National Academy of Indian Railways
Regional Cooperation Programme
19th Training Programme
Integrated Transport and Logistics
Logistics Parks and Terminals and Dry Ports-role of
Integrated Multimodal Transport
R Dayal
Asian Institute of Transport Development
Vadodara
9 March, 2016
Globalisation impacts logistics sector as no
other branch of industry
 Logistics promotes and facilitates the process of globalisation.
• Logistics shifts from a purely cost centre to centre creating value.
 Effective logistics management helps companies gain competitive
advantage through value enhancement and cost reduction.
 Trade is becoming more and more globalised, implying
• spatial expansion of the economy,
• more complex global economic integration, and
• an intricate network of global flows and hubs.
 To stay competitive in complex business, all stakeholders must
collaborate seamlessly across time horizons and functional and
geographical barriers.
Globalisation...
 The globalization juggernaut on an inexorable march.
 There is easy movement of goods, people, information, and finance across
national frontiers.
 Globalization in this context is euphemism for falling transport and trade costs.
 Freight costs have about halved in real terms since the mid-1970s, driven by
 investments in transport infrastructure,
 better capacity use, and
 technological progress.
 Falling costs of transportation and communication shave made the world smaller.
 But they have also made economic activity more geographically concentrated.
 More trade means lower costs of transportation which, in turn, has meant more
trade.
 Emphasis is on integration of national and international production systems with
a greater demand of a common web of integrated supply chain for
 speed,
 efficiency and
 reliability.
Logistics – assuming importance
 Logistics business is no longer limited to basic transportation.
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It encompasses a gamut of services such as
Warehousing
distribution
packaging
labelling
inventory management
order processing.
 Not only suppliers and customers are participants in the distribution or
marketing channel, but also third party logistics providers (3PL).
 A 4PL or lead logistics “manager” is sometimes seen as a supply chain
“manager”, a coordinating intermediary between the shipper and 3PL.
Evolution of logistics
Key growth drivers
 The key growth drivers for the logistics sector such as increase in foreign trade,
outsourcing of manufacturing activities and emergence of organised retail
catalysing the growth of warehousing, supply chain management, cold storage
and transportation.
 The changing business dynamics and the entry of global third-party logistics
players (3PL) has led to the remodelling of logistics services in India.
Rapid growth of warehousing
 The role of a warehouse has transformed from a conventional storehouse to an
inventory management set-up with greater emphasis on value-added services.
 Today, there is an increasing trend of relocating warehouses near consumer
markets.
 Traditionally, warehousing as an important constituent of the logistics sector
has been dominated by small players with low capacities and poor handling,
stacking and monitoring technologies.
 India's archaic warehousing system has been detrimental to efficient logistics
output.
Logistics is more than just transport
Transport...an evolving role
 More than half of world trade today is intra-industry trade.
• This trade consists of final and intermediate goods; both increased
considerably over the last 50 years.
 Intra-industry trade in machines and transport equipment is the highest.
 Falling communications costs have resulted in greater fragmentation of
services into “components,” supplied to final consumers from different
parts of the world.
 Improvements in transportation and communications favour a process of
geographical specialization that increases productivity and spatial
interactions.
Transport is not merely a cost centre as it has hitherto been considered.
• Transport is fast becoming a high-technology industry, making
research and innovation crucial to its further development.
Transport now an integral part of
production process.
 Transport has emerged to be a strategic sector.
 As trade becomes more and more globalised, logistics chains
become more complex and need to be managed globally.
 It is now the integrated transportation chain that matters:
• production,
• transportation,
• storage,
• distribution,
• information
 all integrated into one unique network.
Integrating multimodal logistics
 the evolution of integrated multimodal logistics.
 Intermodal transport industry continues to evolve, and in so doing, it
becomes increasingly integrated with supply chain management.
•
Today, ocean carriers integrate into ports, inland terminals and landside
transport links as well.
• Multimodal operators integrate into the reverse of this chain.
• Railways combine with port terminals.
• Road operators become logistics service providers.
• Freight forwarders extend traditional service boundaries.
 These developments have significant implications for logistics players:
• transportation companies will continue to migrate from pure transport to
value-added logistics services;
• boundaries between segments are likely to get blurred;
• consolidation trend will continue to increase, for
• scale and
• capability.
Logistics parks
 A logistics park is ideally situated near a large industrial city/town for
finished products from industries located nearby to be transported to
distribution centres speedily and economically.
• Similarly, raw materials can also be brought in conveniently through
the park at cheapest cost.
 If area and character of the logistics park warrants, it may be
designated as free trade warehousing zone and all facilities of a dry port
made available.
 A logistics park should better be developed as a well-run business
centre, to meet varying needs of trade and offering a vast range of
services.
• It should include facilities for business and entertainment, banking,
security, health, recreation, travel and transport, etc.
- also for customs, shipping and airlines, logistics service providers
and for commercial, banking and insurance transactions.
Lay out of a BNSF logistics park, Chicago
Lay out of a logistics park proposed at Vapi, India
Logistics parks : one-stop shop
 A logistics park is a notified area that facilitates domestic and foreign trade by providing services like
warehousing, cold storage, multimodal transport facility, container freight stations, etc.
 The park also acts as a place where a company can unload cargo for distribution, redistribution,
packaging and repackaging.
Key functions
Inventory management
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One aspect of modern terminals is inventory management essential in terms of optimal
utilization of resources and time.
Multimodal freight terminal as a logistics hub
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A multimodal freight terminal is always a bimodal or a multimodal hub, which can bundle up
mass flows, and buffer and allocate them according to the demand.
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An important component in a distributional logistics chain is the delivery of goods ‘just-in-time
(JIT)’, tailored to suit customer’s needs and, delivered in smaller quantities as well.
Multimodal freight terminal acts as a regional warehouse.
Freight Terminals
 Terminals for loading/unloading of bulk commodities (coal, ores, limestone,
dolomite, gypsum, bauxite, etc.)
 These commodities are carried in large quantities.
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It is necessary that loading operations be carried out by using payloaders, with 3-4 of
them working in tandem round-the-clock.
 Terminal for loading bottom discharge and side opening wagons
 Terminal for loading bottom discharge and side opening wagons with
mechanized rapid loading systems
 Terminal for unloading side opening wagons with mechanized tipplers
 With a rotary tippler in place, a rake of 60 BOX wagons can be tippled within
1½ - 2 hours.
 Rotary tipplers are ideally suited for merry-go-round systems or for a track layout in
the shape of a bulb.
 Layout for a buffer ended terminus:
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Wagons are tippled while the train engine slowly pulls the rake.
Contd…
 Terminal for loading/unloading of homogeneous, free flowing
commodities carried in unpackaged form (cement, foodgrains,
fertilizers, etc.)
 Cement, foodgrains, fertilizers, etc., though normally carried in packaged
form, some of them, being homogeneous and free flowing, are also carried
unpackaged, in special type of wagons.
 Terminal for loading/unloading of commodities in packaged form
(goods sheds, railside warehouses)
 Terminal for loading/unloading of POL products and LPG
 Terminal for handling containerized cargo
 Terminals for handling containerized cargo may be shared by more than
one container operator, for collection of containers for formation of full
trainload to be expedited.
Freight terminals: new answers
Block rake movement in the 1970s marked a new development in terminal management.
Engine-on-load concept
 Introduction of engine-on-Load (EOL) concept at almost all major bulk loading points for
iron ore and coal in the early 1990s revolutionized terminal management and helped
drastically reduce detention to wagons by wedding locomotives to the rake.
Mechanised handling
 Seamless integration of railway system with in-plant terminal handling system to
universalize engine-on-load system of operation.
 Suitable mechanized rapid loading and unloading systems with backup facilities for faster
loading and unloading.
 Choice of most appropriate commodity-specific customized wagons to derive optimal
turnround of wagons as well as throughput.
 Suitable technology to ensure loading/unloading under the wire in view of progressive
electrification.
 Transition from existing system to heavy-haul rail operations.
Seamless integration
 The railway layout has to be so designed that there is always a forward movement without
involving detachment of locomotive or reversal of brake van.
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This will entail abandonment of exchange yards and R&D yards.
Changing scene posing new challenges
 Till the late 1970s, railway operations mostly confined to piece-meal loading and movement,
• individual goods sheds were designed to handle low volume of traffic.
 Need of the times was huge marshalling yards, big transit/repacking sheds, transshipment
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sheds.
Block rake movement in early 1980s revolutionised Indian railway operations, and sounded
death knell of marshalling yards with allied repacking/transit sheds.
• The main bottleneck to improved efficiency was the absence of full-length goods shed
lines capable of releasing an entire rake in a single placement.
• Releasing a full rake within hours of placement required sufficient labour to begin with.
With a an entire rake getting unloaded at the same time , it was no longer feasible to have
secured covered sheds for keeping goods in safe custody.
Rake-load of consignments required spacious circulating areas for a large number of trucks to
operate simultaneously.
At most places, railways face popular pressure for shifting of most of their major goods sheds to
outside city limits.
There are two options available with railways at present.
• One, to permit private players to go in for their own freight terminals on private land with
railways providing connectivity from the nearest station.
• Second, railways to go in for its own freight terminals on railway land to be managed by
railways themselves or outsourced to private operators.
Some essentials for a terminal
 The transport technology has also undergone a sea-change during the last over
three decades.
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With container becoming a mainstay of transportation, integrated intermodal
transportation has assumed great importance.
This has necessitated setting up of container terminals both at ports and their
hinterlands.
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Layout may preferably be based on the principle of a loop or balloon for smooth
and uninterrupted operations inside a port terminal.
Layout of rail lines and different clusters/grids serving specific streams of traffic in
the port should provide for intra-grid and inter-cluster operations to be managed
without hindering normal operations or conflicting movements.
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A common operator should be employed to carry out the loading/unloading
operations at different container terminals.
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Smooth train as well as shunting operations in the port area be facilitated by the
installation of a state-of-the-art signalling and communication system.
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Provision of EDI network with integrated compatible platforms among different
stakeholders is an imperative in today's logistics ecosystem.
A Dry Port
UNCTAD provides a comprehensive definition of a dry port:
"A common user facility with public authority status,
equipped with fixed installations and offering services for
handling and temporary storage of any kind of goods
(including containers) carried under customs transit by any
applicable mode of transport, placed under customs control
and with customs and other agencies competent to clear
goods for home use, warehousing, temporary admissions, reexport, temporary storage for onward transit and outright
export".
Dry port-an extension of port
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ICDs (inland container depots) and CFSs (container freight stations), as dry ports in generic
terms, in reality, "ports without water"
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serve as nodes for consolidation and distribution of goods with functions analogous to
those of a gateway port.
An ICD is as a rule located in proximity of an industrial/commercial centre.
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A CFS is typically closer to a port.
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It is also set up inland, as, in fact, several of them in India for linkage to regional rail-linked
ICD by road.
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Shippers get benefit not only of speed, and door-to-door services, but also for a complete
logistics solution, which generally involves multimodal integration.
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Inland-based shippers typically have an opportunity to undertake international trade
through local facilities;
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Essential functions such as customs clearance and documentation for export undertaken
locally.
Smaller shippers can benefit from consolidation of their consignments to form full unit loads
(LCL
FCL; FCL
Liner train).
A dry port: Potential hub of prosperity
 With the terminals working as one-stop, single-window facilities and an optimal mix of road-
cum-rail services from factory to port, involving first-mile pick-up and last-mile delivery, a
complete service package has materialized.
 A dry port/ ICD/CFS/distripark/freight village, in generic terms, implies facilities in close
vicinity of production/consumption centres for speedy evacuation of import/export containers
from/to a gateway port, for:
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unitisation, stuffing/de-stuffing of cargo, and mandatory clearances
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warehousing for safety and security of cargo during in-transit storage
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storage, cleaning, repair and transport of empty containers
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integrated logistics/value-added services.
 Europlatforms, the European Association of Freight Villages defines a freight village as
“a defined area within which all activities relating to transport, logistics and distribution of
goods, both for national and international transit, are carried out by various operators.
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In order to encourage intermodal transport for the handling of goods, a freight village
must preferably be served by a multiplicity of transport modes (road, rail, deep-sea, inland
waterway, air)...."
Intermodal Transport Industry is
Continuing to Evolve
Ever increasing volumes
 The enormous increase in the volume of goods produced and distributed.
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This has led to an ever-increasing need to transport ever-increasing quantities.
 These volumes will stretch the limits of seaside infrastructure as much as land for inland intermodal
installations.
 Container port handling worldwide estimated at 1 billion TEU by 2020, doubling the volume of 506
million TEU in 2008 (UNCTAD).
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Cumulative container traffic flows within Asia and between Asia and Europe expected to register a
quantum jump, from an annual existing 32 million TEU level to 98 million TEU in 2025.
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Intra-Asia trade itself is slated to increase, from 20 million TEU p. a. now to over 57 million TEU in 2025.
 Seaport throughput and efficiency jeopardised by bottlenecks in ancillary landside transport system
serving the ports.
 Ports, especially large gateways, today face an array of constraints, impairing their growth and
efficiency:
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scarce availability of land for expansion,
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deepwater requirements for handling larger ships,
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diseconomies of ports as local road and rail systems are seriously strained.
 Environmental constraints and local opposition to port development exacerbate the problem.
Inland terminals support gateways
 Inland terminals become the desired hinterland platform solution and enable
the seaport to increase its terminal capacity.
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To avoid congestion, port operators increasingly channeling incoming container
flows to satellite terminals or intermodal transfer points in the hinterland
 The change in the composition of international trade, with a shift away from
basic commodities towards processed primary products and manufactured
goods, favours growth in container volumes.
 The dynamic growth in the container trade has mainly resulted from:
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increasing exchange of goods in the course of the growing integration of
national economies and stronger international division of labour;
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increasing share of manufacturing, and value-added products in trade;
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movement of production facilities to overseas locations;
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reduction in transportation costs for containers and consequent increase in the
suitability of containerisation for lower value exports; and
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continuing increase in cargo deliveries to the large seaports by means of feeder
vessels.
Critical institutional framework
 To duly coordinate various interests and considerations of growth of multimodal
transport :
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An Inter-Ministerial Committee (IMC) framed guidelines for approval of all
applications for the setting up of ICDs/CFSs.
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involving all stakeholders, including trade and industry, customs, ports and
shipping, railways, roads and other interests.
 All applications for the setting up of ICDs/CFSs are analysed and approved by IMC
 Generally, ICDs and CFSs traditionally been linked to only maritime services, shipping
and ports.
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Some of the ICDs in India have brought within their ambit air cargo as well
 For legal, financial and liability issues, Government enacted Multimodal Transport of
Goods Act, inter alia, for legal support for international banking and liability aspects to
be addressed.
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The MT document serves as an instrument to enforce provisions of the law by
assigning liabilities and responsibilities to MTO, consignor, consignee, insurer and
banker.
Container Business: A Mainstay
DFC – a new kid on the block
 The Dedicated Rail Freight Corridor (DFC), particularly
between Mumbai and Delhi, will have goods trains running
on according to timetable.
• About 100 trains are projected to run per day on Delhi-
Mumbai corridor in 2021-22 at a speed of up to 100 km/h
 Double stack container trains of flat cars under
electric wires are due to run on the corridor.
• About 1.5 km long, each train carrying 400 TEU.
Integrators
 Express air-freight has made overnight delivery possible to most
places on earth.
• Express product definition has changed over time to represent a
type of service rather than a product.
 Large integrators are expanding the logistics service provider value
chain.
 Integrators constitute the nearest approximation to inter-modality.
• They operate in a multimodal environment for door-to-door
service.
• They operate on a single document – one way-bill, no matter
how far shipments are transported, or how many modes are
involved.
 Integrators provide all information to customers through a single
contact.
Thank You