logistics infrastructure 2020

8/2/2019 Logistics Infrastructure 2020

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BY

Mckinsey and Company



The logistics network is highly concentrated.

Freight transport relies excessively on roads.

Around USD 45 billion is lost each year due to

inefficiencies in India’s logistics. Integrated and coordinated approach in

which the development of each mode—

railways, waterways and roads.



The logistics flow are highly concentrated.

Three key components of the network account for two-

thirds of total freight traffic.Component 1 - Seven long-haul corridors that connect 15

high-growth clusters form the backbone of India’s

logistics network.

Component 2 - Over 150 medium-distance connectorsthat connect the corridors are key for India’s logistics

network.

Component 3 – Over 750 last mile links23 of up to 100 km

form a critical component of India’s logistics network.



India’s freight transport is dominated by

road.

Around USD 45 billion is lost each yeardue to inefficiencies in India’s logistics.

A 2.5 times increase in freight traffic in thenext decade will put further pressure on

India’s logistics infrastructure.



Building the right network and ensuring flows

on the right mode.

Creating enablers to maximize networkefficiency.

Extracting more from existing assets.

Allocating more investment to rail, and

reallocating within road and rail.



NATIONAL INTEGRATED LOGISTICS POLICY (NILP)

Help the government reduce recurring losses to the economy

and improve capital efficiency in the following three ways: One, it could lay down the blueprint for the most efficient

logistics infrastructure to support a balanced modal mix

Two, it can ensure better coordination between multiple

national and state-level bodies responsible for developinglogistics infrastructure.

And finally, it can ensure easier access to and optimal

allocation of scarce resources such as investment, equipment

and human resources.



Create an integrated network comprising long-distance corridors,

medium-distance connectors and last mile interfaces as opposed to

supporting diffused geographic development.

Shift from a road-focused network to a balanced modal network

that leverages rail and waterways to transport heavy throughput

over long distances.

Increase emphasis on improving asset efficiency, maximize output

from existing assets and enhance interfaces between modes.

Review the current allocation of investments between modes and

re-allocate as necessary to increase the share of rail.

Build flexibility in policy design and monitoring systems to track

progress and to review and course correct based on changing

economic conditions and trigger points..



The NILP should launch the following ten targeted

programmes:

Accelerating the numbers and build-outs of rail

Dedicated Freight Corridors(DFCs). Strengthening coastal freight corridors.

Constructing national expressways.

Developing multi-modal logistics parks.

Implementing a systematic roads maintenanceprogramme.

Developing a suitable talent pool.

Enabling better equipment and setting common

standards.

logistics infrastructure 2020

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