Multimodal Transport System in India

Multimodal

Transport

System In India

Sustainability Model

Ravi Soni | Sunil Patil

March 2020

www.grusandgrade.com

Acknowledgements

This report has been prepared by group of Students from IIM Indore to identify the core concepts and develop models for sustainable agricultural development programs, policies and methodologies.

We thank Prof. Krishnan Natarajan for his guidance, support and encouragement for building up the concepts and the contents of this research paper.

We also thank the entire team of librarians in IIM Indore for providing us the research documents and helping us zeroing the search process for timely completion of the report. Disclaimer

This document does not claim that every theory and model to be original. The key interpretations, logical designs, critical approach and interpretations based on derivatives, findings expressed herein are those of the student(s) and do not necessarily reflect the views of any individual, organization or institution.

The purpose of this note is purely academic and for creating interest in the academic/intellectual community for further research and innovation in the area of Logistics & Distribution Management for sustainable development of the sector.

Rights and Permission

The authors/ researchers of this project report hold the copyright for the entire scope of work. Copying and/or transmitting portions may be violation of the copyright laws.

2 Table of Contents Abbreviations ...... 5 Multimodal Transport System (MTS) | An Overview ...... 7 Global Perspective : European Case Analysis ...... 8 Transport System in India | Critical Evaluation ...... 10 Road Transport ...... 12 Railways ...... 14 Waterways : Shipping ...... 16 Airways ...... 18 Economic Growth of India |Multimodal Transport ...... 19 Transport Infrastructure Growth In India : An Economic Perspective ...... 20 Multimodal Transport in India : A basic perspective ...... 21 Multimode Transport System & Sustainable Growth Study : System Approach...... 23 Energy Consumption : Mathematical Decomposition ...... 24 Multimodal Transport in India : A Low Carbon Model for the policy Makers ...... 27 Technological Innovations as enablers : Multimodal Transport Revolution ...... 29 MTS | Pricing Strategy ...... 32 Multimodal Transport System : Legal Framework ...... 36 Challenges and Constraints ...... 38 Key Recommendation ...... 40 Bibliography ...... 41

4 Abbreviations

AI : Artificial Intelligence

DFC : Dedicate Freight Corridor

EG is Economic Growth

GCF : Gross Domestic Capital Formation

GLTIH : Growth Led Transport Infrastructure Hypothesis

KDS : Kolkata Dock System

IEA : International Energy Agency

LPN : Logistic Performance Index

MTS : Multimodal Transport System

MTO : Multimodal Transport Operator

NPP : National Perspective Plan

OECD : Organization for Economic Co-operation and Development

RFID : Radio Frequency Identification

PACS : Port Control System : Multimodal Transport System

TILGH : Transport Infrastructure Led Growth Hypothesis

TINF : Total Transport Infrastructure

MTS : Multimodal Transport System

UNIDROIT : International Institute for the Unification of Private Law

3 PL : Third Party Logistics Provider

UNCTAD : United Nation Conference on Trade and Development

VECM : Vector Error Correction Model

Abbreviations

Multimodal Transport System (MTS) | An

Overview What is Multimodal

A Multimodal Transport System uses a combination of more Transport System than one mode of transport and integrates the scope and An integrated transport, logistics viability of simultaneous use of various inter-linked network of & distribution strategy that involves more than one or distribution and logistics channels. Thus, use of at least two or different modes of more modes of transportation which enhances the overall transportation briefly describes efficiency of distribution channel can be briefly termed as Multimodal Transport System. Multimodal Transport System “ Movement of goods in

An efficient and sustainable model which uses various channels one and the same of transportation for efficient allocation and use of resources. loading unit* or road This helps not only to reduce the lead time for delivery of goods vehicle, which uses and services but also encompasses financial and cost efficiency, successively two or more on time delivery, warehouse and storage efficiency, information modes of transport and communication flow as well as environmental protection without handling the (by reduced use of energy and fuel). The model also helps to goods themselves in contains risk of damages, wastage and pilferages. changing modes” [UN CEC ] A simple elucidation of use of multimodal transport system can be explained in the following diagram: *Loading Units : Containers, Swap Bodies, Cranable Semi-Trailers

Customer Order Key Features

Load to truck Warehouse

Reload Lead to Rail truck Wagon & unload to railroad car

Lead to Cargo Plane Use rail service

7 Intermodal Transport in Europe Global Perspective : European Case Analysis Few Facts

➢ Freight transport (by volume in As per the research ton-km) will grow up to 150-230 report of Norbert % by 2050. MULTIMODAL TRANSPORT IS A ‘LEGAL Wagner published in ➢ EU policy Aim : By 2030 shift 30% TERM’ AND IS USED FOR ‘DOOR TO Scientific Journal of by 2030 and 50% by 20250 of DOOR MOVEMENT OF GOODS UNDER road freight to other modes such Logistics, the THE RESPONSIBILITY OF A SINGLE as Waterways or Railways Multimodal transport TRANSPORT OPERATOR KNOWN AS ➢ At present the share of road system uses makes transport in land freight MUTIMODAL TRANSPORT OPERATIOR optimal use of all transport in EU is approximately (MTO) ON ONE TRANSPORT channels of 70% DOCUMENT. transportation can ideally contribute to [UNCTAD, 2014] increase in level of efficiency and attractiveness of the overall transport system. This will ease the burden of all logistical solutions from road infrastructure and build in additional capacity in water, rail and air network.

Intermodal Markets can be classified into two broad categories :

1. Seaborne trade : Pre-On Carriage From-To Seaport

Source : Scientific Journal of Logistics Hinterland 2. Continental intermodal : Unaccompanied craneable semi-trailers Innovation is the key and swap “Containerization is a sea battle, The model innovations required bodies fought and won ashore” development of multimodal transport in Europe include :

A. Multimodal transport in ocean Seaborne Container Transport : Economies of Scale and carriers in maritime hinterland Multimodality transportation B. Innovation in technology related Sovereign data across various countries in Europe indicate to handling of non-craneable that the container traffic has reached a relatively maturity logistics stage. Still there are scope for organic growth and with the C. Development of dedicated innovation in technology and integration of multimodal freight corridors for long distance intermodal transport within the network, the scalability has been studied in the present TEN-T network and Europe Asia report on the basis of the following recommendations : corridor

8 Hinterland hubs & dry ports

Establish hinterland terminals and hubs which act as centres MULTIMODAL for sorting, consolidation and distribution of containers and TRANSPORT DOC. railcars.

Hinterland distribution centres Provision for multimodal The share of ports in logistics and distribution channel is very transport document came into force in 1992 high. This burden can be shifted to hinterlands, thus reducing [UNCATD 1992]. These the burden on ports, decongesting the roads and making documents are the FIATA inventory flow smooth. Bill of Lading or the Make sea carrier a realty in multimodal transport network MULTIDOC 95.

Integrate the land leg and provide a full packaged service. o Integration of vessels owning ocean carriers and sell container over capacity o Multivariant 3 PL ( Third Party Logistic Provider) o Reduce imbalance in container flow and logistics This document serve as a o Invest into hinterland system development which is pre- document of title and are condition for developing a robust multimodal transport bankable in documentary system. credit as per UCPDC 600.

Technological innovations and interventions

Semi-Trailers dominate with more than 66% of transport Plaza Logestica volume, but less than 2% of these are equipped with vertical Zaragoza handlers and robotic cranes. The logistical park in the There is a vast scope for development of material handling outskirts of Zaragoza, and automated crane in Semi-Trailer segment. Though many Spain with a total surface technological thought process has done research in the area of 12,826,898 sq m segment, but none has gone beyond pilot test stage. and an initial investment of over € 170 million,

On account of increase in transportation and logistics cost PLAZA is the largest supplemented by a pressure to reduce greenhouse gases logistical park in Europe. (fuel efficacy increase) technological innovation in rail It acts as a hub for transport becomes imperative. multimodal transport An innovation in IOT, ICT, AI, Digitalization, Blockchain, network in Europe. Augmented Realty is thus the need of hour for developing a sustainable multimodal transport network.

9 Transport System in India | Critical Evaluation

Road Transport India has one of the largest road network of more than 5.8 million KM. This network is responsible for 64.5% of transport of goods and more than 90% of the passenger traffic. With the improvement in connectivity in rural area and development of improved infrastructure in roads, the volume per Sq. km of roads has increased rapidly.

Investment in Road Transport Infrastructure

Total investment in the sector increased from USD 7.43 billion in year 2014-15 to USD 22.73 billion in year 2018-19. As per the data released by Department of Industrial Policy and Promotion, construction development projects resulted in inflow of USD 25.12 billion through FDI route. In March 2019, NHAI projects worth USD 15.99 billion were inaugurated.

The Government through a series of initiatives, is working on policies to attract significant investor interest. It is estimated that by 2022 a total of

22,000 km of national highway will be completed.

Few interesting facts

➢ A total of 65,000 km of roads and highways are to be constructed under Bharatmala Pariyojana. ➢ As of November 2019, there were 9,242 PPP projects in India, of which 2,864 were related to roads and bridges. ➢ The construction of national highway per day increased to 26.9 kms per day in FY18 from 11.6 kms per day in FY14.

Railways

Indian Railways is among the world’s largest rail network with a total route length of 1,23,236 km transports 3 million tons (MT) of freight daily and approximately 3 million passenger travel daily on it. Main benefits of transportation through railways include : a. Cost efficiency b. Less fuel/energy consumption c. Mass transportation and time reduction due to dedicated network.

IR’s revenue increased at a CAGR of 6.2% during FY 2018-19 to USD 27.13 billion in FY 2019. Fregith revenue grew at CAGR of 4030% during the same period. IR is among the top 20 exporters, and its exports has grown at a CAGR of 31.51% during last ten years. The estimated exports during the year 2019 was USD 635 million.

The total FDI inflow during last ten years ( 2010- 18) has been USD 997.24 million.

Over a period of next five years, IR market will be world’s third largest and will account for more than 10% of the global market.

As per the projection’s the freight traffic via the Dedicated Freight Corridors (DFCs) will increase at a CAGR of 5.4% to 182 MT in FY 2021-22.

Dedicated Freight Corridor Corp. of India Ltd (DFCCIL), is already building the first two freight corridors—Eastern Freight Corridor from Ludhiana to Dankuni (1,856km) and Western Freight Corridor from Dadri to Jawaharlal Nehru Port (1,504km)—at a total cost of Rs 81,000 crore (US$ 11.59 billion).

Waterways : Shipping

As per Ministry of Shipping, GOI approximately 95% of the country’s trading by volume and 70% by value is done through maritime transport.

India has 12 major ports and 205 minor and intermediate ports. Under National Perspective Plan (NPP) for Sagarmala, six more ports will be developed. While we have a cost line of 7517 km, the full potential of this wide cost line is yet to be explored fully. The GOI has allowed 100% FDI under automatic route for port and harbour construction and maintenance projects. There is also a provision of 10 year tax holiday to the enterprise who develop ports, inland waterways and ports.

The cargo traffic at major ports in the country during FY 2019 was 669.05 MT and in the current year till Nov 2019 it was 463.07 MT. The major ports had a capacity of 1514.09 MT per annum. As per the GOI’s Maritime Agenda 2010-20, the total capacity build up of 3130 MT has been targeted for FY 2020.

The sector witnessed three major M&A deals in 2017 for USD 29 million. GOI plans to develop ten costal economic regions as part of revival strategy of Sagarmala Project.

During the year 2019, National Waterway-2

(cargo on Brahmaputra in NE India) was initiated. Technological upgradation such as implantation of RFID based Port Control System (PACS) at Kolkata Dock System has been initiated.

In March 2018, a revised Model Concession Agreement (MCA) was approved to make port projects more investor-friendly and make investment climate in the sector more attractive.

Airways

Though the civil aviation industry in India has been identified as one of the fastest growing industries of the world, the sector has its own challenges. The capital intensive industry operates on razor thin operating margin. Any inefficient management or service quality leads to downfall of the industry, leading to resource constraints. The sector has seen two major bankruptcies (Jet & Kingfisher), while the state run Air India is also witnessing its gradual demise.

Despite these challenges and setback, the Indian Aviation market is growing steeply and is expected to overtake UK to become worlds third largest air passenger market by 2024.

The sector has rich potential for investment and as per DIIP, FDI inflow in the country’s air sector reached USD 1904.07 million between April 2010 and June 2019. The Govt has 100 percent FDI under automatic route in scheduled air transport service. FDI over 49% require Government approval.

The GOI is planning to invest USD 1.83 billion for development of airport infrastructure along with navigation services by 2026.

• As per the Union Budget 2019-20, government will promote aircraft financing and leasing activities to make India's aviation market self-reliant. • In February 2019, the Government of India sanctioned the development of a new greenfield airport in Hirasar, Gujarat, with an estimated investment of Rs 1,405 crore (US$ 194.73 million).

18 Economic Growth of India |Multimodal Transport

The sustainability of growth and development of Indian economy can be facilitated by development of integrated and robust transportation network. A multimodal solution for developing an integrated and sustainable infrastructure network is not only the sufficient but also a necessary condition for a progressive India.

The key benefits of developing a sustainable multimodal transport network in India are:

1. Increase in production, distribution and logistical capability. GDP & Employment growth. 2. Reduces time, improves allocation of resources and helps in increased ROI. 3. Changes aggregate demand (called the infrastructure effect) 4. Saves cost, improves fuel consumption, reduces energy consumption. 5. Helps in creating less carbon footprint, reduces green-house gas emission. A sustainable model. 6. Targets universal education and healthcare

19 Transport Infrastructure Growth In India : An Economic Perspective The above nexus indicates that the transport infrastructure and economic growth are deeply interlinked.

Demand Driven Growth Supply Driven Growth ECONOMIC EXPANSION IS THE REAL DUE TO INVESTMENT IN REAON FOR GROWTH OF TRASPORT INFRASTRUCTURE OF TRASNPORT INFRASTRUCTURE SYSTEM, ECONOMIC DEVELOPMENT IS GETTIGN AUGMENTED DEMAND PULLS TRASNPORTAION GROWTH INVESTMENT PUSHES ECONOMIC GROWTH Two different hypothesis thus exists for building up relationship between economic growth and transportation infrastructure development :

Hypothesis 1 : TILGH

Transport Infrastructure Led Growth Hypothesis

Hypothesis 2 : GLTIH

Growth Led Transport Infrastructure Hypothesis

As per the Keynesian economic model, the state needs to pay the toll for infusing economic development, thus make investment to create demand. India witnessed demand led development model post liberalization (1991 onwards). In the present paper we have tried to capture the effect of rail and road infrastructure development to understand the economic growth.

In order to analyse the interrelation between Transport infrastructure and economic growth, the following function has been used :

EG = f ( TINF, GCF)

Where, EG is Economic Growth

TINF : Total Transport Infrastructure

GCF : Gross Domestic Capital Formation

(GDP has been used as a proxy for economic growth for analysis)

A mathematical prognosis based on Granger Casualty test (VECM approach) which has not been elaborated in the present work (beyond the scope of present paper) indicates that there exists a bidirectional causality between road infrastructure and economic growth and vice versa.

20 Multimodal Transport in India : A basic perspective End to End delivery of goods and services in a county like India with huge geographic and demographic divide is a STORIES humongous job. Multimodal transport service in India can shape its own perspective for different service providers of the county. Majority of report and logistic firms in India are family In Varanasi, a freight owned or small dis-integrated players. village is being developed This acts as a major challenge and dissuading factor for along the river to enhance creating a robust and efficient multimodal transport the potential of Eastern network. DFC and to augment traffic Development of an integrated multimodal infrastructure capacity along the National requires huge capital investment as well as coherent and Waterway 1. Inland transparent policy initiative. waterways cargo In 1960’s Indian Railways played a crucial role in movement has already promoting multimodal transport in India. started from NW-1 by Standardized ISO containers began to be used 1970 PepsiCo, Dabur, Emami, onwards and in 1981 the first ISO container was moved. IFFCO from Kolkata to In 1988 CONCOR was established as an offshoot of IR Varanasi where a freight Multimodal Transport Act was passed in 1993 by Indian village is being developed Parliament to establish a standardization in the sector. to connect it to the Director General of Shipping was identified as the eastern DFC competent authority. TOP 15 Logistics Firms in This act paved way for Multimodal Transport Operators India (MTO) IT has been the major enabler in this sector. Use of RIFD, 1. Indian Railways E-Way Bill, GPS Tracking, Robotics, Analytics and AI, 2. House of Patels Blockchain, IoT, ICT and Augmented Glass has been the 3. VRL Group new generation technological revolutions transforming 4. TCI multimodal transport infrastructure. 5. CCIL Complete supply chain and documentation process has 6. Gati Ltd. been revolutionized due to integration of technology. 7. Ghage Patil Transport Completion of dedicated freight corridors (DFCs) will 8. Logistics Post enhance the share of rail freight in the country from the 9. Eastern Cargo Carriers current 30% to around 60-70% 10. ABC India Ltd Private players have been given licence to own their 11. Aegis Group freight trains. This will reduce monopoly of CONCOR 12. Allcargo Logistics while improving the infrastructure due to private 13. DTDC investment. 14. Safeexpress NE India has taken a lead in development of MMT 15. Global Vectra Helicorp Infrastructure in India.

22 Multimode Transport System & Sustainable Growth Study : System Approach

In order to understand the major constraints and need for development of multimodal transport network, we have tried to draw a system archetype diagram for a system’s approach view :

23 The system’s approach in the diagram above indicates that though there are positive reinforcing loops created by robust development of infrastructure thereby promising the growth needed for growing needs and demand of an ever increasing population, in the hindsight it is constrained by a multiple of factors such as policy delays, infrastructural bottlenecks, disintegrated players, high consumption of energy and fuel and carbon emission. These have adverse effect on sustainability.

In order to overcome the challenges, a system’s approach is needed. This implies that a concerted effort of all the stakeholder’s such as Government, General Population, Investors, Industrialist, NGOs, World Organizations etc need to act simultaneously to build a robust multi modal transport system.

The development of a robust infrastructure can help India save more than 10% of its cost of logistics and thus boost the exports by more than 5-6% annually due to cost differentiation from transport system itself.

Energy Consumption : Mathematical Decomposition

We have tried to formulate a mathematical model keeping in view the following objectives:

➢ To determine cause for the change in energy consumption in transport sector in India. ➢ To understand pattern of energy

consumption and their causes for change.

Changes in energy consumption (increase) attributed to :

1. Growth in Transport Volume (increase

2. Structural change or modal

3. Energy Intensity (decline)

24 India is a low carbon county, but the growth engine are fast accelerating which means demand led growth in transport infrastructure. While growth is not only a sufficient but also a necessary condition for feeding the mouth of more than 1.2 billion population and give them a basic standard of living, the huge dependence on limited resources are fuelling unsustainable growth model.

Thus, the need of the hour is to frame policies to develop model that are environmentally sustainable.

The major problem faced by India is high volume of road transport vis-à-vis benchmarked countries. The Indian policy needs to focus on developing a robust and integrated Multimodal Transport System.

In order to over inefficacy, consumer behaviour needs to be changed. It thus implies in the pure economic terms, the utility function of the consumers needs to be radically changed to develop a sustainable consumer class.

We are the 3rd largest CO2 emitter after US and China and as per International Energy Agency (IEA) we account for almost 5% of the global carbon emission. IEA states that China & India increased their emission from road transport by a factor of four and three respectively since 2000.

Transport sector in India is responsible for 10% of total energy consumption. India has witnessed a growth story of about 7% in last one decade. This has led to inequitable growth of wealth. This is against the sustainable growth objectives of PPP ( People, Planet & Profit)

In order to understand the energy consumption by transportation sector we have analysed the mathematical decomposition as accounted in the research paper of Piyush Tiwari & Manish Gulati published in journal www.elsevier.com

Mathematical model that decomposes the passenger and freight transport energy consumption changes into three factors :

1. Change in transport volume

2. Change in transportation energy intensity

3. Structural changes to examine the trend and importance of each factor in contributing the growth of energy consumption by these transport segments. Source : International Energy Agency

25 Mathematical calculation for changes in transportation energy consumption for passenger and Fright transportation :

E = total energy use in passenger transport or Freight transport measured in PJ

P = total volume, measured in passenger-km or tonne-km as appropriate

I = vector of modal energy intensities with elements [Ei/Pi]

S = vector of structural (mix) coefficients, or mode shares, with elements [Pi/P]

Where,

퐸 = ∑퐸푖

퐸푖 is the energy consumption by mode i of transport

The energy intensity of mode i ( i.e. the ratio of energy consumption to transport volume) is :

퐸푖 퐼푖 = 푃푖

For passenger or freight transport, a change in modal transport energy consumption between a base period (t =0) and a later period (t = n) can be algebraically stated as :

훿퐸 = ∑퐸푖푛 − ∑퐸푖0 ………. Eq A

= ∑푃푖푛퐼푖푛 − ∑푃푖0퐼푖표

= ∑퐼푖푛푃푛푆̂푖푛 − ∑퐼푖푂푃0푆̂푖0……………….Eq B

Where

Sit = Pit / Pt

Eq A above representing 훿퐸 is a function of three variables i.e total transport volume (Pt), energy intensity of individual mode of transport (Iit) and the structural parameter, or the share of individual mode in total transport volume (Sit). Applying total differential formula, Eq B can be decomposed as follows :

훿퐸 = 푃푛∑퐼푖푛푆̂푖푛 − 푃0∑퐼푖푂푆̂푖0

= (Pn-P0) ∑퐼푖푂푆̂푖0 ( transport volume effect) + P0 ∑(퐼푖푛 − 퐼푖0) 푆푖0 energy intensity effect + P0 ∑(푆푖푛 − 푆푖0)퐼푖0 Structural effect + interaction terms (R ) ……. Eq C

Thus any change in energy consumption is sum total of transport volume effect, energy intensity effect, structural effect and relative interaction term.

26 The interaction term can be further broken into four combinational product terms of three variables. The same is has not been incorporated in the present scope of research. However, these are joint effect of transport volume and energy intensity, joint effect of transport volume and structure, joint effect of energy intensity and structure and joint effect of all three variables.

Based on the above it can be inferred that

introduction of an efficient multimodal transport system can reduce energy consumption substantially due to overall reduction in transport volume, energy intensity, structural positivity and interaction between these variables.

Multimodal Transport in India : A Low Carbon Model for the policy Makers

Overdependence on Road Transport leads to increased consumption of fuel especially oil. The increasing burden on fossil oil consumption is a concern because of three major factors :

a. Energy Security b. Local Environment c. Climate Change

Burgeoning cities, growth in urbanization and change in standard of living has contributed further to environmental pollution and congestions. The increased use of fossil oil contributes substantially to CO2 emission which is a against the Millennium Development Goal for Sustainability set by UN. The Government’s thrust to achieve climate goals through sustainability approach can be fulfilled by development of Multimodal Transport System. A mathematical decomposition in previous section gives quantitative proof of how a multimodal transport system can help reduce energy consumption.

Media Reports

27 Technological Enablers in

Multimodal Transport System

Technological Innovations as enablers : Multimodal Transport Revolution

Role of Information Communication Technology in development of Multimodal Transport System is omnipotent. However, the uptake of ICT in development of multimodal transport in Europe as well as in India is slow.

ICT functions as a nervous system in logistics and supply chain management. Quick, fast, efficient and reliable flow of information on real time basis can be a game changer in developing a modern sustainable multimodal transport network system and infrastructure. Real time accessibility, quick and efficient exchange of information and flexibility to react to dynamic flow of information in a responsive and time bound manner is the key next generation logistical solutions.

In an Multimodal Transport System, the Multimodal Transport Operator is primarily responsible for performance of entire haulage contract from shipment to destination. The destination can be within the boundaries of same county or an international location which involves custom clearances. The figure T-1 below illustrates international transportation process :

Figure T 1 The communication between all the intermediaries has got to be fast, accurate, timely for efficient movement of goods to destination. The role of ICT is thus non-trivial and indispensable for an efficient network design.

Generation of e-Challans for faster movement of invoices, lorry receipts, shipment documents, bill of lading etc. This improves efficient delivery of goods and service, improves quality check as well as reduces hassles to all parties involved in the transaction.

29 Blockchain technological application in intermodal transport system can be the next generation game changer. This will induce reliability, appropriateness and trust ability of real time data transmission for super-fast information flow and decision taking matrix generation.

Augmented Realty Glass is another technological revolution that will redefine the way logistics are staked, loaded and transported. This will reduce warehouse searching time and cost, damages and pilferage loss as well as timely delivery of orders.

Artificial Intelligence through it’s predictive and prescriptive analogies can determine demand and supply forecast, inventory movement vs container availability, pre & post shipment transportation gap analysis etc. This technology can be extensively used to create a harmonious inter-relationship between various modes of transport. Space availability, dock availability.

Internet of Things (IoT) can be used to track inventory, suppliers and buyers stocks, in transit inventory tracking mechanism, GAP analysis and foundation for logistical connectivity on real time basis.

Cloud Technology will help in accessibility of data on multiple platform and vendors through one source. This improve data transferability while maintaining security and confidentiality.

Apart from these innovative new age technological interventions, a container door-to door transport chain is conducted through the use of advanced technology, Supply Chain ERMs, CRMs and cloud technology.

ICT Application Key Benefits Application Example Freight Resource Management • Operational efficiency Intra-Company Resource Systems and application • Reduced empty runs Management System ( COREM) • Improved utilization of resource • Customer satisfaction Terminal & Port Information & • Reduced loading, Automatic Equipment Communication System and unloading time Identification for monitoring application • Interface between modes (INTERPORT) of transport • Reduced operating cost Freight & Fleet tracking and • Operators ability to Intermodal Fleet and Cargo- management system and monitor improves Monitoring System application • Positive utility of available (MULTITRACK) infra resource • Improves security and safety Integrated operational • One shop marketplace E-Commerce system : Booking, information exchange • Custom authority check scheduling, brokerage, /platform/portal integration payment, invoice etc (DOLPHINS)

MTS

PRICING STRATEGIES

MTS | Pricing Strategy

The existing traffic systems in the economics of transport service pose severe theoretical and empirical limitations in realistic applications. The main reason for this is that the present system link travel cost functions, which do not accurately describe the intra-day traffic dynamics and relate them to urban- scale network characteristics in a way that is computationally tractable and consistent with the physical properties of traffic. This failure constrains the ability of economic models to support efficient development of a network of multimodal traffic management and weaken congestion externalities

Most of studies on the congestion in the traffic with regard to treatment of congestion dynamics (utilized traffic models), most of the aforementioned studies assume a steady-state have shown that the traffic condition or demand-type of capacity-supply functions, models ignore the fact that the level of congestion is not a memory-less function of demand at a given time, but dependent on the history of the system, i.e. the same demand profile can influence differently the system if this was uncongested or congested at the current state . Further with regard to the

32 application of the pricing schemes, pricing based on individual links is extremely difficult to implement in practice, and it is computationally complex for large-scale networks.

So, while designing the pricing for multimodal transport the balancing the gain of all users have rarely been studied, with respect to multimodal transport the other alternative modes are not taken into account in most approaches.

Integration of multimodality consideration in pricing is challenging and reserves further attention. While the classical approaches focus on the link- or corridor-level of application, existing pricing schemes for macroscopic (large-scale) level have similar ambiguity.

To develop efficient pricing schemes that allow higher user acceptance, we consider the following objectives in our current work. (i) Integrate the behavioural adaptation of the users during pricing (ii) Promote a multimodal solution combined with pricing, to maximize the efficiency of pricing (iii) Recognize the heterogeneous effect of pricing on users, to design pricing strategies with equity. (iv) Use value-of-time based pricing rates or redistributing toll revenue to improve public transport service, can significantly enlarge the efficiency of the pricing and the sustainability of urban mobility. In particular, we reveal that considering the effect of pricing on multimodal mobility improves remarkably the system performance, which has not been studied thoroughly. (v) Development of Transport pricing exchange, which will help in disseminating the information about the transport and logistic pricing (vi) Motivation for Public Private Partnership in the Multimodal Transport System

33 Further we need to also understand the following when deciding the Pricing for multimodal transport • How pricing rates should be adjusted when congestion conditions change due to user’s behavioural changes? • What are the impacts of different types of incentive programs for using public transport (PT) on the performance of congestion pricing? The studies have highlighted that in spite of the vast studies in pricing, field assessments are quite limited and this is one of important reasons of user acceptability for multimodal transport. • The type of incentives to other modes of transport (e.g. return a fraction of the tolls paid to users that switched to public transport mode) can make such policies more attractive for real cases.

2020

Multimodal Transport System : Legal Framework

International Institute for the Unification of Private Law FDI Limits (UNIDROIT) in 1930 first tried to formulate legal regime for Industry Entry % of FDI multimodal transport. These were mostly theoretical Type Route allowed concepts rather than practical models. The term Multimodal Logistic Automatic 100 Services was first officially introduced by UN’s Multimodal Transport Courier FIPB 100 Convention in 1980. Services Storage and Automatic 100 A legal recognition to Multimodal Transport System was Warehousing including however, given by UNCTAD / ICC in 1992 with introduction warehousing of Multimodal Transport Rules. In India, initially there was of agricultural no uniform rule for this segment. The Multimodal Transport products Act, 1993 (the “Act”) enacted on 16th October 1992 provides with cold storage for registration of a person as multi-modal transport Transport Automatic 100 operator. and Transport support After incorporation of the “Act”, Multi-Modal service transportation can only be carried out by a person Ports and Automatic 100 registered as Multimodal Transport Operator. This model Harbors Air transport Automatic 100 reduces the cost of an exporter and enhanced competitive services advantage.

The “Act” was amended in 2002 to simplify the procedures. Section 4 of the act states that “ any person may apply for registration to the competent authority to carry on or commence the business of multimodal transportation”.

The Director General of Shipping has been identified as the nodal officer and competent authority to perform the functions of the Act.

This is a progressive act and has borrowed few ideas from Carriers Act and UN Convention on Multimodal Transport of Goods held in Geneva in 1980.

( Annexure 1 : Draft copy of Draft National Logistics Policy)

36 Challenges and constraints

37 Challenges and Constraints As per World Bank Logistics Performance Index Report, all is not well as India slipped in the league from 35th position to 44th position in year 2018. Logistics is a $3.4 trillion industry globally and a robust channel of transport supported by infrastructure, technology & innovation in multimodal transport can substantially reduce cost and increase competitive advantage for exports.

The logistics performance index (LPI) is the weighted index of the country scores on the six key dimensions :

1. Efficiency of the clearance process (i.e; speed, simplicity and predictability of formalities) by border control agencies, including customs. 2. Quality of trade and transport related infrastructure (e.g., ports, railroads, roads, information technology). 3. Ease of arranging competitively priced shipments 4. Competence and quality of logistics services (e.g., transport operators, customs brokers). 5. Ability to track and trace consignments. 6. Timeliness of shipments in reaching destination within the scheduled or expected delivery time.

The county faces multi-variant challenges in all the six parameters discussed above. The bureaucratic hurdles supplemented with non-congruous legal framework are major roadblocks that are a hinderance to efficient model development .

Apart from these challenges, the policy implementation, corruption and multiple state laws apart from central laws are key challenges.

The sector also lacks appropriate investments as thee mega projects are capital intensive with long gestation period for being a profitable institution.

Key Recommendation

A. Investment Environment • Design robust routes for demand-responsive transport system • Initiate policy guidelines to allow hundred percent foreign direct investment through automatic route • Improve Ease of doing business for Multimodal transport operators • Establish regulatory bodies in the segment to mitigate buyer supplier conflicts

B. Infrastructure Development • Develop SEZs for MMT Hubs • Robust Road, Rail & Port infrastructure for multi-factor transport network. • Build up dry ports, inland ports, logistical hubs to decongest ports and supplement movement of goods through various models of transportation.

c. Technological Development

• Technological interventions and innovation in the sector for efficiency • Incentivise investment in technology, research & development activities • Set up MML data and logistic centres • Introduce industry 4.0 interventions

d. Environmental protection for sustainability • Improve fuel economy through MMTS • Reduce CO2 emission by reducing burden on roads and transport cargos through rail or water.

e. Policy framework • Make a coherent state and central law for all clearances. Custom checks, inter state border checks ets needs to be made more transparent • Simplification of laws and rules • Decomposing bureaucratic hurdles

40 Bibliography

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