The logistics sector in India has conven-tionally relied on roads to facilitate their freight transportation requ-irements. An already grid-locked road network, accounting for 65 per cent of the freight movement in the country, has severely under-mined the competitiveness of Indian logistics. It has also resulted in substantial cost overruns for the industry with environmental impli-cations also.
Realising the importance of providing a viable cargo transport alternative to logistics sector players, the government has unveiled the dedicated rail freight corridor (DRFC) initiative. Aiming to create an integrated rail corridor framework in the country and mitigate the burden of existential rail routes whose efficiencies have been marred by high line capacity utilisation, the government will be constructing six freight corridors across the country. Work is already on in full force on the 1,500 km western freight corridor, which will run from Dadri near Delhi to JNPT, Mumbai and the eastern corridor traversing 1,800 km from Ludhiana, Punjab to Dankuni, West Bengal. Both the corridors are on completion course and expected to become operational by 2020-21.
The high-speed dedi-cated freight-only lines will not only establish crucial rail connectivity but also create trade and commerce linkages with emerging markets located across the country’s hinterlands. The freight corridors can play a pivotal role in unleashing the economic growth and development potential of untapped and under-developed regions by facilitating the setting up of multi-modal logistics parks (MMLPs) and industrial clusters. The government will need to expedite the pace of identifying strategic locations and develop the right infrastructure for the integrated development of multi-modal logistics parks offering world-class logistics and warehousing facilities. A significant rise in the modal share of railways in the overall freight transport mix will enable the seamless movement of goods from multi-modal logistics parks to faraway market locations, accelerating delivery schedules and optimising high transport transaction costs. Laying the foundation of an effective multi-modal logistics park model will require the convergence of key factors like monetary and tax incentives, regulatory reforms, transport connectivity, access to working capital and a robust information technology framework. The government should place high priority onus on demarcating areas for the development of industrial clusters and integrated industrial town-ships in proximity to dedicated freight corridors for increasing employment opportunities, fostering ind-ustrial growth and produc-tivity and facilitating supply chain value enhancement.
As consumers from small towns and hinterlands of India redefine consumption patterns and reshape market purchase dynamics, com-panies are reorienting their marketing strategies and revamping their distribution channels to tap into under-leveraged consumer markets in tier II and III regions of the country. The dedicated freight corridor project will be a key corollary in boosting consumer-led economic growth as trade and commercial activity is uplifted and large-scale employment is generated in key investment clusters and industry belts set up in proximity to the rail corridors. Streamlining logi-stical processes and improving crucial connec-tivity between production centres and consumption markets, dedicated freight corridor holds the promise of revitalising regional market competencies and inte-grating a widely-scattered consumer base within the national supply chain mainframe. Providing cru-cial socio-economic linkages and shorter transit time for bulk traffic, the rail corridors project will play a key role in connecting consumer aspi-rations with supply chain strategies and providing a sustainable roadmap for consumer-centric growth and development in under-penetrated regional markets.
The dedicated freight corridor initiative will also boost the efficacies of the ambitious Sagarmala pro-gramme by expediting end-to-end rail and port connectivity. The “freight only” rail transport corridors will fast pace freight movement between ind-ustrial heartlands in north India and ports on the eastern and Western seaboard of India.
Environmental conservation and protection of fragile ecological resources will receive a much-needed boost owing to the dedicated freight corridor project. Green-house gas emissions will largely be curtailed and the carbon footprint will be significantly lowered as emerging freight corridors account for a major bulk of the freight traffic movement. As reduced vehicular traffic density leads to road decongestion, there will be a substantial reduction in use of conventional fossil fuels.
An ambitious pro-industry initiative, the dedicated freight corridor project has the potential to transform the functional contours of Indian logistics and boost its revenue-earning capacities. One of the largest rail freight transport initiatives globally, its scale and complexities remain unparalleled in contemporary times. A game-changer for the Indian logistics sector, the successful completion and seamless implementation of the project within stipulated deadlines will determine the course that Indian logistics will chart in the near future.
Realising the larger vision of the government’s ‘make In India’ campaign, the dedicated freight corridor project aims at providing indigenous solutions to resolve India’s freight movement bottlenecks, promote inclusive growth and development through enhanced connectivity between the country’s ports and heartlands and create a conducive ecosystem for raising India’s standing as a global logistics power.
(The writer is executive director & CEO at Allcargo Logistics)