Following the Union Road Transport and Highways Minister, Mr Nitin Gadkari’s call for reducing the average logistics cost (out of the total cost) for all the industry sectors by introduction of ‘innovative models for transportation’, the government has proposed to set up multimodal Logistics Parks across the country.
These parks will be a part of Logistics Efficiency Enhancement Programme (LEEP) which is initiated with the purpose of improving logistics efficiency and cost of logistics. As per LEEP, these parks will serve four key functions: freight aggregation and distribution, multimodal freight movement, storage and warehousing, and value-added services such as custom clearances.
The LEEP also states that a multimodal company (MMC) will be formed. This MMC will be responsible for the development of these Logistics Parks and will also represent the National Highways Authority of India (NHAI), Indian Railways, Airports Authority of India (AAI), Inland Waterways Authority of India (IWAI) and Indian Ports Association (IPA). It will also partner with several government entities such as Dedicated Freight Corridor Corp. of India, Delhi Mumbai Industrial Corridor Development Corp. and Container Corporation of India Ltd.
In total 15 locations with highest freight movement have been shortlisted for the first phase of this program. These locations are:
- North Punjab (Amritsar, Jalandhar, Gurdaspur)
- South Punjab (Ludhiana, Sangrur, Patiala)
- Delhi NCR (Delhi, Gurgaon, Ghaziabad, Faridabad, Noida);
- North Gujarat (Ahmedabad and Vadodara)
- South Gujarat (Surat and Bharuch)
- Mumbai (Mumbai, Mumbai suburbs, JNPT, Mumbai ports, Raigad district)
These Logistics Parks will be set-up in a total area of around 4800 acres at an approximate cost of Rs. 33,000 crore. Investments will follow after a detailed technical assessment of the initiative.
At present, the logistics cost out of the total product cost in India is more than 14%. These multi-modal Logistics Parks will be pivotal when there will be a requirement of shifting goods from one mode of transport to another as there will be less wastage of time and handling of goods. With such multi-modal hubs, there will be significant reduction of handling cost and processes will become more efficient and streamlined, including the government clearances. LEEP aims at improving the overall efficiency and logistics cost by almost 8% – 10%.
Meanwhile, 20 other locations have been identified for similar parks in the second phase of LEEP.