tybms.logistic.modernlogisticinfrastructure.docx

7/27/2019 tybms.logistic.modernlogisticinfrastructure.docx

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tybms

Konjath Mithun

logistics

[Modern Logistics Infrastructure]


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Contents

Containerization

Mechanized Handling EquipmentDeep Water PortsICDs & CFDs NetworkMaritime LogisticsCold Chain LogisticsDedicated Freight CorridorGolden Quadrilateral & Network of HighwaysDouble Stacked ContainersUnit TrainLogistics ParkContainer corporation indiaPrivate Logistics Company


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Containerization

Is a system of cargo transport based on a range of steelintermodal containersAKA Shipping Containers or ISO ContainersContainers

Are built to standardized dimensions (sizes)Can be loaded and unloaded, stacked, transported

efficiently over long distancesCan be transferred from one mode of transport to

another viz container ships, rail and semi-trailer trucks,without being openedThe system was developed after World War II, led togreatly reduced transport costs, and supported a vastincrease in international trade

Initially containers were used for sea transportation(maritime transportation)Now are extensively used in inland transportation overrail & truckUsed in both international & domestic tradeIdea of containers originated in 1956 by MalcolmMcLean, owner of a huge trucking company in USAContainerization in shipping started in 1960sHawaiian Citizen was the Pacific's first full containershipIn 1961, the International Organization forStandardization (ISO) set standard sizes for containers

The container sizes need to be standardized so thatContainers can be stacked one on top of the otherModes of transport such as ships, trains, trucks and

planes can be built to stow containers

Cranes at ports can be specially fitted or built tohandle, load & unload containersTwo most important & most commonly used containersizes

20-foot length AKA Twenty-foot Equivalent Unit[TEU]

40-foot length AKA Forty-foot Equivalent Unit [FEU]


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Factors that contributed to growth of container usageIntegration of various modes of transportElimination trans-shippingReduced risk of damage & pilferage in transitSubstantial reduction in logistical packaging of goods

Globally, containers account for 80% of all cargo volumeIn 2007, Indian ports handled 6 million TEUBy 2014, Indian ports are expected to handle 14.2 million TEUContainer services started in 1966 & initially containers with a payloadof 5 tonnes were introduced by India Railways [IR]In 1968, IR's first container service was between Mumbai &

AhemdabadIn 1988, Container Corporation of India [CONCOR] was formed underIR to look after container traffic in India

Container traffic handled at various ports [2005-06]


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Mechanized Handling Equipment

The time spent in loading / unloading at ports,warehouses, railway terminals can be considerableEquipments used for the purpose help in making theseoperations efficient & reducing * Vehicle TurnaroundTime [VTT]To select the correct equipment, the following factorsmust be consideredWeights & quantities of material handledNatures of material handledFrequency of loading / unloading operationsCustomer needsVehicles are usually loaded / unloaded by utilizing equipmentmounted on loading docks (bays)Often vehicles are built with loading / unloading equipmentCommon equipment used at loading / unloading docks (bays)Automatic dock levelersForkliftsCranesPneumatic tubesPipelinesConveyorsAutomatic dock levelersUsually vehicle platforms vary in heightDock levelers help level the dock according to thevehicle height so that forklift trucks can directlydrive into the vehicleDock levelers maybe built into the dock or maybeportableForkliftsAre widely usedAvailable in wide range of optionsUsually deployed for pallet loads


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CranesAre widely usedAvailable in wide varietyUsually used for large & heavyUnable to handle large volumesAre costlyPneumatic tubesUsed for handling loose materialin powder form such as sand,flour grainTubes are laid along the loadingdock and material is suckedalong the tubes

PipelinesAre deployed where liquids are involvedConveyorsUsed for high volume loadsMaybe driven by power or gravityMaybe fixed or movableAvailable in a wide variety


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Deep Water Ports

Deep water ports are locations along the coastlineor shore that are deep enough to allow navigation oflarge and more economical vessels

Throughout history ports have handled every kind oftraffic, at times have played an important militaryrole, often dominate the local economyPort may extend for miles, support and storagefacilities vary widelySome of the largest ports in the world are Shanghai[China], Hong Kong [China], Guangzhou [China]and Rotterdam [Netherlands]

To ensure smooth port operations and to avoid congestionat the port, it is necessary toUpgrade the ports infrastructureUpgrade port operations to international standardsIntegrate port connectivity with other modes of transportGlobal port operators such as Hutchinson Port Holdings,

APM Terminal, Port of Singapore Authority and Dubai PortsInternational are now managing terminal facilities in almostevery single major port around the world

The 6,000 km long Indian coastline has 12 major ports and181 minor ports out of which 139 are operationalIndian Ports are the gateways to India's international tradeby sea and are handling over 90% of foreign trade

The major ports are located at

KandlaMumbaiJawaharlal Nehru Port Trustat Nhava Sheva

MormugaoNew MangaloreCochinTuticorinChennaiEnnoreVishakhapatnamParadipCalcutta / Haldia


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Dry and liquid bulk make up about 80% volume of the port traffic

while containerized cargo makes up the balance 20%Although the ports in India have shown considerable improvementover years, in comparison with ports in Hong Kong & Rotterdam,there needs to be marked improvement to get Indian ports at parwith international standardsWeak hinterland connectivity is a challenge for most Indian ports,reducing accessibilityIn keeping with general policy of liberalization & globalization ofIndian economy, the Port sector has been thrown open to private

sector participation by the government of IndiaWith the opening up of the port sector for privatisation, it isexpected that efficiency, productivity and quality of services at portswill improve considerablyIt is also expected that the private sector participation would helpbringing in latest technology & improved management techniques


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Inland Container Depot (ICD)& Container Freight Station (CFS)

Concept diagram of Ocean Logistics [Maritime Logistics]

Industry

Facilities set up for handling and temporary storage ofexport / import laden containers as well as empty

containersIt is a common user customs controlled facility with publicauthority status, equipped with warehousing space,adequate handling equipments and IT infrastructureCFSs / ICDs provide an integrated platform for activitiessuch as loading / unloading, transporting and stuffing / destuffingof containersCFS and ICD service providers also extend value-addedservices, including customs clearance, less than container

consolidation, refrigerated warehousing, hub-and-spokeservices, etc.

Distinction between an ICD & a CFS

The main distinction between a CFS and an ICD is that aCFS is an off-dock facility located near the service ports,while an ICD is generally located in the hinterland


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(hinterland means interiors outside of port towns)Since a CFS is an off dock facility located near theservicing ports which helps in decongesting the port byshifting cargo and customs related activities outside theport areaFunctionally there is no distinction between an ICD / CFS asboth are transit facilities, which offer services forcontainerization of break-bulk cargo and vice-versaThese could be served by rail and / or road transportFunctions of ICDs / CFSs

Receipt and dispatch / delivery of cargoStuffing and stripping of containersTransit operations by rail / road to and from servingports

Customs clearance

Consolidation and desegregation of LCL cargo (LCLmeans less than container load)Temporary storage of cargo and containersReworking of containersMaintenance and repair of container unitsCFS & ICD were privatized by the Indian Government in the lastdecade.

In 2006, government of India awarded 15 licenses to operate railcontainer services across all routes in IndiaCurrently 8 players have begun operationsThe Kolkata Port Trust's (KoPT) first rail-linked container freightstation (CFS), built by Concor, at a cost of Rs 2.5 crore, waslaunched on March 28, 2011At Jawaharlal Nehru Port Trust [JNPT], Nava Sheva, more than 40%of up-country cargo is being containerized at CFS and transported toJNPT for loading on the vessels

Some of CFSs around JNPT are MAERSK Line, CONCOR, Sea BirdMarine Service, Trans India and Maharashtra State Ware HousingCorporationSome of the ICDs of India are Ahmedabad ICD (Sabarmati), JaipurICD, Delhi TKD ICD (Tuglakabad), Delhi PPG ICD (Patparganj),Ludhiana ICD, Bangalore ICD, Hyderabad ICD


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Maritime Logistics

Maritime transport involves the shipment of goods (cargo) andpeople by sea and other waterways

The dominant mode for international trade both for bulk transport ofcommodities and containerized cargo

This is on account of its capacity to carry large quantities of cargoover long distances at low costMaritime Logistics is the planning and performance of sending ashipment by sea and other waterways from point a to point b intime and at a reasonable cost

One of the most globalized industriesIn the Asia- Pacific region, trade by sea is vital especially for islandnations such as Japan, Taiwan, Australia & New Zealand

99.7% of all Japanese trade enters & leaves via harborsHong Kong transports 80% of its cargo by seaOperation of maritime industry is divided intoLiner Shipping Business is based on same ships, routes, prices andregular voyages

Tramp ShippingIrregular routes, prices and voyagesIndustry ShippingIndustrial carriers are vessels operated by largecorporations to provide transportation to manufacture anddistribution

Vessels are run to ports and on schedules determined bythe specific needs of the owners

The ships may belong to the corporations or may beChartered

Introduction of containerization in 1966 revolutionizedmaritime transport

Maritime industry is crucial for world economy with portsplaying a strategic role

Maritime security involves physical security, vessel securityand cargo security

One of the major concerns of maritimeindustry are the rising pirate attacks

IMO the International MaritimeOrganization is the United Nationsspecialized agency with responsibilityfor the safety and security of shipping

and the prevention of marine pollutionby ships


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Cold Chain Logistics

Cold chain is a logistic system that provides a series of facilities formaintaining ideal temperature storage conditions for perishablesfrom the point of origin to the point of consumption in the supplychainRefers to the transportation of temperature sensitive products alonga supply chain whilst protecting the quality of these shipmentsIt is used to help extend and ensure the shelf life of products suchas fresh agricultural produce, frozen food, photographic film,chemicals, vaccines and pharmaceutical drugsA well organized cold chain reduces spoilage, retains the quality ofthe productsCold storage construction costs around Rs 3000 per metric tonwhere as dry cargo storage costs Rs 300-400 per metric tonDue to the increasing cost of electric power, running cost of a coldstorage is higher than a dry cargo storage

The Cold chain logistics infrastructure generally consists ofPre-cooling facilities-Cold StoragesRefrigerated CarriersPackagingWarehousingThe total cold chain market in India is worth Rs. 21,375 millionChiller segment, which includes fruits & vegetable packhouses,potato, apple contributes Rs 16050 million to the cold chainmarketDemand is rising on account of growth in the retail industryMCW Ltd. has setup a 1000 metric ton cold storage facility atNavi Mumbai for storage of fruits & vegetables

Some cold chain service providers in IndiaSnowman Logistics Ltd. (Snowman)

Indias first Cold Supply Chain Company with a nationwide presence connecting more than 100 cities and distributing to morethan 4400 outlets100+ completely owned and leased refrigeratedcontainers (Reefers)

ColdStar Logistics

Delivers customized solutions for cold storage and refrigeratedtransportation across India

M. J. Logistic Services Ltd.Provides services mainly in North IndiaEnd-to-end handling and shipping of temperature-sensitiveproducts (-25C to +15C)


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Dedicated Freight Corridor [DFC]

Under the 11th Five Year Plan of India(20072012), Ministry of Railways initiatedconstruction of a new Dedicated FreightCorridor (DFC)DFCCIL - The Dedicated Freight Corridor Corporation of IndiaLimited is a corporation run by the Government of India to undertakeplanning, development construction & maintenance of the DedicatedFreight CorridorsDFC is the Indian Railways' [IR] quadrilateral linking the fourmetropolitan cities of Delhi, Mumbai, Chennai and Howrah,commonly known as the Golden Quadrilateral and its two diagonals(Delhi-Chennai and Mumbai-Howrah)Total route length of 10,122 km carries more than 55% of revenueearning freight traffic of IRThe overall freight traffic growth in 2020 for the country is expectedto be over 2.5 times the current freight traffic

The freight traffic increase has been estimated in two parts - coaltraffic and non-coal trafficThe existing trunk routes of Howrah-Delhi on the Eastern Corridorand Mumbai-Delhi on the Western Corridor are highly saturatedwith line capacity utilization varying between 115% and 150%In April 2005, the prime ministers of India and Japan made a jointdeclaration of the projectThe project was approved at a cost of Rs. 28,181 Crore at 2005pricesNeed for DFC

Economic liberalization in 1991The railway freight traffic has grown by 8 to 11%, which is projectedto cross 1100 million tonnes by the end of 11th Five Year PlanIndian economy is expected to grow at 8-10% over the next threeyearsNeed of speedy and quality transportation serviceAdvantages of DFC

Exclusively for running freight trains at speeds up to 100 km/hParallel to existing Indian Railways Corridors and connection atimportant junction pointsCorridor bypasses populated cities / townsMinimize environmental impactsEnsure guaranteed transit time thus providing quicker andreliable serviceReduce unit cost of transportationFacilitate running of longer and heavier trainsDependence on road transport is decreased to a certain extentAccelerated industrial development in the regionNeed of speedy and quality transportation service


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Golden Quadrilateral [GQ] & Network of Highways

India has an extensive road network of3.3 million kms - 2ndlargest in the world

Roads carry about 57% of the freight and 85% of thepassenger trafficFreight transport in India is mainly done over roads57% of freight is transported over roads36% of freight is transported over rail6% of freight is transported over water1% of freight is transported over airThe National Highways are the primary long-distanceroadways and span about 67,000 km of which 600 km areexpressways, with two or more lanes in each direction

Management of these roads is under the jurisdiction ofthe National Highways Authority of India, an agency of the Ministryof Road Transport and HighwaysNational highways constitute approximately 2% of the total roadnetwork of India, but carry nearly 40% of the total trafficHighways form the economic backbone of the countryBenefits of Highways

Travel time savingFuel savingBenefits to trade especially movement of perishable goodsSaving in maintenance costsReduced accidentsArea developmentThe Golden Quadrilateral is a highway networkconnecting India's four largest metro cities Delhi, Mumbai,

Chennai and Kolkata, thus forming a quadrilateral of sortsFour other major cities Bangalore, Pune, Ahmedabad,and Surat, are also served by the networkGQ is the largest highway project in IndiaInitiated by Atal Bihari Vajpayee, it is the first phase ofthe National Highways Development Project (NHDP)


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Consists of building 5,846 km of four / six lane expresshighways at a cost of60,000 crorePhase 1 of golden quadrilateral is complete nd passesthrough 13 states Delhi, Haryana, Rajasthan, Gujarat,Maharashtra, Karnataka, Andhra Pradesh, Tamil Nadu,Orissa, West Bengal, Bihar, Jharkhand and Uttar Pradesh

Economic Benefits of GQ

The GQproject establishes better and faster transportnetworks between many major cities and portsIt provides an impetus to smoother movement of productsand people within IndiaAnnual savings of Rs.8000 crores on fuel, wear and tear ofvehicle costsReduction in journey time, safe movement of passengersand goods are additionalProvides big boost to cement, steel, road construction,automobile and tourism industriesFaster access to marketsGenerate employment for over 5 lakh people every day


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Double Stack Container [DSC]

Double stack container is a form of Intermodal freighttransport where two containers are stacked on rail carsIntroduced in North America in 1984, double stack hasbecome increasingly common

Using double stack technology, a freight train of a givenlength can carry roughly twice as many containers, sharplyreducing costs per containerThe first DSC train rolled on 23rd March 2006 from Jaipur toPipavav Port in Gujarat

The Railways plan to introduce DSC service betweenGurgaon in Haryana and Mundra Port in GujaratThe double-stack container service is expected to boost thetransportation of import-export goodsThe 1,198-km long Gurgaon-Mundra section will be thesecond route to have double-stack container serviceThe first double-stack train was the 950-km long Jaipur-Pipavav route on Western Railway which becameoperational in March 2006At present, IR carriesan estimated 34million tonnes of

goods in double-stacktrains


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Unit Trains

AKA block trainIs a train in which all thewagons making it up are

shipped from the same origin tothe same destination, withoutbeing split up or stored en routeIt also enables railways tocompete more effectively withroad and water transportThis saves time and money, as well as the hassle, delays andconfusion associated with assembling and disassembling trains atrail yards near the origin and destinationHowever, unit trains are economical only for high-volumecustomersUnit trains are usually used for the transportation of bulk goodssuch as coal, iron ore, crude oil, cars etc


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Logistics Parks

Logistics parks are locations which contain several types of firms andoperationsFirms providing logistics services, such as 3PLs transportation,warehousing and freight forwardersThe logistics operations of firms, such as the distributionoperations of retailers,manufacturers and distributorsAlso include firms that provide services to logistics companies, suchas truck maintenance operations, software providers, specialized lawfirms, international financial services providers etc.A Logistics park is a one-stop-shop for all logistics needsThey are known asLogistics Villages in GermanyDistribution Parks in JapanLogistics Platforms in SpainLogistics Clusters in USAThere are, literally, thousands of logistics parks around theworld, two of the prominent ones are Rotterdam Port inHolland and the Singapore Port area

Logistics Parks offer

Strategic location with good road, rail and air connectivityLarge amount of warehousing space at a placeSpace for multiple clients and industries and for futureexpansionAmple truck and office parking spaceSecured place with CCTV, high compound wall, lightningarrester, boom barriers and fire protection systemsIntegrated park management taking care of generalmaintenance, landscaping, security & waste management

Safexpress Pvt. Ltd.

In April 2009, inaugurated its high-tech LogisticsPark in AhmedabadCovering an area of 2,74,000 square feet, provides its clients withtrans-shipment & 3PL servicesIn May 2009, inaugurated another high-tech logistics park in Kolkataover an area of 1,84,000 square feetIn December 2009, inaugurated yet another high-tech logistics park inPune over an area of 3,10,000 square feet

The Orange City Logistics Park

Has created a state-of-the art warehousing facility atNagpur at a distance of 12 kms from Dr. B. R.

Ambedkar International Airport


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CWC Logistics Park

In June 2011, CWC Logistics Park, a joint venture between CentralWarehousing Corporation (CWC) & Hind Terminals Pvt. Ltd wasinaugurated at Dronagiri Node, near Jawaharlal Nehru Port Trust(JNPT)

Future of logistics parks in India

By 2012, some 110 logistics parks spread over3,500 acres are expected to come up across India,at an investment of $1 billionLogistics parks' at strategic locations will save$13-16 billion in supply chain costs for IndiaThese logistics parks would be not just a modernwarehouse but a hub of value added supply chainand manufacturing activitiesAt present, most of the parks have modernwarehousing facilities but do not have the valueadded service capabilities that are available globally

Container Corporation of India Ltd. [CONCOR]

CONCOR is a Govt. of India undertakingSet up in 1988, to profitably satisfy customer'sneeds for high-quality, cost-effective logisticsservicesA network of more than 61 terminals, offering scheduledand on demand rapid rail and road services between the

hinterland and ports, and between major metrosCONCOR's core business involves three distinctactivitiesCarrierTerminal operatorWarehouse operatorCarrier

Majority of CONCOR terminals are rail-linkedFacilities are, however, provided for first and last mile transportation byroadTerminal and CFS Operator

In 1989, CONCOR started operations with 7 ICDsCurrently CONCOR has a network of totally 61 terminals [18 are exportimportcontainer depots, 13 only domestic container depots and 30terminals combined domestic & international terminals]


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CONCOR's customs bonded Inland Container depots are dry ports in thehinterland, and serve the purpose of bringing all port facilities includingcustoms clearance to the customer's doorstepThe terminals are almost always linked by rail to the Indian Railwaynetwork

WarehousingCONCOR's terminals provide a variety of warehousing, container parking& repair facilities

As CFS operator, CONCOR adds value to the logistics chain by offeringvalue added services such asTransit warehousing for import and export cargoBonded warehousingLess than Container Load (LCL) consolidationTerminal network for hub and spoke movements that allow singlecustomers to move cargo to multiple locations at a single time, withCONCOR taking care of the distribution and re distribution requirementIn the area of domestic business door pick up and door deliveryservicesSingle-window facility co-ordinating with all the different agencies andservices involved in the containerized cargo trade, from Customs,Gateway Ports, and Railways, to road hauliers, consolidators,Forwarders, Custom House Agents and shipping lines

Customized packages designed to provide the most cost-effectivecombination of road and rail

In financial year 2010-2011Concor has handled cargo as belowInternational 20,18,551 [TEUs]Domestic 5,43,746 [TEUs]Total 25,62,297 [TEUs]TEU => Twenty-foot equivalent unitOne TEU represents the cargo capacity of a standard

intermodal container, 20 feet long and 8 feet wideTotal Income Rs. 4,030.18 Crores


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Private Logistics Companies

India opens up wide array of opportunities for the logistics serviceproviders across the worldThe high demand for the logistics services is due to the significantgrowth of economyIn 2009 the value of the India logistics market was at $14 billion and isexpected to grow at a rate of 7-8%The logistics companies in India cater to millions of retailers and meetthe requirements of about a billion peopleSome of the MNC logistics companies in India are TNT Express, AFL,DHL & BluedartSome of the best private logistics companies in India are Gati,Mahindra Logistics Ltd., Essar Shipping Ltd., TATA NYK Shipping Pvt.

Ltd, Samsara Shipping Pvt. Ltd.Gati was the first Indian logistics company to setup operations in HongKongToday Gati also has operations in Malaysia, Singapore, Thailand,Mauritius, Nepal, China and Dubai

tybms.logistic.modernlogisticinfrastructure.docx

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