With India moving fast toward its $5 trillion economy target, the logistics segment is in the midst of a revolutionary change with multi-modal logistics parks (MMLPs) becoming a pillar of industrial development.
Multi-modal logistics, by weaving together road, rail, air, and sea into smooth supply chains, is cutting costs, streamlining efficiency, and making Indian industries globally competitive.
With Indian logistics costs at 13-14% of GDP, almost double the 8-9% in advanced economies such as the US, efforts such as MMLPs are essential to harness the country’s industrial potential.
Multi-modal logistics sees multiple modes of transport used coordinately under a single agreement, making goods movement from the point of origin to delivery seamless.
In India, where 60% of the freight is dependent on the roads, this strategy is tackling inefficiencies due to an unbalanced modal mix, overloaded networks, and poor infrastructure. The government’s Logistics Efficiency Enhancement Program (LEEP), under the Ministry of Road Transport and Highways (MoRTH), is constructing 35 MMLPs at strategic points such as Jogighopa (Assam), Dadri (Greater Noida), and Chennai.
These parks provide mechanized warehouses, cold storage, intermodal transfer facilities, and value-added services such as customs clearance and packaging that save transit time and costs.
The effect on Indian industry is significant. MMLPs allow manufacturers to compete in the world market by linking hinterland production centers to ports and global trade routes.
For instance, the Jogighopa MMLP, spanning 317 acres, integrates rail, road, and inland waterways along National Waterway 2, facilitating exports to Bangladesh and Northeast India. Similarly, Dadri’s MMLP, with a Rs. 7,064 crore investment, leverages the Dedicated Freight Corridors (DFCs) to cut transit times from 70 hours to 30 hours for cargo moving to Mundra Port.
This effectiveness enhances industries such as textiles, electronics, and agriculture that are dependent on timely delivery.
Small and medium enterprises (SMEs), which account for 45% of India’s manufacturing value, stand to gain much.
MMLPs make advanced logistics infrastructure affordable for SMEs, allowing them to expand operations and compete with larger companies. The hub-and-spoke structure of MMLPs, whereby merchandise is consolidated in central hubs before distribution, minimizes transportation expenses and facilitates entrepreneurial development.
In 2021, a report mentioned that MMLPs had the potential to generate 3 million jobs by the year 2022, with active projects such as Ludhiana and Pune promoting employment opportunities in logistics, warehousing, and manufacturing.
Government programs such as PM Gati Shakti and the National Logistics Policy (NLP) add to these advantages. PM Gati Shakti brings together 16 ministries to organize infrastructure projects more easily, and the NLP’s Unified Logistics Interface Platform (ULIP) makes paper-work digital, decreasing delays.
The Sagarmala initiative improves port connectivity, with port-based MMLPs such as Pipavav enabling coastal shipping.
These initiatives complement the ‘Make in India’ drive, entice global producers by enhancing logistics reliability. For instance, private investments such as ESR Group’s logistics parks and Morgan Stanley’s Rs. 350 crore venture in Pune reflect the sector’s attractiveness.
Technology is a disruptor. MMLPs utilize GPS, RFID, and AI for real-time monitoring and route planning, improving supply chain transparency.
Maersk’s application of blockchain for logistics operations best reflects how digital solutions reduce delays and losses at transshipment points. The e-commerce revolution led by titans such as Amazon and Flipkart further makes the case for MMLPs, which enable last-mile delivery and fulfillment centers, essential for retail and consumer goods sectors.
While there is promise, there are challenges. Gaps in infrastructure, especially last-mile connectivity, impede smooth operations.
The 1993 Multimodal Transportation Act has made slow progress, and regulatory drags in the form of complicated documentation have continued.
Environmental issues are also important—while rail and water transport lower carbon footprints than road transport, MMLPs have to incorporate green technologies such as electric vehicles in order to achieve sustainability objectives.
Experts such as Pawan Agarwal, ex-Special Secretary to Logistics, point out that connectivity for the first- and last-mile may nullify savings through rail or waterways and necessitate improved transshipment facilities.
To address these, the government is simplifying approvals through single-window clearances and encouraging private investment.
The Bharatmala Pariyojana, covering 24 MMLPs, and the completion of DFCs aim to shift freight from road to rail, targeting a 45% rail share by 2030. Industry leaders like Raaja Kanwar of Apollo LogiSolutions emphasize that PM Gati Shakti’s focus on multimodal connectivity is a “revolution” for logistics efficiency.
Multi-modal logistics is transforming India’s industrial scenario, facilitating cost reduction, international competitiveness, and employment generation.
Through overcoming infrastructure and regulatory hurdles, India can bring down logistics costs to 9-10% of GDP, in tune with international levels.
As MMLPs grow, they will enable industries to flourish, turning India into a logistics hub and a global trade leader.