NEW DELHI: Moving freight to rail and optimising truck use, India can reach its goal to reduce logistics cost from 14% of GDP to 10% by 2022 and this can save up to Rs 10 lakh crore in 2022, a report by government think tank Niti Aayog said on Thursday.
“Improved rail mode share, increased logistics efficiency and clean vehicles are the building blocks for a transformative freight paradigm that is within India’s reach.
This freight paradigm will be cost-effective with reduced transport costs, clean with more efficient and electric vehicles, and optimised with improved mode share and operational efficiency.
Implementing multi-stakeholder collaboration in a phased manner is critical to this transformation,” said the Niti Aayog and RNI report titled Fast Tracking Freight in India.
As national freight activity grows about five-fold by 2050, India’s freight transport ecosystem has a critical role to play in supporting India’s ambitious priorities which include global competitiveness, job growth, urban and rural livelihoods, and clean air and environment.
It called for increasing the share of rail transport, optimising truck use, promoting use of fuel-efficient vehicles and alternative fuels.
The report said this strategy will lead to reduced logistics costs, reduced carbon emissions and improved air quality and less truck traffic on roads.
India can save 10 giga tonnes of CO2, 500 kilo tonnes of particulate matter (PM) and 15 million tonnes of nitrogen oxide (NOx ) caused by freight transport by 2050 while improved mode share and efficient logistics can reduce the vehicular-freight activity by 48 percent in 2050 over a business as usual scenario.
To increase the mode share of rail transport, India can Increase the rail network capacity and raise the share of intermodal transportation.
It recommended improving existing network infrastructure by increasing axle loads, increasing train length, and enabling trains to move faster, adding new network capacity by developing specialised heavy-haul corridors and dedicated freight corridors and identifying and upgrading corridors with high potential for intermodal transport and ensuring better modal integration across rail, road, and water.
The report said that rail’s share in freight transportation in India has been declining since 1951.
In 2020, it stood at merely 18% as compared to road’s share of 71%.
“This is due to insufficient rail capacity, especially on certain high-density routes.
Several factors suggest that rail could be a cost-effective and efficient alternative for a significant share of India’s freight,” it said.
To optimise truck use, India can improve transportation practices and warehousing practices and recommended several solutions to achieve the objective.
It called for improving load matching using digital platforms and get freight on the right type of truck, depending on the use case.
Maximise vehicle productivity through efficient packaging and loading and improving the siting of warehouses using the principles of optimised network design.
It recommended improving the performance of warehouses by implementing advanced digitised tools.
To promote clean, fuel-efficient vehicle technologies such as electric vehicles (EVs), India can prioritise improving fuel economy and reduce internal combustion engine vehicles’ emissions, the report said.
It also backed use EVs and cleaner fuels “The following actions can support the deployment of these solutions: • Enhance fuel consumption and emissions standards of ICE vehicles • Promote collaboration across industry players to share experiences with technology solutions • Implement supportive policies and pilot projects to deploy EVs and charging infrastructure • Manufacture high-quality electric vehicles and create a robust charging infrastructure network,” the report said.
The logistics sector accounts for 5% of the country’s GDP and employs 2.2 crore people.
India handles 4.6 billion tonnes of goods each year, amounting to a total annual cost of Rs 9.5 lakh crore.³ These goods represent a variety of domestic industries and products: 22% are agricultural goods, 39% are mining products, and 39% are manufacturing-related commodities.
Trucks and other vehicles handle most of the movement of these goods.
Railways, coastal and inland waterways, pipelines, and airways account for the rest, the report added.
Cost-effective, clean freight transport key for India’s growth
