1. Multi Modal Transportation CII -21 st aug 15 By: Prashant Bhatmule

2. 2 Minimizing supply chain costs while keeping a reasonable service level customer satisfaction/quality/on time delivery, etc. This is how SCM tries to contributes to the bottom line We believe “SCM is not strictly a cost reduction paradigm! SCM Generated Value

3. 3 Growth Dynamics: India’s Port Sector Overall average annual growth (major & non-major) 9.2% (2000-2012) Major ports (7.3%) & Non major ports (13.7%) Total Traffic, 2000-01: 383.85 Million tons Total Traffic, 2012-13: 933.66 Million tons Growth:143% Capacity utilization around 90-98% at Major ports Highest annual growth in container traffic (15%) Data as 2014

4. Supply Chain Process Overview Warehousing Transportation Vendors/plants/ports Transportation Factory Transportation Customers Information flows 4

5. Customer service goals  The product  Logistics service  Information sys. The Logistics Strategy Triangle (4 problem areas) 5

6. Product Price Promotion Place-Customer service levels Inventory carrying costs Lot quantity costs Order processing and information costs Transport costs Warehousing costs Sales & Marketing Logistics Relationship of Logistics to Sales and Marketing 6

7. 7 The objective of Logistics management are: 1. Inventory reduction 2. Reliable and consistent delivery performance 3. Freight economy 4. Minimum product damages 5. Quick response Objectives of Logistics Management

8. 8 India GDP Annual Growth Rate 1951-2015 The Gross Domestic Product (GDP) in India expanded 7.50 percent in the first quarter of 2015 over the same quarter of the previous year. GDP Annual Growth Rate in India averaged 6 percent from 1951 until 2015, reaching an all time high of 11.40 percent in the first quarter of 2010 and a record low of -5.20 percent in the fourth quarter of 1979. GDP Annual Growth Rate in India is reported by the Ministry of Statistics and Programme Implementation (MOSPI).

9. 9 Comparative of GDP Growth rate India vs China

10. 9 1.World’s 7 th Largest country by Area & 2 nd Largest in Asia. 2.Area - 3.29 million Sq Kilometers. 3.2 nd most populous country in the World. 4.Population – 1210 million (Census) 2011with density of 382 per Sq Km (31 st ). 5.Largest Democratic country in World, with 28 States (Numeric Representation), 6 Union Territories & 1 National Territories (Alpha Representations). India Perspective-- Geographic

11. 11 Transportation refers to the movement of product from one location to another as it makes its way from the beginning of supply chain to the customer. Transportation is an important supply chain driver because products are rarely produced and consumed in the same location. Transportation

12. 12 Prologue

13. 13 The Multimodal Transportation of Goods Act, 1993 (MMTG) provides for the regulation of Multimodal Transportation of Goods from any place in India to any place outside India involving two or more modes of Transport on the basis of a single Multimodal Transport Contract. This act came into force from 2.4.1993 and it provides for Registration of a person a Multimodal Transport operator and Multimodal Transportation can be carried out only by persons registered as MTO under MMTG Act, 1993. The Director General of Shipping has been notified as the competent authority to perform functions under the Act including registration of MTOs. The MTO registration is valid for period of 1 year and may be renewed for further period of one year from time to time. The Director General of Shipping has, after obtaining the prior approval of Ministry of Surface Transport, prescribed the Multimodal Transport Document under Rule 3 of Multimodal Transport Document Rules, 1994. Multimodal Transportation.

14. Modes of Transportation AirWaterSurface intermodal Package Carrier Inland PipelineRail Road Oversea

15. 15 Multi modal Transport mechanism

16. THE LOGISTICS GAME CHANGERS 16

17. INDIA –Port Data 7 5 1 6.6 k m s coas t l i ne Port Locations 2 4/15/2014 -200 ports -54 ports in east coast -146 ports in west coast -India’s seaborne trade 95% by volume & 77% by value of international trade -Indian Ports Act, 1908 allows Maritime States to set up their own port systems - Major Port trust Act, 1963, Thematic Diagram ofMajor Port Locations regulates 12 major ports (

18. 2012- 2013 2011- 2012 2010- 2011 2009- 2010 2008- 2009 2007- 2008 2006- 2007 2005- 2006 2004- 2005 2003- 2004 KOLKATA 463412377 378302297239203159106 HADIA 137140149 124127128110 128137 PARADIP 1384 4242324 VISAKHAPATNAM 248224145 98867156474520 CHENNAI 153915581524 121611431128886735617539 TUTICORIN 470477468 440439450377321307254 COCHIN 326336312 290261254227203185170 NEW MANGA LORE 484540 32921171097 MORMUGAO 202218 1714 13910 MUMBAI 58 72 5892118138159219197 JNPT 425942314270 4062395240603298266723712269 KANDLA 118168160 147138167178148181170 TOTAL 769976797539 6865658567125541474442333900

19. Growth of containers trade YearDemandDemandSupply 200010.77.8 20012.48.5 200210.58.08.0 200311.68.08.0 200413.48.08.0 200510.610.5 200611.213.6 200711.411.8 20084.210.8 2009-9.0-9.04.9 20104.88.3 20117.16.7 20123.35.2 20135.05.06.06.0

20. YEARTOTAL CARGO HANDLED AT INDIAN PORTS FROM 2003 TO 2013 GDP GROWTH RATE Y (MMT)X (%) 20037.4458.3 20047.4686.2 20057.6998.4 20067.6799.2 20077.5399 20086.8657.4 20096.5857.4 20106.71210.1 20115.5416.8 20124.7446.5 20134.2334.4

21. Actual and Predicted Tonnage 18901905 1920 1935 1950 1965 1980 Year 1995 2010 -10-10 0 10 25 20 30 40 50 Inbound/outbound predicted Inbound observed Outbound observed I nboun d ( m illi o n t on s ) 0 5 10 15 30 35 40 45 Ou t boun d ( m illi o n t on s ) 21 -Inbound flow continuessteep and upward trend -Outbound decreases till 2014-15 and then increases

22. 22  Local logistics & All India Distribution is challenge for supply chain.  India have wide & diversified geographic conditions, consumer habits, and infrastructure conditions, it is a major challenge for Indian industries to efficiently manage their supply chain to reach all parts of the country.  Additionally, India’s retail network is very vast,  The highest priority of all industries in India is to achieve a consistent presence of their products across maximum possible section of this vast retail network. Local Logistics (Distribution)

23. 23  The Indian Railways, which boasts of being the world’s second largest rail network under a single management, has been one of the biggest contributors to the rise of industry and the change in the economic landscape of the country for over 150 years.  Of the two main segments – freight and passenger – of the Indian railways, the freight segment accounts for roughly two thirds of its revenues.  Concor (Container Corporation of India) has handled 1.6 million TEUs of containerised cargo during the last fiscal, which was 15 per cent more than that handled in the previous fiscal Rail Freight Movement

24. 24 1 Adani Logistics Ltd 2006 I Patli Mundra Port 2 CONCOR 2006 I IR (Public Sector Undertaking) 3 Container Rail Road Services 2006 I DP World Ports, Dadri Mundra Port 4 CWC 2006 I CWC (Public Sector Undertaking) Warehousing, Loni 5 Freightstar Loni JN port 6 Gateway Rail Freight Ltd Garhi Harsaru Mundra Port 7 Hind Terminals Nhava Sheva Loni 8 India Infrastructure and Logistics JN Port 9 Reliance Infrastructure 10 SMART Hatta Road (MP) Khetri (Rajasthan) 11 Boxtrans (India) Logistics Services Kolkata 12 Pipavav Railway Corporation Ltd (PRCL Ports, 13 TransRail Logistics Ltd i 14 Innovative B2B Logistics Solutions West Bengal Andhra Pradesh 15 KRIBHCO Infrastructure Ltd 16 Arshiya Rail Infrastructure Jharsuguda Visakhapatnam Private Train operators India

25. 25 AIR SHIPPERS –THE MOST IMPORTANT CONSTITUENT OF AIR FREIGHT SUPPLY CHAIN The rapid growth of international trade has created a global village where air transport assumes great importance in the transportation of goods. This is especially true of high yield items and perishable goods. It also helps reduce high inventory-carrying cost. Air Cargo Industry is a direct pointer to the prosperity of a country. The prospects for the Air Cargo Industry in India has grown manifold over the past few years. The rapid growth of international trade and merchandise export has resulted in boosting the prospects of the Air Cargo Industry in India. India’s growing might in the Information Technology, large scale liberalization and globalisation of trade have been instrumental in the growth of the Air Cargo Industry. Moreover, the purchasing power and the consumption pattern of the one million middle class people in the country has undergone a vast change which has a bearing on the growth of the Air Cargo Industry. Air Cargo In India

26. 26 At its present compounded annual rate of growth – 5.5 percent – cargo demand in India is expected to boost theIndia airfreight market to 2.8 million tonnes by 2018, according to a recent report by market research analysts at Frost & Sullivan. Most of this growth, however, willFrost & Sullivan benefit foreign-owned, rather than domestic, carriers. Indian airfreight to soar through 2018

27. Air Cargo Air cargo serves as a vital link between domestic and international markets. India’s fast growing international and domestic trade by air is facilitated, integrated and expanded. While the total volume of air cargo traffic currently constitutes about 1 percent of total trade, it accounts for close to 29 percent of total trade value. 27

28. 28 Surface Transport : Poor quality of roads and network connectivity ƒ Stoppage of vehicles at State border check posts are a major cause of delays. It is estimated that 40% of the time lost are due to these stoppages. ƒ No stringent requirement or regulations for starting a trucking business ƒ Large number of small and unorganised players, with no industry consolidation and intense competition. Rail Freight ƒ Freight tariffs in India are among the highest in the world. ƒ Rail freight lacks reliability and traceability ƒ It is deficient in terms of quality of operations, speed, and customer orientation. Key Issues in Multimodal Logistics Road /Rail

29. 29 Air Freight ƒ absence of integrated cargo infrastructure; ƒ There is a need for streamlining of Customs procedures in air cargo; ƒ a need of technological up-gradation of cargo handling processes; ƒ inadequacies in gateway and hinterland connectivity through rail and road; ƒ need to formulate a performance based service Port Freight ƒ inefficiencies in berthing, and delays in loading and unloading. i.e. high turnaround time of vessels ƒ delays in co-ordination between ports and the Customs authorities ƒ poor hinterland connectivity and poor port- and land-side infrastructure and outdated equipment ƒ Navigation channel restrictions do not allow bigger vessels to be berthed Key Issues in Multimodal Logistics Air Freight

30. 30 Challenges like the Poor Road Infrastructure, Institutional Barrier, Financial barrier Policy Constraints impeding the development of intermodal transport. A need for Intermodal Linkage and Collaboration at national and regional levels Improve the Current aged Inter Modal Connections Promote co-operation between infrastructure planners Enhance the Use of Information Communication and Technology Enhance high rate of development in other sectors Modernize ports Role of Government in Facilitate multimodal Transport Challenges in Multimodal Logistics

31. 31 MMLPs can help in saving of cost in transportation. This is possible because of use of right modal choice for the movement. ƒ One of the main features of MMLP is that it reduces the transit time of the goods. Thus reducing the inventory cost both for logistics operators as well as for the ultimate user of the transport mode. ƒ helps in the proper utilization of the assets as the transit time is less and the goods vehicles and the other hardware are free to use for the other business. Thus the per unit cost of the transportation of goods can be reduced considerably. ƒ Helps in the balanced growth of all the modes of transport ƒ Helps in optimal modal choice ƒ Helps in proper utilization of assets like railways or other modes of transport. Benefits of Multimodal Logistics Parks include:

32. 32 Summary & conclusions Multimodal transport : Multi Modal transport Is becoming increasingly important & will dominate the market in the future Need for an appropriate physical & legal infrastructure for its development Existing national / regional laws mainly based on the old regime,needs to be changed to meet tomorrows faster need of delivery.

33. Growth Miulti modal Transport Mgt

34. 34 Thank you