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Rational haulage charges and capacity optimisation hold key to position railways on track: NISAA Forum

DSC_0079The 2019 edition of “NISAA Business Forum”, which was held on March 15, at Crowne Plaza hotel in New Delhi, was concluded on a high note that manufacturing, ex-im trade, multimodal transport and logistics industry in India is poised to be the potential growth engine in the years to come. However, pragmatic policies apart, need of the hour is effective executions of those policies and astute arithmetic to do away with irrational and paradoxical practices to reduce exorbitant logistics cost and transit time that make Indian produces uncompetitive in  the international market.

DSC_0085 (1)In his welcome address NISAA (North India Steamer Agents Association) President Capt D Mishra aptly set the tone of this highly esteemed gathering attended by cream of the Shipping Lines, Container Train Operators, ICDs, CFSs, Freight Forwarders, CHAs, Ports, Logistics Companies, Infrastructure Companies and Government representatives from North India as well as other parts of the country in a very large number. He underlined the root causes which predominantly creating hindrances to cost effective and smooth cargo traffic system in this region (North India). According to Capt Mishra, in North India precisely the following points perceived to be the determining factors behind gradual downward trends as far as growth of the containerised cargo industry is concerned:

  1. Frequent increases in rail freight /other charges making rail expensive compare to road movement
  2. Lack of reliability in rail transit times
  3. Lack of effective focus on vessel bound trains
  4. Huge imbalance in container movements that carry import and export cargo up

Capt Mishra also pointed out that there is an increasing trend of shift of cargo from rail mode to road mode that includes long haul cargo as well. This is not desirable ideally from less expensive, less transit time, hassle free and green logistics’ point of view. Remarkably, presently road transport carries more than 60 per cent of total cargo in India and this segment is constantly improving its modus operandi, supported by pro-active government policies and robust development in the physical infrastructure i.e roads, highways and expressways in the recent times. In addition, quick adoption of new technologies by road transport operators provided an edge over rail mode. “Better visibility by road transport (as trailers are fitted with GPS and are flexible to suit requirements of trade) and dedicated fleet to exporters or importers resulted in reduced turnaround time,” he underlined.

In view of the modal shift Capt Mishra made caution against any lopsided development which goes against multi-modal transport system required for overall growth of manufacturing, exim and entire logistics industry including ICDs and MMLPs. He also stressed upon optimum utilisation of existing facilities instead of nonsensical capacity deployment. He, however, expressed high optimism about the positive effects of Dedicated Freight Corridors, which is expected to be commercially operational by mid 2020.

DSC_0158DSC_0326The NISAA Business Forum was also attended by Mr Anant Swarup, JS (Logistics), Dept of Commerce, Govt of India and several industry experts including Mr V. Kalyana Rama, CMD, Concor (keynote address); Mr AK Sachan, MD, DFCCI; Capt Viren Bhawa, CEO, CMA CGM Logistics Park (Dadri); Capt Sanjiv Rishi, Advisor, ICD Loni; Mr Tarun Kalra, VP, MSC Agency India; Mr Kamlesh Gupta, President, ACTO; Mrs Poroma Munshi Rebello, Commercial Director, India Linx; Mr Sanjay Swarup, Director (IM&O), Concor; Capt Suresh N Amirapu, Advisor, PSA India and Mr S Ramakrishna, Chairman, FFFAI.

DSC_0369In his speech Mr Anant Swarup made it clear that the government of India is now very serious in strengthening the logistics infrastructure, which, in fact, is the backbone of the country’s economy. He highlighted salient features of the draft logistics policy by seeking comments from the industry to give a final shape to it. “Our aim is to promote multi modal transport system and to create required hard and soft infrastructure for an integrated logistics system across the country,” he emphasised. “We are not looking only at road development but also other modes such as railways, coastal, and inland waterways,” he further clarified.

DSC_0402The “NBF 2019” had three thought-provoking panel discussions on: “North India Imbalance-A challenge to Rail and opportunity to Road”; “Infrastructure in North India-Is it Enough” and “Looking Ahead and Way Forwards”. Taking cue from Mr Mishra and Mr Swarup, all panel speakers were of the view that with a vast railway network including forthcoming DFC, commendably developing road/highways infrastructure, vast coastal areas, untapped inland waterways and air connectivity to new regions India can position itself a lucrative destination as manufacturing and logistics hub. “Only thing we will have to be little cautious is judicious use of available infrastructure capacity and rational pricing. For example, we are very enthusiast about commissioning of DFC. But are we sure it would be able to offer a competitive price, by coming out of the mechanism follows by existing rail operators because of their own constraints?” Mr Ramakrishna raised a very pertinent issue. Earlier, Capt Rishi, Capt Bhawa and Mr Gupta unequivocally maintained that pain points like inadequate connectivity to hinterlands, imbalance in container movements by rail and irrational haulage charges making rail mode less attractive at present, especially for the shippers from North India. And, DFC will have to ply the ‘extra miles’ to reach out those shippers.

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