Multimodal Transportation: Chapter 3 (Part 2)

Multimodal Transportation: Chapter 3 (Part 2)

Transport Corporation of India LimitedBy Transport Corporation of India Limited January 16, 2018

20 Percentage of cargo in India that is containerized

It is observed from Table 16 that while multi-modal transportation requires a longer transit time than for road transportation, the economies of scale for multi-modal transportation are clearly evident, especially when rake capacity increases. The cost of road transportation is almost always higher than for multi-modal transportation for every route.s

It is evident from the data shown in Table 16 that for scale economies, the share of railways in carrying freight should increase beyond the current level. In the US and China, railways carry 47-48% of the total freight volume. According to a study by McKinsey & Co.9, in China, roads, railways and waterways carried 22%, 47% and 30%, respectively, of the total freight volume shipped in 2007.

The ideal modal mix for India, as reported by McKinsey & Co., should be an even balance between roads and railways, each carrying about 46-47% of the total freight volume. A 2012 study by Frost & Sullivan10 reports that the major industries in India availing multi-modal transportation services are engineering goods, pharmaceuticals, retail, automotive, auto components, electronics and communication. A majority of these industries use a combination of roads and railways although some of them also use a combination of roads and airways, and roads and waterways, depending on the nature of shipment, network, transit time and cost economies.

Some of the major concerns expressed by the survey respondents regarding multi-modal transportation are the lack of coordination between road transport and railways, loading delay at railway stations, unavailability of rakes, lower frequency of goods train movement on certain routes, incompatible policies and procedures between road and rail transportation, and an inability of service providers to offer efficient, seamless and end-to-end transportation solutions.

Another problem associated with freight transportation by railways is the low level of cargo containerization in India. While in developed countries, the level of cargo containerization is 80%, in India the figure is 20%. To increase the share of railways in freight movement, the level of cargo containerization must be enhanced.

The cost of road transportation is almost always higher than that for multi-modal transportation for every route.

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