The Frost & Sullivan report forecasts that the share of railways in carrying freight would increase by about 5% and the corresponding share of roads would decrease by about the same percentage by 2017. India’s international trade is growing at 10-12% annually with a commensurate increase in cargo containerization.
Most of India’s import and export of goods are through major seaports, which need to be connected with the hinterland and mainland through a mix of transportation modes, increasing the need for multimodal transportation. With increased cargo containerisation, it will also be easier to shift cargo from one mode of transport to another, facilitating a mix of transportation modes.
Earlier, Container Corporation of India (CONCOR) had a monopoly in running container trains. Once Indian Railways opened container freight operations to private operators, many private service providers commenced container freight trains with their own Inland Container Depots (ICD). The entry of private container train operators will increase cargo containerisation.
Freight transportation by railways will also get a boost when the dedicated freight corridors (DFC) become operational by 2015/2016.
The eastern (Ludhiana to Dankuni) and western (Dadri to JNPT) DFCs will cover almost 3,300 route kms, run longer and heavier trains, accommodate faster speeds up to 100 kmph, guarantee transit time and reduce unit transportation costs.
Many large logistics parks with multimodal facilities have already been set up or are in the process of being set up by private parties either on their own or through collaborations with Government entities such as CONCOR in the publicprivate partnership (PPP) mode.
MIHAN (Multi-modal International Hub and Airport at Nagpur) and Vizag International Cargo Terminal are two prominent examples of multi-modal logistics parks (MMLP).
The Ministry of Railways plans to set up 10 MMLPs along the DFCs within 300 km of each other. These MMLPs, spanning 400-500 hectares and built by Government and private funding, would accommodate railway sidings with sheds, container depots, warehouses, office building and assembly units. Once operational, these MMLPs are expected to bring down operational costs by 20-30%.
In the near future, road transportation will still dominate rail transportation in terms of passenger and freight. However, as already mentioned, because of increased cargo containerisation and the operational commencement of DFCs, the share of railways in carrying freight will increase marginally at the cost of a road share.
Air freight will continue to be used only for high-value, time-sensitive and perishable goods, its share of freight movement likely to be limited to 1-2% as before.
Despite possessing a coastline of about 7,500 km and close to 6,000 km of navigable inland waterways in the form of rivers and canals, India’s coastal and inland waterway transportation is extensively underutilised, contributing only 3-4% of domestic freight movement by volume.
If infrastructural bottlenecks can be removed, there is an immense potential increase the share of coastal and inland waterways in domestic freight movement that could not only lead to economies of scale, but also reduce carbon emissions and environmental pollution.
As shippers prefer a single-service provider to provide seamless end-to-end multimodal transportation solutions, large capital investments may be necessary through the PPP mode.
Also, since coordination among the different transportation modes is critical to quality, an apex body, say Multi-Modal Transport Regulatory Authority of India (MMTRAI), in line with the Telecom Regulatory Authority of India (TRAI), may be set up to coordinate the different ministries, i.e. Ministry of Road Transport and Highways, Ministry of Railways, Ministry of Shipping and Ministry of Civil Aviation to facilitate multi-modal transportation.