia,shareofrail,roadandwaterbornemodeintotalfreightflows(rail,roadandwaterborne)was39percent,54percentand7percentrespectively in200708.Theaverage leaddistanceforrailfreightwas 661 kms for India compared to 762 kms forChina; average leaddistance for roadfreightinChinawasmuchshorterat67kmsin2007whichincreasedto182kmsin2011.Indecidingtheoptimalmodalmixfordomesticfreightflows,thefollowingfactorsneedtobe12Table6.ModalMix(BTKM):Rail,RoadandWaterborne China USA IndiaGNI(PPP) US$10,222 US$14,636 US$4,160Year 2007 2007 200708Rail 2380(47%)762KM 1962(47%)1469Km 508(39%)661KMRoad 1136(22%)67KM 1959(47%)NA 706(54%)453KMWaterborne 1560*(31%)2231KM 229(6%)*KM 89#(7%)1450KMTotal 5076(100%) 4150(100%) 1303Note:Figureswithinparenthesisindicatepercentageshareinthetotalfreightflow(rail,roadandwater)oftherespectivemode;FiguresinitalicsindicatesaverageleaddistanceinKMforrespectivemodesincarriageoffreight;Source:ForChinadataisasperChinaStatisticalYearbook:2012;*includesinlandwaterwaysandcoastal;forIndiadataaspertheestimatesofTSSRITESStudy:#includesinlandandcoastal;ForUSATableI58NationalTransportationStatistics2012,USDepartmentofTransportation;TKMforUSAderivedbyusingthefactor1TonMile=1.459972;*range1,783KMcoastwise,internalwater703KmGNIGrossnationalincomeatpurchasingpowerparity(PPP)basiskeptinview:(a)theevolutionoftransportmodalsharesinlargesizeeconomieslikeChinaandtheUS;(b)likelihoodoftwodedicatedfreightcorridorsontheEasternsector(forcoalandsteel)andWesternsector(forcontainertraffic)gettingoperationalizedby theendofthe12thFiveYearPlan;(c)shorteraverage leaddistanceforrailfreightandmuchhigheraverageleadforroadfreightinIndiaincomparisonwithChinaprovidesamplescopeforrebalancingthemodalfreightmixtowardsrailmode.KeepinginviewtheconstraintsonrailcapacityandexperienceofcountrieslikeChinaandlongeraverageleaddistanceandshorteraverageleaddistanceforroadandrailrespectively,amodalshareof45percentforRailways, 45per cent for road and 10per cent forwatermode (inlandplus coastal) inconveyanceofdomesticfreightappearstobefeasibleoverthelongrun.ThetariffstructureinRailwaysisseriouslydistortedbecausepassengerfaresarekeptverylowand freight faresare increased tocrosssubsidise the low levelofpassenger tariff. InPurchase Price Parity terms, the tariffs bear no comparison. In terms of freight rates,however, the Indian freightratesare thehighestwhereas thoseofChina,Russiaand theUSAare58percent,75percentand51percentoftheIndianratesadjustedforPPP.Eveninnominal terms,Chinese freight ratesareonlyaround72per centof the Indian frightrates(Table7).Table7.FreightYieldsinMajorEconomies FreightYieldUSCents/TonneKmNominalPrices AdjustedforPPP(India=1)India 2.11 1.00China 1.49 0.58Russia 2.20 0.75USA 2.28 0.51Source:WorldBank(2012):RailwaysInternationalOverviewIssuesforIndiareproducedinp.213,Vol.II,12thFiveYearPlanDocument.13CompositionofFreightFlowshasImplicationsforLogisticCostsKeeping inviewthemodalmixoftransportflows in largeeconomies likeChinaandtheUSA provides ample scope for rebalancing themodal freightmix towards railmode.KeepinginviewtheconstraintsonrailcapacityandexperienceofcountrieslikeChina,aswellasthelongeraverageleaddistanceforrailandshorteraverageleaddistanceforroadin comparison to India,amodal shareof45per cent forRailways,45per cent for roadconveyanceand10percentforwaterbased(inlandpluscoastal)conveyanceofdomesticfreightappearstobefeasibleoverthelongrun.i) In theabsenceofmoreefficientmultimodalalternatives, road transportdominatesthefreightmarket(over60percentofgoodsintermsoftonnagearetransportedbyroad), resulting in excessive economic costs in the longdistancemarket.Maritimecoastaltransportisalsolimited,despiteIndiaslongcoastline(7,500Km)andstrongconcentrationof thepopulation in coastal regions. In termsofmodal share, Indiascompositionof freightflows isquitedifferent fromthose found in largercountries,suchasChinaandtheUSA,whereshipping/waterwaysandrailroadsareofgreaterrelevance.ii) Dominance of trucking in freight transportation is amajor challenge in a countrysaddledwithhigh logisticcosts. Indias transportmarketwhich shipsmainly largevolumes of low valuetoweight commodities over long distances suits low costcoastal shipping or rail based options, but trucking clearly dominates.Rail basedoptioniscosteffective,butitsmarketshareexcludingafewitems(coalandironore)isstilltoolow.iii) The costs and reliability of road freight services are not only affected by roadconditions, but also by the system of discretionary checks en route.Detentions atinterstatecheckpostsunderminetheutilizationoftruckfleetandturnaroundtime.iv) Inventoryandwarehousingcostsarehighnotonlyasaresultofhighinterestrates,butalsoduetoinventorylevels.Firmsinventorylevelsaremuchhighercomparedtodevelopedcountriesonaccountofqualityandvariabilityintermsoftransittimeoftransportationservices;and,v) Logistic costs also incorporatehigh internal administrative costs in the absence ofserviceproviders.TransportEfficiencyandCosts:ImplicationsforLogisticsTransportcost is the largestcomponentof logisticscostandaccountsformore thanonethirdofthetotallogisticscost.Indiasroadtransportmarketispopulatedbymanysmallcarriers(withaveragefleetsizeoflessthan2trucks).Althoughtransportratesarelow,thehighlyfragmentedsupplyanddemandforroadtransportservicesmeansthatshorthaultruckers frequentlyreturnhomeemptyand longhaul truckershave towaitanexcessiveamountof time toget loads,seriouslyaffecting theiroperatingefficiency. Ifpayments totruckbrokersareincluded,thecostofgettingabackhaulloadwillbeevenhigher.Thehighcost of finding backhaul cargo makes the profit margin of running a goods carrier14extremelythinafterpayingforfixedvehiclecosts(e.g.,acquisitioncostofatruck,licensefees);andfuel,repair,andmaintenancecosts.About75percentoftruckingfirmsownsmallfleetsoflessthanfivetruckswithonly11percentoperatingmorethan20trucks(CRISIL,2009).Besides, lightvehiclesanddoubleaxle trucks dominate the Indian trucking fleet.Dominance of a large number of smallowneroperatedroadcarriershasledtoexcessivecompetitionresultinginexcessivelylongdrivinghours,overloading,andunauthorizedmodificationsinvehicledesigntoimprovetheirpayload.Theypassontheirinternalcoststothesocietyintheformofexternalcostssuchasexcessivelyhighaccidentrates,damagetoroad infrastructure,andhigh levelsofpollution. However, the creation of large, negative externalities is not sustainable.Efficiency gainsmust come from improved operations efficiency (including eliminatingemptybackhaulsthroughcarrierandshippercollaboration,andreducingthesearchcostofbackhauls)aswellaspromotingtheuseofmultimodaltransportforlonghauls.Figure2.ElementsofLogisticCostinIndiaSource:StatusandLeverageofLogisticParksinIndia,NiravKothary,JonesLangLaSalle.Table8providesasnapviewoflogisticscostformovementofexportcontainers(20feet)onselectroutes.Transittimebyvariousmodesishighlyvariableandbearslittlerelationshipwith distance. For instance, transit time other than railmovement (which includesdetentionsonaccountofvariousclearances)betweenthenationalcapitalregion(NCR)andJawaharlalNehruPort(JNP)foradistanceofcloseto1400Kmtakesaboutthreeandhalfdays compared tomovement by rail betweenHyderabadChennai andHyderabadJNPwhich takesthreeandfourdaysrespectivelyforadistancewhich is littlemorethanhalfcompared to the distance betweenNCRJNP. In case of containermovement by roadbetweenBangloreChennai/CochinandCoimbatoreChennai/Cochin,othertransittimeonaccount of clearances/detentions is 50 per cent ormore.However, for intrastateLosses14%Packaging11%Handling&Warehousing9%CustomerShopping6%Transportation35%Inventories25%15Table8.LogisticsCostfortheMovementof20FeetTEU(OriginDestinationpairs)Mode CostParametersRupees) TimeTaken(Days)LTC OTC TTC[4] LTT OTT TTT[7][1] [2] [3] [4]=[2]+[3] [5] [6] [7]=[5]+[6]MovementfromNationalCapitalRegiontoJNP(1388Km)Rail 28,620a(73%) 10,500(28%) 39,120 3.5(64%) 2.0(36%) 5.5MovementfromHyderabadtoJNP(667Km)Rail 12,700b(47%) 14,500(53%) 27,200 5(63%) 3(37%) 8MovementfromHyderabadtoChennai(725Km)Rail 13,200c(52%) 12,300(48%) 25,500 4(67%) 2(33%) 6MovementfromBangloretoChennai(334Km)Road 15,000(61%) 9,500(39%) 24,500 2(50%) 2(50%) 4MovementfromBangloretoCochin(550Km)Road 18,500(63%) 10,800(37%) 29,300 2(40%) 3(60%) 5MovementfromCoimbatoretoCochin(175Km)Road 14,000(56%) 10,800(44%) 24,800 1(29%) 2.5(71%) 3.5MovementfromCoimbatoretoChennai(492Km)IntraStateRoad 18,000(65%) 9,500(35%) 27,500 1.5(60%) 1(40%) 2.5MovementfromCoimbatoretoTuticorin(352Km)IntraStateRoad 14,500(62%) 9,100(38%) 23,500 1(50%) 1(50%) 2MovementfromHooglytoKolkotta(60Km)IntraStateRoad 5,000(16%) 27,200(84%) 32,200 1(20%) 4(80%) 5MovementfromSabarmatitoJNPT(550Km)Road 14,660(58%) 10,500(42%) 25,160 4(80%) 1(20%) 5LTC:LandTransitCostincludescostoffreightmovementbytransportmode;OTC:OtherTransitCostincludescostonaccountoftransitfacility(CFS/ICD),customsclearance,terminalhandlingcharges,documentationcharges,othercosts,etc.;LTT:LandTransitTimeTimetakeninfreightmovementbytransportmode;OTT:OtherTransitTimeincludestimetakenonaccountofdetentionattransitfacility (CFS/ICD), customs clearance, terminal handling charges,documentation charges, othercosts, etc.; a: includes 5,500 for inland road movement; b: includes 2,000 for inland roadmovement;c:includes2,500forinlandroadmovement.Figuresinparenthesisarepercentagetototalcost/transittimerespectivelyineachrow.Source:DataDeloitteResearchquotedinTablenos.31,32,34and35oftheFinalReport.Methodologyformeasuringthelogisticscostformajormanufacturingexportsandassessingitsimpactontheircompetitiveness,FICCI,June2011,nmcc.nic.in/pdf/NMCC_FinalReport_June2011.pdfmovements (CoimbatoreChennai/Tuticorin), it is 50 per cent or less of the total transittime. This clearly reflects lack of seamless container/freightmovement for even exportcargo. IncaseofcontainermovementbetweenHooglyKolkotta (adistanceof60KM), ittakesonedayandinlandfreightmovementaccountsforonly16percentofthetotaltransitcost(Rs32,200/TEU);othertransitcostsonaccountoftransshipmentandterminalhandlingmake up for 84 per cent of total transit costs and other transit time as transshipmentaccountsfor80percentofthetransittime.Duetodraftlimitations,nomainlinevesselscallatKolkottaPort.ThisentailsuseoffeedervesselsandconsequenttransshipmentofcargoatColombo or Singapore.The feeder vessels usuallydo not run according to schedulespecifiedandifthefeedervesselsmissthemainlinevesselatSingaporeorColombo,the16consignment shipment is further delayed by 1015 days. From Kolkata to Europe theaveragetimetakenis35days,whilethatfromJNPort,itisaround18days.ExportsfromKolkata necessitate transshipment from Colombo or Singapore, which involves anadditionalcostofaroundUS$350/TEU.Exportershavetobeartheexpensesduetodelays,whichcannotbepassedontothebuyer.Theseexpenses(bufferyardcharges,paymentstothe transporters forholdingon to theconsignment, timeof theresource,etc.)eventuallyaddup toasignificantamount.Logisticdeficienciesmustbe tackledbypolicymakers inorderforIndiatosuccessfullymoveitsindustriesupthevaluechain.Otherwise,asIndiashiftsitsmanufacturingtoitsinteriorsandfurtherawayfromitsseaports,itsalreadyhighlogisticscostwillincreasefurther,puttingthecountryatacompetitivedisadvantage.6. TimeCostofTransportDespitetheextensivegrowthoftheroadnetworkbeginninginthe1950s,seamlessfreightflowacrossthecountry ishamperedby institutionalbarriers(multiplechecksduringthecourse of transit) and quality of road infrastructure (less than onefourth of nationalhighwaynetwork isfourlanedandabove).Presentlythereare177 interstatecheckpostsand268tollbarriersonnationalhighways.Awellfunctioningfreighttransportsystemisvital for a competitive logistics sector. Seamless freight flows reflect efficientloading/unloadingand transfer in terminals,reliablevehicleperformance,aminimumofhalts/detentionson route, andhighutilisation levels for the fixed assets required in thesystem.Interventionsthatinterrupttripfloworincreasetriptimetypicallyaddtothecostanderodeasset turnover.Topromoteseamless freightmovementacross thecountry: (a)integrateSales/StateVATtaxadministrationwithinterstatefreightflows;(b)adoptgreenchannel for transit of secure/sealed containerized cargo.This is feasible inview of theintroductionofsmartcardsforvehicleregistrations(Vahan)anddriverlicences(Sarathi);(c)automateandunifyInterStateCheckpostsandintroduceSingleWindowClearanceforallauthorizedchargesincludingtollfees.The time required to export and import a good is an important barrier to trade. Inparticular,therearetwoaspectsoftimethatrepresentacostfortrade.Oneistheleadtime,that is, the lengthof timebetweenplacementofanorderand receiptof thegoods.Thisdepends on the distance between customers and suppliers, the speed of themode oftransportchosen,thetypeofproduct,themanagementofthesupplychainandthelogisticsaswellasthetypeofadministrativeproceduresrelatedtoexportingorimporting,waitingtimeforshipmentanddelaysrelatedtotestingandcertificationofgoods.Alongleadtimerepresentsacostandthereforeanobstacletotradebecauseitraisesthecostsofuncertaintyandvariationindemandforthefinalproducts.Theotheraspectof time thatrepresentsanobstacle to trade is thevariabilityofdeliverytime. Themore varied the delivery time, the greater the buffer stocks needed to facedemand.Highvariabilityofdelivery timewouldmake itveryhard toorganizejustintimedelivery,where inventories arekept to abareminimum and inputs arrive at the17factory onlywhen they enter the production process.When justintime technology isintroduced,delayeddeliveryofacomponentcanholduptheentireproductionandinflictcosts.Transittimeandcostofconveyanceoffreightbyroadareimportantparameterstoassessefficiencyofroadfreighttraffic.Transittimeforvarioustriplengthspertainingtofreightrelatedvehicularflowsandcommoditieshavebeenanalyzedintermsof;shorthaul:originand destination within a district; medium haul: origin and destination other thanAhmadabaddistrictbutwithinGujarat:longhaul:originanddestinationoutsideGujarat(Table9).Thisshowsthattransittimevariesfrommorethanonedayforshortdistancesupto60kmto6to10daysforlongdistancesofbeyond400kmupto1800km.Table9.TransitTimeforVariousTripLengths LongDistance MediumDistance ShortDistanceDistance(KM) 1800 400 4060Duration(Days) 610 36 >1Note: Impacts of Intrusion ofMovement of Trucks inUrbanAreas:AnviManiar and H.M. Shivanand Swamy, Centre of Excellence UrbanTransport,CEPTUniversity.Source:Thesefindingsweredisplayedat5thUrbanMobilityConference,India,NewDelhiheldonDecember58,2012.CostofDetentiononInterstateCheckPostsCheck Posts impose following economic costs: (a) Surveillance and enforcement costs(operationalcost),(b)CostofCompliance(timerelatedVOCandcargoholdingcosts),and(c)CostofExternalities(congestionatcheckposts imposescostonothervehiculartrafficleading to lossof timedistance relatedVOCandvalueofTravelTimeon thepassengervehicles).Savingbothtime(thatiswastedatthecheckposts)andcompliancecostscouldhelp improve the profitmargin of truck operationswithout any additional investment.Faster turnaround of trucks alone in the absence of Check Posts may improve theoperational efficiency of road transport sector. Sample survey of en route expenses,(MumbaiDelhi,DelhiKolkata andKolkataChennai routes) showed that amajor shareranging between 52 to 66 per cent of the total enroute expenses goes for fuel and oil;another7to9percentoncrewexpenses;and,balanceintherange25to40percentofthetotal expenseswere accounted for by otherunspecified expenses including tolls, octroi,speedyclearanceatcheckposts,etc.,(DebroyandKaushik(2002),BarrierstoInterStateTradeandCommerce).Thiswasdue tooverloadingofgoods.Thepercentageofactualmovingtimetothetotaltriptimewasabout69percent,54percentand38percentforMumbaiDelhi,DelhiKolkataandKolkataChennairoutesrespectivelywithaveragevehiclespeedonthesecorridorsintherange30to35Kmperhour.Slowspeedoftrucksresultsinpoorservicequalityintermsofreliabilityandontimedelivery.Whilelowratespoorqualityisacceptable for lowvalue commodity items, forhighvalue,perishableand timesensitive18itemspoorservicequality isdefinitelyacauseofconcern.Incontrast,Railrail ispublicsectormonopolyandmorecapitalintensive,withnocompetition.Freight sector isverydiverseand consistsofdifferentmodesof conveyance.Roadtheroadfreightsectorishighlycompetitive,butfragmentedduetotherelativelylowbarrierstoentry.Participantsrangefromowneroperatorswithasingletruck,tolargeintermodalcompanieswith large fleetsofmore than4,000vehicles. In India,a truckcancoveronly250400kmperdaycompared to700800km indevelopedcountries. Inagivenyear,atruckonIndianroadscancover60,000100,000kmwhileintheUS,atruckcantravelupto400,000kmayear(ReportoftheWorkingGrouponLogistics,p.25,PlanningCommission)A wellfunctioning freight transport system is vital for a competitive logistics sector.Seamlessfreightflowsreflectefficientloading/unloadingandtransferinterminals,reliablevehicleperformance,aminimumofhalts/detentionsenroute,andhighutilization levelsforthefixedassetsrequiredinthesystem.Interventionsthatinterrupttripfloworincreasetriptimetypicallyaddtothecostanderodeassetturnover.Conversely,modificationsthatimproveflowsandtriptimesusuallyreducecostandimproveassetturnover.7. RoleofMultiAxleVehicle(MAV)MAVs(grosstonnageincludingweightoftruckofover16.2tonnes)arecheapertooperatecompared to smaller trucks, i.e. medium commercial vehicles and light commercialvehicles,byover25percent.Infact,costpertonKmfor25tontruckand30tontruckisestimatedat85percentand75percent,respectively,relative toa16 ton truck (BuildingIndia: Transforming theNations Logistics infrastructure,Mckinsey&Company, 2010). TheincrementalcostofanMAVcanberecoveredinlessthanthreeyears.MeasurestopromotetheuseofMAVscouldbeconsideredincludingexcisedutyreductionsforMAVs(similarto that of small and fuel efficient cars), stringentmonitoring of overloaded trucks andenforcingpollutionandsafetynorms,whichcouldleadtoretirementofoldtrucks.Undercapitalizedsmall truckoperators find itdifficult toraise funds throughorganizedbanking or financial channels.Therefore, it isvirtually impossible for them to invest inmodern equipment and technology to increase efficiency and reduce the cost oftransportation. Information on various transportmarkets as regards the availability oftrucksandgoingratesisnotavailabletotruckersonarealtimebasis,forcingthemtorelyonbrokersforloadingtheirtrucks.Shippersalsoenduppayinghigherthanmarketfreightrates,ifreturnloadsarenotassured.Ifmarketinformationwereavailabletoshippersandtruckersonarealtimebasis,shipperswouldhavepaidactualmarketrates.Also,veryfewtransporters have realtime tracking facilities (GPS). Once a vehicle departs from thesource, there isnoway to track themovementof thevehicleonarealtimebasisuntil itreachesthedestination.198. EfficiencyofIndiasPortSectorPortsconstituteintermodalinterfacebetweenmaritimeandroadandrailtransport.Indiahasacoastlineofaround7,517kmwith12majorportsand176nonmajorportsalongthecoastlineandseaislands.Almost95percentbyvolumeand70percentbyvalueofIndiasglobal merchandise trade is carried through the sea route. Maritime transport is theshipmentofgoods(cargo)andpeoplebyseaandotherwaterways.Portoperationsareanecessary tool to enable maritime trade between trading partners. Ports represent acomplexstructure inacountrys transportationsystemprovidingshipharbour interfaceservices such as pilotage, dredging, provision of berths, maintenance of navigationalchannels,etc.;shipport interface in termsof loadingandunloadingcargoes;and,portlandinterfaceindeliveringcargotoandfromthehinterland.Thus,seaportsserveastheinterfacebetweenmaritime and inland transportation, andplay a significant role in theeconomicdevelopmentofacountry.Aseaport isan interfacebetween twomodesof transport,namely landandsea,and itsefficiency is directly related to the connectivity covering both themodes of transport.Seaside would require sheltered water, sufficient draught, navigational andcommunication facilityandproperportmanagement.Landsidewouldrequirehandlingequipment, sufficient and welldesigned stack yard, cargo evacuation facility andhinterland connectivitywith supporting infrastructure and systems.Container terminalsshouldproviderapidtransitfacilitiesforcontainerizedcargo(similartoanAirportwherepassengerarriveanddepartwithready luggage /cargo).Thiswouldenable theports toplanandutilizelandoptimallyforthebenefitoftheshipsandnotforstowageforwhichCFS/ICDareplanned.TheaveragecapacityutilizationofMajorPortsisover80percentwithportslikeJNP,Mumbai,operatingabove100percentcapacityfollowedbyportatVizag,KandlaandMormugaooperating at capacityutilization levelsbetween 9295per cent in 201112.Thishasledtodeteriorationintheiraverageturnroundtime(TRT),whichhasincreasedfrom3.6daysin200506to4.6daysin201112(Table10).Thisrisewasmainlyonaccountof an increase in preberthing time at the ports. The high TRT at Indian ports can beattributedtothefactthatmanyoftheportsoperateatcapacityutilizationlevelswhichareabovetheoptimumlevelof70percent(internationallyacceptednorm),resultinginhighcongestion levelswhich impactstheiroperationalperformance.Almostallmajorports inIndiahaveaTRTofmorethan3.5daysexceptEnnoreandCochinwhichhavearound2days.SomeoftheportswhichhavehighturnaroundtimeareKandla(6.4days),Paradip(6.3days),Vizag (5.7days),Mumbai,MormugaoandTuticorin (about5days),Chennai(about4days),andJNP(2.5days).IncaseofJNP,whichisIndiaspremiercontainerportandhandlesmorethan50percentofIndiastotalcontainerthroughput, it isabnormallyhighat1.1dayscomparedtointernationallevelsoflessthan12hoursincaseofColombo,Singapore,Dubai,andShanghai.20Table10.MajorPorts:SelectEfficiencyIndicatorsPorts 199091 200001 200506 201112AveragePBD(Days) 2.1 1.2 1.1 2.1AverageTRT(Days) 8.1 4.1 3.6 4.6AverageOutput#(tones) 3372 6701 9543 10917Note:PBD:Preberthingdetention;TRT:Turnaroundtime;#pershipberthday.Source:VariousIssuesofBasicPortStatistics,PortUpdate,GovernmentofIndia,MinistryofShipping.9. DraftandVesselsizePresently,vesselsofgreaterthan11,000TEU,suchastheEmmaMaersk,areinservice.Themovementtowardslargershipsisdrivenbytheinexorablesearchforeconomiesofscale.Theneedtomaximizeutilizationofthesevesselswillinturnleadtoreductioninnumberofportcallsonmajorroutes,andpushforthedevelopmentofglobalmegaportsservedbyfully integratedglobalnetworks.InSouthernIndia,VallapadamPortdevelopedbyDPWorldmay competewith Colombo for transshipment volume.New portswith largerdrafts in South India like Gangavaram (on Eastern Coast, 21metres draught, alreadycommissioned)andKrishnapatnam(onEasternCoast19metresdraught),inadditiontonew terminalsatTuticorin,Ennore, etc., canalsobeexpected toprovide competition tooperationalcontainerportsinSriLanka.Incaseofcontainershipfor1,000TEUcapacities,the average draft is 8.3metreswhich rises to 15.5metres for ships above 11,000 TEUcapacities.Containervesselwithacapacityof4,000TEUrequiresaminimumdraftof12.5metres. Smaller ship classes aremarkedwith greater variability in draft due to designspecifications.Shipsabove8,000TEUcapacitieshaveuniformdesignandlittlevariation.10.CargoEvacuationbyTransportModesEvacuationof cargo from theportandmovement to theportareashave tobeproperlysynchronized so that the intermodal network functions smoothly. Road and railconnectivity formsan integralpartof theport infrastructureas inefficient evacuationofcargocanunderminetheentireoperationofaport.Inparticular,containerizationofcargopresupposesaseamlesslinkwiththeroadandrailnetworkinanendtoendtransportsystem. Port congestion results on account of delayed evacuation of cargo due toinadequate roadand rail capacity.Thisadversely impacts the competitivenessof Indianindustry.Portconnectivityhasramificationsthatgobeyondtheoperationofaportperse.There is need to allocate the regional distribution of cargo to differentmodes of landtransport. Though in certain cases of bulk cargo, it is easy to identify themode for aparticular cargo at aparticularport; assumptions regardingpercentage splithave to bemade in respectofcargosuchasPOL,LPG, fertilizer, fertilizer rawmaterial,otherbulkcargo, containersandbreakbulk cargo.Theseassumptionsneed tobemadedependingupon the features of the respective regions,nature of cargo, quantum of cargo and thespreadofhinterland.2111.HubandSpokeWhile containership size has increased, and container volume has grown, shippingnetworkshaveincreasedincomplexityaswellasinscale.Thekeydevelopmenthasbeentheevolutionofhubandspoke systems (withcargoesarecarried from smallerportsbyfeedervessels) loadedon to largemainlinevessels callingatmajor transshipmenthubs.However,usingahubandspokesystemmeansincurringthecostsoffeederservicesandofextrahandlingmovementsinthehubport.Inmanycases,itmeanslongertransittimes,andwherecommoncarrierfeederservicesareused,a lessvisiblepresence intheportoforigin (or destination) of the cargo. Shipping lines are therefore required to constantlybalance thebenefitsof transshippingoverahubportagainst thosecallingdirectlyat theportoforigin(ordestination)ofthecargo.Foranyparticularmarket,thiswillchangeovertimeasvolumes increase,makingdirect calls becomesmore attractive.Transshipmentcargoes offer port authorities and terminal operators an opportunity to develop theirbusinesses at a faster rate than the development of their economic hinterlands permit.Therefore, it isnotsurprisingthatcompetitionfor transshipmentbusiness is intense,andvolumescanbeveryvolatile.Given thecontainer trafficgrowth in thepast fewyears, thereseems toascope forhuboperations in India,possiblyoneeachon theeastandwestcoasts.Theabsenceofahubportmeans that a significant shareof containers leaving an Indianportgoes through afeeder, transshipmentandmainlinemovement.This impliesadditionaldelaydue to thefeedervoyage from India to thehubportand thenat thehubportwhile itwaits for themainlineshiptocall.ThereasonsforahubportnotevolvinginIndiaare:(a)CabotagelawwhichunderMerchantShippingActdoesnotallowcarriageofgoodsbetweenany twoports within India by a foreign registered vessel; however, this rule is subject todiscretionaryrelaxation;and;(b)insufficientinfrastructureincludingdraftrequirementforamainlineship.TheadvantagesofhavingahubportinIndiawouldbe:(i)feederingtimetootherportswouldreduce,and(ii)marinesidetrafficfromandtothehubportwillmovefasterandbecomecheaper.12.DevelopmentofIntermodalTransportandKeyIssuesThenotionofmultimodaltransportisgenerallyusedforthecarriageofgoodsbyatleasttwomodes. TheUnitedNations EconomicCommission for Europe defines intermodaltransportas:Themovementofgoods(inoneandthesameloadingunitoravehicle)bysuccessivemodesoftransportwithouthandlingofthegoodsthemselveswhenchangingmodes(GlossaryforTransport Statistics: prepared by the Intersecretariat Working Group on TransportStatistics (EUROSTAT,ECMT,UN/ECE 2nd edition 1997). In the same terminology, theterm combined transport isused for intermodal transportofunitized cargowhen themajorpartoftheEuropean journeyisbyrail,andanyinitialorfinallegiscarriedoutbyroad.Essentially,Intermodalismimpliestheuseofatleasttwodifferentmodesoftransportinanintegratedmanner inadoortodoortransportchain.Allfreightmovements involvingat least22twoormoremodesoftransportation,fromapointoforigintoadestination,canthereforebedefinedasintermodal.UNECEdefinesmultimodalityascarriageofgoodsbytwoormoremodesoftransportandintermodalityasthemovementofgoods inoneandthesame loadingunitorroadvehicle,which successivelyuses two ormoremodes of transportwithout handling thegoods themselves inchangingmodes, thusstressing the (non)handlingof thegoods inthe transfersituation.Themaindistinctionbetween thesedefinitionsseems tobe thatintermodalityisrequiredtousesomeformofuniformpackaging(e.g.,containers)ofthegoodswhich facilitates transferswithoutdirecthandling,whilemultimodality isnotconcernedwiththemeansofobtainingthemodalcombination.Thus,transportationofbulkmaterialssuchasgrainorcoal,andliquidmaterialswouldbeanexamplethatcanbe classified as multimodal, but not intermodal transportation, using the abovementioneddefinitions.A multimodal transport operator is responsible for the entire carriage and takes oncontractualresponsibilityforthewholejourneyfromthesellerswarehousetothebuyerswarehouseandissuesamultimodaltransportdocument.Amultimodaltransportoperatoriscalledacontractualcarrier,whichdistinguishes them fromanactualcarriersuchastheshippingcompanyandthemaster(captain)oftheshipwhichcarriesthecargofromtheportofloadingtotheportofdischarge.Multimodaltransportisthereforeaconceptwhichplaces the responsibility for transportactivitiesunderoneoperator,withmore thanonemodeof transportunder thecontrolorownershipofoneoperator. It involves theuseofmorethanonemeansoftransportsuchasacombinationoftruck,railcar,aeroplaneorshipin succession to each other, e.g., a container linewhich operates both a ship and a railsystemofdoublestacktrains.MMToffersmanybenefitsintermsof:(i)moreefficientwaysofgettinggoodstomarket;(ii) container and ICT applications; (iii) using a combination of transportmodesmoreeffectively; (iv) provides faster transit of goods asMMT reduces the disadvantages ofdistance frommarketsand the tyingupofcapital; (v) reducesburdenofdocumentationand formalities involved in issuingmultipledocuments andother formalities connectedwith each segment of the transport chain; and, (vi) establishes only one agency todealwiththeconsignorhastodealwithonlythemultimodaltransportoperatorinallmattersrelating to the transportationofhisgoods, including the settlementof claims for lossofgoods,ordamagetothem,ordelaysindeliveryatdestination.13.NeedforanAlternativetoPureRoadTransportTheproductivityof road transport isdecliningasa resultof congestion,enforcementofregulation, Inter StateCheckposts and social standards (training,driving times) and isleading to higher costs and loss of competitiveness of road transport. Road transportcapacities will not increase in tandem with growth because of the costs of newinfrastructure.Road transport (trucks) isheavilydependenton fossil fuel andhigh fuel23prices,andpriceinstabilitieshavetobefaced.Economicgrowthinvolvesincreasedtrafficflows,andtocopewiththis,thedifferenttransportmodesneedtocombinetheirservicestocreateanefficientandsustainabletransportsystem.Intermodality isseenasonepossibleapproachwith a high potential tomake freight transportmore sustainable and ensureeconomic development. Intermodality is needed so that better use can be made ofalternative modes that have accessible spare capacity.Making better use of availableresourcesisnotanexpensivesolutionandreducesstressonoverusedroadNetworks.14.TrendsinIndiasIntermodalTransportAnintermodalterminalisafacilitythatenablescontainerstobetransferredfromroadtorailoralternativelyfromrailtoroad.Containerizedimportsmaybeoffloadedfromashipand then directly loaded onto a train at a rail facility located at the seaport. Similarly,exportcontainerscanbeefficientlytransportedfromthepointofproductiontoaseaportviaan intermodalroad/rail transferaswell. Intermodal terminalscanalsobeanefficientandeffectivewayof transportinghighvolumesofcontainerized freight fromone inlandlocationtoanother,eitherwithinoneregionorbetweenregions,bycombiningalongraillegwitharelativelyshortroadtrip.Thedataandstatisticspertainingtointermodaltransportarenoteasilycapturedbecauseintodaystimes,datacollection ismoderelatedandnotconsignmentrelated.It isthereforedifficult to find significant and comparable data. This has to be kept in view whenassessingthefollowingdevelopmentsinintermodaltransport.Themostfamiliarexampleis the transferofcargo incontainersor trailersbetweenrail,marineandroadmodes.Atpresent,railwaysinIndiacarryintermodaltransport,mainlycontainers.Inspiteofaverylong coastline ofmore than 7,500 Km and industrialized coastal regions, there are noregular domestic RORO3 (roll onroll off) ferry services. Intermodal transportation ofcontainersthroughrailisundertakenbyCONCOR(Table11).AlthoughintermodalTable11.NumberofContainersEximandDomesticHandledbyCONCOR(ThousandTEUs) 200102 200607 200708 200809 200910 201011 201112TotalRaila 1232 2105 2448 2308 2421 2562 2604Exim 905 1715 1977 1855 1882 2018 2136Domestic 327 390 470 453 539 544 468TotalPortb 7541 9288 9937MajorPorts 2884 5541 6712 6578 6863 7561 7778NonMajorPorts* 678 1727 2159*includescontainertrafficofAdaniandPipavavPorts.Source:a.ContainerCorporationofIndiahttp://www.concorindia.com/index.asp;b.BasicPortStatistics,MinistryofShipping. 3 Rollon rolloff (RORO)maritimeoperation refers to the transportofLorries trailers/semitrailers,containersorswapbodiestoshipsontheirownwheelsoronwheelsattachedtothemforthispurpose.ThiscoversrailwayferrieswhichareextensivelyusedinEurope.24transport isgrowing, itsshare isstillrelatively low.Thecontainer isa transportunitaswellasa logisticsunit.Effortsaremade toensure thatcontainerizedassetsareusedasefficiently as possible. Empty container flows remain an enduring challenge in freightdistribution.During the lastdecade (200102 to 201112), the total containervolumesmovedby railgrewbyacompoundannualgrowthrate(CAGR)of7.8percentwitheximanddomesticsegmentgrowingby9per centand4per cent respectively.During the lastdecade, theshareofeximcontainersbyrailintotalcontainerscarriedbyrailincreasedfrom73percentin200102to82percentin201112andthatofdomesticcontainersfellfrom27percentto18percent.AnotheraspecthasbeentherobustgrowthincontainervolumesbothintermsofTEUs and tonnage atmajorPorts. TheCAGR in container volumes inTEUsduring200112was10.4percentbutintermsoftonnageitwashigherataCAGRof12.4percent,almostdoubletherateforIndiasseabornetraffic(excludingcontainervolumes)ataCAGRof5.8percent.However,shareofrailwaysinconveyanceofcargohandledatIndianPortsfellfrom31percentin200102to27percentin201112duetocapacityconstraints.IMTrequires long distance and high cargo volume corridors. IMT offers various alternativetechniques.Beforechoosing, techniquesshouldbeevaluatedcarefully.Most importantly,economiesofscale,i.e.itshoulduseequipmentproducedinmassproduction.IMTshouldbebasedoninternationallystandardizedequipment.EconomiesofIMTEconomiesofIMTconsistof:(a)apickupoperation;(b)aterminaltransferthatwillcreateadditional costs; (c) a linehaul that shouldbemuch cheaper than the linehaul in roadtransport; (d) a 2nd terminal transferwith its additional costs; and, (e) a final deliveryoperationthatmightbemorecostlythandeliveryafterdirectroadtransport. All potential savings are concentrated in the line haul, which increase with distance.Longer the linehauldistanceofan IMToperation, thehigher the savings.On theotherside, the additional costs do not depend on the distance but are additional costs perBox2.BenefitsofIntermodalTransportIMThasthepotentialtotransfercargoflowsfromroadtorailtoinlandwaterwaysandtocoastalshipping IMTallows en routechange fromagiven transportmode suchas road transport toanothersuchasrailorcoastalshipinordertocarrylargervolumesinonetransportoperation.i) Acoastalvesselmaycarry1200TEUs,i.e.loadof600trucksii) IMTeasespressureonroadcapacity.Atrain/railcoversonly1slotintherailnetwork,buttakes45wagons/90containers(20ft)45truckmovementsofftheroad.iii) Thetrainwillusemuchlessenergythanthe40truckswouldhaveconsumediv) A train needs, for the long haul operation, 4 personswhile the 45 truckswould haveneededaminimumof45driversand45cleaners/helpersv) Themovementof1trainisnormallycheaperthanthecosttooperate40trucks25operation.SoacertainminimumdistanceisnecessaryforIMToperationtobeviable.TheminimumtransportdistanceforIMTtobeviableinmostcasesisintherangeofbeyond400Km.Ifanintermodaloperationstartsataseaport,theminimumviabledistancemaybelower(250300km)becausetheloadingunitsarealreadyconcentratedononeendofthejourneyandthecostofassemblingthemintothelargertransportunitcanbesaved.Anotherissuepertainstoconcentratedtrafficflows,thatconcentrateoncargomovementfromasingletruckload(withsome20tonnesofcargo)totrainload(withsome2500tonnesofcargoormore)meanthatsuchalargevolumeshouldbeavailableonagivencorridor.Ashipper or forwarder expects a minimum number of departures per week in bothdirections.Ifweassumethat:(i)eachtrainwillcarryanaverageof90TEU(20feet)tobecommercially viable, and, (ii) each TEU contains some 28.25 tonnes of cargo, one canconclude that a corridor shouldoffer avolumeof around 2500 tonnesof cargo in eachdirection to justify a viable IMT operation.Economies of scalework in favour of largeconcentratedcargotransportcorridors.ProblemsinIntermodalTransportIntermodal transport involves modal haulages, transshipments and terminals, andrequiringthe interventionofvarietyofoperators,whoserolesmayoverlapandcompete.Intermodaltransportationreferstotransportofgoodsincontainersthatcanbemovedonland either through rail or truck and onwater through ship or barge.When freight istransferred fromonemode toanother (e.g., fromships to trucks), ithelpssavehandlingcharges for containers; also, a truckrail container movement can generate savingscomparedwithtruckaloneifthecostofthetransfer(thecostoftheaddedhandlingofthecontainer plus the cost of the difference in speed and reliability between truck andintermodal) is offset by rails lower cost per ton mile. Besides, its external costs aresignificantly lower.Despite theseadvantages,competitivenessof intermodal transport isbesetwithproblems.Thethreemainproblemswithintermodaltransportare:quality,priceandcoverage.Morespecifically,intermodaltransportisoftenslow,lessreliableandmoreexpensivethantruckonlytransport,andfurthermoreitisonlyofferedinselectedcorridors.Qualityisthemostimportantfactor in todaysfreight transportmarket.The threemost importantaspectsofqualityinthemainhaulageprocessareschedulereliability,servicefrequency,andspeed.These problems can only be solved with freight infrastructure investments (capacityupgrades)andpolicychanges.Yetanotherproblemisthelowqualityofservicescurrentlyoffered,whichinhibitgrowthofintermodaltransportation.Transshipment entails significant costs.According to industry observers, transshipmentcostscouldrepresentuptoonefourthofthetotaltransportcostsinthecontinuoushaulagescenarioanduptoonethirdoftotaltransportcostsinthebrokenmainhaulagescenario.Due to the costs of transshipment, it is clear that by eliminating prehaulage or posthaulage, intermodal transportcanbeagoodalternative to truckonly transporteven for26medium distance trips. The seaport industry particularly is an attractive option forintermodaltransportbecause,apartfromeliminatingtheneedforprehaulage, it ismorelikely to fill a train to capacity, given the greater commodity flows passing through atypicalseaport.Theintermodaltransportprocessisachainofindependentcompaniesworkingtogethertomoveacontainerfromshippertoreceiver.Itconsistsofthreemainprocesses:prehaulageand posthaulage (pickingup/delivering the container to the intermodal terminal),transshipment (loading the container onto/off the train), and main haulage (containercarriedby train todestination terminal).Today, theseprocesses areoften completedbydifferent companies; in fact, themainhaulageprocessmay even be completed throughcoordinationamongseveralcompanies.However, thebestoptionwouldbe thatasinglecompany be responsible for managing all transport chain partners. There are severalalternative organizational structures that could achieve these objectives. One commonrequirementisthattheintermodalterminaloperatorberesponsibleforprovidingtheprehaulageandposthaulageservices(PPH).Ideally,boththeoriginanddestinationterminalswouldbeunderthecontrolofthesameoperator.Theterminaloperatorcouldeitherenterintoacontractwitharailroadpartnerforthemainhaulageor(preferably)operateitsowntrainsbetweenterminals.Incaseswheretheoriginanddestinationterminalsareoperatedbydifferentcompanies,thesecompaniesmustdeveloparealworkingpartnership.BarrierstoIntermodalTransportThe main reasons for the slow development of intermodal transport are certainimpedimentsasdetailedbelow:a) Organizationalbarriers, i.e.manymodes/participantspartnersare involved,a lackofcooperationamongstkeyplayers,unclearresponsibilitiesandliabilities,etc.b) Technicalbarriers,i.e.lackofdoortodoortrackingandtracing,frictionattransferpoints,lackofstandardization(semitrailers,certainloadingunits),etc.c) Infrastructural barriers, i.e. lack or inadequate and unsuitable infrastructure atterminals, capacity restraints at terminals and their access roads, lack ofstandardizationatterminals,etc.d) Operational,logisticalandservicerelatedbarriers, i.e.a lackof informationaboutavailable services, a lack of awareness of possibilities of intermodal transport,problemsintegratingintermodaltransportinlogisticschainsofcompanies,etc.e) Financial impediments:Thereareno financialor regulatory incentives inplace toassistthepromotionofintermodaltransportwhichentailshighinvestmentcosts.f) Legalbarriers:Multi IMToperations facemanyproblems inpractice;oneof theseconcernsthedeterminationofthelawtobeappliedtoaspecifictransportoperation,whenseveraltransportmodeswithdifferentcivilliabilityregimesareused.AsIMTtakesmakes use of containers, it becomes difficult to determine the leg inwhichdamagehasoccurred.27g) Liabilityfordelay:Traditionallyacarrier(i.e.commercialentitywhichcontractsforthe carriage of goods and their delivery in good condition to the contractedconsignee) is liable for the delivery of the consignment, but not necessarily for itstimelydelivery. Specifically, railways are reluctant to accept responsibility for thedelivery of goods at a given date and hour. Due to competitive environment,organized road transport operators arewilling to accept obligation to deliver theconsignmentontimeandagreetopenaltypaymentsforgoodsnotdeliveredintimetoretaincustomers.Thisisnotthecasewithrailwaysastheyhappentobemonopolyserviceproviders.Clientshavenochoice.Forexample,afreightforwardertakesoveraconsignmentforcarriagebyroadanddecidestouseIMTservicesforapartofthetotal carriage. If the delay is attributed to railway authority, theymay refuse anyliability,becausetheconcernedrailwayauthorityinIndiadoesnotguaranteetimelydelivery.Thus,theIMToperatormayhavetopayapenaltyforadeficientserviceforwhichheisnotresponsible.h) Thedamageproblem:Anothermajorproblemof IMT is thecontinuouschangeofresponsiblefactorsalongtheintermodalchain.Amootpointis:whendamageoccurs,how to attribute responsibility and determinewhich party pays the damage. Theefficiencyof thewhole logisticssupplychain largelydependson thestructureandnetworkof intermodalnodes/dryports [theseareContainerFreightStations (CFS)InlandContainerDepots (ICDs)] storage and distribution hubs as they act as theintegrating and coordinating mechanism between different components, e.g.,shipping lines, inland transportationandwarehousing.Essentially theevolutionofdry ports is a direct result of development of global transport strategies. Thephenomenon of shiftingmanufacturing basis from coastal areas to further inlandlocationswasaconsequenceofcapacitylimitationsofgatewayports.15.ConceptofDryPortThedispersionofindustrial/economicactivitiesandsaturationofportcapacitiesbroughttothe fore theneed foranetworkofdryports.Dryports canbeondistant,midrangeorshortrange toseaports.Asmidrangeandshortrangedryportsareclose to theseaportand transport distances are relatively short, inbound and outbound flows are mostlyhandledbyroadtransport.Longdistancedryportsare locatedfurther inthehinterland,thetransportdistancebetweentheseaportandthedryportismuchlarger.Inlandshippingand rail becomemore competitive on such longdistances.Adry port provides all theservicesofaportexceptforthe loadingofcargo toandfromseagoingships.Adryportfacilitytypicallyprovidescontainerhandlingandstorage,breakbulkcargohandlingandstorage,andcustomsinspectionandclearance.AspertheESCAP,thetermdryportsisdefined to include full customsrelated services, in contrast to the ICDwhere thisneednotnecessarily be the case (Review ofDevelopments in Transport inAsia and the Pacific 2007,UNESCAP,p. 225).Establishingdryportswouldnot only allow shippers toundertakeconsolidation anddistribution activities,but alsohelpwith export/importprocedures at28inlandlocationsthatareatrelativelyshortdistancesfromfactoriesandfarms.Completingnecessarydocumentationandproceduresat such facilities couldhelp reduce congestionanddelaysatbordercrossingsandports,therebyreducingtransactioncostsforexportersand importers.Approximately 200dryportswere located inEurope in 2005,providingimportantlogisticservicestoindustryandtrade.IntheUnitedStatesofAmerica,thereareapproximately370majorinlandcontainerdepots,andatleast200smallerones(ReviewofDevelopmentsinTransportinAsiaandthePacific2007,UNESCAP,p.226).Theoperatoratthedry port usually outsourcesmost of the services to several contractors/vendors whilegiving full freedom to its customers/usersof the facility to choose theirCHA (CustomsHouseAgent)orFreightForwarder,ShippingLine,etc.TheCFS/ICD (ContainerFreightStations/InlandContainerDepot) operator looks after infrastructure development, assetmanagement and regulatory function such as obtaining permission from Customs,transportsafety,environmentalclearances,etc.InEuropeandNorthAmerica,dryportsfunctionasmodalinterchangeandfreightstoragefacilities,oftenlocatedatcloseproximitytostrategicrailandroadhubs.Theyareknownby different names across countries, e.g. StrategicRail Freight Interchanges in theUnitedKingdom, InlandPortsorMultimodalTransportandDistributionHubs in theUnitedStates,andFreightvillages inEurope.Essentially,a freightvillage isaEuropean conceptwhichcomprisesanareaoflandthatisdevotedtoanumberoftransportandlogisticsfacilities,activitiesandservices,whicharenotjustlocatedinthesamearea,butalsocoordinatedtoencouragemaximumsynergyandefficiency.Afeaturethatiscentraltoafreightvillageisan intermodalterminalthat isconnectedtomajorfreightcorridorsandanearbyseaport.This enables flexible, quick movement of containerized and decontainerized cargobetween wharf, warehouse and ultimate destination by both road and rail. Thejuxtapositionofthe intermodalterminalwithfacilitiessuchascontainerstorage(fullandempty) and handling areas, and warehouses that are linked to rail, is intended tosignificantly reduce cargo handling costs and time, and reduce the use of roads forcontainer transportation.The seconddistinguishing featureofa freightvillage is sharedaccesstootherfacilities,equipmentandcommonuserservices.Acentralizedmanagementand ownership structure is the third distinguishing feature of a freight village. This issimilar to the strategic management role of a port authority/corporation. Centralizedmanagementhastheresponsibilityforplanningthe longterm investmentandgrowthofthefreightvillageaswellastheshorttermmaintenanceofthevillageinfrastructure.Itisresponsibleforestablishingcorporategovernanceandadministrativearrangementsforthevillage, including those related to quality control, safety, and risk and environmentalmanagement(ReviewofDevelopmentsinTransportinAsiaandthePacific2009,UNESCAP,p.127).AwellthoughtoutapplicationoftheseconceptstoIndiacouldbringinimmenseuserbenefitsatmuch lower resourcecosts to theeconomy.Thefreightvillageconcept isaEuropeanmodelthat takestheconceptoftheclusteringofrelated logisticsactivities toanew level.Within theAsiaPacific region therearewellestablished logistics centresanddistriparksthatsharemanyofthefeaturesofafreightvillage.Adistriparkisalargescale,advanced, valueadded logistics centre with comprehensive facilities for distribution29operations at a single location, typically with an emphasis on consolidation anddeconsolidationofcontainerizedgoods.Distriparksaretypicallylocatedclosetocontainerterminalandmultimodaltransportfacilities(ReviewofDevelopmentsinTransportinAsiaandthePacific2005,UNESCAP,p.156,).16.ContainerFreightStations(CFS)/InlandContainerDepots(ICD)CFS/ICDs in India play the role of a dry port and are served by rail or/and road.AnICD/CFStypicallylocatedinlandfromseaports,providescontainerhandlingandstorage,breakbulkcargohandlingandstorageandcustoms inspectionandclearance.Inessence,theyhave thesame functionsasaport terminal,exceptship toshore transfer.While thetransportation of containers to and frommany ICDs is by truck, in some cases it alsoinvolvesrail.InthiscaseanintermodalfacilitymayformpartoftheICDormaybelocatednearby.IndianCustomsManualdefinesanICDas acommonuser facilitywithpublicAuthoritystatusequippedwithfixedInstallationsandofferingservicesforHandlingandtemporary storage of Import/export laden and empty containers carriedunder customstransitbyanyapplicablemodeoftransportplacedundercustomsact.Allactivitiesrelatedto clearanceofgoods forhomeuse,warehousing,and temporaryadmissions, reexport,temporarystorageforonwardtransitandoutrightexport,transshipmenttakeplacefromsuchstations.Functionallythere isnodistinctionbetweenanICDandCFSasbotharetransitfacilities,whichofferservicesforcontainerizationofbreakbulkcargoandviceversa.Thesecouldbeservedbyrailand/orroadtransport.AnICDisgenerallylocatedintheinteriors(outsidetheporttowns)ofthecountry,awayfromtheservicingports.CFS,ontheotherhand,isanoffdockfacilitylocatedneartheservicingports,whichhelpsindecongestingtheportbyshifting cargo and Customs related activities outside the port area. CFSs are largelyexpectedtodealwithbreakbulkcargooriginating/terminatingintheimmediatehinterlandofaportandmayalsodealwithrailbornetraffictoandfrominlandlocations.The benefits as envisaged from an ICD/CFS are: transfer of cargo (mainly unitized)between twomodes) concentration points for long distance cargoes and its unitization,customsclearance facilitiesobviating theneed forcustomsatports therebydecongestingports.CFS/ICDs offer a range of services like rail siding in case of rail based terminal,storagefacilitiesintheyardarea,andwarehousing.TheCFSs/ICDsfunctionasdryportsandhelpreducecongestionandaugmentterminalcapacityatports.NumberandGeographicalspreadofICDs/CFSLocation decisions of CFS/ICDs have significant bearings on the efficiency andcompetitivenessofthewholesupplychain,e.g.,transportcost,connectivity,andtransportmodes.CFS/ICDsareakeypartof the logistics industry infrastructure. InterMinisterialCommittee(IMC),constitutedin1992underMinistryofCommerce,isthenodalagencyforapprovingCFS/ICDs.Currently,177CFS/ICDs(bothrailandroadbased)arefunctioning30out of a total 227 approved by the Ministry of Commerce(commerce.nic.in/trade/icd_list.pdf).Terminalshandling lowervolumes areusually roadfed.TamilNadu(47CFS/ICDsinoperation)ranksfirstaccordingtonumbers,followedbyMaharashtra(33)andGujarat(25).CONCORhasjoinedhandswithanumberofprivateaswell as other public sector entities in order to develop synergies and strengths, costreduction,andefficiencyenhancements.Therehasbeenparticipationoftheprivatesectorinthedevelopmentofdryports(ICDandCFS)inIndiaaswell.Outofthetotal177ICDsandCFSs in operation, asmany as 99 (56%) are in theprivate sector; of a total of 177functionalICDsandCFSs,CONCORfacilitiesaccountforonly17percent.Due to unevenspatial distribution ofmanufacturing activity, the distribution of functioning CFS/ICDswithinIndiaisuneven,withabout39percent,33percentand20percentbeinglocatedwithin the southern,western andnorthern regions respectively (the central and easternregions are conspicuous by the smaller presence of dry ports). This uneven spatialdistribution has led to congestion in a few dry ports, breakdown of infrastructure andunderutilizationofcapacity.InIndia,theContainerCorporationofIndia,Ltd.(CONCOR)hasputinplaceanextensivenetworkof62CFS/ICDs (asper the informationon theirwebsite),ofwhich18arepureexim terminals, 14puredomestic terminals, and 30mixed terminalswhichhandlebotheximanddomesticcargo.TheCONCORcustomsbondedinlandcontainerdepotsaredryports in thehinterland, and serve to bring allport facilities to the customersdoorstep,includingcustomsclearance.TheterminalsarealmostalwayslinkedbyrailtotheIndianRailway network, unless their size or location dictates that they be linked by road.CONCOR terminalsprovide a spectrumof facilities in termsofwarehousing, containerparking, repair facilities and even office complexes. The corporation adds value to thelogisticschainbyoffering theprovisionofasinglewindow facilitycoordinatingwithallthedifferent agencies and services involved in the containerized cargo trade, includingcustoms, gateway ports, railways, road haulers, consolidators, freight forwarders andshippinglines.ContainertrafficforCONCORhasseenamorethantwofoldjumpfrom1.2millionTEUs in 200001 to 2.6millionTEUs in 201112.Currently, themarket shareofCONCORisabout85percent.PricingandStructureofCFSTorecoverinitialcapitalcostssuchaslandacquisition,leveling,paving,accessroads,etc.,aprivatedryportoperatorneeds tochargeapriceequal tohis longrunaveragecost.Thisplaces new entrant at a competitive disadvantage visvis a public operator whoseinvestmentcostsneednotberecovered. SuccessfulPPPs and greater involvement of theprivate sector in dry port operationswould require pricing policies based on longrunaverage cost pricing aimed at full cost recoverybypublic andprivatedryportoperatorsalike.Thiswouldeventuallyhelpestablishalevelplayingfieldamongthepublicandtheprivate sectors.Container trainoperations aredominatedby a fewoperatorswith stateownedCONCOR accounting for a dominantmarket share.Given the significant entry31barriers in terms of regulatory barriers and large upfront costsmakes container trainoperations inherently oligopolistic.Given homogenous service offerings and exogenousdemand,oligopolisticmarketbestowsa leadershiporpricesetting roleon thedominantplayer.Dominantplayercanreapsupernormalprofitsinasituationofstrongdemandandcan even indulge in predatory pricing to protect itsmarket share. CONCORs pricingstrategytosomeextentreflectstraitsofoligopolisticbehaviour.IndianCFS/ICDsegmentinthe logisticschain inparticular ismarkedbyastrongpublicsectorpresence,substantialexcesscapacity,skewedspatialdistributionofICDs/CFs,smallersizeintermsofhandlingcapacityvisvisoperatorsabroadwhichhandlemillionplusTEUsannually.InIndia,theGovernment(itsagenciesanddepartments)isalsotheownerofhugetractsoflandwhichhasabearingon landprices.Inadditiontothis,thegovernment,through itscorporateentities,isalsotheleadingdryportserviceprovider(CONCOR)andwarehouseowner (CentralWarehousingCorporation).Public sectordryport owners enjoy a hugeadvantageofhavinglandavailableforuseattokencostorleasedoutforlongperiodsatvery low, subsidized rates. The government thus becomes a price setter for dry portservices.Incontrast,theprivatesectordoesnotgetsimilarpreferentialtreatmentandhastoacquire landatmarketvalue.Adryport isessentiallya landintensiveventurebut itsrelatedinfrastructureisinthenatureofpublicutility.Competitionbetweenthepublicandprivatesectorshasnotbeentakingplaceonalevelplayingfield.The size of dry ports varies according to the industrial production and commercialtransactionsintheareaservedbythefacility.IntheEuropeanUnion,thereisconsiderablevariationintheaveragesizeofdryports(typically40,000to1.9millionTEUthroughputsper year), land area (typically 30200 hectares), number of firms (typically 25100) andoverall employment (approximately 7,000 to around 37,000 people).Highly urbanizedcountries tend tohavemoredryports,butof smaller sizefor example, Spain (23dryports),Belgium(9),Switzerland(4),andSlovenia(3)[UNESCAP(August2006,p.8].IntheRepublicofKorea,fourdryportshavebeenbuilt.YangSanICDwasbuiltin2000closetoBusanPort and is running around 66per cent of its capacity.Uiwang inland containerdepotnearSeoulwasdeveloped in1992underaBuildOperateTransfercontractwithaprivateconcessionaire.Itcurrentlyhandlescloseto1millionTEUsperyear(Table12).Table12.InlandContainerHandlingFacilitiesinRepublicofKoreaRegion Location Area(Sq.m) Throughput(TEU) Capacity(TEU)Seoul UiwangKyunggi 753,127 903,000 1,370,000Busan YangsanKyungsangnam 951,940 395,000 1,400,000Honam Jangsung,Chollanam 520,782 5,700 340,000Central ChungbooChungchungbok 480,736 3,500 350,000Youngnam ChilgokKyungsangbuk 456,499 6,600 330,000Source:ReviewofDevelopmentsinTransportinAsiaandthePacific2011,UNESCAP,p.72,2011.3217.Conclusion:NeedforaCoordinatedApproachtoIMTToachieveenhanced integration intheglobaleconomy,Indianeedstorespondtoglobalchangesswiftly.Withthisinview,amultimodal,viableandcompetitivetransportsystemshouldbean integralpartof tradeand transportpolicy.Asa firststep, there isneed forIntermodal and LogisticsNational Plan to help outline the intermodal network andprovideaframeworkfortheintroductionofIMTandlogistics.ThisNationalPlanshoulddefineanetworkof intermodalcorridors,nodesandgateways.TheplanshouldmakeadistinctionbetweencorridorstobeservedbyIMTandotherswhichwillbeservedbyroadtransport.Ofparticularimportancearethelocationsofintermodallogisticscentreandportareasandtheirlinkageswiththetransportcorridors.TheIMTPlanshouldcoverobjectivesintermsofmodalshifttoreduceroadcongestionandpromoteefficiency.33ReferencesAnnualReportsofMinistryofRoadTransportandHighways for the followingyears:201112,201011,200910,200809,200708,200607,http://morth.nic.in/index2.asp?slid=297&sublinkid=139&lang=1Arvis, J.F.,M.A.Mustra, J. 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Kogan (2003), JustinCase Inventories: A Cross Country Analysis, PolicyResearch Working Paper 3012, The World Bank,http://elibrary.worldbank.org/doi/book/10.1596/181394503012Haralambides,H.E. (2002), Competition, ExcessCapacity and the Pricing of Port Infrastructure,InternationalJournalofMaritimeEconomics,Vol.4,No.4,December,Pp.323347.Haralambides, H.E. and Girish Gujar (2011), The Indian Dry Ports Sector, Pricing Policies andOpportunitiesforPublicPrivatePartnership,ResearchinTransportationEconomics,Vol.33,Iss.1,Pp.5158,Elsevier.Hummels,D.(2000),TimeasaTradeBarrier,PurdueUniversity,mimeo.Hummels,D.(2001)TowardaGeographyofTradeCosts,UniversityofChicago.Kothary,Nirav(2011),StatusandLeverageofLogisticParksinIndia,JonesLangLaSalle.Lagneaux, Frdric (2008), Economic Importance of Belgian Transport Logistics,Working PaperDocumentSeriesNo.125,http://www.nbb.be/doc/oc/repec/docwpp/wp125En.pdfLimo,N.andA.J.Venables(2001),Infrastructure,GeographicalDisadvantage,TransportCosts,andTrade,TheWorldBankEconomicReview,Vol.15,Iss.3,Pp.451479.ListofICDs/CFsApprovedbytheIMCwhichareunderImplementationorFunctioningason16062014,commerce.nic.in/trade/icd_list.pdf34MethodologyforMeasuringtheLogisticsCostforMajorManufacturingExportsandAssessingitsImpactontheir Competitiveness (2011), Final Report, FICCI, June, accessed on January 8, 2013,nmcc.nic.in/pdf/NMCC_FinalReport_June2011.pdfMinistryofRoadTransportandHighways,GovernmentofIndia.MinistryofShipping,GovernmentofIndia,shipping.nic.inNationalAccountsStatistics2013:CentralStatisticalOrganization,GovernmentofIndia.12thFiveyearPlanDocument(201217),PlanningCommission,GovernmentofIndia,Vols.I,IIandIII.National Transportation Statistics 2012, US Department of Transportation,http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/nts_entire_with_q4_updates.pdfNotteboom, T.E. and JP Rodrigue (2005), Port Regionalization: Towards a New Phase in PortDevelopment,MaritimePolicyandManagement,Vol.32,No.3,Pp.297313.Rantasila, Karri and Lauri Ojala (2012), Measurement of National Level Logistics Costs andPerformance,DiscussionPaper201204,InternationalTransportForum,Paris.ReportoftheWorkingGrouponLogistics,GeneralReports,PlanningCommission,GovernmentofIndia,Transport Division, New Delhi,http://www.planningcommission.nic.in/reports/genrep/index.php?ReportoftheSubGrouponPolicyIssues(2011),MinistryofRoadTransportandHighways,GovernmentofIndia,September,http://morth.nic.in/writereaddata/linkimages/Policy%20Issues9224727324.pdfReportoftheWorkingGroupforthePortSectorfortheTwelfthFiveYearPlan201217(2011),Governmentof India, Ministry of Shipping, October,http://planningcommission.nic.in/aboutus/committee/wrkgrp12/transport/report/wg_port.pdfReportoftheWorkingGrouponCentralRoadsSector,GovernmentofIndia,MinistryofRoadTransportandHighways 12th Five Year Plan (201217), http://planningcommission.nic.in/aboutus/committee/wrkgrp12/transport/report/wg_cen_roads.pdfRoadTransportYearBook:200910&201011(2012),TransportResearchWing,MinistryofRoadTransportandHighways,GovernmentofIndia,NewDelhi,July,http://morth.nic.in/showfile.asp?lid=838StatisticsofInlandWaterTransport:201011,TransportResearchWing,MinistryofRoadTransportand Highways, Government of India, New Delhi, March,http://www.shipping.nic.in/showfile.php?lid=827UNESCAP (2006), Cross Cutting Issue for Managing Globalisation Related to Trade and Transport:PromotingDry Ports as aMeans of Sharing the Benefits of Globalisation with Inland Locations,E/ESCAP/CMG(3/I)/1,August17.UNESCAP(2005),ReviewofDevelopmentsinTransportinAsiaandthePacific2005,Flagshippublicationsandbookseries,January.UNESCAP(2007),ReviewofDevelopmentsinTransportinAsiaandthePacific2007,Flagshippublicationsandbookseries,December.UNESCAP(2009),ReviewofDevelopmentsinTransportinAsiaandthePacific2009,Flagshippublicationsandbookseries,February.UNESCAP(2011),ReviewofDevelopmentsinTransportinAsiaandthePacific2011,Flagshippublicationsandbookseries,December.UNESCAP (2006), Crosscutting Issue for Managing Globalization Related to Trade and Transport:PromotingDryPortsasaMeansofSharingtheBenefitsofGlobalizationwithInlandLocations,No.E/ESCAP/CMG(3/1)1,Bangkok:UNESCAP.UNESCAP(2009),DevelopmentofDryPorts,TransportandCommunicationsBulletinforAsiaandthePacificNo.78,NewYork:UnitedNations.UpdateonIndianPortSector(31.03.2012)(2012),GovernmentofIndia,MinistryofShipping,TransportResearchWing,NewDelhi,June,http://www.shipping.nic.in/showfile.php?lid=954ListofISIDWorkingPapers174 IndustrialPolicy:ItsRelevanceandCurrency,BiswajitDhar,December2014173 INDIA:StructuralChangesintheManufacturingSectorandGrowthProspect,T.P.Bhat,December2014172PostFordism,GlobalProductionNetworksandImplicationsforLabour:SomeCaseStudiesfromNationalCapitalRegion,India,PraveenJhaandAmitChakraborty,November2014171 FromthePhasedManufacturingProgrammetoFrugalEngineering:SomeInitialPropositions,NasirTyabji,November2014170 IntellectualPropertyRightsandInnovation:MNCsinPharmaceuticalIndustryinIndiaafterTRIPS,SudipChaudhuri,November2014169RoleofPrivateSectorinMedicalEducationandHumanResourceDevelopmentforHealthinIndia,ISIDPHFICollaborativeResearchProgramme,PradeepKumarChoudhury,October2014168TowardsEmploymentAugmentingManufacturingGrowth,SatyakiRoy,September2014167 ImportIntensityandItsImpactonExports,OutputandEmployment,MahuaPaul,March2014166ChallengeofInvitroDiagnosticsforResourcePoorSettings:AnAssessment,ISIDPHFICollaborativeResearchProgramme,NidhiSinghandDineshAbrol,March2014165OutofpocketExpenditureonHealthandHouseholdswellbeinginIndia:ExaminingtheRoleofHealthPolicyInterventions,ISIDPHFICollaborativeResearchProgramme,ShailenderKumarHooda,March2014164LabourProcessesandtheDynamicsofGlobalValueChain:ADevelopingCountryPerspective,SatyakiRoy,March2014163HealthPolicyChangesandtheirImpactonEquityinHealthFinancinginIndia,ISIDPHFICollaborativeResearchProgramme,SwadhinMondal,March2014162TechnologicalUpgrading,ManufacturingandInnovation:LessonsfromIndianPharmaceuticals,DineshAbrol,February2014161 FDIintoIndiasManufacturingSectorviaM&As:TrendsandComposition,ForeignInvestmentsStudyTeam, February2014160GrowthandStructureoftheServicesSectorinIndia,JesimPais,January2014159UnemploymentinanEraofJoblessGrowth,N.ChandraMohan,January2014158AccesstoandFinancingofHealthcarethroughHealthInsuranceInterventioninIndia,ISIDPHFICollaborativeResearchProgramme,ShailenderKumarHooda,November2013157ParentalEducationandInfantMortalityinIndia:UnderstandingtheRegionalDifferences,ISIDPHFICollaborativeResearchProgramme,PradeepKumarChoudhury,November2013* Mostof theworkingpaperscanbedownloaded from the Instituteswebsite:http://isidev.nic.in/orhttp://isid.org.in/Institute for Studies in Industrial Development4, Institutional Area Phase II, Vasant Kunj, New Delhi - 110 070Phone: +91 11 2676 4600 / 2689 1111; Fax: +91 11 2612 2448E-mail: info@isid.org.in; Website: http://isid.org.inInstitute for Studies in Industrial DevelopmentNew Delhi175Working PaperDecember 2014Arvind KumarFREIGHT LOGISTICS & INTERMODAL TRANSPORTImplications for CompetitivenessAbout the InstituteThe Institute for Studies in Industrial Development (ISID), successor to the Corporate Studies Group (CSG), is a national-level policy research organization in the public domain and is affiliated to the Indian Council of Social Science Research (ICSSR). Developing on the initial strength of studying Indias industrial regulations, ISID has gained varied expertise in the analysis of the issues thrown up by the changing policy environment. The Institutes research and academic activities are organized under the following broad thematic areas:Industrialization: Land acquisition, special economic zones, encroachment of agricultural land, manufacturing sector, changing organized-unorganised sector relationship, rise of service economy in India, training and skill formation etc.; Corporate Sector: With special emphasis on liberalization-induced changes in the structures of the sector, corporate governance, individual firms/groups, emerging patterns of internationalization, and of business-state interaction;Trade, Investment and Technology: Trends and patterns of cross-border capital flows of goods and services, mergers & acquisitions, inward and outward FDI etc. and their implications for Indias position in the international division of labour; Regulatory Mechanism: Study of regulatory authorities in the light of Indias own and international experience, competition issues;Employment: Trends and patterns in employment growth, non-farm employment, distributional issues, problems of migrant labour and the changes in workforce induced by economic and technological changes;Public Health: Issues relating to healthcare financing, structure of health expenditure across states, corporatisation of health services, pharmaceutical industry, occupational health, environment, health communication;Media Studies: Use of modern multimedia techniques for effective, wider and focused dissemination of social science research to promote public debates;Other Issues: Educational policy and planning, role of civil societies in development processes etc.ISID has developed databases on various aspects of the Indian economy, particularly concerning industry and the corporate sector. It has created On-line Indexes of 210 Indian Social Science Journals (OLI) and 18 daily English Newspapers. More than one million scanned images of Press Clippings on diverse social science subjects are available online to scholars and researchers. These databases have been widely acclaimed as valuable sources of information for researchers studying Indias socio-economic development.

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