Multi-Modal Logistics Park (MMLP)

Mains Marks Booster     5th August 2023        
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A Multi-Modal Logistics Park (MMLP) as an inter-modal freight-handling establishment comprising warehouses, dedicated cold chain facilities, freight or container terminals and bulk cargo terminals.

It eases and optimizes merchandise movement via road, rail, waterway and air.

MMLP

Advantages & Significances of MMLP

  • Minimise Costs of Logistics: It aims to reduce India’s logistics costs from the current about 14% of GDP to less than 10% of GDP, on par with international standards. 
  • Reduce cost of storage and trans-shipment: Shifting warehouses, currently being operated inside city limits, to logistics parks will enable reduction in warehousing cost, driven by lower rentals in logistics parks situated outside the city limits. 
  • Efficient Inventory planning: Regional logistics parks can provide end-to-end visibility of inventory, collaboration, agility and optimization. o Often, companies are unable maintain inventories for contingencies due to the dearth of storage infrastructure at the local level. 
  • Optimize efficiency through technology: MMLP’s with appropriate information technology infrastructure and integrated Application Programming Interface (APIs) based platforms, can help in digitizing the traditional supply chain, supporting big data analytics and disruptive technology such as AI. o This can in turn help in achieving on-time performance and reduce cost to serve. 
  • Maximise Utilisation of Assets: It helps in the proper utilisation of assets as the transit time is less and the goods vehicles and the other hardware are free to use for the other business or purposes. 
  • Environment Friendly: Increased freight movement on higher sized trucks and rail will enable in reduction in CO2 emissions.
  • Social Benefit: Create employment opportunities and Help with the development and expansion of Small and Medium Enterprises (SME).

Challenges:

  • Availability of Affordable land: Availability of land at an affordable rate and the issues with land acquisition. 
  • Issues with material handling infrastructure: Warehousing landscape is highly unorganized with the presence of many small, private, and unorganized warehouses. 
  • Poor Skill set: Efficiency is compromised as many firms try to compete through the factor advantage of low wages which have led to hiring poorly skilled personnel thereby hampering service quality.
  • Red Tapism in the departmental works: Multiplicity of government agencies involved in setting up MMLPs which may hamper ease of business. Numerous approvals are mandatory from several Central and State ministries for the fulfilment and carrying out of these MMLPs.
  • Skewed modal transportation mix: In India, 60% of freight moves by road, which is significantly larger than in many developed economies. Contribution of inland waterways is negligible, Rail transport is marginal, despite being 45% cheaper per ton–km than road.

Way Forward:

  • Promote private sector participation (PPP Model): The PPP is the preferred mode of implementing MMLPs. To encourage greater private participation, the MMLPAI could develop a model PPP framework to define the role and interdependencies between central and state governments and private players. 
  • Single window Clearance: Centralize MMLP approvals. A single window would facilitate the process of clearances. 
  • Selection of Best suited location: Optimize the location of park and easy land availability. The location should not only have the requisite infrastructure but should also house industries. 
  • Using of Modern cutting-edge Technology: Cutting edge information technology for delivery management also plays an important role for MMLPs to work effectively.
  • Develop Efficient connectivity: Identify gaps in trunk and multimodal interlinkages and bridge them while developing terminals for efficient multimodal freight transfer.
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