Case study: How EY optimized the supply chain of a leading Indian MNC
EY helped a leading FMCG company optimize vendor costs, eliminate redundancies, and create a common sales and operations platform.
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Ashish Nanda
EY India Business Consulting Leader
The better the question
How can we unlock synergies from two businesses post acquisition?
After acquiring several iconic brands, a leading FMCG company needed to capitalize on the synergistic benefits of the opportunity.
I n 2018, one of India’s leading FMCG companies acquired a consumer business which housed several reputed brands. After the acquisition, the immediate priority for the company was to identify and tap into synergistic opportunities of the acquisition. Supply chain and procurement was one of the primary focus areas for cost, operation and capacity optimization. Both sets of businesses had many overlaps across the supply chain, including suppliers, locations, and raw materials. The company had to quickly identify all existing overlaps and eliminate redundancies.
The better the answer
We optimized the supply chain of the complete brand portfolio
The optimization covered three critical areas ꟷ procurement synergies, logistics and network optimization, and sales and operations planning.
As the company wanted to ensure that it leveraged the benefits of synergies from the acquired entities, it employed EY to optimize the complete supply chain. The core areas of supply chain optimization included:
- Realizing procurement synergies and optimizing vendor costs.
- Lowering of warehouse and freight costs by identifying logistics overlaps.
- Integration of sales and operations planning across the complete brand portfolio.
EY led three critical areas of supply-chain optimization: procurement synergies, logistics and network optimization, and sales and operations planning.
Procurement levers to extract synergistic value
To realize value from various synergistic opportunities in packaging, EY investigated several cost levers and their potential impact. The team deep dived into cost sheets and identified saving opportunities for major packaging material through index-linked buying. In addition, EY also consolidated vendor bases and leveraged scale across key categories for negotiation, besides leveraging different price floors which the two organizations had.
EY also conducted market assessments and index identification for synergistic raw material categories and alternate vendor and price discovery for high priority categories. It also developed a scientific price forecasting model for better indicative price visibility.
End-to-end network optimization from analysis to implementation
EY conducted an end-to-end investigation to identify network cost optimization opportunities. It included, sales gravity analyses, cost and service lever optimization runs, and network footprint implementation. The team also conducted center of gravity analysis for CFAs and hubs and determining cost baseline values and identified a list of several CFA locations and determined their associated cost savings.
The value drivers of the network optimization exercise included warehouse and freight lanes consolidation, price discovery and alternate vendor identification, and primary freight management. EY also piloted the 3PL logistics model in key regions.
Building a common sales and operations planning strategy
Since the two entities had different sales and operations planning approaches, the company needed a common governance model and tech-enabled process to establish visibility and control across the integrated entity’s complete value chain. EY’s intervention was targeted at bringing three crucial components of the sales and operations planning processꟷ demand planning, replenishment planning, and sales and operations planning meetings. These included overhaul to the company’s forecasting processes and reporting mechanisms, improving responsiveness of the entity’s replenishment planning approach, and establishing a formalized decision-making process.
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The better the world works
An efficient supply chain led to lower costs and better value
The company realized lower supply chain costs, more operational efficiency, and better decision-making across the complete brand portfolio.
EY’s approach was premised on several value drivers spread across different cost or value measures across all three optimization categoriesꟷ procurement synergies, network and logistics, and sales and operations planning. It involved investigation of different pricing models, alternate vendor discovery, and rightsizing different logistics costs. As a consequence of the supply chain optimization , the company identified and started implementing synergies across the target areas.
Cost and value improvements which EY’s delivered for an Indian FMCG company
- Procurement synergies
Identified procurement synergies of
across key packaging material categories
- Network and logistics
Optimized network and logistics cost reduction helped in identifying opportunities of
in logistics spend
- Sales and operations planning
inventory reduction potential
(Contributors include Nishit Bhatia, Shreyan Sarkar, Abhijeet Vaidya, Amit Kumar, Shivagurunathan Narayan, Chirag Goel.)
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The logistics and warehousing market in India
The report gives an insight on various trends driving the market, presenting a comprehensive perspective.
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The logistics and warehousing sector in India has seen a significant transformation, mainly driven by the post pandemic surge in online purchase, and a shift in consumer’s buying pattern. Changing business needs and altering consumer behaviour have led to a series of technological developments and have also led to newer and flexible business formats, accommodating several factors around cost and operations.
The ensuing focus towards speed and convenience has driven consumers towards online shopping, while on the other hand, the commercial and office segments have witnessed mutations in the form of flexible office spaces and smaller formats, which are closer to customer locations. Given the pace in demand and increasing government support across several aspects, the sector may well be set for strong growth in the next few years. Development of dedicated rail-based freight corridors, improving focus towards multi-modal connectivity, policies such as Logistics Efficiency Enhancement Programme, along with initiatives to support sustainability, all of these could further add fervour to the sector’s potential.
Technological developments have been rampant across logistics value chain, given the larger focus on optimisation, speed, and efficiency. Consequently, players have been emphasising on automation and data analytics, while also deploying digital tools for effectively utilising resources and managing operations.
Going forward, it would be critical to be adaptive to the changing industry dynamics. In parallel, it would also be essential for companies to consider the challenges around surging prices and skewed modal share. As a consequence, staying in line with new technology and leveraging government support would be imperative in order to gain strategic advantage over other peers in the industry.
India’s logistics and warehousing market’, provides a view of the industry in terms of the trends and its growth potential.
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Original research article, recovering supply chain disruptions in post-covid-19 pandemic through transport intelligence and logistics systems: india's experiences and policy options.
- School of Business, SMVD University, Katra, India
Before the COVID-19 pandemic, Indian firms have focused on interconnected and lean supply chains to ameliorate the gaps through increased efficiency of supply chains. However, the pandemic has exposed most Indian firms to severe supply chain disruptions (SCDs) due to undiscovered supply chain vulnerabilities. Against this background, we reviewed the existing relevant literature on SCDs and transportation disruption in general context and pandemic specific context and identified that there exists very little research on this issue especially in the context of Indian firms, and offered policy options by developing a new model of robust transport and advanced logistics system (ALS) for speedier supply chains recovery (SCR). We have utilized and analyzed the rich available literature on SCDs, transport intelligence (TI), and ALS using gray literature. The study revealed that many Indian firms have experienced major disruptions in transportation and logistics services, including impact on transportation and logistics data, time delays, and cargo cancellations due to cramped freight capacity, restricted circulation, closure of ports, and slow customs clearances. This has also impacted adversely the production and transport consignments including logistics services and led to delays and rerouting to final consumers. With the gradual removal of restrictions, firms are making concerted efforts to recover from SCDs; however, with weak applications of robust TI and ALS, the SCR is relatively very slow. This called for a review of current transport and ALS used by priority firms. Therefore, we offered a new model for addressing the SCDs using robust intelligence transportation systems and ALS.
Introduction
The COVID-19 pandemic has spread across the world and infected a huge population ( Sohrabi et al., 2020 ). Major production centers have been closed due to worldwide lockdown, which led to severe supply chain disruption (SCDs) in all manufacturing sectors. SCDs referred to the unplanned and unpredicted events that disturb the flow of goods and services across the supply chain ( Craighead et al., 2007 ). With the shutdown in production activities and transportation disruption, the global prices of raw materials and intermediate supplies have increased ( Maffioli, 2020 ). Border restrictions have led to a temporary stoppage in human mobility and transportation activities, which resulted in unparalleled pressure on shipping and road freights, and created severe impediments for international trade. Transportation disruptions have led to substantial interruptions in actual goods flows, product mobility, and have affected the entire supply chain, thereby leading to operations shutdown, sales loss, late deliveries, and reputational loss. Strong links between transport freight and trade have been observed. The surge in transport freight costs had significantly impacted the supply chain. Therefore, transportation has been considered a vital logistical driver, which impacted the responsiveness, efficiency, and performance of supply chains.
A responsive supply chain and transport flexibility can deliver products to customers more effectively ( Ghavamifar et al., 2018 ). There are a variety of factors and sub-factors, which led to transportation disruptions in supply chains, for instance, adverse weather mostly disrupted transportation and adversely affected the supply chains ( Sheffi, 2015 ). But a disruption like the COVID-19 pandemic is a potent risk to transportation in the supply chain and brought a meta-uncertainty. As an outcome of the COVID-19, supply chains in the transportation industry have been hampered, though differently across air, rail, road, and sea sectors. Therefore, there are various potential consequences for the supply chain due to transportation disruptions, which called for identifying the potential threats caused by transportation disruptions using innovative SCM practices through robust mitigation strategies via supply chain risk management (SCRM) to recover from business slowdown. The firms should design an effective mitigation and recovery plan in the event of logistics and transportation disruptions. However, relatively little research has been conducted on the impact of the COVID-19-induced transportation disruptions on SCDs. Against this background, we reviewed the related literature on supply chains, SCDs, and SCM vis-à-vis pandemics such as the COVID-19 to identify the research gaps and accordingly offered mitigation strategies including a logistics and transportation recovery model and prescribing the short-term and long-term measures for speedier recovery of firms from transportation disruptions in the Indian context.
Literature Review
In recent years, supply chain risks have received increasing attention in SCM research ( Zsidisin, 2003 ) due to growing business uncertainty and vulnerability, which significantly lowered business practices like outsourcing, production, supplies, and inventories and in turn caused supply chains to become more susceptible to disruptions due to business risks ( Craighead et al., 2007 ). This is linked to upstream and downstream supply agents, which caused supply chains more sensitive and complex than ever before ( Blackhurst et al., 2005 ). Companies should strategically collaborate with their key suppliers and customers to survive and prosper. SCD risks have severely impacted the operational and financial performance of the firms based on their intensity ( Hendricks and Singhal, 2003 ), which plays a significant role in building resilience against SCDs ( Bode et al., 2011 ). Disruption in supply chains motivated the researchers to understand such risks and their impact on supply chains ( Kleindorfer and Saad, 2005 ).
The lean and globalized business structures of many firms are currently affected by the COVID-19 ( Ivanov, 2020 ). The pandemic hampered the resilience of supply chains and made the firms more vulnerable to SCDs due to a halt in production and logistics activities. With longer lockdown, the consumer demand has slowed down along with reduced demand for labor, supplies, and delivery, thereby severely impacting the supply chains without the established SCR mechanisms such as risk mitigation inventories, subcontracting capacities, backup supply and transportation infrastructures, robust channel distribution systems, and flexible production technologies ( Araz et al., 2020 ). The COVID-19 has affected about 94% of the Fortune 1,000 companies due to SCDs in affected areas ( Linton and Vakil, 2020 ). Both the demand and supply have declined substantially due to the pandemic-induced prolonged lockdown, which needed the governments' support to overcome the impact. SCR can be achieved by developing risk mitigation inventories, subcontracting, backup supply and transportation apparatus, and digital monitoring and visibility systems ( Dolgui et al., 2020 ; Xu et al., 2020 ).
The COVID-19 pandemic has not been limited to a particular region or confined to a particular time. Different components of manufacturing, distribution centers, logistics, and markets have impacted the supply chains. The COVID-19-induced lockdown, economic shutdowns, and the SCDs have pushed many firms into bankruptcy ( Tucker, 2020 ). For instance, many prominent US companies such as Sears, Hertz, and J. Crew have faced severe financial pressures. Besides manufacturing, the pandemic has caused widespread damage to the airline, tourism, and hospitality sectors ( Asmelash and Cooper, 2020 ). For instance, Fiat Chrysler Automobiles NV and Hyundai temporarily have suspended production due to the harsh COVID-19-induced restrictions and SCDs ( Ivanov, 2020 ). This has caused ripple effects in the industry and required robust SCRM strategies ( Chen et al., 2019 ; Pournader et al., 2020 ) including sound data and more digitally enabled supply chains ( Choi, 2020 ; WEF, 2020a , b ) to improve the quality of the response ( Ivanov et al., 2019 ).
The impact of the COVID-19 pandemic on SCDs is still to be adequately investigated ( Sarkis et al., 2020 ). The unique nature of the COVID-19 crisis required robust policy challenges to address the SCDs, which must be different from earlier experiences of dealing with similar risks. The demand and supply have declined substantially due to prolonged lockdown in almost all productive activities, which needed substantial governmental supports. In the contemporary scenario, the COVID-19 pandemic could be the first global SCD, which called for robust management of global supply chains (GSCs) and also addressing the associated risks.
Researchers such as Mamani et al. (2013) and Büyüktahtakin et al. (2018) have focused on epidemic outbreaks and business operations. The COVID-19 pandemic has confirmed that supply chains acted as the veins of economic activities ( Ivanov, 2020 ) at a large scale ( Lin et al., 2020 ). The COVID-19 pandemic has threatened the global production network (GPN) severely and increased SCDs ( Araz et al., 2020 ). Disruptions in manufacturing, distribution, and transportation have caused economy-wide repercussions, which are linked to reduced mobility and led to SCDs and normal functioning of businesses ( Lin et al., 2020 ).
In the recent past, disruptions such as natural disasters ( Tang and Musa, 2011 ; Sheffi, 2015 ) have immensely caused transportation and logistics disruptions. Transportation disruptions referred to the interruption in the actual flows which delayed the delivery from one node of a supply chain to another ( Zhen et al., 2016 ). Disruptions in transport and logistics systems have significantly impacted the normal operations in supply chains ( Baghalian et al., 2013 ; Chen and Chen, 2014 ; Tan et al., 2020 ). The COVID-19 pandemic-induced restrictions have led to the disablement of economical operations, and impacted transportation networks in maritime, rail, air, and trucking industries ( de Vos, 2020 ; Gössling et al., 2020 ). Ultimately, trade restrictions, demand restraint, and transport disruptions have significantly impacted supply chains and consequently impacted freight volumes. The COVID-19 pandemic had caused a range of major disruptions in transport and logistics services, including flight cancellations, which also cramped air-freight capacity, disrupted global circulation, caused labor shortages and temporary closure of ports, and slowed down the customs clearance. This, in turn, delayed the production of goods and consignments in transit, which were rerouted or discharged short of their final destinations.
With the rising economy of e-commerce and online shopping in recent years, express shipping services (e.g., FedEx, DHL, and UPS) have played an important part in supply chains and logistics. Despite the COVID-19 pandemic, e-commerce service providers have experienced rapid growth in their businesses. The e-commerce market in India is likely to surge at a compound annual growth rate of 19.6% between 2019 and 2023, to become a US$98.4 billion market by 2023. E-commerce payments were expected to record a steep increase of 25.9% in 2020 due to a shift in consumers' preference from in-store to online store platforms ( GD, 2020 ). Hence, transport and logistics services have a vital role in SCR from unpredicted pandemics like the COVID-19. Thus, transportation and logistics disruptions have been very sensitive to SCDs. In the context of the COVID-19, little attention has been paid to analyze the pandemic impact on transportation and logistics disruptions and its consequent effects on SCDs, specifically in the Indian context. Therefore, we made a modest attempt to fill the knowledge gap in this area and explored the impact of the pandemic on transportation and logistics systems of the Indian firms, and also offered an SCR mitigation model to tackle transportation and logistics disruptions and consequent SCDs.
Objectives and Methodology
To mitigate the negative effects caused by SCDs and transportation and logistics disruptions, a significant amount of work is required in the field of SCRM practices in the context of the pandemics such as the COVID-19 to suggest mitigation strategies. We reviewed the related literature on SCDs, transportation and logistics disruptions, and analyzed the COVID-19 impact on India's transportation and logistics systems and SCRM, and offered mitigation strategies including a transportation risk management model using short-term and long-term measures for speedier recovery of firms from the SCDs and transportation disruptions. The recent performance of India's transportation and logistics sector has also been presented. We also analyzed the challenges and opportunities in operationalizing the suggested model along with optimization of transport and logistics resources by the firms. In order to accomplish the intended goals, we analyzed the available literature using a web search and desk approach. The secondary data and information have also been analyzed using data triangulation and the theoretical method. We used the triangulation method to build a transportation risk management model by a systematic literature review to ensure a more comprehensive analysis. The application of the triangulation method increased the credibility and validity and improved the model creativity and validity by design and also clarified the concepts used for risk mitigation strategies and enhanced the testability of the model in the context of the COVID-19 pandemic-like future crisis.
Recent Performance of India's Transportation and Logistics
Transportation refers to the movement of goods from one place to the other, while logistics refers to the transportation and delivery of goods including the storage, handling, inventory, packaging, and various other aspects. Transportation is the mode to execute logistics planning. Sustainable SCM required efficient and low-cost transport and logistics. New technologies and improved business processes have impacted both the logistics and transport sectors worldwide and India is no exception.
Performance of India's Transport Sector
Maritime transport.
In recent years, India's maritime transport contributed about 95% and 70% of trading by volume and value. India has 12 major ports and 205 notified minor and intermediate ports. In India, the cargo capacity at major ports remained underutilized over the period. Figure 1 shows cargo traffic at major ports and non-major ports in India from 2016–2017 to 2020 to 2021. Major ports handled more than half of India's maritime transport, which declined by 10.5%−414 million tons (MT) during April–November 2020 compared with last year. The cargo traffic at non-major ports has declined by 10.8%−310 MT during April-October 2020. During the national lockdown period of April–May 2020, there has been a sharp decline in cargo traffic at both the major ports and non-major ports followed by a gradual improvement in cargo traffic since June 2020 due to a pickup in economic activity and trade both domestically and globally.
Figure 1 . Cargo traffic at major ports and non-major ports in India (MT). Authors' creation based on Port Data Management Portal, Ministry of Ports, Shipping & Waterways, Government of India, New Delhi (2021) and Ports Sector Update, CARE Ratings, Mumbai (2021). FY refers to Indian financial year (April-March) and FY2021T* for major ports and non-major ports refers to April-November 2020 and April-October 2020, respectively.
In FY2012, the market share of major ports was recorded at 61% compared to non-major ports at 39%. Over the period, non-major ports have gained their share to reach 45% in FY2019. The growth in container traffic at major ports in India reached 9.98 TEUs (20-ft. equivalent units) in FY2020 at a growth of 1.12% year-on-year basis but declined to 4.93 TEUs during April-October 2020 due to the COVID-19-induced restrictions ( Government of India, 2021 ). Massive investment in India's ports sector has been planned to improve maritime transport infrastructure. India's ports have received a cumulative foreign direct investment (FDI) of US$1.63 billion from 2000 to 2020 and US$1.9 billion were allocated for the upgrade of major ports from 2016 to 2019. From 2020 to 2021, US$257.22 million has been allocated for the development of the ports sector in India. The turnaround time at major ports stood at 64.69 h in 2019–2020. The additional port capacity is expected to reach 275–325 MT at a compound annual growth rate (CAGR) of 5–6% by 2022. India's cargo traffic at ports is likely to reach 1695 MT in 2021–2022 ( IBEF, 2020a ).
The air cargo handled in India has increased substantially from 703,000 in FY2000 to 3,328,296 in FY2020. In FY2020, the share of domestic and international airfreight traffic was 39.8 and 60.2%, respectively. Figure 2 shows the growth performance of air freight traffic in India from FY2016 to FY2021. In India, total air freight traffic increased from 2.7 to 3.33 MT at a CAGR of 5.32% from FY2016 to FY2020. However, air freight traffic has declined sharply to 0.99 MT during April–September 2020 due to the lockdown restrictions. The air freight traffic is likely to reach 4.14 MT in FY2023 and 17 MT in FY2040. India's air transport sector (including air freight) has received an FDI inflow of US$2.79 billion between FY2000 and FY2020 and is expected to receive an investment of US$4.99 billion by FY2024. Airport infrastructure is expected to receive an additional investment of US$1.83 billion by FY2026. The National Air Cargo Policy Outline 2019 envisaged making India's cargo and logistics the most efficient and effective globally by 2030 ( IBEF, 2020b ).
Figure 2 . Air freight traffic in India (MT). Authors' creation based on Airports Authority of India (2020) and Ministry of Statistics and Programme Implementation, Government of India, New Delhi (2020). FY refers to Indian financial year (April-March).
Rail Freight
Indiaś rail network consisted of 123,236 km, which catered 9,146 freight trains and transporting 3 MT of freight per day. Figure 3 shows that rail freight traffic increased to 1208.34 MT in FY2020 from 1104.2 MT in FY2016 at a CAGR of 2.28%. The COVID-19 pandemic has provided an opportunity for India railways to improve their freight capacity. In FY2021, rail freight traffic has increased to 1145.68 MT and likely to achieve the 2024 MT mark by FY2024. The revenue growth of Indian Railways remained robust over the years. The rail freight revenue has increased up to FY2019 and then declined modestly in FY2020 and accounted for 65.1% of total rail revenue. In FY2020, the share of passenger segment and freight earnings stood at US$24.78 and US$16.24 billion, respectively. Rail freight movement has increased significantly due to enhanced carrying capacity, cost-effectiveness, and improved service quality. The COVID-19-induced road transport restrictions have led to an increase in rail freight loading, which stood at 108.16 million tons in October 2020 compared to 93.75 million tons and contributed US$1.40 billion of freight earnings, higher by US$117.41 million compared to US$1.28 billion in October 2019. Investment in rail infrastructure has increased considerably from US$31.03 billion during 2008–2012 to US$58.96 billion during 2013–2018 and planned to invest US$124.13 billion during 2018–2022. India requires US$545.26 billion by 2032 for capacity addition and modernization. The dedicated freight corridors are expected to transport 182 MT in FY2021 from 140 MT in 2016–2017. Indian railways planned to increase its freight traffic from 1.1 billion tons (BT) in 2017 to 3.3 BT by 2030 ( IBEF, 2020c ).
Figure 3 . Rail freight traffic in India (MT). Authors' creation based on Ministry of Railways, Vision 2020, and Railway Statistics, Government of India, New Delhi (2020). FY refers to Indian financial year (April-March), FY2021T* refers to up March 11, 2021.
Road Freight
India's road network has consisted of 5.89 million kms, which catered transportation of 64.5 and 90%, respectively, of goods and passenger traffic. Highway construction increased substantially at 21.44% CAGR between FY2016–FY2019. The roads sector is expected to receive 18% of capital expenditure from US$1.4 trillion worth National Infrastructure Pipeline during 2019–2025. Investment in road infrastructure has remained unstable since FY2017. India planned to construct 65,000 km of national highways for US$741.51 billion by 2022. The National Highway Authority of India (NHAI) became fully digital using a cloud-based and artificial intelligence (AI)-powered big data analytics platform in the mid-2020. India envisaged an investment of US$545.26 billion by 2032 for capacity addition and modernization of road infrastructure ( IBEF, 2020d ).
Performance of India's Logistics Sector
In a post-COVID-19 period, the global logistics market size is estimated to increase from US$2,734 billion in 2020 to US$3,215 billion by 2021 due to an increase in the supply of essential commodities, and supply chain stabilization initiatives ( IBEF, 2020e ). In India, the logistics sector was given infrastructure status in 2017. Figure 4 shows that India's logistics market is estimated at US$215 billion in 2020 from US$160 billion in 2017 ( Research and Markets., 2020 ). Between 2019 and 2025, the logistics sector is projected to grow at a CAGR of 10.5% with an investment of US$500 billion annually. Between 2018 and 2020, investment in warehousing increased by US$7.12 billion. Currently, the share of organized players in the logistics industry stood at only 10–15% ( Government of India, 2018 ). Thus, unorganized players dominated India's logistics industry. Therefore, there is a need to organize the highly fragmented logistics market.
Figure 4 . Logistics market size in India (US$ billion). Authors' creation based on data from Research and Markets, Dublin (2020). E refers to estimated.
In 2018, India was ranked 44 out of 167 countries in the World Bank's Logistics Performance Index 2018. India was ranked second in the 2019 Agility Emerging Markets Logistics Index. The government invested substantially in national highway construction to improve logistics. India's Logistics Performance Index improved significantly from 54th rank in 2016 to 35th rank in 2018. Figure 5 reveals the level of innovation in India, China, and the United States (US) in terms of global innovation index score. The US followed by China remained the top innovation performer compared to India ( Cornell University, INSEAD, and WIPO, 2020 ). This is one of the reasons for the weak transport and logistics system in India ( Cornell University, INSEAD, and WIPO, 2020 ). Figure 6 reveals that the US remained the top logistics performer in 2020 with a score of 85.2 compared to India's score of 51.9. India's low logistics performance has been attributed to a lack of advanced technologies and poor optimization of supply chain drivers such as modern transportation, information, and warehousing. Figure 7 shows the comparative value of logistics performance in the global innovation index of China, India, and the US ( Cornell University, INSEAD, and WIPO, 2020 ). India spends about 14% of its gross domestic product (GDP) on logistics compared to Japan at 11% and the US at around 9–10%. Therefore, logistics costs should be reduced by improving infrastructure, and adopting advanced and innovative technologies including digitalization. The application of emerging technologies and rapid digitalization of logistics operations can significantly improve the efficiency and performance in freight management and port operations to ease supply-chain cost pressures.
Figure 5 . Global innovation index of China, India, and United States (Score). Authors' creation based on data from Cornell University, INSEAD, and WIPO (2020).
Figure 6 . Logistics performance of China, India, and United States. Source: Authors' creation based on data from Cornell University, INSEAD, and WIPO (2020).
Figure 7 . Global innovation index and logistics performance of China, India, and United States. Authors' creation based on data from Cornell University, INSEAD, and WIPO (2020).
Figure 8 shows that India's merchandise exports and exports recorded negative growth of 13.58 and 25.92%, respectively, in April–January 2020 to 2021 over the same period last year with a trade deficit of US$72.01 billion. Figures 9 , 10 show the rank and score of the market access and transport infrastructure of India and their percentage change, respectively. India's rank in market access and transport had declined from 2015 to 2020 with a negative performance of 2.58% in score in 2019–2020 ( Legatum Institute, 2020 ). This has significantly impacted the performance of India's logistics sector.
Figure 8 . India's external (merchandise) trade (US$ billion). Authors' creation based on data from Ministry of Commerce and Industry, New Delhi, 2021. FY refers to Indian financial year (April-March). FY2021* refers to the period up to February 15, 2021.
Figure 9 . Market access and transport infrastructure of India (Rank and score). Source: Authors' creation based on data from Legatum Institute, London (2020).
Figure 10 . Market access and transport infrastructure of India (% change in rank and score). Authors' creation based on data from from Legatum Institute, London (2020).
The Indian e-commerce market is likely to increase from US$38.5 billion in 2017 to US$200 billion by 2026 mainly due to the rapid increase in Internet and smartphone penetration. Online retail market sales increased to US$32.7 billion in 2018. Internet connections and smartphone shipments increased to 760 million and above 50 million by mid-2020. The e-commerce sector saw new developments during the pandemic. For instance, Flipkart acquired a 7.8% stake with an investment of US$203.8 million in Aditya Birla Fashion and Retail in the third quarter of 2020. Flipkart also partnered with PayTM to increase its market. Amazon India invested over US$95.4 million into its payment unit, Amazon Pay. Recent government initiatives such as Digital India, Make in India, Start-up India, Skill India, and Innovation Fund supported the growth of e-commerce. India's e-retail market increased to US$ 25.75 billion in 2020 and is projected to reach US$100–120 billion by 2025 ( IBEF, 2020f ). However, last-mile delivery for India's e-commerce remained a cause of serious concern. Therefore, technology-driven solutions are essential to address the existing lags in supply chains and to move forward with an adaptive approach in the new normal economy.
In brief, the COVID-19-induced national lockdown has led to a slowdown in trade, which is likely to reduce the growth performance of all types of freights in India. India's capacity growth of different freight segments is likely to exceed demand due to lower consumer confidence. India's logistics sector is expected to improve operational efficiencies with significant investments in technology adoption. This can increase India's exports substantially. The application of AI in designing transport route optimization can enable optimum utilization of freight assets. Real-time global positioning system (GPS)-based vehicle tracking can improve the transparency and reliability of India's transportation and logistics substantially. Application of the Internet of Things (IoTs), data assessment, and automation can ease the moving and tracking of cargos and help businesses smoothly operate their distribution network. Besides, the make use of digital GPS and Radio-frequency identification (RFID) systems can minimize the cost of identification and location of the products along the supply chain and improve profitability.
Covid-19 Impact on India's Transportation and Logistics
The COVID-19-induced lockdown measures have disrupted transport mobility severely, which also restricted international trade and added fuel to the fire in the logistics sector. Restrictions on transport freights have slowed down the mobility of goods sharply. Lockdown restrictions have brought first- and last-mile transportation and intermodal movement of goods to a complete halt for an initial period, and were eased later. These restrictions have caused a sharp reduction in vessel capacity and equipment shortages and impacted both domestic and external trade substantially. India's air freight volume has been expected to contract by 17–20% during 2020–2021 due to the government-imposed capacity restrictions to reduce the impact of the COVID-19 pandemic ( ICRA, 2020 ). Figure 11 shows that air freight volume had recovered faster since April 2020, even there was a decline of 45% in the air freight volumes from April to September 2020 compared to the corresponding previous period ( ICRA, 2020 ).
Figure 11 . India's cargo traffic in 2020-2021 (January-December) (MT). Authors' creation based on data from Airport Authority of India, New Delhi (2021).
A heavy decline in freight volumes had forced major air cargo carriers to cancel their services including empty sailings to and from India and the Middle East, Europe, and the Mediterranean. Aviation has been one of the worst-affected segments due to pandemic-induced restrictions. The Indian government has suspended all passenger flights but allowed the movement of cargo flights. All these have adversely impacted the transportation and logistics performance to achieve the predicted future potential.
The COVID-19-induced disruptions in transportation and logistics systems required robust responses to mitigate the SCDs in India. The complete revival of shipping and ports at the pre-pandemic level can be one of the responses. India's shipping sector had strongly participated in global trade and linked the domestic market with the global markets. The widespread lockdown has caused immense transportation vulnerabilities and unexpected contraction in the supply and demand, which in turn reduced shipping demand and port traffic. Figure 12 reveals that both the overseas and domestic cargo traffic flows showed a negative trend during April–December 2019–2020 to April–December 2020–2021. The overall cargo traffic has registered a negative growth of 9%, while coastal cargo traffic declined sharply by 15.1% compared with overseas cargo traffic during the same period.
Figure 12 . Port cargo traffic flows in 2019-2020 to 2020-2021 (April-December) (MT). Authors' creation based on Port Data Management Portal, Ministry of Ports, Shipping & Waterways, Government of India, New Delhi (2021).
Thus, the COVID-19 pandemic-induced restrictions have affected cargo traffic volume immensely at 12 major ports of India. The disruption in shipping transportation has integrated with the disruption in the road and air freight transportations and caused severe SCDs. For instance, more than 50,000 sea containers were laid uncleared at 23 Container Freight Stations and private container terminals at the major ports of Chennai, Kamajarar, and Kattupalli due to the unavailability of road transportation facilities and lacked strong supply chain visibility due to the COVID-19 pandemic. Therefore, the decline in cargo traffic volume has slowdown other transport modes, which in turn disrupted the supply chains substantially. This had caused indirect short-term impacts via reduced production, collapsed the supply chains, confused the inland logistics, and contracted offline consumption including indirect medium to long-term impacts through reduced demand in raw materials, contracted demand and consumption, reduced merchandise trade, and disrupted the supply chains.
Indian roadways have been the second largest and one of the busiest transport networks in the world, which covered over 5.23 million kms and carried 65% of domestic freight and 80% passenger traffic ( TCI, 2015 ). The National Highways of India carried about 40% of total road traffic and contributed just 2% of the total road network. However, the Indian ports have facilitated 96 and 70%, respectively, in terms of quantity and value of foreign trade ( Frost and Sullivan, 2020 ). Figure 13 shows the increasing trend in the volume of road freight transportation in the last decade.
Figure 13 . Volume of road freight transport in India, 2010–2019 (MT kms). Authors' creation based on data from the Ministry of Road Transport and Highways, Government of India, New Delhi (2020).
However, the vulnerability of India's transport and logistics network has been widely exposed due to the COVID-19 pandemic. The domestic road transport sector has been estimated to decline by 20%, which may lead to backward movement from stable to negative growth due to inadequate technology interventions and lack of sound mitigation strategy. The pandemic-induced restrictive measures have also impacted the growth prospects of the Indian logistics sector adversely due to restricted road freight mobility. Figure 14 shows the significant decline in road freight traffic during the initial period of strict lockdown measures, and then the freight mobility picked up gradually to cross the pre-pandemic level. However, it had caused severe disruptions in supply chains and logistics.
Figure 14 . Monthly road freight traffic during January-December 2020 (Net ton kms). Authors' creation based on data from Ministry of Road Transport and Highways, Government of India, New Delhi (2021).
The freight availability has declined sharply, which led to a sharp decline in aggregate revenues by 18–20% on a 2020–2021 year-on-year basis ( ICRA, 2020 ). Additionally, the near-term profitability metrics of the transport sector have been estimated to remain under pressure due to low fleet utilization levels and high fixed costs of salaries, truck EMIs, and routine maintenance. The manufacturing halt has reduced demand for logistics services, which caused downward pressure on prices across warehousing, freight, and logistics. Approximately, 50% of India's trucking fleet had been wrecked due to labor unavailability and disruptions in road transportation. The local transportation system was less impacted and managed with reduced capacities.
The government has also announced some relief to the transport sector during the lockdown. Despite this, inland logistics companies' volume is likely to fall by 10–15% in 2020–2021 as the consumption demand could take a longer time for recovery. The operational recovery for logistics players will be gradual and prolonged over 2020–2021. The volume of inland logistics players is expected to be down by 10–15% in 2020– 2021 year-on-year ( ET Bureau, 2020 ).
Indian e-commerce logistics market has been segmented into service type, operational area, and end-user. Based on service types, the logistics market has been further segmented into transportation, warehousing, and value-added services. In the recent past, the transportation segment captured the largest share of the market. In terms of the operational area, the logistics market has been also segmented into domestic and international. The domestic segment is expected to register the highest returns in near future. Based on end-user, the logistics market has also been bifurcated into business-to-business (B2B) and business-to-consumer (B2C). The B2C segment had contributed substantially to the market in the pre-pandemic period.
Despite severe transportation disruptions and a lack of modern technological intervention in the sector, the e-commerce logistics sector had achieved significant growth during the pandemic. E-commerce players have sought alternative warehousing locations to help the continuity of their businesses, along with mitigating the delivery delays. With the rising awareness for social distancing among Indians, people have started opting for online platforms more than before, even in rural areas. E-commerce logistics players have leveraged options, such as contactless deliveries to mitigate the risk of infection, thereby boosted the demand for online sales. Several retailers across the country have switched online to expand their reach, which offered a wider choice of goods to the customers at competitive pricing and thus boosted e-commerce sales. The Unicommerce report on E-commerce Trends 2020 has noticed an overall order-volume growth of 17% in the COVID-19 period up to June 2020. Numerous leading companies have been operational in India's e-commerce logistics market. These companies have focused on adopting organic growth strategies, such as supply chain expansions to sustain their position in expanding the Indian market. For instance, in January 2020, Mahindra Logistics Ltd. had launched a distribution center for the pharmaceutical industry in North India, which managed the distribution and warehousing for its clients. The e-commerce sector may have performed better if smart transportation and logistics existed in India. However, despite substantial growth in road mileage and entry of foreign players in the Indian commercial automotive sector, the Indian commercial transportation and logistics systems have failed to integrate with the digital supply chains (DSCs) and transport intelligence.
In India, the manufacturing sector has been estimated to contribute 25–30% of the GDP by 2025, which will drive the growth of the warehousing segment. The port capacity is likely to grow at a CAGR of 5–6% by 2022, with substantial additional capacity. Indian Railways have planned to increase their freight volume from 1.1 BT in 2017 to 3.3 BT in 2030, whereas air freight traffic has been estimated to reach 17 MT by 2040 ( Frost and Sullivan, 2020 ), despite lack of supporting infrastructure, and automated material handling systems. Thus, there is a need to adopt the robust transportation risk management model to strengthen India's transportation and logistics from the COVID-19like pandemic in the future. At the same time, there is a need to build DSCs using AI and enabling digital payments as a solution to deal with emergencies such as the COVID-19 pandemic.
Transportation Risk Management Model
The suggested model in Figure 15 has focused on transportation disruptions and risk management for the revival and recovery of the Indian firms from the COVID-19-like pandemic crisis in the future.
Figure 15 . Transportation risk management model. Authors' creation.
Transport Disruptions and Risks
Transport disruption referred to disruption in the distribution, which negatively impacts the SC performance and customer safety ( Zsidisin, 2003 ). In the model, sources of risk comprised hazards and vulnerability. Hazards such as the COVID-19 pandemic are the disruption events, which have badly disrupted the whole supply chain. Vulnerability referred to exposure of the system within which the mitigation strategies are compromised and diminished. Transportation disruption risk management involved decision-making at every stage of the process: identification of the sources of risk and vulnerability, risk analysis, and risk mitigation strategies ( Kleindorfer and Saad, 2005 ).
Transportation risks consisted of internal and external disruptions. Internal disruption referred to the disruptions in the suppliers and retailers in the domestic markets, and external disruption referred to disruptions in the shippers to the overseas market. The internal and external disruptions have often led to disruptions in manufacturing, supply, and demand in the supply chains. For instance, demand for supply chains of the auto components and products have been unable to meet due to pandemic-induced SCDs. Likewise, the demand for numerous services has declined rapidly due to lockdown in the affected regions. Transportation disruptions have economy-wide repercussions due to restricted mobility and led to the SCD in manufacturing, distribution, and normal functioning of businesses ( Lin et al., 2020 ).
Manufacturing disruptions referred to disruptions in internal processes caused by a delivery interruption in raw materials or auto components in case of a crisis. Supply disruption referred to disruptions linked with inbound supply from suppliers and shipment and supply market failures. Demand disruption implied the risks associated with unstable environments, demand complexity, dynamic customer needs, and demand uncertainty, which influenced the logistics and transportation system. To mitigate disruption risks like the COVID-19 crisis, firms must follow short-term and long-term risk management strategies.
Short-Term Risk Management Strategies
Short-term risk management strategies should include the crisis response team and contingency planning, backup route, third party logistics (3PLs), transport cost structure, transport event management, outsourcing transport, transportation audit, supplier collaboration, and flexible contract.
Crisis Response Team
A crisis response team should help the firms to identify the planning gaps in the transportation system and requisite internal and external resources for an improved response. Analyzing the response capabilities and vulnerability analysis can help in understanding the negative impact of transport disruptions in supply chains and quickly respond to the disruption risks.
Contingency Planning
Contingency planning should focus on the financial influence of the shortage of auto components and products due to disruptions in internal and external transportation systems. Researchers have paid increasing attention to the contingency plan using alternate suppliers ( Sheffi, 2007 ; Tomlin and Wang, 2010 ), which is also known as contingent rerouting ( Tomlin, 2006 ).
Backup Route
The transportation and logistics diversification strategies required the firms to make significant investments in advance of any potential disruptions like the COVID-19. The companies must absorb the direct and indirect transportation costs associated with the backup supply route strategy when a disruption occurs. Backup supply route strategy should integrate the expenditure of resources with the occurrence of a disruption. Analogously, a company can avail of an emergency transportation mode if their standard mode has been disrupted, which is aimed at reducing the lead time disruption risk. Researchers also paid attention to the disruptions in transportation and discussed how “backup transportation” can help ( Zhen et al., 2016 ). Venkatesan and Goh (2016) explored the optimal “multi-objective” supplier route problem when transportation disruption occurred.
Third-Party Logistics
Firms should adapt to unpredicted events like the COVID-19 pandemic. The 3PLs have the potential to support supply chains at the time of disruption. Earlier the 3PLs made the provision for transportation and warehousing ( Yang, 2016 ) and provided new and innovative ways to reduce the contact distance between suppliers, manufacturers, and consumers. Regardless of mode or freight volume, the 3PLs can assess and tailor solutions to a company's requirements by gathering transportation and logistics information to forecast accurate needs, influence supply chain decisions, and can ultimately grow the processes efficiency and customer services. Partnering with a 3PL can help in mitigating the short-term impact of transportation disruption on firms.
Transport Cost Structure
Firms should focus on routine transportation management and cost structure in the short run to survive the pandemic. Transportation cost consisted of two aspects: unit costs and production cost. Focusing on unit costs or carrier rates can only result in creating instability in the transportation network. The opportunity cost during a disruption is the productivity costs. This can help the firms in understanding the criticality of the transportation cost structure to mitigate the disruption in transportation and improve transportation responsiveness and visibility in the supply chains. The real goal should be the negotiation of carrier rates as fair, competitive, and equitable to all the parties. But the sustained cost reduction cannot be realized through infrequent transportation network designs.
Transport Event Management and Outsourcing
Daily event management and hour-to-hour focus on waste identification and reduction should be targeted. Daily transportation plan and its execution in compatibility with the actual condition should also be accomplished. Any detected waste should be documented and followed using problem-solving techniques such as creating daily route designs, completing a real-time track, and tracing and generating real-time metrics to complete daily problem-solving. Transport outsourcing should also be reported if required.
Transportation Audit
Implementing a comprehensive transportation audit across all modes and geographies should be targeted. Transportation audit can help in the carrier and regulatory compliance by identifying the saving opportunities upstream in the sourcing, planning, and execution areas. A transportation audit can be performed for reviewing carriers, shipping needs, and transportation procedures currently employed within a supply chain.
Supplier Collaboration and Flexible Contract
Strong collaboration and cooperation are needed with various domestic suppliers. Firms working with suppliers located in different regions should identify and develop a relationship with backup suppliers. Whenever transportation disruption occurred, the existing relationships may put the firms in an advantageous position over their competitors who were similarly impacted by disruption and also reduced the disruption impact. This can result in building flexibility into the transportation contracts and provide an opportunity to transit between land, air, or sea delivery methods in the case of potential disruptions like the COVID-19.
Long-Term Risk Management Strategies
Long-term risk management strategies can help the firms in revival and resilience against the disruption risks, which include supply chain collaboration, intelligent transportation system (ITS), Industry 4.0, vendor management system, supply chain freight visibility, carrier relationship management, and digital supply network (DSN).
Supply Chain Collaboration
The collaboration in logistics processes referred to the continuity of flow, transport, and warehousing activities in the supply chains. It provided the effective conditions to facilitate the B2B and B2C relations to achieve the transport cost reduction in supply chains. This can help the firms in building transportation resilience in supply chains. Strong collaboration demanded robust cooperation between different stakeholders, including the firms, suppliers, and customers for sharing resources, information, and technology to create synergy and to recover from disruption to remain competitive.
Intelligent Transportation System
Firms can implement their logistics and transportation systems with strong application of information technology for effective and efficient transport management using techniques such as ITS and other administrative tools for operation management and decision making. ITS referred to the interconnection of different information systems aimed to capture, communicate, compute and assist the decision making and allow proper management of the flow of vehicles and transportation means. Proper management of a transport system required the integration of technologies such as the internet, electronic data exchange, wireless communications, computer technology, programming, and technologies designed to capture and analyze the required information. ITS also provided solutions for cooperation and a reliable platform for transport management. Electronic toll collection (ETC), highway data collection (HDC), traffic management systems (TMS), vehicle data collection (VDC), transit signal priority (TSP), and emergency vehicle preemption (EVP) are some of the widely used applications for ITS. The application of these tools can help the firms in building robust transportation and improve efficiency during transportation disruptions. These systems provided efficient transport management to produce economically efficient and safe routes and also allowed relevant information to users to be delivered such as controlling congestion and traffic, managing cargo fleets and vehicles, optimizing infrastructure, and managing communication between these elements. The most recent generation of ITS, generation 4.0 made use of multimodal systems incorporating personal mobile devices, vehicles, infrastructure, and information networks for system operations as well as personal contextual mobility solutions.
Industry 4.0
Firms should adopt and integrate their logistics and transportation system with Industry 4.0 to form logistics 4.0. Logistics 4.0 referred to the combination of using logistics with the innovations and applications added by the cyber-physical system. An efficient and strong logistics 4.0 must rely on and use the following technological applications such as resource planning, warehouse management systems, transportation management systems (TMS), intelligent transportation systems, and information security. These applications can build agility and flexibility in transportation and facilitate better recovery from disruptions. Flexibility, agility, and redundancy have helped the firms to strengthen resilience in supply chains ( Parast and Shekarian, 2019 ). With the massive use of the IoTs and the inevitable road to Industry 4.0, a TMS is an essential element in the concept of logistics 4.0. Logistics 4.0 had used real-time and inline data to achieve more efficiency and effectiveness in a logistic process. TMS system has been important for a company to use the GPS technology to accurately locate its vehicles while on the road, monitor freight movement, negotiate with carriers, consolidate shipments, and use the platform's advanced functionalities and interacted with ITS.
Vendor Management System
Vendor-managed inventory (VMI) has been one of the successful business models used by Wal-Mart and other retailers. VMI can help the firms in closer understanding and collaboration between suppliers, manufacturers, distributors, and retailers. VMI model shared the information (inventory level and demand data) between the chain's members via electronic data interchange (EDI), which can help in understanding the transportation disruption for upstream and downstream partners in crisis. It can also help in analyzing demand and supply disruptions caused by transportation disruptions. Using EDI, the manufacturer can control distributors' inventory and decide the requirements of automotive for a distributor. The supplier can also check the raw material inventory level of the manufacturer based on the production planning via the EDI, and take business decisions.
Supply Chain Freight Visibility
When firms faced a disruption risk like the COVID-19, the supply chain partners must have information related to supply chain freight operations, which has termed as supply chain freight visibility. Transportation systems can focus on implementing cutting-edge supply chain visibility solutions into their operations for quick response to change using real-time data during the crisis. Therefore, firms should analyze real-time strategic information such as traffic patterns, weather, or road and port conditions to take action and reshape demand or redirect supply and optimize routes. Logistics companies that used fully integrated supply chains have more efficiency than those without integration. IoT sensor technology has been a crucial asset for tracking shipments. The connected IoT devices on parcels allowed the warehouses to track inventory, vehicles, and equipment through cloud services. At the same time, the container management powered by IoT made it easier through real-time monitoring, increased fuel efficiency, implemented preventative maintenance, and made container operations proactive instead of reactive. With that in mind, partnerships between the IoT and logistics companies should be vital to recover and mitigate the effect of transportation disruption in logistics during a crisis.
Carrier Relationship Management
When shippers, providers, and carriers joined together to form a team dedicated to balancing cost and performance, the outcomes can be more successful in the long run. This is called carrier relationship management. When each team member understands and respects the goals of the others, it can open all eyes to a broader perspective, and allow the team to visualize and explore the shared solutions. For example, when capacity is tight yet predictable, carriers require longer lead times to accommodate agreed-upon service demands. At the same time, facing increasing customer expectations for same-day pickup, expedited delivery, and personal service, shippers can require even shorter-than-usual schedules. In the traditional competitive environment, these two sets of requirements would be seen as mutually exclusive. Each player would be at odds with the other, arguing, blaming, and clutching tightly to their positions. In today's more collaborative approach, the shipper and carrier should work together to identify common goals, complementary needs, and practical options to arrive at win-win solutions in the long run. This can help the firms to cope up with the change in opportunities due to disruption risks like the COVID-19 crisis.
Digital Supply Network
Most firms lack end to end view of the supply chain and agility to face the volatility of today's unpredicted marketplace. DSN referred to the digitally linked information and transportation networks that provided the firms an unlimited level of real-time visibility. DSNs can solve various issues in the supply chain such as lack of visibility, poor response times, conflicting priorities, and insufficient risk management model. Four characteristics are required to build the DSNs: rapid, scalable, intelligent, and connected. Firms can enhance the supply chain responsiveness toward the disruption risks by developing robust data analytics capabilities. Replacing the traditional supply chain with the DSNs can enhance the integration of talent, physical, financial, and information in supply chains to promote collaboration and open communications with both the upstream and downstream suppliers. Such measures can help the firms in mitigating the risks posed by the transportation disruption in the context of the COVID-19 crisis.
Challenges and Opportunities in Operationalizing the Model
In India, most transport and logistics operations are primarily handled manually, which led to high costs and low-profit margins ( Mitra, 2011 ). Robust and advanced transport and logistics infrastructure played a vital role in SCM by enhancing the speed and efficiency of the logistics system and reducing the impact of SCDs. India's large and diverse transport and logistics sector faced numerous challenges in the adoption of ITS and Industry 4.0 due to skill and resource constraints. Advanced information technology tools such as GPS technology and tracking and tracing of shipments have been successfully adopted by only 2% of the supply chain companies in India ( Luisa et al., 2013 ). Several international logistics companies in India adopted Industry 4.0 tools like IoT, AI, and machine learning for smart warehousing and logistics.
In the recent past, India also gained experience in implementing small-scale ITS projects in most cities through traffic regulatory management systems, automated traffic control, automated terminal information services, advanced public transportation system, bus rapid transport, and rapid bus transitways. Under the Digital India campaign, India attempted to improve digital skills. Some technology front logistics players utilized RFID systems using vehicle tracing technologies and warehouse control systems. However, India still lacks a robust digital policy to transform the traditional transport and logistics sector. Large gaps existed in the adaptation of new communication canals in the transport and logistics sector due to lack of technical competency ( Arnold et al., 2016 ) and inadequate awareness among the key stakeholders ( Sauvage, 2003 ) including the government ( Govindan et al., 2014 ) to effectively regulate the transport and logistics sector ( Mitra, 2011 ). Therefore, India's transport and logistics sector requires substantial technological improvement through heavy investment in digital transportation infrastructure and skill development ( Abdulrahman et al., 2014 ; Govindan et al., 2014 , Thai et al., 2011 ).
India's past experiences in the diffusion of ITS and Industry 4.0 in the transport sector should be replicated for adaptation and promotion of advanced modern technologies in emergency management, advanced vehicle control system, and congestion management to strengthen the transportation and logistics system for mitigating SCDs. The development of robust transport and logistics system in India should focus on the modeling, technology development, and interconnectivity of engineering branches such as transportation, communication, electronics, and information technology through the substantial application of sensors, detectors, communication devices, and global navigation satellite system along with advanced modern technologies like ITS, ALS and Industry 4.0 to digitize supply chains. This requires a cooperative and responsive collaboration between the government, the private sector, and academic research institutions. The COVID-19 pandemic has pushed India to address these challenges and to adopt advanced modern technologies like ITS, ALS, and Industry 4.0 along with focusing on the short-term and long-term risk management strategies to strengthen the transport and logistics sector. The application of these advanced modern technologies in the transport and logistics sector demonstrated the initial agreement on the deployment of the transportation risk management model and provided a conceptual basis and research challenges for the implementation of advanced transport and logistics systems in India. Therefore, robust communication canals using advanced digital technologies are one of the key elements for the implementation of a suggested mitigation methodology for dealing with a COVID-19 pandemic-like future crisis.
Optimization of Transport and Logistics Resources
In a post-COVID-19 economic recovery scenario, companies must integrate the short-term and long-term risk mitigation strategies with flexible and innovative use of available resources to smoothen and safeguard the supply chain across the industry. Besides, following recommendations should be considered for flexible use of resources in post-COVID-19 recovery of supply chains such as shifting of ocean cargo to air, transformation of empty passenger aircraft to passenger-freighters by inclusion of belly cargo, freight consolidation, warehousing close to point-of-origin or destination, conversion of stores into distribution and fulfillment hubs, strategic use of ocean freight as floating storage through careful timing of orders and deliveries, use of efficient alternative airport, ports, and trucking routes, vehicle routing and scheduling solutions to reroute shipments, efficient staff-vehicle utilization and redeployment of assets in real-time, use trailer and product sensors to help monitor and locate critical items moving through the supply chain, diversifying sourcing strategies, use of interoperable set of e-freight systems to provide real time data, substituting cargo cycles for delivery vans, shared mobility pick-up and drop-off zones, delivery and loading zones, multi-sourced key commodities or strategic components to diversify their supply chains from a geographic perspective, evaluate alternative inbound logistics options, collaboration with domestic suppliers, use of drones for delivery and use of supplier specialization programs to reduce supply delivery risk by supplier development training. Soon, the demand is likely to be uncertain and there will be huge pressure on the transport and logistics industry to work effectively by flexible and innovative use of resources to provide a high-performing logistics system. Therefore, there is a need to identify planning gaps and requisite internal and external resources for an improved response through an autonomous plan.
Indian firms have focused on interconnected and lean supply chains to overcome the supply gaps in normal business operations. The COVID-19 pandemic has led to massive SCDs due to undiscovered supply chain vulnerabilities caused by government-imposed economic restrictions including transportation disruptions worldwide including India, which adversely impacted the normal functioning of the firms. Many Indian firms have experienced severe disruptions in transportation and logistics services, including stronger impact on transportation and logistics data, time delays, and cargo cancellations due to drastically reduced freight capacity, limited mobility, ports shutdown, and problems in routine customs clearances. All this has also severely delayed the production of goods, transport consignments, and logistics services thereby caused massive delays and rerouting to final consumers. The suggested model of robust transport and ALS can be widely used by firms for speedier SCR in the context of economic crises like the COVID-19 pandemic. Over the period, the government has gradually removed most of the restrictions and the firms have made concerted efforts to speedily recover from SCDs, however, inadequate applications of robust TI and ALS have delayed the SCR by the firms. This calls for reviewing current transport and ALS used by firms on priority for speedier SCR. Therefore, the suggested model can be widely applied to address the SCDs using robust intelligence transportation systems and ALS. The challenges and opportunities in operationalizing the suggested model along with optimization of transport and logistics resources should also be considered by the firms.
Data Availability Statement
The original contributions presented in the study are included in the article/supplementary material, further inquiries can be directed to the corresponding author/s.
Author Contributions
All authors listed have made a substantial, direct, and intellectual contribution to the work and approved it for publication.
Conflict of Interest
The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.
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Keywords: supply chain disruptions, supply chain recovery, COVID-19 pandemic, transport intelligence, advanced logistics systems, India, policy options
Citation: Sudan T and Taggar R (2021) Recovering Supply Chain Disruptions in Post-COVID-19 Pandemic Through Transport Intelligence and Logistics Systems: India's Experiences and Policy Options. Front. Future Transp. 2:660116. doi: 10.3389/ffutr.2021.660116
Received: 28 January 2021; Accepted: 30 March 2021; Published: 04 May 2021.
Reviewed by:
Copyright © 2021 Sudan and Taggar. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) . The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
*Correspondence: Tapas Sudan, tapassudan69@gmail.com ; Rashi Taggar, rashi.taggar@smvdu.ac.in
This article is part of the Research Topic
Human Mobility and Transportation Impacts due to COVID-19
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Efforts on to keep Air Cargo out of murky waters
DHL’s Trend Report outlines the potential of Next-Gen Wireless in Logistics
BLR Airport partners with Kale Logistics to develop Air Cargo Community System
Pradeep Panicker takes over as CEO of Hyderabad airport
Pharmaceutical Supply Chain: In Sickness and In Health
CBIC announces 1st phase of All India roll-out of Faceless Assessment
New Delhi airport emerges as a focal point for agricultural perishables amidst lockdown
24×7 Custom Clearance at all sea ports, airports extended till 30 June
National Logistics Policy to be released soon: Mansukh Mandaviya
Global air freight demand witnesses the sharpest fall ever recorded
Logistics and Warehousing to emerge stronger than ever before
Lockdown 4.0: Transporters unhappy with 7pm – 7am curfew; seeks exemption
AIMTC pins its hopes on the Centre for revival of the trucking industry
USD 575 bn investment opportunity in transport infra in next 5 yrs: Report
Amazon forays into India’s online food delivery market with Amazon Food
Cyclone Amphan wreaks havoc at Kolkata Airport
Supply Chain Demand Planning In The Age Of COVID-19
Lockdown 4.0: All states to allow inter-state movement of goods and cargo
Gearing up for recovery in the Post-COVID World
A Robust local Supply chain imperative for a self-reliant India: PM Modi
Breather for Airlines: Resumption of domestic flights on the cards by May 18
Despite drop in demand, Warehousing & Logistics steering towards recovery: Research
How a Digital Freight platform enabled Indian Customers to move shipments during COVID-19
Aimtc warns of supply disruptions as fresh problems worry truckers.
Five Air India pilot who flew cargo flights to China test COVID positive
Container Volumes at Indian Ports to witness a decline of 16% in FY21: CRISIL
Home Ministry to use control room for resolving Trucker’s issues
Warehousing: Maintaining operational efficiency during a pandemic
COVID-19 shows the need for a globally-connected supply chain
Industrial and Warehousing segment will bounce back faster post COVID, says experts
Pawan Kumar Agarwal appointed as the new Special Secretary – Logistics
Post Lockdown: How airports across India are gearing up for resumption of operations
e-Way Bill under GST: Big relief for goods in-transit during lockdown
Debunking post-covid demand surge in the trucking sector.
As industries prepare to open up, spike in freight rates and lack of drivers worry logistics professionals
Responsible Supply Chains: Is COVID-19 a prescription for change?
No restrictions on inter-state and intra-state movement of goods trucks: Govt clarifies
Lockdown Impact: How to achieve Supply Chain Continuity through Risk Mitigation
Acing The Supply Chain Business With A Mix Of Technology
Is the Apparel Industry choosing Sea Freight over Air Freight?
Indian Railways asks cement companies to free up rakes for essentials
Spicejet operates first of its kind cargo-on-seat flights for flying essentials
Centre lifts restrictions on exports of 12 Active Pharmaceutical Ingredients
The Vehicular Lock Jam: An augury of an impending essential commodity crisis
Allcargo gets SEBI’s approval on its open offer to acquire Gati
Global Air Freight Market Demand dips by 3.3% in Jan: IATA
COVID-19 impact: Scarcity of empty containers looms large on Indian exporters
IATA postpones 14th World Cargo Symposium due to Coronavirus outbreak
Embassy Industrial Parks leases 3.5 lakh sq.ft. of warehousing space to Rhenus Logistics
Threat looms over Medical Devices Market as COVID-19 causes supplies to run-out
Cargo Service Center and Mumbai Airport launch world-class facility for handling Pharma and Agro products
Is Kolkata making Headway as the Warehousing Hotspot for the year 2020?
Aviation Minister sees no further hiccups for Air India disinvestment
Indian Warehousing Market records 30% growth in 2019: CBRE Report
Arth Ganga Project and NW development to boost cargo volume and economic activity
Sowing Seeds of a Successful and Efficient Supply Chain
E-comm welcome to work within the framework and the laws of the land: Piyush Goyal
Impact of Coronavirus on the Global Supply Chain
Coronavirus: India among top choices for relocation of production from China
Air Cargo experts exchanged thoughts on ‘Digitisation to Digitalisation’ in ACFI’s event
Coronavirus: A Lesson for Supply Chain Risk Management
Union Budget 2020 speaks of National Logistics Policy with E-Logistics Market
Budget 2020 expectations: national logistics policy, tax reforms and removal of red tapism, dp world cochin flags off new rail service to bangalore, how small businesses can ship freight from china.
Government mulling announcement of National Logistics Policy in Budget 2020
Delhi Mumbai Expressway to be completed in 3 years: Gadkari
Government invites bids for sale of Air India, sets March 17 deadline
JNPT and Antwerp Port Authority discuss initiatives for seamless trade
How Supply Chain Excellence contributes to Brand Building
“End-to-End Visibility across the Supply Chain is of paramount importance for JK Tyres”
An initiative similar to ICEDASH is in offing at AAICLAS, says Keku Bomi Gazder, CEO, AAICLAS
Six Demand Planning and Forecasting Software providers to help you manage your inventory
7 Best Tips to Reduce Logistics Cost in the Year 2020
How LogYcode made Freight Forwarding just a 5-click process
Gaps in Agri Supply Chains impacting Farmers’ Income Negatively: Report
China chooses Delhi Airport as its sole cargo transshipment centre in India
AllCargo likely to acquire an additional 26% share in Gati
Govt to use E-way bills and FASTag to crackdown on bogus GST returns
Indigo, etihad possible contenders for take-over of air india, uk-based hinduja group eyeing to buy jet airways, flat containerised trade indicate global softening & weak domestic demand: maersk india trade report q3 2019, world bank group: online retail sales in india is just 1.6% of total retail trade.
Phase-I of Bharatmala Project to be completed by 2021-2022: Gadkari
Guwahati emerging as a logistics and warehousing hotspot, global aviation industry hopes for better profits in the coming year, iata forecasts net profit of $29.3 billion in 2020, ecom express receives equity investment worth $36 million from uk’s cdc group, govt aims to reduce logistics cost with introduction of road trains, allcargo logistics enters in express business with the acquisition of controlling stake in gati ltd, decline in airfreight volume marks a weak start to traditional peak air cargo season: iata, icao revises the limit of liability for air cargo to 22 sdr, fastag implementation deadline extended till dec 15.
Managing Supply Chain Volatility During Festive Season
S ramakrishna to lead delhi customs brokers’ association, special coverage: day 1 of the 45th annual acaai convention held in phuket, turnaround time at major ports has come down by 23 hours: mansukh mandaviya, mos shipping, “i want to build a strong interface between air cargo industry and government”, delhi and bangalore airport racing with each other to speed up the cargo clearance process, govt launches icedash to fasten customs clearance process, freight forwarders may soon have to give up on extra profit margins, exploring issues plaguing cold chain infrastructure, understanding the supply chain of india’s most loved breakfast brand – kellogg’s, magnificent madhya pradesh investors’ summit 2019: business leaders brainstormed to develop mp as a logistics hub, how jay bharat maruti group maintains a seamless & agile supply chain – an insider view, air cargo flying through challenging times, seamless rural supply chain holds the key to increase farmers’ income, spicexpress starts cargo service from delhi to indore on a trial basis, second half of fy20 will see higher freight volumes: icra, us-china trade war weighs heavily on air cargo, global cargo players losing volumes due to trade war, points out ti insight’s report, govt mulling disinvestment in concor: reports, rising consumer impatience is giving jitters to supply chain professionals, pmo schedules a meeting on oct 3 to discuss draft national logistics policy, dp world envisions hyderabad as a multi-modal distribution hub for domestic cargo, maersk india trade report 2019: india’s containerized trade growth slower than the global average, 37th gst council meeting: gst exemption on air and sea exports extended by 1 year.
Share Market soars as Govt reduces Corporate Tax
National logistics policy is on the way: union commerce minister, fm announces to implement an action plan to reduce turn-around time at airports and ports by december, gujarat tops ease of logistics index 2nd time in a row, exclusive: crippling supply chain in jammu & kashmir, trade war continues to take a toll on global air cargo demand, aai to improve cargo-handling capacity at chennai airport, dgca grants license to first commercial ‘small category’ drone, air india clarifies capa that they are still the market leader, aai staff staged a peaceful protest against airports privatisation across india, govt is determined for 100% privatisation of air india, says civil aviation minister, nationwide survey to improve air cargo delivery to begin on sept 1, isro designed coa system starts real-time monitoring of more than 700 trains.
Exploring how Red Bull gives wings to its Supply Chain
Finance minister’s mini-budget plan: can it reform the indian economy, these software solutions providers are challenging the traditional way of freight forwarding, cathay pacific ceo steps down amid strong chinese scrutiny, hong kong protests likely to affect air cargo operations.
Can Paytm Mall revive with its new business model?
Dedicated elevated corridor for delhi airport to ease movement of cargo, port community system: what it holds for indian maritime trade.
Govt takes on Time Release Study to make trade flow hassle free
Inland waterways: game-changer for the north-eastern states, decoding the mantra for efficient last-mile route planning, india’s global export plummets without warning, trade unions are up in arms against modi 2.0’s disinvestment move.
Attempts to resolve the ongoing trade tussle between India and USA ended without major progress: Report
Indian railways eyes big bucks through freight corridors, why are investors betting big on the warehousing in india, global air freight demand falls consecutively for the 13th time: iata, delhi international airport launches india’s first dedicated ‘transshipment centre’.
Central scheme for Cold Chain may become part of the draft National Logistics Policy: Commerce Minister Goyal
Govt’s push in Logistics likely to take Exports up to $1 trillion in the next 3 years
Centre cracks down on gst evasions; plans to integrate fastag with e-way bill, warehouse space leasing grows by 77% yoy in 2018: knight frank report, zomato, uber eats and the race for drone deliveries.
PM Modi pitches India for a 5 trillion-dollar economy by 2024
‘addressing sustainability and diversity issues will be on top of my mind’ – steven polmans, chairman-designate, tiaca, air cargo industry falling prey to protectionist measures, lufthansa group’s ceo, carsten spohr to lead iata.
Digitalization revolutionizing Customs clearance procedures in India
Iata: ground handlers should focus on safety, global standards & modernization.
India and Japan to develop container terminal in Sri Lanka
Adani group bags lease rights for six non-metro airports.
Modi 2.0: What does it mean for the Logistics Industry
Mahindra logistics seeking dgca nod for using drones, how dow india is redefining hazardous goods transportation, exporters may get automated gst refunds from june, “warehouster ensures annuity and good returns for its investors”, db schenker plans warehousing punch of 7 million sq feet in india.
CONCOR to invest Rs 8,000 crore in the next 5 years
Blockchain: a contraption to increase supply chain transparency & efficiency, india’s biggest port mundra set to turn bigger with quay & breakwater extension, surface logistics industry hit by truck drivers’ shortage.
5 Tech-Logistics Startups in India providing hassle-free delivery to sellers
“supply chain managers must have ‘passion and ownership’ for products they handle”, jet fades into horizon with last flight to amritsar, “new approach of breaking silos is benefiting air cargo,” secretary – moca, india’s exports touch new high in five years, high cargo dwell time increasing supply chain challenges in india, delving deep into godrej’s supply chain processes, robots in warehouse: are cobots the future, how drone policy 2.0 could fuel e-commerce business, national commitment required to boost coastal shipping, we at aurobindo evaluate lsps based on their expertise: gm – warehouse, aurobindo pharma, the jet saga – how india’s first dedicated air cargo service provider ended with bailout, tata buys stake at gmr infrastructure to enter airport business, ups starts deliveries of medical samples via drone in the united states, jet airways chairman goyal decides to hang boots to save the airlines, a team of 100 robots to manage flipkart’s bangalore delivery centre, make way for the ‘first unicorn of 2019’: delhivery crosses $1.6 billion valuation mark, technology redefining supply chain processes, smaller players to reap benefits from new e-commerce policy.
India aiming spot in top 5 global air freight markets by 2025
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Case Studies: Success Stories in India’s Coastal Shipping Industry
Introduction:
India’s coastal shipping industry is experiencing a remarkable surge in success, with pioneering companies skillfully navigating the seas of opportunity through strategic prowess. This detailed blog embarks on an exploration of inspiring case studies that illuminate the growth and potential of the dynamic coastal shipping sector in India. From optimizing shipping logistics to embracing sustainable practices, the success stories presented herein underscore the resilience and innovation defining this maritime landscape.
Company A: Optimizing Shipping Logistics for Maximum Efficiency
In the vast expanse of India’s coastal shipping domain, Company A emerges as a trailblazer, having mastered the intricate art of optimizing shipping logistics. Through the strategic integration of cutting-edge technology and data analytics, they have achieved remarkable efficiency gains. The reduction of turnaround times and the streamlined operations spearheaded by Company A not only enhance their competitiveness but set new benchmarks for the entire industry. A deeper dive into the details of their logistical innovations reveals a profound impact on their seafaring triumph and the industry at large.
Company B: Navigating the Green Seas – A Sustainable Coastal Shipping Model
Sustainability takes center stage with Company B, a beacon of eco-friendly practices in the coastal shipping industry. From the deployment of fuel-efficient vessels to the implementation of environmentally conscious packaging solutions, this company has made a resolute commitment to green navigation. Unveiling the intricacies of Company B’s sustainable practices reveals not only a contribution to a healthier planet but also an appeal to environmentally conscious customers. Company B’s success story showcases the viability and desirability of eco-friendly approaches in the often turbulent waters of the maritime world.
Company C: Strategic Alliances for Collaborative Growth
In the complex and interconnected realm of coastal shipping, success often hinges on collaboration, a truth embodied by Company C. Masters of forming strategic alliances, they have forged partnerships with key players in the maritime ecosystem, creating a network that fosters mutual growth. The intricacies of Company C’s collaborative approach unveil a tapestry of shared resources and expertise, propelling them to the forefront of the coastal shipping arena. Company C serves as a testament to the idea that collaboration is not just beneficial but a cornerstone of success in the maritime industry.
Company D: Last-Mile Connectivity as a Game-Changer
Navigating the last mile, often overlooked in logistics, becomes a strategic game-changer for Company D in the coastal shipping landscape. Their innovative infrastructure and transportation systems have revolutionized last-mile connectivity, ensuring seamless operations and an enhanced customer experience. The investment in advanced technologies, detailed in this case study, not only benefits Company D but also sets a precedent for the transformative power of focusing on the finer details of the shipping process. Company D’s success story underscores the significance of meticulous planning and execution in the maritime industry.
Company E: Digital Innovations Redefining Coastal Shipping
Amid the winds of digital transformation, Company E emerges as a pioneer, leveraging technology to reshape coastal shipping practices. From IoT-enabled tracking systems to blockchain-based documentation, they have embraced digital innovations that not only enhance transparency and security but also redefine the very fabric of coastal shipping. This case study unveils how Company E is not merely riding the technological wave but actively reshaping the future of coastal shipping with their forward-thinking approach. Company E’s success highlights the transformative potential of digitalization in an industry traditionally reliant on manual processes.
Conclusion:
India’s coastal shipping industry, as depicted through these diverse and detailed success stories, is a tapestry woven with innovation, resilience, and strategic brilliance. Each company examined has carved its unique path, navigating challenges and embracing opportunities in a sector where the seas can be both turbulent and promising. As we delve into these case studies, the promise of the future becomes clear — not just a promise but a potential laden with opportunities for those who dare to sail the seas of innovation and excellence.
In a landscape where the waves of change are constant, the companies highlighted in this blog showcase that success in India’s coastal shipping industry is not just about staying afloat but about skillfully navigating the currents of innovation, sustainability, collaboration, and digital transformation. The future of coastal shipping in India is not merely promising; it is an expansive ocean of possibilities awaiting those who are ready to set sail.
- Navigating the Logistics Landscape: Innovations and Challenges in India’s Warehouse Sector in 2024
- The Evolution of Domestic Cargo Services in 2024 and the Role of Technology
- Revolutionizing Urban Mobility Exploring the Future of Transportation in Cities and Shipping
- Unveiling the Art of Biophilic Design Enhancing Logistics and Shipping Spaces with Nature
- The Power of Universal Design Creating Inclusive Environments for All in Shipping and Travel
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How GST (Goods and Services Tax) Has Affected Logistics in India!
Supply Chain Game Changer
FEBRUARY 28, 2019
Right after demonetization, another big thing that came to India was the implementation of GST (Goods and Services Tax). Over time it was understood that this was much needed and it actually helped in organizing and setting up different logistics and transport sectors to speed up their overall processes. Growth and Evolution.
Report Indicates Apple India iPhone Output is Now $7 Billion
Supply Chain Matters
APRIL 13, 2023
Our commentary reiterated that over the last three years there were reports indicating that Apple was instructing its contract manufacturers to begin evaluating and seeking out new hardware sourcing outside of China , specifically India and Vietnam , with the former garnering the most attention. All rights reserved.
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- Scaling Logistics for Success: A White Claw Story
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Case Study: People and Processes Drive Supply Chain Improvements at Honeywell
MAY 8, 2020
While there have been significant advancements in logistics technology, those tools can only go so far in advancing your supply chain. One of our North American plants wasn’t meeting performance numbers, and logistics costs were increasing because shipments didn’t have sufficient lead time.
MAY 8, 2019
Restructuring Global Value Chains & Tariff Reduction – A Continuous Evolution for Supply Chains
The Logistics & Supply Chain Management Society
AUGUST 19, 2022
Feature Article by Dr. Raymon Krishnan – President at the Logistics and Supply Chain Management Society. Southeast Asian countries, Taiwan and India have become alternative manufacturing locales or sources of supply. Raymon Krishnan has over thirty years experience in the Logistics industry as an end user and service provider.
Retailers, Customer Delight is Tied to Exceptional Delivery Experiences
FEBRUARY 3, 2023
According to our research, India ’s e-commerce revenue will reach $113.5 However, India is not the only country contributing to the growth of e-commerce across the world.Southeast Asia has over 222 million users in 2020 and has a growth potential of 411 million by 2025. Download the Case Study 3.
Tata Steel Drives Supply Chain Transformation with Optimization Technology
JANUARY 24, 2019
The company was established in India as Asia’s first integrated private steel company in 1907. We are using several AIMMS-based models to improve our operational efficiency, with a focus in India . Tata Steel uses a lot of advanced software to tackle business requirements, but spreadsheets are still the preferred choice in most cases .
Supply Chain Spotlight on Mexico: Takeaways from Logistic Summit & Expo 2015
APRIL 6, 2015
A clear sign that Mexico is currently in the supply chain spotlight was last month’s Logistic Summit & Expo 2015 in Mexico City, which attracted over 10,000 attendees and almost 200 exhibitors, including leading 3PLs, software vendors, and other supply chain and logistics companies from both the United States and Mexico.
Beyond Asset Tracking: RFID For An Accelerated Supply Chain
DECEMBER 2, 2013
Today’s supply chain and logistics management executives are tasked with managing multiple supply chain configurations, maximizing flexibility and incorporating complex technology systems into the mix. A long line of case study success. Case study examples to support these statistics aren’t hard to come by either.
Supply Chain Planning in Emerging Markets: Four Points to Remember
MARCH 5, 2019
Gartner analyst Debashis Tarafdar says that the large size of a country (like India , China or Indonesia) can mean “significant polarization of population between urban and rural with distinctly different buying capabilities and purchasing preferences. The challenges can be multi-faceted: High logistical costs. Transfer taxes.
Supply Chain Management in Apparel Industry
APRIL 27, 2022
And numerous case studies of businesses show that by investing in better supply chain management , the prospect of business growth improves significantly. This is a huge step that requires the extensive support of groundbreaking logistics that helps distribute the clothing to appropriate locations across the country or countries.
Supply Chain Management:Challenges Faced By E-Retailers in India
Infosys Supply Chain Management
MARCH 30, 2012
Logistics and Distribution. Case Studies . |. Main | Increase in Operational Efficiency through Voice Technology » Challenges Faced By E-Retailers in India . In my previous blog , I highlighted the factors which helped e-commerce retailing develop in India . Communication Services. Consumer Packaged Goods.
The Localized Supply Chain
APRIL 26, 2018
And as markets become increasingly global, brands have to consider the logistics of selling their products around the world. When the phone’s release in India was announced in 2015, more than 100,000 people placed pre-orders. Case Study . Chinese smartphone startup Xiaomi captured the Indian market by doing just this.
Keeping Inventory Cool: Challenges of Temperature Control
MAY 8, 2016
This requires companies to closely monitor another dataset beyond average supply chain logistics management information. Packaging Digest reported the global health care cold chain logistics market is projected to increase by $3-billion between 2014 and 2018. As markets emerge in India , China and South America, U.S.
Reflections: Building the Network of Networks
Supply Chain Shaman
OCTOBER 17, 2018
The most advanced work is in India and Japan. Collaborative Logistics . Logistics costs increased greatly in 2018; yet, 40% of trucks are empty. In the case study below, a major manufacturer worked for six months to try to validate over 24,000 suppliers. Why Is It Important? Corporate Social Responsibility (CSR).
Garment Workers in BRICS Countries Cannot Afford Basic Quality of Life
Material Handling & Logistics
SEPTEMBER 11, 2017
Using the Western European clothing supply chain as a case study , the researchers wanted to test a standard as to the ‘fairness’ of that sector’s global supply chains. They analyzed garment industry wages in 2005 in the BRIC countries – Brazil, Russia, India and China.
How COVID-19 is Battering Australia’s Imports and Exports
Logistics Bureau
MARCH 9, 2020
Aware of the dangers of being over-reliant on a single trading partner, Australia had, even before the outbreak of the virus, started trying to diversify its markets by launching negotiations for free trade agreements with countries such as Indonesia, India , Japan, South Korea, and the United Kingdom.
The History and State of Vehicle Routing!
MARCH 30, 2021
On top of that there are more innumerable logistics companies (local, national and international), carriers, couriers, private trucking fleets, contract trucking fleets, and more all available to move these goods.
Supply Chain Management:Factors which helped e-commerce.
FEBRUARY 14, 2012
Logistics and Distribution. Case Studies . |. « Make your Assets Green, as Dollar is Green | Main | Get,Set,Go-Agile Implementation of Multi Channel Commerce Solution » Factors which helped e-commerce retailing develop in India . Ecommerce is really picking up in India . Communication Services. Healthcare.
Making 'Cash on Delivery' attractive to E-Retailers - Infosys Blogs
SEPTEMBER 13, 2012
Logistics and Distribution. Case Studies . |. It is still early days in India for the Online Retailing industry. Companies like Square Inc (USA), Ezetap ( India ) offer a simple credit/ debit card reader which can connect to a mobile phone/ device and enables the phone to read debit/credit card. Financial Services.
Ethics in Procurement – Simple, but Not Always Easy
NOVEMBER 14, 2018
As bribery is one of the more common forms of unethical or even fraudulent procurement practices, it is worth examining a case study to understand how it typically takes place, but more importantly, how the consequences of what to some may simply be seen as ‘greasing the wheels of business’ are increasing in seriousness. This is true.
Online Grocery Retailing that too in.India - Infosys Blogs
APRIL 30, 2012
Logistics and Distribution. Case Studies . |. But do we purchase grocery online (excluding the perishables) in India . At present buying grocery online in India is not an attractive option, as compared to other categories. Among the top 20 e-retailers in India grocery is sold by just 28%. Financial Services.
Every Shipment Matters With Jim Waters
MAY 19, 2022
We help shippers, carriers, 3PLs, and logistics service providers actively track their shipments so that they arrive on time and in full because it’s all about getting all your stuff on time, not busted up, late, and lost. I’ve worked at a third-party logistics company. We did a case study with GEODIS.
Supply Chain Management:The 'Cash on Delivery' Payment Option!
SEPTEMBER 17, 2011
Logistics and Distribution. Case Studies . |. Cash on Delivery (COD) as a payment option has existed for a long time, but is fast becoming a popular payment option in some countries such as India . cash on delivery persist, I am not sure if online retailers in India have a choice in the immediate future. Healthcare.
Supply Chain Management:Infosys team at Pulse 2012 - Day 0
MARCH 4, 2012
Logistics and Distribution. Case Studies . |. Had an uneventful journey from India - was long though. Have never spent that much time in air to travel to West coast from India . Communication Services. Consumer Packaged Goods. Financial Services. Healthcare. Hospitality and Leisure. Industrial Manufacturing.
Supply Chain Management:Increase in Operational Efficiency.
APRIL 2, 2012
Logistics and Distribution. Case Studies . |. « Challenges Faced By E-Retailers in India | Main | Best practices for defining Asset Register » Increase in Operational Efficiency through Voice Technology. Improvements in the order picking accuracy are dramatic and in cases an accuracy of 99.9% Healthcare.
Supply Chain Management:SAP acquired Ariba, what does it mean.
MAY 25, 2012
Logistics and Distribution. Case Studies . |. When a colleague forwarded the news of SAP (finally) buying Ariba past midnight India time on Wednesday ( [link] ), my first response was roughly on the lines of "better late to the dance than allow Oracle to steal your partner". Communication Services. Consumer Packaged Goods.
Unilever Gains Visibility & Control Over the Most Unpredictable Spend Category
JULY 7, 2020
Unilever has research and development facilities in China, India , the Netherlands, United Kingdom and United States and does 57 percent of its business in emerging markets. In the transportation and logistics category there are infinite variables and unpredictable circumstances. Download the case study in PDF here now.
Supply Chain Management:How to make Preventive Maintenance a.
MAY 18, 2012
Logistics and Distribution. Case Studies . |. I started my career as a maintenance engineer in a leading paint manufacturing company in India . Communication Services. Consumer Packaged Goods. Financial Services. Healthcare. Hospitality and Leisure. Industrial Manufacturing. Media and Entertainment. Medical Devices.
Supply Chain Management:Make your Assets Green, as Dollar is.
FEBRUARY 10, 2012
Logistics and Distribution. Case Studies . |. « A New Lens for Supply Chain Roadmaps | Main | Factors which helped e-commerce retailing develop in India » Make your Assets Green, as Dollar is Green. Communication Services. Consumer Packaged Goods. Financial Services. Healthcare. Hospitality and Leisure.
Walmart Says It Can Reduce Emissions in China by 50 Million Tons
APRIL 3, 2018
Over 400 suppliers in China, India , the U.S. To help provide resources to suppliers in China, Walmart has created a digital resource center in Mandarin and English with tools, case studies , and program resources on emissions reduction in the value chain: www.walmartsustainabilityhub.com.
Supply Chain Management:Get,Set,Go-Agile Implementation of.
Logistics and Distribution. Case Studies . |. « Factors which helped e-commerce retailing develop in India | Main | Mobile Gift Cards » Get,Set,Go-Agile Implementation of Multi Channel Commerce Solution. Communication Services. Consumer Packaged Goods. Financial Services. Healthcare. Hospitality and Leisure.
Supply Chain Management:Preventing Failed Deliveries.
Logistics and Distribution. Case Studies . |. « Bricks and Clicks - The New Business Model and Supply Chain Capability for Retail Industry | Main | Challenges Faced By E-Retailers in India » Preventing Failed Deliveries. Communication Services. Consumer Packaged Goods. Financial Services. Healthcare.
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Mahindra Logistics Case Study
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Mahindra Logistics, a subsidiary of the Mahindra Group, is a prominent player in the logistics and supply chain management industry in India.
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Logistics industry in India - statistics & facts
Road transport, covid-19 impact on the sector, key insights.
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Freight movement by road transportation in India from financial year 2001 to 2020 (in billion metric tons per kilometer)
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Existing stock for warehousing in leading cities across India in financial year 2022 (in million square meters)
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Share of warehousing transactions across India in financial year 2023, by sector
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Demand drivers in warehousing in India in 2022, by sector
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Vacancy rate in warehousing stock in leading cities across India in financial year 2022
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Number of parcels delivered by India Post FY 2016-2022, by type
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Leading logistics companies based on net sales in India 2024
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Leading logistics companies by market capitalization in India as of July 2023 (in billion Indian rupees)
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Home / Case Studies
Case Study – Air transport services for mining industry
Our client needed to transport a total of 8 cable reels of 23 tons each from Shanghai. The challenge was to make the shipment in the shortest possible time with reasonable costs.
Case Study – Air Charter for Healthcare
The start of the Covid-19 vaccination campaign was imminent and our client needed regular shipments of syringes from China, where the factory was located, to Peru so they could ensure the vaccination campaign ran smoothly.
Case study – Air charter for the mining sector
Our client needed to urgently ship two conveyor belts from Santiago de Chile to Lima. These conveyor belts are used to move the mineral extracted from the mine into the storage area. Due to their size and weight, more than 60 tonnes, it was necessary to study in detail what would be the best transport solution to deliver in the shortest possible time.
Case Study – Automotive logistics
To create a cost saving solutions with enhanced service levels, whilst maintaining existing structures and warehouse facilities.
Case Study – Retail logistics: LG Harris
When understanding the LG Harris supply chain requirements, Noatum Logistics quickly identified that their buying terms were CIF (cost, insurance, freight) across the majority of their supply base. This prevented shipment visibility for LG Harris until the goods arrived into port. Accounting for over 1,000 TEU per annum was a major headache. The supply chain model was completely reactive with little or no reporting or key-performance-indicator (KPI) management. This created high demurrage charges, inbound-inventory and stock-control challenges at the LG Harris distribution centre (DC) located in the Midlands (UK).
Case Study – Personal care logistics
The customer felt its supply chain was working fine. No pain, no need to change! However, having worked with Noatum Logistics in the past, and experienced improved operations, the new leader was willing to let us review the company’s pricing and route information on outbound shipments to the United States, Japan, Taiwan, Malaysia and Australia.
Case Study – Outdoor retailer logistics
The retailer faced major challenges with days-in-inventory and capacity at its distribution center (DC). Days-in-inventory time continued to increase over the prior five years The single distribution center experienced overly high storage levels, delays with unloading railcars and shipping containers, and an overall worsening in port-to-DC transit times (hovering around 40 days).
Case Study – Oil & Gas industry
With each unit weighing approximately 32,000 pounds, the company faced high shipping costs for the pumping units sourced from China.
Case Study – Oil and Gas logistics
The customer suspected they were being overcharged for shipping. They were not using freight forwarders, instead allowing manufacturers to arrange for the ocean-freight shipping of the oilfield equipment from China to Canada. Cargo was shipped using fixed load plans with no optimization for larger batches.
Case Study – Mining logistics
An initial assignment was for the movement of Autoclave and Flash Vessel pieces from their manufacturing plant, located 30 miles inland from the Shanghai port, to the mining project 90 miles east of Lima, Peru. The equipment pieces were over size and over weight, requiring special loading/unloading procedures; ocean, rail and ground transportation; and infrastructure modifications.
Case Study – High Tech logistics
With a significant segment of the semiconductor wafer foundry base moving to Asia, our customer decided to relocate operations closer to their end user. Our customer opened an equipment integration facility in Singapore near their customer who provides wafer fabrication equipment. Unfortunately, this move created an increase in real estate and labor costs, thus denying our customer the warehouse space to stage components for assembly and integration.
Case Study – Pharma&Healthcare logistics
Sourcing product from Korea, the customer initially used Noatum Logistics to assist with international freight forwarding and the custom clearance process for shipments to the U.S. As the customer grew their customer base and product offering, it was apparent their outsourced warehouse solution in the U.S. could not keep up with their needs. The end customers’ orders frequently required special packing, rush deliveries, and special project handling, straining the customer’s inventory management practices.
Case Study – Fashion industry logistics: Gant
Capitalise on the retail expertise and capabilities of Noatum Logistics, including our robust warehouse management technologies and local capacity. The benefits of greater inventory visibility and control would cascade into other supply chain functions including transportation, warehousing, distribution and customer service.
Case Study – Consumer Electronics logistics
A leading manufacturer of cell phone accessories was in a crisis. Issues with an overseas partner completely shut down their supply chain. They needed a new logistics services provider to quickly step in and get shipments moving. The manufacturer also recognized the need to rethink its supply chain to gain better control over vendors, reduce costs and achieve more efficient handling of orders.
Case Study – Apparel retailer logistics
A retail client of Noatum Logistics for international freight forwarding services sought additional assistance for improving control over its global supply chain. The client recognized that greater visibility to purchase orders and shipments would lead to better purchasing, transportation and distribution decisions.
Case Study – Industrial Manufacturing logistics
Our customer is a leading multinational manufacturer of automobiles and agricultural machinery. The company entered the U.S. market in 2000; since 2002, Noatum Logistics has handled the company’s customs brokerage at Noatum Logistics’ Houston branch.
Case Study – Fashion industry logistics
Founded in 1920, New Era Cap Company is an American headwear company headquartered in Buffalo, New York. Best known for being the official on-field cap for Major League Baseball, the official sideline cap for the National Football League, and the official on-court cap for the National Basketball Association.
Case Study – High tech firm
The customer, a global provider of secure IP/Ethernet switching solutions, sources products from South China and Taiwan for sales in the United States. They identified cost containment objectives and wanted to improve the overall performance of their supply chain.
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Freight Traffic Impacts and Logistics Inefficiencies in India: Policy Interventions and Solution Concepts for Sustainable City Logistics
Prasanta k. sahu.
1 Department of Civil Engineering, BITS Pilani, Hyderabad, 500078 India
Agnivesh Pani
2 Department of Civil Engineering, Indian Institute of Technology (BHU), Varanasi, India
Georgina Santos
3 School of Geography and Planning, Cardiff University, Cardiff, UK
Associated Data
The data that support the findings of this study are available from Prasanta Sahu ( [email protected] ) upon reasonable request.
Freight traffic fulfils not only the business needs of a region to move goods between producers, manufacturers, and end consumers, but also creates a host of unintended environmental, social, and economic impacts. Despite its importance, freight traffic impacts and associated logistic inefficiencies are largely overlooked in the urban transport discussions in developing economies like India. This paper addresses this research gap by outlining the research progress related to freight transport in India and discusses the key problems related to freight system performance. The published literature in the last three decades (1990–2020), policy briefs and institutional reports are explored to summarize key findings and uncover thematic linkages. We categorize the inefficiencies in the freight system into four aspects: (i) long-haul trucking, (ii) last-mile logistics, (iii) freight distribution (inventory level), and (iv) policies and regulations. Apart from identifying the limitations in policy discourse, this paper also explores the possible solution concepts to improve efficiency in freight transport and mitigate the unintended negative externalities in urban areas. The overall conclusion is that increasing and improving infrastructure and equipment, technology and operations, and policy and regulations will go some way towards making freight more efficient in India and reducing congestion and emissions of air pollutants and GHG. The present paper can be expected to promote further freight research and effective policy instrument design in India.
Introduction
Currently, more than a third of global transport energy consumption (39%) is generated by freight movements [ 1 ]; trucking is responsible for 23%, followed by marine vessels, which are responsible for 12%, and rail and pipelines, which are responsible for 4%. It is therefore an imperative research need to investigate how to ensure that freight activities fulfil their role in economic transaction of goods, while mitigating the associated negative externalities. It is also critically important to understand why, how and where freight activity takes place and what kind of infrastructure and policies need to be provided to respond effectively to the growing logistical requirements of businesses and households [ 2 – 4 ]. The practical requirements to improve the logistics competency and operational efficiency of freight transport have been acting as strong catalysts to stimulate a number of studies towards understanding freight activity at both national and local scales. However, a data-driven summary of the freight system performance in India, expanding on the logistics inefficiencies and negative externalities of freight traffic, are evident gaps in the literature. This discernible research need triggered the present comprehensive review. This review specifically outlines the progress that has been made in freight research, along with possible future research directions and policy guidelines.
The objectives of this review paper are therefore threefold: (1) to investigate the various aspects of freight system performance, logistics inefficiencies, and freight traffic negative externalities in India; (2) to discuss the potential solution concepts and prepare a research agenda for future research on sustainable city logistics in India; and (3) to develop insights for policy and practice based on the empirical evidence in the literature and the emerging trends in the logistics market. These objectives are motivated by the lack of practice- and policy-based discussions on improving freight mobility in India and enhancing the ease in moving goods across cities and states in a geographically diverse country like India. Reviewing the inefficiencies and externalities of freight in India will help to provide solution concepts and mitigation strategies to improve the freight system performance. This paper, therefore, addresses the need for a comprehensive review focusing on Indian freight studies and aims to draw inferences from the existing literature and provide guidance for future research in India. The review findings are expected to promote freight research and effective policy instrument design to meet the growing needs to reduce the overall logistics cost for moving goods.
Method Adopted for the Review and Data Collection
Research questions.
The primary aim of this paper is to present a comprehensive review of the freight traffic impacts and logistics inefficiencies in India, which is an area of significant practical and research interest in the context of coordinated global efforts to reduce transport emissions. The following are the specific research questions explored in this review:
- What is the extent of literature relevant to freight transport planning in India and what is the emerging trend?
- Are there any deficiencies of freight performance in India relative to global benchmarks?
- What are the logistics inefficiencies in India and what are the underlying reasons contributing to them?
- What are the environmentally negative externalities of freight movements and how can they be quantified in India?
- What are the potential solution concepts that can be derived from the literature for addressing the issues related to freight system performance, logistics inefficiencies, and negative externalities of freight movements in India?
An overview of the review questions, methodology and the discussion structure adopted in this paper is presented in Fig. 1 . As can be seen, the first research question (RQ1) is designed to map the extent of literature related to freight transport planning in India through a review of published literature, policy documents, and reports. The second research question (RQ2) follows from the previous question as it is to analyse and discuss the freight system performance in India based on the papers identified and screened as a part of RQ1. The third research question (RQ3) is to discover the underlying reasons contributing to logistics inefficiencies in India as a logical extension of RQ2. The fourth research question (RQ4) is to assess the environmentally negative externalities of freight transport, going beyond the operational efficiency focus in RQ3. The final research question (RQ5) is aimed at discussing the potential solution concepts in practice across the world to improve the freight system performance (RQ2), logistics inefficiencies (RQ3), and negative externalities (RQ4) in India.
Overview of the review questions, method, and discussion structure
Identifying and Screening of Literature
To ensure the review covered the most recent published literature on freight in India, Scopus, Web of Science, and TRID were combined with Google Scholar. The initial search used the general keywords ‘freight transportation/transport’ but this was later narrowed down to ‘India’, and subject areas ‘engineering’, ‘social sciences’, ‘environmental science’, and ‘decision science’. The search process was repeated using additional keywords of interest to this study, such as ‘logistics inefficiencies’, ‘freight traffic’, and ‘freight system performance’. Only peer-reviewed articles (including both review and original papers) were considered but these were combined with grey literature reports and government (e.g. Government of India) and international organizations (e.g. the World Bank) publications. The initial 290 unique records published between 1990 and 2020 were screened and purged down to 49. Many papers were irrelevant to the present study, as they dealt with issues unrelated to the research questions posed, despite having come up in the search exercise. The limited number of relevant papers found in the published literature underline the urgent need to focus on these research problems.
Review Approach and Data
The papers that survived the pruning were papers published in the following journals: Transportation Research (TR) Part A, TR Part B, TR Part C, TR Part D, Transport Policy, Transportation, Transport Geography, Transportation Research Record, Research in Transportation Economics, Travel Behaviour and Society, Sustainable Cities and Society, Transport Reviews, Journal of Cleaner Production, Energy Policy, Transportation Research Procedia, KSCE Journal of Civil Engineering, Transportation Letters, and Research in Transportation Business and Management. To quantify the extent of literature relevant to freight transportation in India (RQ1), the number of papers published in each of these journals is presented in Fig. 2 and the total number of publications in each year is presented in Fig. 3 . As can be seen in Fig. 3 , there has been substantial growth in freight studies since 2018. This jump in the number of papers underlines the increased research attention given to this topic area in recent years. Out of the 49 papers, 41 were published in Elsevier journals (83.67%), 3 were published in Springer journals (6.12%), 3 were published in Taylor and Francis journals (6.12%), and 2 were published in SAGE journals (4.08%). The 49 papers can be categorized into four areas: (1) development of disaggregate-level freight demand estimations at seaports [ 5 , 6 ] or urban establishments [ 7 – 11 ], (2) development of aggregate-level freight generation [ 12 , 13 ] or distribution models [ 14 ], (3) design of establishment-based freight surveys [ 15 , 16 ] and zoning systems [ 17 – 20 ], (4) analysis of freight transport parking practices [ 21 ], emissions [ 22 , 23 ], expenditure patterns [ 9 , 24 , 25 ], and logistics sprawl [ 26 ]. Since the relevant statistics on freight system performance (e.g. modal share, logistics cost) or specific logistics inefficiencies related to India were missing in these publications, the review scope was also extended to collect aggregate-level data from publicly available sources, such as the Logistics Performance Index from the World Bank [ 39 ] and the Freight Transport Indicators from the OECD [ 38 ]. Additionally, policy briefs and reports published by government agencies in India were also referred to gain insights into the status of freight transport policies. The Indian Government National Transport Development Policy Report [ 27 ] was reviewed with the aim of capturing the policy discourse. The discussion derived from the identified literature follows the structure shown in Fig. 1 . The thematic discussions on three specific topic areas are provided in the next three sections: freight system performance in India (RQ2), logistics inefficiencies in India (RQ3), and negative externalities of freight traffic in India (RQ4). The solution concepts for the issues identified in the thematic discussions are discussed in the penultimate section. The final section concludes this paper.
Number of papers reviewed from the literature and their respective journals
Number of papers published each year between 1990 and 2020
Freight System Performance in India
In line with the rest of the world, freight transport is undergoing important changes in India, most of which are simply a result of market trends, and most of which are already shaping and will continue to significantly shape the way freight transport performs in the future. This section is devoted to scrutinizing these trends, putting them in context, and understanding their potential impact in the short and medium term.
Unbalanced Modal Mix and Growth in Road Freight
The Indian economy is growing rapidly, partly thanks to its ongoing industrialization. One of the consequences of this is that freight movements are growing exponentially—both in the last-mile and long-haul trucking sector [ 27 ]. A major share of this demand is carried by road transport due to the flexibility provided for first-mile and last-mile logistics. The freight transport sector in India, as a result, is heavily skewed towards road transport with a modal share of 64% [ 28 ]. This compares with 75% in Europe [ 29 ] and 63% in the USA [ 30 ]. The historical trend of modal share between road, railways and inland waterways is presented in Fig. 4 using secondary data publicly available from a report published by the “Sustainable Urban Transport Project”, an organization devoted to the study and promotion of sustainable transport in urban areas [ 31 ]. The rail market share, as it can be seen, has gradually declined over the years. This trend is concerning because the economies of scale for bulk cargoes can be better achieved using a combination of railway, inland waterways, and coastal shipping. In 2018–2019, freight mode share in India stood at 27% rail, 64% road, 5% coastal shipping, 2% inland waterways, and less than 1% air (plus a 2% via pipelines for gas, water sewerage, etc.) [ 28 ]. Considering the less than optimal rail share, Indian Railways, a government entity under the Ministry of Railways that operates India’s national rail system, has set a target of having at least a 50% share of the country’s freight traffic by 2030 [ 32 ]. To achieve this, Indian Railways is investing heavily on network expansion projects and dedicated freight corridors. The strategic planning of these large-scale projects requires accurate freight demand models [ 24 , 25 , 33 , 34 ].
Variation in freight modal share in India over time.
Source: Urban Freight and Logistics: The State of Practices in India [ 31 ]
Achieving an efficient modal share is important for a country and the environmental impacts of different transport modes are evaluated in several studies [ 35 ]. An efficient modal share is one that maximizes volumes transported and does so at the minimum social cost, to include not just time and vehicle operating costs, but also externalities, especially noise, air pollution, climate change, caused by greenhouse gas (GHG) emissions, and accidents. For example, large, regular flows of goods with low-value density are historically suited for transport by railways, because: (i) origin/destination points tend to remain the same; (ii) commodity fragmentation can be avoided, and (iii) emissions can be minimized. Medium-valued goods are also increasingly transported by railways due to the availability of modern intermodal services around the world [ 36 ]. Due to significant economies of scale, railway or inland waterways have the potential to move these goods at a much lower unit cost than trucks with far lower GHG emissions and cost variability. A recent comparison of freight mode performance in India [ 37 ] suggests that the unit costs of moving goods is highest for road transport (2.58 INR/ton-km or 3.4 US cents/ton-km at April 2022 exchange rates), followed by railway (1.41 INR/ton-km or 1.86 US cents/ton-km at April 2022 exchange rates) and waterways (1.06 INR/ton-km or 1.40 US cents/ton-km at April 2022 exchange rates), respectively. Despite the high unit costs and road freight externalities, freight transport is road dominated in India (and other regions of the world such as Europe and the USA, as already highlighted above) because it offers greater delivery flexibility and shipment size. This trend is reflected in the growth of (road) freight transport in emerging Asian countries, such as China and India, as shown on Fig. 5 . The data were collected from the OECD Freight Transport Indicators Database [ 38 ]. The figure shows a clear growth of road freight in emerging economies, in line with the growth of the freight sector in those countries, and of the economy in general. Freight flows in OECD countries of North America and Europe, on the other hand, have reached a steady-state.
Growth of road freight transport in India and other major OECD countries.
Source: OECD Freight Transport Indicators Database [ 38 ]
Road freight transport offers lower transit times and higher reliability, making it better suited for transport of perishable goods and commodities with high value density [ 17 ]. The other operational advantages of using trucks include saving in packaging costs, ability to track and trace cargoes, door-to-door serviceability, and ability to schedule the delivery. An effective mode share of a country should thus concomitantly satisfy two criteria: (i) minimizing transport costs and (ii) meeting the operational requirements of shippers. While there is no consensus on the “ideal” modal mix for freight transport, India’s geographical features (extensive coastlines, predominance of hinterland economic activity, longer length of hauls) and the need to reduce freight emissions point in favour of rail transport.
Logistics Cost, Performance and Global Benchmarks
Logistics costs are a significant component of total trade costs. The high logistics costs constrain the competitiveness of the economy and are often the result of shortcomings (physical, regulatory, or institutional) in the transport sector. Nearly one-third of India’s logistics costs (~ 4% of GDP) are attributed to inefficiencies in infrastructure. An important logistics measure that can be used to compare the performance of India’s logistics system against its competitors is the Logistics Performance Index (LPI) produced by the World Bank [ 39 ]. The LPI scores are based on data on six dimensions of trade: customs efficiency, infrastructure quality, ease of transporting international shipments, logistics quality and competence, trackability of consignments (also called tracking and tracing), and delivery timeliness [ 39 ]. The World Bank uses the LPI to rank countries [ 39 ], and a summary of this ranking, relevant to the present paper, is presented in Fig. 6 . As it can be seen in Fig. 6 , the logistics infrastructure in India lags behind that in Germany, the USA, the UK, and China. Jumping up the LPI rank, as currently proposed [ 40 ], will require a fundamental reorientation in the way logistics infrastructure caters to freight demand in India.
Global variation in logistics performance index.
Source: Logistics Performance Index [ 39 ]
Pairwise comparisons of LPI scores between major OECD countries and India are given in Fig. 7 , to highlight the deficiencies across different aspects of logistics.
Pairwise comparison of LPI between OECD countries and India.
Changes in Logistics Strategies and Freight Needs
One important challenge in the freight sector is linked to the changes that have taken place and continue to take place in the context of E-commerce [ 41 ]. The purchasing options of consumers in the past were limited to retailers in the city centre, whereas these are now competing with wide-ranging options provided by online retailers. To maintain a competitive edge in the market, shops are increasingly adopting just-in-time inventory practices, which result in stocks being kept to a minimum. Another noticeable change is the increased requirement for better logistics outsourcing service levels [ 9 ]. Many customers expect delivery within 24 h after placing an order [ 10 ]. Retailers are forced to respond and adapt to changing consumer requirements or risk losing them to the nearest competitor. Compounding this challenge is the consumer experience, which has become highly personalized and specialized, thanks to the digital transformation that has taken place since the early 2000s. This implies more customized orders, stricter quality controls, tighter compliance standards, shorter delivery windows and an overall intolerance to delays in shipments. The role of “fulfilment centres” became increasingly important over the first two decades of the 2000s, and is now a component in many supply chains, with a prime example being Amazon. The changes in logistic strategies of many stores (and warehouses) and the expectations from end consumers have had significant impacts on the demand for freight transport as follows: (i) there is a higher demand for goods, (ii) there are higher service levels, and (iii) shipment sizes tend to be smaller than they used to be.
Diversification of Freight Flows
There are different types of freight flows. These are depicted in Fig. 8 , based on the typology suggested in a report by the Ministry of Housing and Urban Affairs and Rocky Mountain published in 2019 [ 42 ]. As shown in Fig. 8 , there are four different types of shipments: (i) low-value, bulk freight (LVBF), (ii) medium-value, medium-density freight (MVDF), (iii) business-to-business freight (B2BF) for urban consumption, and (iv) business-to-consumers freight (B2CF) for urban residents. LVBF refers to shipments of construction materials (concrete, sand, gravel) and industrial goods (oil and petrochemicals). LVBF accounts for a significant share of freight shipments, especially in cities where the majority of the infrastructure is still in the process of being built. These low-value shipments tend to be shipped in large quantities (and heavy-duty vehicles), which cause high external costs. The next spectrum of shipments refers to MVDF, which are inputs or outputs of light industry (raw material oriented and less capital intensive), such as, for example, paper products, plastic products, leather, and textile products. The B2BF shipments are typically directed towards retailers so that they can be sold to urban residents. These shipments include fast-moving consumer goods, such as, for example, food products, beverages and pharmaceuticals, and they are typically stocked on the shelves of consumer stores. B2BF shipments are characterized by a high frequency of trips, although they are typically transported in light or medium-duty vehicles. Restricting the movement of B2BF shipments is generally contentious, because B2BF shipments directly cater to the needs of urban residents. Instead of reducing the freight volume, restrictions are typically found to force the shippers to move freight in less efficient ways. B2CF shipments typically are of high value and have specialized handling and delivery requirements (e.g. food deliveries, document packages, parcels). These types of freight are transported in light-duty vehicles, vans, two wheelers or even by foot, directly to the end consumer. Formerly a relatively small segment of urban freight travel market, B2CF shipments have become critical in urban logistics with the rise of E-commerce. Much like B2BF shipments, B2CF shipments cater to urban residents and policy interventions should focus on efficiency rather than demand management. While these diversifications are unique in each supply chain, a general conceptualization of urban supply chains is presented in Fig. 9 .
Type of shipments transported by urban freight.
Source: authors’ own conceptualization based on freight flow categories discussed in the report by the Ministry of Housing and Urban Affairs and Rocky Mountain Institute [ 42 ]
Conceptual layout of urban supply chains.
Source: authors’ own conceptualization, extending the layout in Pani and Sahu (2019b)
B2CF shipments have experienced an important growth in the last few years, mainly due to increased Internet penetration. In the organized retail market, the share of online purchases was 25% in 2019, with forecasts predicting it could reach 37% by 2030 [ 43 ]. The presence of online platforms also enables consumer-to-consumer online markets; this form of E-commerce is rising in popularity [ 44 ]. Due to the influx of online platforms, many traditional retailers feel the need to participate in E-commerce as well, further increasing the urban freight flow levels. Many retailers are choosing to sell goods held in their inventory through E-commerce and Omni-channel delivery systems to offer better options to consumers [ 45 ]. In the context of increasing B2CF flows, reverse logistics of goods are also becoming more important. These streams involve not only the return and exchange of goods purchased online, but also services such as waste collection. As it can be seen in Fig. 9 , shippers also produce additional freight activity in the form of waste and “reverse logistics” of returns and exchanges. Policymakers should therefore customize policy interventions to different types of freight traffic. For instance, shippers or retailers can offer customers (end node of supply chains) unique value by incentivizing reuse of raw or finished materials through a seamless “return” policy. By creating these feedback loops in supply chains, cities can transition towards a circular economy with significant societal and economic benefits [ 46 ]. Classifying the type of goods entering the city through different supply chains can be the first step for understanding the diverse needs of the freight market segments and, in turn, examining what challenges they present. Existing freight studies in India have largely focused on freight flow, and limited attention has been given to reverse logistics and service activities [ 9 , 16 , 47 ].
Infrastructure Investment and Mobility Studies
Productive investment on freight transport infrastructure is vital for improving the freight system performance and, in turn, enabling seamless deliveries and pick-ups of goods in urban areas [ 48 ]. An integrated approach to infrastructure spending, with investment schemes driven by transport policy goals that are coordinated with land-use and industrial development objectives, is critical for India. Since much of the freight movements have a destination in cities where ports or airports are located, infrastructure investment needs to be prioritized in those cities and regions, especially as freight vehicles share road space with passenger traffic. A comparison of infrastructure investment in India over the period 2004–2017 is presented in Fig. 10 .
Growth in infrastructure investment.
Source: OECD Infrastructure Investment Database [ 49 ]
There have been several initiatives for increasing capacity, such as for example, the construction of dedicated freight corridors (DFCs). DFCs are expected to ensure that long-haul freight demand is catered efficiently in existing trunk routes on the eastern and western corridors (Howrah-Delhi and Mumbai-Delhi), which are currently saturated with line capacity utilization of 115%–150% [ 27 ]. The diversion of freight traffic from the long-haul trucking sector to DFCs on truck routes is expected to decongest the existing highway network for passenger movement. However, appropriate transport supply improvements require a demand assessment toolkit which is still missing for India [ 18 ].
Logistics Inefficiencies in India
There are a number of inefficiencies in both freight transport and freight policies in India. These inefficiencies can be broadly categorized into four areas: (i) long-haul trucking, (ii) last-mile logistics, (iii) freight distribution (inventory level), and (iv) policies and regulations. Reducing these inefficiencies will reduce the generalized cost of moving goods and the externalities of road transport. It will also improve the satisfaction of urban residents.
Inefficiencies in Long-Haul Trucking
The inefficiencies in trucking costs are driven by three factors: (i) avoidable running costs created by empty backhaul of trucks, (ii) usage of trucks with reduced fuel economy and (iii) insufficient fleet size and mix of logistics providers, which lead to inefficient utilization of trucks for forwarding shipments. The root cause of these inefficiencies is related to the inability of trucking firms to achieve economies of scale, thereby resulting in low productivity and efficiency. This is partially linked to the rise of small trucking firms, which attempt to reduce logistics costs through overloading, service violations and poor maintenance. These unlawful logistic operations artificially lower the price of trucking services and make the traditional carriers with large efficient fleets unable to continue operations. Large trucking firms, on the other hand, can achieve economies of scale through efficient dispatching and scheduling, which is critical to increasing fleet utilization and reducing empty running. Another important contributor towards inefficiency is the suboptimal load size observed in emerging countries [ 37 ]. The highways in India are also inadequately maintained, inconsistent in road width and heavily congested [ 27 ]. These infrastructure shortfalls underline the need for targeted capacity increase to improve the inefficiencies in long-haul trucking.
Inefficiencies in Last-Mile Logistics
Last-mile logistics involves delivering packages to end consumers or retail shops in urban centres. It typically follows different trip patterns, uses different vehicle types and has a different spatial extent of travel, compared to long-distance trucking. Due to the nature of multi-stop delivery tours carried out in last-mile operations, priority is given to maximizing the amount of freight delivered in an average tour. This is in contrast with the priorities given to achieving improved shipment size in long-distance trucking. The importance of last-mile logistics, despite being the shortest link in supply chains, stems from the fact that it constitutes up to up to 13%–72% of total logistics costs in many supply chains [ 50 ], and up to 55% in supply chains involving E-commerce [ 37 ]. The variation in costs is because of several potential causes of inefficiencies that exist in last mile, as explained below.
- Fragmentation of receivers: In India, as in many emerging markets, the demand for freight can be somewhat fragmented. The reason for this fragmentation is the informal, even impulsive, ordering behaviour of “nano stores” [ 51 ]. This ordering behaviour affects the performance of the whole supply chain, as it triggers actions upstream in the supply chain [ 51 ].
- Fragmentation of carriers: Planning delivery tours is a complex optimization problem, which needs to maximize delivery quantities, minimize time and distance whilst reaching all destinations, considering delivery windows and traffic patterns/congestion . Logistic providers in developing countries like India often lack the fleet size and technical tools to dispatch delivery trucks on optimal tours.
- Fragmentation of delivery points: In the era of E-commerce and highly personalized freight orders, fragmentation of delivery points is an important barrier to last-mile logistics efficiency. The discretization of delivery points is a more pronounced issue in urban areas than the fragmentation of receivers. This is a problem common to both developed and developing countries, but in countries like India, the impacts are more evident, probably because of the higher traffic congestion levels that prevail in most cities.
- Logistics sprawl: Due to high land values in cities, warehouses and distribution centres tend to migrate towards the suburbs. This phenomenon, known as “logistics sprawl”, increases the duration of delivery tours and the resultant traffic increases congestion levels, both going into and out of the cities [ 52 ]. Transportation is intrinsically linked to the urban growth phenomenon and the associated logistics sprawl [ 53 , 54 ]. Another implication of logistics sprawl is that it reduces the number of delivery points accomplished in a single tour. The evidence for logistics sprawl in major Indian cities is already available for industry sectors such as the timber market [ 26 ].
Inefficiencies in Freight Distribution
Inventory is a critical element of logistics costs, as it requires facilities for storage and holds up the working capital of firms (i.e. receivers) in a freight system [ 55 ]. To reduce these costs, firms typically attempt to minimize inventory levels without compromising their ability to serve end consumers. Due to uncertainty in lead times (i.e. time taken by shipper to deliver goods), excess inventory costs are typically incurred by shippers in the freight system, thereby increasing the overall logistics costs. The reduced reliability in transit times leads to higher buffer stocks to guard against uncertainty. The highly fragmented and inefficient distribution system poses major challenges to buffer stock reductions. Another challenge is the limited digitization of links connecting the stakeholders in a freight system, which restricts the ability of retailers to reduce cycle stock (i.e. the inventory held in shelves to satisfy normal sales demand). The ability to implement just-in-time (JIT) ordering practices that can accomplish reductions in cycle stock hinges on two factors: (i) digital capabilities to track inventory drawdown and (ii) digital links to distribution centres and supplies to avail dynamic replenishment of products. Due to limited advances in JIT systems in India, efforts to reduce the total amount of inventory in the distribution system and the amount of inventory lost have not been very successful [ 37 ].
Inefficiencies in Policy Framework
Policies intended to reduce the negative externalities or inefficiencies from freight can actually backfire and yield the opposite result. The National Urban Transport Policy (NUTP) in India acknowledges that freight traffic will grow substantially [ 31 , 56 ]. Timely and seamless freight movements are also mentioned as a priority for the economic development of the country [ 31 , 56 ]. The freight-related policy measures recommended in the NUTP report can be summarized as follows: (i) using off-peak hours for freight deliveries, (ii) restricting the entry of heavy-duty trucks into cities during daytime, (iii) building bypasses through public–private partnerships so that long-haul trucks can go around the city, instead of adding to the city traffic, (iv) reorganizing land use by locating wholesale activities in the periphery of cities, along the interstate highways, rather than in city centres, (v) building truck terminals and parking facilities outside the city limits to encourage the shifting of wholesale activities, (vi) provisioning parking space at appropriate locations for on/off street with the use of intelligent transport systems, (vii) planning ring roads to relieve traffic congestion in central areas, and (viii) implementing auto-fuel policies that call for tighter emission regulations and fleet upgrades [ 31 , 56 ]. Following the recommendations of the NUTP report [ 31 , 56 ], some cities, including Ahmedabad, Bangalore, Hyderabad, and Kochi, have set up committees, known as Unified Metropolitan Transport Authorities (UMTAs), charged with the mission of integrating the functioning of agencies associated with passenger and freight mobility. These top-down policies may deliver positive impacts and help achieve more efficient freight movements in urban areas.
Another policy that has been suggested is the implementation of time-based or cordon-based restrictions. These restrictions have been introduced in some cities in India [ 7 ]. They can entail, for example, banning vehicles exceeding 7.5 tons during specific time periods of the year or specific times of the day [ 7 ]. Delhi has also banned non-destined transiting trucks (heavy, medium or light-duty vehicles) from passing through certain regions in Delhi [ 23 ] and has imposed entry time restrictions to freight destined for Delhi. Shifting freight travel into times of minimum residential use can force deliveries at night, greatly increasing the share of last-mile cost in total logistics cost. Furthermore, it can, and it has, resulted in good deliveries by vans or three wheelers, which are not subject to bans, and this can, and indeed has, in turn, increased overall traffic.
In addition to the above, the imposition of pollution taxes can help freight face the environmental costs they cause. Delhi, for example, introduced a pollution tax in 2015, payable by trucks passing through Delhi [ 23 ]. The tax is 700 INR and 1400 INR (USD 9.24 and USD 18.49 at April 2022 exchange rates) for light-duty vehicles and heavy-duty vehicles, respectively. Reorganizing land use by moving wholesale markets to outer town suburbs or satellite towns can help reduce the pressure from freight movements. Mumbai did exactly this to reduce traffic levels in the congested south part of the city. Another initiative is that of Urban Consolidation Centres (UCCs) [ 57 ]. These schemes aim to reduce the number of goods delivery vehicles in urban areas by consolidating multiple shipments at centres located in the city periphery [ 58 ]. There are several informal examples of such centres in India, especially in the perishable product sector (e.g. Azadpur vegetable market, sabzi mandi in Delhi). Another example of consolidation is the ITC e-Choupal project in which internet-based kiosks reach out directly to farmers and eliminate the middleman in agri-business supply chains [ 31 ]. Finally, many cities, such as for example Chennai, are planning to have truck terminals and parking zones on the city periphery [ 31 ]. However, there are several institutional, practical and legal barriers for long-term success in UCCs implementation, as reported in some European cities like Oslo [ 57 ].
Despite the publication of the NUTP and the setup of UMTAs in some cities, freight transport policy in India is still in nascent stage [ 42 ], in contrast with passenger transport policy. Save for the policy initiatives aimed at increasing capacity and building facilities (truck terminals, consolidation centres), freight policies in India have largely been restrictive in nature [ 23 ]. A scenario building approach, perhaps taking into account individual perspectives [ 59 ], has the potential to yield participatory decision-making outcomes related to freight policies.
Negative Externalities of Freight Traffic in Indian Cities
The negative externalities from freight traffic in India are only expected to increase in magnitude, bearing in mind the trends mentioned in previous sections. Negative externalities from freight can be defined as the costs imposed by freight on freight and other traffic, and society in general. These costs are not borne by those causing them, and are not reflected in any economic transaction (i.e. when the good is produced, transported or consumed). These external costs can be broadly categorized into three [ 60 , 61 ]: (i) environmental impacts, (ii) social impacts and (iii) economic impacts, as explained below.
Environmental Impacts
The environmental impacts from freight transport include air pollution, climate change caused by GHG emissions, noise, and water pollution. A multimodal emission assessment shows that the emissions from transport are expected to grow by 4.1–6.1% per year, leading to an increase of seven times by 2050 [ 62 ]. Air pollution is caused by emissions of particulate matter (i.e. microscopic solid or liquid particles in air), carbon monoxide, ozone and hazardous air pollutants such as benzene, which causes cancer and other serious health effects. Most trucks run on diesel, which is more polluting than petrol. Climate change is caused by GHGs. Excessive noise can negatively impact human health, disturb sleep, and cause cardiovascular and psychophysiological problems [ 63 ]. Most of the external costs from trucks in Europe come from noise [ 64 , 65 ]. Water pollution can result from freight transport when there are spills, leakages, or disposal of cargo material in water bodies. Although freight traffic constitutes merely 3% to 15% of total traffic in urban arterials and expressways [ 66 , 67 ], it is estimated to be responsible for up to 50% of road transport emissions [ 68 ]. In the case of noise pollution and vibration hindrance, in general, road freight has a much larger impact than cars [ 64 , 65 ]. Compounding these impacts is the fact that freight trucks used for urban deliveries are generally older and more polluting than trucks used for long-haul shipments [ 69 ]. Finally, land-use changes associated with freight flow and transport infrastructure development are an increasing source of concern as they can cause visual intrusion on environmental landscape, and destruction of habitats and species loss.
Social Impacts
The main negative externality from freight with social impacts is accidents. A significant share of road accidents can be attributed to trucks, as shown in Fig. 11 , based on crash data published by the Transportation Research and Injury Prevention Programme at the Indian Institute of Technology in Delhi [ 70 ]. The vehicle types include motorized two wheelers (MTWs), three wheel scooter taxis (TSTs), buses, cars, trucks, and others. As it can be seen in Fig. 11 , 72% and 65% of fatal crashes in six-lane national highways and urban highways are associated with trucks as one of the impacting vehicles.
Proportion of impacting vehicle type in fatal crashes (2015–2018).
Source: Transportation Research and Injury Prevention Report, Table 10 [ 70 ]
Economic Impacts
The main externality from road freight that has economic impacts is congestion. Congestion caused by road freight has become a common problem in cities around the world [ 71 ]. In Europe, most of the external cost from trucks comes from congestion (and noise) [ 64 ]. Trucks take between two and four times the road space that cars take, and their speeds also tend to be lower. In addition, due to scarcity or inadequate configuration of loading or unloading bays/zones, freight trucks often double park during their delivery tours [ 72 ], thereby blocking the road for other vehicles. Traffic congestion has substantial negative impacts in terms of reduced productivity and wasted fuel. A high-level estimate of the economic loss resulting from congestion in major cities in India is over 22 billion USD per year [ 61 ]. Two conflicting interests emerge regarding congestion—public authorities aim to reduce freight traffic to improve the attractiveness of their city to residents as well as tourists, while private companies seek to operate at lowest cost with quick deliveries to satisfy consumers’ expectations in a highly competitive market [ 61 ]. The regulations and restrictions brought by public authorities can cause “detour” of delivery vehicles through narrow streets and unsafe delivery areas with low vertical clearance, further exacerbating traffic congestion [ 73 ].
Solution Concepts for Sustainable City Logistics
Considering the past trends, future projections of freight movement in India, a portfolio of solution concepts needs to be proposed and implemented to address negative externalities and inefficiencies in freight transport. We provide a broad overview of these solution concepts in this section and do so under four categories: (i) physical assets such as infrastructure and equipment, (ii) technology and operations, (iii) policy and regulations, and (iv) logistics-driven changes. The first two classes of solution concepts are part of long-term planning and require significant investment and changes to transport infrastructure. The latter two classes are part of short-term planning and they aim to reduce the impact of freight transport within the existing expanse of transport infrastructure. These categories of solution concepts are explained in the next subsections.
Infrastructure Solutions
These solutions include improving the quality and capacity of the road and railway networks and providing multimodal hubs and warehouses. Analyses of commodity movements and freight demand are critical decision-making tools for provision of infrastructure solutions. These solutions are imperative for developing a balanced modal mix and reducing the overall logistics cost, as explained below.
- Improving freight distribution and last-mile logistics: The infrastructure facilities that need to be provided to improve freight distribution and last-mile logistics in urban areas are: (i) curb-level parking infrastructure and loading bays, (ii) exclusive truck lanes and dedicated routes, (iii) urban freight consolidation centres, and (iv) urban logistics spaces and (v) smart lockers. Parking and loading bays are critical for reducing the cruising time for truck traffic since delivery locations in urban areas often lack parking infrastructure. As a result, the inability to find an unloading spot or off-street parking lot leads to double parking and congestion [ 74 ]. Development of reversible lanes (off-peak reorganization of lanes in dense business districts), developmental lines and land-use ordinances are some of the effective solutions for improving parking efficiency [ 72 ]. Exclusive truck routes help for “detouring” freight deliveries away from residential areas in urban areas. These routes need to be designed for anticipated truck traffic levels in terms of vertical clearance, turning radii, sight distances and gradients. Provision of exclusive truck routes helps to streamline freight traffic in such a manner that the operational efficiency of other roads can also be improved. UCCs allow for greatly enhanced loading and routing efficiency in last-mile logistics efficiency. UCCs implementation can reduce freight travel by up to 50% in urban areas [ 37 ]. Urban logistics spaces (ULS) present a less intrusive way of achieving shipment consolidation than UCCs. Logistics operators and shippers typically welcome ULS compared to UCCs since the former are perceived to cause less disruption to lead times and delivery frequency. Smart lockers, or pack stations, are banks of lockers placed in activity centres such as transit stations, malls, grocery stores, to allow end consumers to collect their orders during their daily activity travel pattern, instead of taking delivery at home locations.
- Achieving a balanced modal mix: There are two complementary targets in the roadmap for achieving a balanced modal mix in a country like India where rail freight is having a suboptimal share. One is to look at potential solutions that can foster a modal shift towards rail transport and the other is to facilitate better intermodal transfer between road and rail [ 75 ]. The former category of solutions includes the following: (i) increasing rail network capacity, and (ii) resolving gaps in rail network connectivity. The latter category of solutions includes developing intermodal logistic parks in tandem with dedicated freight corridors, and/or promoting double-stack clearance (stack containers one above the other) of intermodal corridors.
- Reducing inventory costs: Two major solutions exist for reducing inventory costs, a major component of total logistics costs. The first is to improve the quality of warehousing, and the second is to reorganize warehouses to optimal locations. As for the first solution, the quality of warehousing can be improved by investing on automation, cross-docking facilities and refrigeration systems.
- Improving trucking efficiency and productivity: The most important solution to improve trucking efficiency is to ensure that the current highway network keeps in pace with growing freight demand. Another avenue is to standardize logistic practices (e.g. harmonization of pallet and truck standards) and inventory data (e.g. inventory management for better dispatching of trucks).
Technological Solutions
To enable logistics chains, reduce costs, and improve services for customers, freight systems need to be enriched in various technologies. Digitization, coupled with adequate technological support and targeted investment schemes, can integrate the supply chain from demand forecasting stage to shipment consolidation, truck routing and dispatch scheduling [ 76 ]. The potential solutions through these technological, digital and operational advancements can be explained on seven fronts: (i) developing more accurate demand forecasting models through enhanced inventory visibility, (ii) automation of warehouse processes, (iii) deploying inventory data insights in distribution network design to deal with demand volatility, (iv) implementation of just-in-time inventory systems and fostering lean ordering behaviour among establishments, (v) achieving efficiency in truck routing and dispatch through real-time information, (vi) implementing intelligent transport systems (ITS), such as weigh-in-motion systems, delivery space booking systems, and route planning systems, and (vii) promoting carrier collaboration and accomplishing higher levels of operational efficiency through “Internet of Things” applications. These technological solutions are increasingly explored by the new third-party logistics providers, freight forwarders, and trucking companies emerging in the Indian market. For instance, driver relay models are increasingly adopted to reduce the continuous driving time of truck drivers to less than a day, and in turn reduce the turnaround time on long-haul routes (eliminating the driver idling time in the prior operational models). Increased adoption of location tracking solutions and growing presence of fulfilment centres in Indian cities have been helping the emerging logistics companies to eliminate the inefficiencies in the traditional hub-and-spoke model of delivering parcels. By utilizing distributed delivery models (i.e. each arc in the network acting as a hub and a processing centre by itself), the delays in routing the shipments through a hub before reaching the spoke can be avoided with the help of technology. As a result, most of the emerging logistics companies are positioning themselves as supply chain enablers with their own in-house order management systems. The challenges faced by small fleet owners have also come to the focus of the emerging market players in the logistics space with a vast number of software-as-a-service (SAAS) companies working towards hassle-free truck bookings and real-time vehicle tracking. The ongoing efforts as a part of Government of India’s Gati-Shakti national master plan to develop a unified logistic interface platform (ULIP) are expected to further accelerate the efforts of trucking companies and SAAS providers to reduce the overall costs of logistics and time in India.
Policy Interventions
Policy interventions play a crucial role in translating the first two solution classes into action, both in terms of energy demand and economic consequences [ 77 ]. Government departments, such as the Ministry of Shipping and Logistics, can employ a wide-range of policy measures, ranging from taxation instruments (e.g. fuel taxes, excise taxes and tolls) to financial incentives (e.g. tax rebates for supporting greener modes, capital grants) and regulation orders (e.g. vehicle design, entry time, emission standards), as explained below.
- Taxation: Apart from the typical taxes levied on petroleum products (24–25% by the central government and 20–25% by state governments), additional charges such as the ‘green surcharge’ (up to INR 2/litre, or US cents 2.6/litre at April 2022 exchange rates) exist in India, although they do not include diesel vehicles. Introducing such differential charges for trucks can favour a switch to alternate modes, such as electric trucks or rail and water. The political challenges of introducing a carbon tax in developing countries are well known [ 78 ] and require more coordinated efforts in the future to foster a nationwide change to low carbon logistics.
- Financial incentives: The financial support provided by the government varies from initiatives such as off-hour deliveries to incentives for shifting to greener freight modes such as electric trucks. The extent of financial support depends on external factors such as (i) differences in service and infrastructure ownership, (ii) competition policy, (iii) nature of freight market, and (iv) regulations governing financial aid from governments. Incentives also include capital grants to develop rolling stock or vessels for intermodal transfer and terminal development. Depending on the contribution to achieving government-level goals of sustainability, many services and infrastructure provisions can avail discounted infrastructure payments, operating subsidies or revenue supporting grants.
- Supply chain digitization: As discussed in the previous section, digitization of supply chains and enforcement strategies can improve trucking efficiency. For instance, weigh-in-motion (WIM) implementation helps to penalize shipments that are exceeding the allowable limits and helps to identify the defaulters in the freight system; this also allows for effective checkpost clearance since trucks do not need to stop for inspections. The introduction of the electronic way (e-way) bill under tax-reforms like GST has improved clearance times across various states in India.
- Zoning for freight operations: Land-use planning needs to develop designated locations for intermodal facilities such as inland container terminals, which can reduce urban congestion and foster a shift towards smaller commercial vehicles [ 18 ]. For this purpose, premium city space may need to be made available for logistical development near significant freight generating areas [ 19 ]. Another important aspect of land-use planning is to encourage spatial clustering of manufacturing firms that can achieve economies of density, which can lower transport costs down and improve delivery efficiency.
- Zoning for logistic sprawl: Due to increasing land values in city cores, logistic land uses tend to locate farther from the city centre [ 79 ]. This sprawl of logistic facilities increases daily truck kilometres travelled, as well as congestion on urban arterials. By developing an efficient zoning policy for reserving suitable land uses in city centres (e.g. creation of urban logistics spaces or ULS near major retailing chains), logistics sprawl can be reversed. By bringing ULS to city centres, urban residents can also benefit in terms of superior access to goods and services.
- Low emission zones: Low emission zones (LEZ) are geographic areas that limit access to those vehicles meeting certain emission standards [ 80 ]. The purpose of LEZs is to restrict or put a price on the most polluting vehicles if they enter areas in close proximity to urban residents. LEZs are typically proposed in areas where air quality levels are hazardous to society.
- Delivery vehicle restrictions: These are among the most common policy responses taken by public authorities when freight traffic is sharing the same right of way with passenger traffic [ 81 ]. Implementation of these restrictions without the provision of ULS or UCCs are found to have negatives impacts on the regional economy. Besides, these restrictions often turn counterproductive due to increased delivery activity using small vans and three-wheelers. In the aftermath of the COVID-19 pandemic, delivery vehicle restrictions have received increased attention due to the rising delivery activity in residential areas, largely driven by the emergence of grocery and food delivery companies. As the delivery start-ups are primarily focusing on faster deliveries and increased convenience for consumers, fulfilment/distribution centres are being deployed in the middle of dense urban neighbourhoods and delivery drivers are incentivized to achieve 10-min or 15-min delivery windows. The traffic safety concerns resulting from these delivery vehicles have thus been receiving notable coverage in the newspapers, underlining the requirement of data-driven delivery vehicle restrictions and centralized self-service delivery lockers as a mitigating solution.
Market-Driven Solutions
The final class of solution concepts is related to the market-driven changes that can be implemented in the freight transport sector. These solutions include three broad categories: (i) technological advances, (ii) crowd shipping on transit (COT) programs, and (ii) planning and cooperation initiatives, as explained below.
- Electric and autonomous freight vehicles: A number of technological advances in the freight transport sector have been made in the field of vehicle technology [ 82 – 84 ]. These advances are increasing the fuel efficiency of trucks and reducing emissions through emission filters. Continuous improvements are being made with respect to noise reduction and safety hazards. Furthermore, electric trucks (ETs) and connected and autonomous trucks (CATs) are becoming more scalable and viable alternatives relative to diesel powered trucks [ 85 – 87 ]. Analysis of the passenger transport sector already shows that the policy push for e-vehicles will only reduce GHG emissions if the electricity generated to power these vehicles is produced in a clean manner, i.e. the electricity generation mix needs to have a large share of renewables [ 88 ]. Fostering the replacement of traditional truck fleets with ETs and CATs through incentive schemes and tax reductions will significantly reduce the negative externalities of freight transport. Autonomous delivery robots (ADRs) are another emerging technology in retail and are projected to be a crucial step towards low-carbon last-mile deliveries [ 89 ]. With various tests underway, researchers believe that ADRs could revolutionize the system and reduce delivery costs by 80% to 90%. Although the current state of autonomous delivery still faces substantial challenges, the capabilities of the technology are promising for a country like India, with a fragmented delivery system. There has also been conclusive evidence that autonomous delivery robots (ADRs) can bring carbon emissions down compared to traditional van deliveries, especially when the delivery areas are near to the depot [ 90 ]. The existing policy framework in India, however, does not allow testing of autonomous technology and significant research is required to assess the implementation challenges in enabling CATs, ETs, and ADRs in India. Recent policy initiatives by the Indian government, such as ‘Faster Adoption and Manufacturing of Hybrid and Electric Vehicles’ (FAME), are a valuable step towards fostering technology advancements in freight transport.
- Crowdshipping on transit: Crowdshipping on transit (COT) is a concept that incorporates the underutilized passenger transport mode capacity and related infrastructure to cover the last mile and deliver freight packages [ 91 ]. Packages are delivered with the help of commuters and other trip makers, who drop the packages off at designated places on their way, for the packages to then be picked up by another trip maker and delivered to the customer at the final destination. While large-scale formal crowdshipping programmes have been missing in Indian cities, the ongoing COVID-19 pandemic has put a sudden spotlight on introducing COT for enhancing non-ticket revenue of transit systems [ 92 ]. For instance, the public transit agency in Kerala, a Southern state in India, has recently initiated COT programs for parcel service in an attempt to overcome the fall in revenue following the pandemic-induced lockdowns and heightened risk perceptions [ 93 ]. Further research is required to scale up COT programs with the required infrastructure and operational efficiency for last-mile delivery.
- Planning and cooperation initiatives: Business establishments can achieve higher logistic performance by cooperating with other stakeholders in the freight system, utilizing resources more efficiently [ 94 ]. This cooperation can either be horizontal (between same types of establishments active in the same stage of supply chain, such as carriers) or vertical (between different establishments positioned upstream and downstream of a supply chain, such as shippers and carriers). Despite the potential benefits of collaboration among logistics service providers, there is little effective collaboration in practice. In the era of the sharing economy, logistics collaborations have great potential in a country like India towards on-demand logistics, freight consolidation, facility sharing, and warehousing.
Conclusions
This paper has reviewed Indian freight transport research and policies in terms of logistic performance and solution approach for mitigating externalities. What emerges from the discussion is that freight transport is growing substantially in India, mainly due to its growing economy. However, like in Europe and the USA, the share of road transport seems too high, especially bearing in mind the higher negative externalities that road freight causes relative to its main competitor, rail freight. Decreasing this share is not easy because of the fragmentation of receivers and carriers in India. The penetration of the Internet has also triggered, like in most developed and many developing countries, an increase in B2CF, which only increases air pollutant and GHG emissions, and congestion. To make matters worse, some of the policies intended to reduce the externalities from road freight in India are proving counterproductive. Restricting areas or hours of freight deliveries, or banning big trucks, has increased, rather than decreased some externalities. The response has often been to fragment deliveries even further by, for example, using smaller vehicles and making more trips, or delivering during the night when time restrictions do not apply.
A portfolio of solution concepts to overcome the inefficiencies has also been presented. Although there is no one solution that will solve all the problems discussed, the following policy interventions have the potential to make freight more efficient in India and reduce emissions of air pollutants and GHG. Long-term planning and significant investment in infrastructure, including parking and loading bays, exclusive truck routes, consolidation centres, urban logistics spaces and pack stations, increasing road and rail network quality and capacity, could go some way towards integrating road and rail freight and reducing traffic congestion. Short-term planning to reduce the impact of freight transport within the existing expanse of transport infrastructure, including the development of intermodal logistic parks in tandem with dedicated freight corridors, and the promotion of double-stack clearance (stack containers one above the other) of intermodal corridors, would also help to increase the efficiency of the freight transport system in India. Additional interventions could entail developing more accurate demand forecasting models, automating warehouse processes, deploying inventory data insights in distribution network design to deal with demand volatility, implementing just-in-time inventory systems and fostering lean ordering behaviour among establishments, achieving efficiency in truck routing and dispatching through real-time information, implementing intelligent transport systems (ITS), delivering space booking systems, and route planning systems, and promoting electric delivery trucks.
The coordination and implementation of these actions are likely to require financial and time resources, and to encounter some degree of stakeholder backlash. This review has outlined the progress in freight research related to India and provided a framework of solution concepts. India is in a position to leapfrog and make important advances in policy implementation and doing so will increase the efficiency of freight transport, with consequent positive impacts on the economy and the environment.
Funding was provided by the Research Initiation Grant (RIG Head 06/03/302), Birla Institute of Technology and Science (BITS) Pilani, Hyderabad, India.
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Economics of conserving endangered birds: the case for Gyps vultures in India
- Published: 16 March 2024
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- N. M. Ishwar 1 &
- Saudamini Das ORCID: orcid.org/0000-0002-4070-8447 2
The use of diclofenac— a non-steroidal anti-inflammatory drug—to treat livestock, and the subsequent sharp decline in the population of Gyps species of vultures across South Asia, led to the lack of ecological services like scavenging. This triggered the population of secondary scavengers like feral dogs posing serious implications for human and wildlife health in the region, and a subsequent increase in public expenditure to manage the dead carcass. In the absence of vultures, scavenging services are being provided anthropogenically through the establishment of carcass-rendering plants with government financing. Although the veterinary use of diclofenac has been banned in India with vulture-safe substitutes being made available, the critically low vulture population is unable to self generate and it has been argued that captive-breeding initiatives and safe release of the Gyps species are necessary for these endangered vulture populations to revive in the wild. However, such initiatives are limited and lack strong support, and governments are in need of economic appraisal of such initiatives to validate and reinforce their conservation program. This study does a cost–benefit analysis of India’s vulture captive-breeding programs by using the replacement cost approach to ecosystem service valuation. It assumes the cost of rendering plants as the benefit to society that vultures traditionally provided through scavenging. This benefit is compared to the costs associated with the ex-situ conservation and reintroduction of vultures into the wild which is the cost of captive breeding, release, and the creation and maintenance of Vulture Safe Zones (VSZs). The study finds the lifetime scavenging value of a vulture to vary between USD 4457 to 4047 in urban India and between USD 3825 to 3357 in rural India at 2014–2015 prices. Annually a single vulture is seen to provide scavenging services worth USD 235 to 187 depending on the location and discount rate used in the calculation. These benefit measures are underestimates as many components of the replacement costs are not accounted for due to lack of data. Despite the underestimation, the benefit-cost-ratios overwhelmingly support, irrespective of discount rates used, the captive breeding of vultures and their release in vulture-safe zones to stabilize their population. Results reinforce the efforts of the conservation authorities to invest in VSZs so that society receives a natural solution to carcass disposal.
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Data availability
The author confirms that all data used or generated for this study are included in this manuscript. Table 1 and Appendix Table 5 contain all data used in the analysis.
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We collected such information through personal interaction with Chris Bowden, Globally Threatened Species Officer at the Royal Society for Protection of Birds and Manager of Saving Asia's Vultures from Extinction (SAVE) Programme.
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Acknowledgements
The authors would like to thank the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), Germany, and the Ministry of Environment, Forests and Climate Change, Government of India for their funding support under the TEEB India Initiative. We also thank the Scientific Advisory Committee of TEEB India for their support and input. Several experts took an active personal interest in the project during its entire duration and we particularly want to put on record our acknowledgments to Dr. Vibhu Prakash, Chris Bowden, Dr. J R Bhatt, and Dr. Simon Stuart. We also thank the field team of the Foundation for Ecological Security, Mandla, and Ms. Jagriti for their help with the data entry and questionnaire survey. We thank the anonymous reviewer for providing such excellent comments and ecological values that have helped improve the quality of the manuscript significantly.
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Ishwar, N.M., Das, S. Economics of conserving endangered birds: the case for Gyps vultures in India. Environ Dev Sustain (2024). https://doi.org/10.1007/s10668-024-04637-y
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Received : 19 May 2023
Accepted : 12 February 2024
Published : 16 March 2024
DOI : https://doi.org/10.1007/s10668-024-04637-y
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India's transportation and logistics sector can act as the backbone to support this fast-paced growth, which the country is poised to achieve in the next 25 years. India's freight movement is heavily skewed toward road transportation, which moves 66% of cargo (in ton-km). This is followed by rail (31%), shipping (3%) and air (1%).
Even before the second wave of the disease began, in the spring of 2021, the pace of recovery was unclear. In 2019, the McKinsey Global Institute (MGI) predicted that India's logistics sector would expand at a compound annual growth rate of more than 10 percent, from $200 billion in early 2020 to at least $320 billion in 2025.
across India as well as deep pin-code level coverage within the city. Utilization of the fleet by venturing into adjacent value pools may become the key (e.g. food delivery agents doubling up as parcel carriers in lean time periods) Logistics players could choose a mix of different models to offer integrated, "one-stop shop"
The core areas of supply chain optimization included: Realizing procurement synergies and optimizing vendor costs. Lowering of warehouse and freight costs by identifying logistics overlaps. Integration of sales and operations planning across the complete brand portfolio. EY led three critical areas of supply-chain optimization: procurement ...
The logistics and warehousing sector in India has seen a significant transformation, mainly driven by the post pandemic surge in online purchase, and a shift in consumer's buying pattern. Changing business needs and altering consumer behaviour have led to a series of technological developments and have also led to newer and flexible business ...
logistics and for all three of the economies that will be referenced in this report, the United States, South Africa and India; it constitutes more than 50% of logistics costs (64% in the case of the United States [AT Kearny, 2017] and 58% in the case of South Africa [Havenga, et. al. 2016]).
In India, the logistics sector was given infrastructure status in 2017. Figure 4 shows that India's logistics market is estimated at US$215 billion in 2020 from US$160 billion in 2017 (Research and Markets., 2020). Between 2019 and 2025, the logistics sector is projected to grow at a CAGR of 10.5% with an investment of US$500 billion annually.
An important logistics measure that can be used to compare the performance of India's logistics system against its competitors is the Logistics Performance Index ... Bharadwaj N, Mathew S, Pani A et al (2018) Effect of traffic composition and emergency lane on capacity: a case study of intercity expressway in India. Transp Lett 10:316-332. ...
Logistics in India is expected to be a $215 billion industry in 2020. It is projected to expand through 2032 at a rate that is roughly 1.2 times the growth rate of India's gross domestic product (GDP) and generate $360 billion in value added.1 The logistics industry has evolved significantly over time.
They follow the logistic industry's transformational journey, key growth drivers, and future growth opportunities. A small case study is prepared on one of the leading logistic service providers in India. The chapter is provided in ten sections. Section 12.1 talks about global COVID-19 situation.
The model is applied to a case study of the outbound automotive logistics in India. Exploratory insights on the enablers and challenges to adopting coastal shipping-based distribution are presented along with the route configuration and the level of modal shift achievable based on the model results. The results of the study suggest that the ...
Big growth on the cards for India's logistics sector, but challenges persist: GS1 Report. In 1996, the Ministry of Commerce and Industry, along with industry bodies like CII, FICCI, […] May 27, 2023. ... Case Studies May 11, 2020. AIMTC warns of supply disruptions as fresh problems worry truckers ...
As per the World Bank's Logistics Performance Index, India's rank has escalated from 54 in 2014 to 44 in 2018. . ... Case Study: The Ever Given, the Cargo Ship Stuck in the Suez.
Achieving sustainability with multi-modal transportation. Reconfiguring your logistics setup can be challenging. But the immediate environmental benefits are clear and tangible. This case study illustrates how Nokia lowered its carbon emissions by up to 68% on a tradelane between China and Brazil by switching from an air freight - only ...
Elevate Your Brand with International Express Shipping Solutions. DHL Express. As the preferred choice of technology companies of all sizes, we offer unmatched international express shipping solutions, delivering speed, unparalleled local customs expertise, and tailored services that fuel your company's success and customer experience.
This detailed blog embarks on an exploration of inspiring case studies that illuminate the growth and potential of the dynamic coastal shipping sector in India. From optimizing shipping logistics to embracing sustainable practices, the success stories presented herein underscore the resilience and innovation defining this maritime landscape.
Material Handling & Logistics. SEPTEMBER 11, 2017. Using the Western European clothing supply chain as a case study, the researchers wanted to test a standard as to the 'fairness' of that sector's global supply chains. They analyzed garment industry wages in 2005 in the BRIC countries - Brazil, Russia, India and China.
Mahindra Logistics, a subsidiary of the Mahindra Group, is a prominent player in the logistics and supply chain management industry in India. Let us go through the detailed case study on Mahindra Logistics, prepared by thecodework.. Let's develop the next generation of technology for logistics companies like Mahindra Logistics and shape the future of the industry together.
The average logistics cost per GDP among BRICS countries was 11 percent, however, in the case of India, the cost share per GDP was 13 percent. The high cost of logistics can be attributed to an ...
However, the application of AI and ML technologies has improved the efficiency and effectiveness of last-mile logistics operations. Case Study: In India, the e-commerce industry has been growing ...
Climate change is a key personal concern for many individuals in Asia Pacific. A Deloitte study has shown that consumers in the region are willing to pay more for sustainable products, with 52 percent having changed their purchasing behaviors to contribute to climate protection. DHL Express' GoGreen Plus solution allows individual shippers to ...
Case Study - Industrial Manufacturing logistics. Our customer is a leading multinational manufacturer of automobiles and agricultural machinery. The company entered the U.S. market in 2000; since 2002, Noatum Logistics has handled the company's customs brokerage at Noatum Logistics' Houston branch. Read More.
An important logistics measure that can be used to compare the performance of India's logistics system against its competitors is the ... Mathew S, Pani A, et al. Effect of traffic composition and emergency lane on capacity: a case study of intercity expressway in India. Transp Lett. 2018; 10:316-332. doi: 10.1080/19427867.2016.1265237 ...
OFR market volume back to year-over-year growth since October. MSC continues to dominate newbuilding orders. Global capacity to grow at similar rate in 2024.
The study finds the lifetime scavenging value of a vulture to vary between USD 4457 to 4047 in urban India and between USD 3825 to 3357 in rural India at 2014-2015 prices. Annually a single vulture is seen to provide scavenging services worth USD 235 to 187 depending on the location and discount rate used in the calculation.
NEW DELHI: Delhi's Rouse Avenue Court granted bail to Arvind Kejriwal on Saturday in a case related to him skipping ED summonses.The relief to Kejriwal was granted on a bond of Rs 15,000 and a ...
The Election Commission of India on March 16, Saturday, announced dates for Lok Sabha elections 2024. The first phase of voting will be held on April 19, 2024
The service is also scalable - another important requirement, given Jamoona's fast growth plans. Market expansion, agility and growth are all supported by the EFN's pay-per-use commercials and volume-based rate cards. DHL was able to execute the Jamoona vision as a result of its expertise in e-commerce, logistics and transport, the last ...