MMLP: Reshaping India’s Logistics Sector

This report shares glimpses of overall success drivers of MMLP (Multi-Modal Logistic Parks) facility globally as well as applicability of the same for Madhya Pradesh as its potential destination.

May 10, 2021

The Indian logistics sector is reshaping its identity – from traditional scattered and isolated ways of functioning to a modern integrated mode. The change is taking place across various stages of logistics, including inventory management, storage, transportation, etc.

India’s objective is to bring the logistics cost down from the current 14% to 7-8% of the GDP in the medium term. About 50% of the logistics cost lies in transportation, currently relying on roadways, which is expensive and time-consuming.

A gradual shift from road to rail can bring down the transportation cost by 45% and travel time by 50%. To enable this, the government has developed the National Rail Plan, 2030, to enhance infrastructural capacity. The National Rail Plan, 2030 aims to increase the modal share of railways in the total freight in India from a current 27% to 45% by 2030. The network of Dedicated Freight Corridors (DFC) and high-intensity Indian railway corridors will contribute significantly to achieving this feat.

Multi-Modal Logistics Park (MMLP) forms a crucial logistic node across rail and road. A typical MMLP would have a dedicated railway siding integrating other facilities, including

  •  Warehouse (Domestic)
  •  Warehouse (Bonded)
  •  Container Yard
  •  Inland Container Depots (ICDs)
  •  Container Freight Stations (CFS)
  •  Value Added Service Area
  •  Customs Area
  •  Administrative Building

MMLP has the potential to merge EXIM and domestic cargo, thus improve utilisation and performance. Some other benefits include:

  • reduction in transportation cost 
  • ~65% lower CO2 emissions from freight movement by rail, compared to road freight on a per tonne per km basis
  • ~20% reduction in congestion due to increased freight movement on higher sized trucks and rail 
  • improved utilisation and performance of inland container depots (ICDs) and container freight stations where they exist

This study explores the opportunities of MMLP facilities in India with a focus on Madhya Pradesh state. It highlights the key attributes and USPs of the state to become a logistics or distribution hub for the country and deep dives into priority locations for the development of MMLP in the state.

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