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India’s First Multimodal Logistics Park Will Be a Gamechanger

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Jogigpoha in Assam has recently been creating headlines in the leading national newspaper. Jogigpoha, a small town on the northern bank of the Brahmaputra River, will be India’s first MultiModal Logistics Park (MMLP) and be part of the “Kaladan Multi-Modal Transit and Transport Project” when linked to Myanmar through Mizoram.

Assam approved the transfer of 200 acres of land owned by the now-defunct Ashok Paper Mill for the project following the Government’s decision. Jogigpoha in the Bongaigaon district is strategically located and has the potential to significantly improve India’s logistics.

The Multimodal Logistics Park project will be carried out in two stages. In the first phase, 102 acres of the park will be outfitted with external roads and rail to connect to inland waterways. The remaining 88 acres for the inland water terminal will be developed in the second phase.

The upcoming project at Johigpoha, Guwahati, is perceived as a game-changer in improving India’s competence and quality in logistic services. According to a report by CII and Arthur D, the cost of transporting freight can account for up to (13-14%) of our GDP. It is nearly double the price of developed economies (7-8%) and significantly higher than other BRIC countries by 9-10%.

image 30
Source: https://www.gktoday.in/

First, let us look at the factors that give Jogigpoha a competitive advantage in becoming a significant logistics and export-import hub.

  • Jogigpoha connects not only the Northeast but also eastern India and countries such as Bhutan, Nepal, and Bangladesh. Products from these countries can be easily imported for further export or transported to other parts of the country.
  • Jogighopa is located 175 km by road from Phuentsholing, a significant trading and transit point on the Indo-Bhutan border.
  • Jogigpoha is 300 km from Kakarbhitta, a massive trading and trans-shipment hub on the Indo-Nepal border.
  • It will be easier to export products from North Bengal’s Dooars and Darjeeling Hills areas, which are well-connected with Jogigpura. In addition, Jogigpura can significantly reduce the burden on the overcrowded Bagdogra Airport in Siliguri.
  • Jogigpura is also close to the Brahmaputra River, our predominant inland waterway connecting Bangladesh. Goods in large volumes from Bhutan, North Bengal, and North East can easily be transported to other destinations.

This flagship project is part of the Government’s “Bharatmala Pariyojna” initiatives, which aim to make Northeast India’s economic powerhouse.

Overview of Multimodal Logistics Park (MMLP)

The National Highways Logistics Management Limited (NHLML) of the Ministry of Road Transport and Highways (MoRTH) and the National Highways Authority of India (NHAI) are in charge of the Multimodal Logistics Park, which is a Government of India initiative.

In 2017, the Government of India launched this program to build 35 MultiModal Logistics Park/s (MMLP) across the country through Public-Private-Partnerships. The proposed investment in this ambitious project is about Rs. 50,000 Crores. 

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Objectives of India’s Multimodal Logistics Park(MMLP)

The intent driving the program was to reduce India’s logistics costs and combat five constraints-

  • aggregation and distribution of freight,
  • freight transportation via multiple modes,
  • storage and warehousing combined,
  • assistance with information technology, and
  • services with added value

How High Costs of Logistics Are Impeding Our Economic Growth

The high cost of freight transportation is putting pressure on manufacturers while significantly reducing their profit margins. Lower profits for an extended period may have an impact on India’s future as a manufacturing hub.

The cost of road transport is whooping high and dominates the price escalations in high-value items such as auto parts, automobiles, pharmaceuticals, hardware, tiles, marbles, sanitary items, furniture, fixtures, steel molded products, and a few more. 

Automobiles accounted for the greatest value in Indian transport equipment exports in the financial year 2022. This amounted to more than 6.8 billion US dollars.

image 31
Source: India: the value of transport equipment exports by type 2022 | Statista

In the financial year 2022, India’s value of exports of railway transport and parts was approximately 416 million US dollars. This was a sizable increase from the previous financial year’s figure of 135.3 million dollars.

image 32
India: the value of railway transport equipment exports 2022 | Statista

Reducing the monopoly of road transport can lead to robust economic growth. We must introduce special parcel trains, modernized cargo booking, delivery outlets, and high-speed freight corridors to give our Indian manufacturing industry a strategic edge.

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Challenges in Roadmap to Reduce Logistics Cost

The major bottlenecks to production synergies and lowering logistics and trade costs are higher transportation costs and procedural delays.

  • Overpacked rail networks
  • Ships have a long turnaround time due to overcrowded berths and cargo evacuation delays.
  • Acceptance of technological advances

India’s first MultiModal Logistics Park is proposed to be built on a massive area of over 317 acres at Jogishopa in Assam. Loaded with multiple facilities like a Warehouse, cold storage, yard, petrol pump, parking, lodging, etc, MMLPs aim to reduce the logistics costs by a minimum of 10 %. 

Benefits of Multimodal Logistics Park and Lowering Freight Costs

If we work towards lowering our logistics costs and improving our transport systems, we can gain better access to international markets and increase trade. Mr. Nitin Gadkari, Union Minister of Road Transport and Highways, too emphasized the importance of lowering our current logistics costs by nearly 10% to achieve greater economic viability.

 Some of the appealing advantages are :

  • End-to-end transparency and visibility in the supply chain and logistics cost regulation.
  • Smooth management of storage and distribution of goods in warehouses.
  • Forecast product demand
  • Better inventory management and preventive maintenance.
  • Intelligent route planning to optimize delivery operations.

While addressing the event, “Climate Goals: Technological Roadmap to Net Zero”, he stated that by cutting our logistics costs, we can multiply our savings and boost exports by almost 50%. With technology, innovation, and research we can significantly lower our logistics cost building a fertile ground for manufacturers, entrepreneurs, and innovators at large. 

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The Final Thought

MultiModal Logistics Park  (MMLP) lay the foundation to reshape the infrastructure and encompass various logistics segments. It aims to streamline freight traffic, cold chain transportation, and warehousing. The Government intends to use digitalization to expand India’s logistics landscape so that it can compete with its global counterparts.

FAQs

What is the operating model for the project?

The project is built on Hub and Spoke model aimed to integrate freight through highways, railways, and inland waterways.

How is the Multimodal Logistics Park an eco-friendly initiative?

Multimodal Logistics Park will reduce pollution significantly. MMLP has the potential to reduce carbon emissions by 50%. Replacing regular plastic packaging with biodegradable packaging and reducing reliance on railways would help.

When the first Multimodal Logistics Park is set to be functional?

Jogighopa, the first Multimodal Logistics Park could be set up by 2023.


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