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    System In India Sustainability Model

    March 2020

    Ravi Soni | Sunil Patil

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    This document does not claim that every theory and

    model to be original. The key interpretations, logical

    designs, critical approach and interpretations based

    on derivatives, findings expressed herein are those

    of the student(s) and do not necessarily reflect the

    views of any individual, organization or institution.

    The purpose of this note is purely academic and for

    creating interest in the academic/intellectual

    community for further research and innovation in the

    area of Logistics & Distribution Management for

    sustainable development of the sector.

    Rights and Permission

    The authors/ researchers of this project report hold

    the copyright for the entire scope of work. Copying

    and/or transmitting portions may be violation of the

    copyright laws.


    This report has been prepared by

    group of Students from IIM Indore to

    identify the core concepts and

    develop models for sustainable

    agricultural development programs,

    policies and methodologies.

    We thank Prof. Krishnan Natarajan

    for his guidance, support and

    encouragement for building up the

    concepts and the contents of this

    research paper.

    We also thank the entire team of

    librarians in IIM Indore for providing

    us the research documents and

    helping us zeroing the search process

    for timely completion of the report.

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    Table of Contents Abbreviations .......................................................................................................................................... 5

    Multimodal Transport System (MTS) | An Overview ............................................................................. 7

    Global Perspective : European Case Analysis ........................................................................................ 8

    Transport System in India | Critical Evaluation .................................................................................... 10

    Road Transport ................................................................................................................................. 12

    Railways ............................................................................................................................................ 14

    Waterways : Shipping ....................................................................................................................... 16

    Airways .............................................................................................................................................. 18

    Economic Growth of India |Multimodal Transport .......................................................................... 19

    Transport Infrastructure Growth In India : An Economic Perspective .............................................. 20

    Multimodal Transport in India : A basic perspective ........................................................................ 21

    Multimode Transport System & Sustainable Growth Study : System Approach.................................. 23

    Energy Consumption : Mathematical Decomposition ...................................................................... 24

    Multimodal Transport in India : A Low Carbon Model for the policy Makers ................................. 27

    Technological Innovations as enablers : Multimodal Transport Revolution ........................................ 29

    MTS | Pricing Strategy .......................................................................................................................... 32

    Multimodal Transport System : Legal Framework ................................................................................ 36

    Challenges and Constraints ................................................................................................................... 38

    Key Recommendation .......................................................................................................................... 40

    Bibliography .......................................................................................................................................... 41

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    AI : Artificial Intelligence

    DFC : Dedicate Freight Corridor

    EG is Economic Growth

    GCF : Gross Domestic Capital Formation

    GLTIH : Growth Led Transport Infrastructure Hypothesis

    KDS : Kolkata Dock System

    IEA : International Energy Agency

    LPN : Logistic Performance Index

    MTS : Multimodal Transport System

    MTO : Multimodal Transport Operator

    NPP : National Perspective Plan

    OECD : Organization for Economic Co-operation and Development

    RFID : Radio Frequency Identification

    PACS : Port Control System : Multimodal Transport System

    TILGH : Transport Infrastructure Led Growth Hypothesis

    TINF : Total Transport Infrastructure

    MTS : Multimodal Transport System

    MTS : Multimodal Transport System

    MTS : Multimodal Transport System

    MTS : Multimodal Transport System

    MTS : Multimodal Transport System

    UNIDROIT : International Institute for the Unification of Private Law

    3 PL : Third Party Logistics Provider

    UNCTAD : United Nation Conference on Trade and Development

    VECM : Vector Error Correction Model

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    Multimodal Transport System (MTS) | An


    A Multimodal Transport System uses a combination of more

    than one mode of transport and integrates the scope and

    viability of simultaneous use of various inter-linked network of

    distribution and logistics channels. Thus, use of at least two or

    more modes of transportation which enhances the overall

    efficiency of distribution channel can be briefly termed as

    Multimodal Transport System

    An efficient and sustainable model which uses various channels

    of transportation for efficient allocation and use of resources.

    This helps not only to reduce the lead time for delivery of goods

    and services but also encompasses financial and cost efficiency,

    on time delivery, warehouse and storage efficiency, information

    and communication flow as well as environmental protection

    (by reduced use of energy and fuel). The model also helps to

    contains risk of damages, wastage and pilferages.

    A simple elucidation of use of multimodal transport system can

    be explained in the following diagram:

    What is Multimodal Transport System

    An integrated transport, logistics

    & distribution strategy that

    involves more than one or

    different modes of

    transportation briefly describes

    Multimodal Transport System.

    “ Movement of goods in

    one and the same

    loading unit* or road

    vehicle, which uses

    successively two or more

    modes of transport

    without handling the

    goods themselves in

    changing modes” [UN

    CEC ]

    *Loading Units : Containers, Swap

    Bodies, Cranable Semi-Trailers

    Key Features

    Customer Order


    Load to truck

    Lead to Rail

    Wagon & unload

    to railroad car

    Use rail service Lead to Cargo Plane



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    Global Perspective : European Case


    As per the research

    report of Norbert

    Wagner published in

    Scientific Journal of

    Logistics, the

    Multimodal transport

    system uses makes

    optimal use of all

    channels of

    transportation can

    ideally contribute to

    increase in level of

    efficiency and

    attractiveness of the overall transport system. This will

    ease the burden of all logistical solutions from road

    infrastructure and build in additional capacity in water, rail

    and air network.

    Intermodal Markets can be classified into two broad

    categories :

    1. Seaborne trade : Pre-On Carriage From-To Seaport


    2. Continental intermodal : Unaccompanied craneable


    and swap


    Seaborne Container Transport : Economies of Scale and


    Sovereign data across various countries in Europe indicate

    that the container traffic has reached a relatively maturity

    stage. Still there are scope for organic growth and with the

    innovation in technology and integration of multimodal

    network, the scalability has been studied in the present

    report on the basis of the following recommendations :

    Few Facts

    ➢ Freight transport (by volume in

    ton-km) will grow up to 150-230

    % by 2050.

    ➢ EU policy Aim : By 2030 shift 30%

    by 2030 and 50% by 20250 of

    road freight to other modes such

    as Waterways or Railways

    ➢ At present the share of road

    transport in land freight

    transport in EU is approximately


    Source : Scientific Journal of Logistics

    Innovation is the key

    The model innovations required

    development of multimodal transport

    in Europe include :

    A. Multimodal transport in ocean

    carriers in maritime hinterland


    B. Innovation in technology related

    to handling of non-craneable


    C. Development of dedicated

    freight corridors for long distance

    intermodal transport within the

    TEN-T network and Europe Asia


    Intermodal Transport in Europe









    [UNCTAD, 2014]

    “Containerization is a sea battle,

    fought and won ashore”

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    Hinterland hubs & dry ports

    Establish hinterland terminals and hubs which act as centres

    for sorting, consolidation and distribution of containers and


    Hinterland distribution centres

    The share of ports in logistics and distribution channel is very

    high. This burden can be shifted to hinterlands, thus reducing

    the burden on ports, decongesting the roads and making

    inventory flow smooth.

    Make sea carrier a realty in multimodal transport network

    Integrate the land leg and provide a full packaged service.

    o Integration of vessels owning ocean carriers and sell

    container over capacity

    o Multivariant 3 PL ( Third Party Logistic Provider)

    o Reduce imbalance in container flow and logistics

    o Invest into hinterland system development which is pre-

    condition for developing a robust multimodal transport


    Technological innovations and interventions

    Semi-Trailers dominate with more than 66% of transport

    volume, but less than 2% of these are equipped with vertical

    handlers and robotic cranes.

    There is a vast scope for development of material handling

    and automated crane in Semi-Trailer segment. Though many

    technological thought process has done research in the

    segment, but none has gone beyond pilot test stage.

    Provision for multimodal

    transport document came

    into force in 1992

    [UNCATD 1992]. These

    documents are the FIATA

    Bill of Lading or the

    MULTIDOC 95.

    This document serve as a

    document of title and are

    bankable in documentary

    credit as per UCPDC 600.

    Plaza Logestica


    The logistical park in the

    outskirts of Zaragoza,

    Spain with a total surface

    area of 12,826,898 sq m

    and an initial investment

    of over € 170 million,

    PLAZA is the largest

    logistical park in Europe.

    It acts as a hub for

    multimodal transport

    network in Europe.


    On account of increase in transportation and logistics cost

    supplemented by a pressure to reduce greenhouse gases

    (fuel efficacy increase) technological innovation in rail

    transport becomes imperative.

    An innovation in IOT, ICT, AI, Digitalization, Blockchain,

    Augmented Realty is thus the need of hour for developing

    a sustainable multimodal transport network.

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    Transport System in India |

    Critical Evaluation

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    Road Transport

    India has one of the largest road network

    of more than 5.8 million KM. This network

    is responsible for 64.5% of transport of

    goods and more than 90% of the passenger

    traffic. With the improvement in

    connectivity in rural area and development

    of improved infrastructure in roads, the

    volume per Sq. km of roads has increased


    Investment in Road Transport Infrastructure

    Total investment in the sector increased from USD 7.43 billion in year 2014-15 to USD 22.73 billion in

    year 2018-19. As per the data released by

    Department of Industrial Policy and Promotion,

    construction development projects resulted in

    inflow of USD 25.12 billion through FDI route. In

    March 2019, NHAI projects worth USD 15.99 billion

    were inaugurated.

    The Government through a series of initiatives, is

    working on policies to attract significant investor

    interest. It is estimated that by 2022 a total of

    22,000 km of national highway will be completed.

    Few interesting facts

    ➢ A total of 65,000 km of roads and highways are to be constructed under Bharatmala


    ➢ As of November 2019, there were 9,242 PPP projects in India, of which 2,864 were related to

    roads and bridges.

    ➢ The construction of national highway per day increased to 26.9 kms per day in FY18 from

    11.6 kms per day in FY14.

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    Indian Railways is among the world’s

    largest rail network with a total route

    length of 1,23,236 km transports 3 million

    tons (MT) of freight daily and

    approximately 3 million passenger travel

    daily on it.

    Main benefits of transportation through

    railways include :

    a. Cost efficiency

    b. Less fuel/energy consumption

    c. Mass transportation and time reduction due to dedicated network.

    IR’s revenue increased at a CAGR of 6.2% during FY 2018-19 to USD 27.13 billion in FY 2019. Fregith

    revenue grew at CAGR of 4030% during the same period. IR is among the top 20 exporters, and its

    exports has grown at a CAGR of 31.51% during last ten years. The estimated exports during the year

    2019 was USD 635 million.

    The total FDI inflow during last ten years ( 2010-

    18) has been USD 997.24 million.

    Over a period of next five years, IR market will be

    world’s third largest and will account for more

    than 10% of the global market.

    As per the projection’s the freight traffic via the

    Dedicated Freight Corridors (DFCs) will increase

    at a CAGR of 5.4% to 182 MT in FY 2021-22.

    Dedicated Freight Corridor Corp. of India Ltd (DFCCIL), is already building the first two freight

    corridors—Eastern Freight Corridor from Ludhiana to Dankuni (1,856km) and Western Freight

    Corridor from Dadri to Jawaharlal Nehru Port (1,504km)—at a total cost of Rs 81,000 crore (US$ 11.59


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    Waterways : Shipping

    As per Ministry of Shipping, GOI

    approximately 95% of the country’s

    trading by volume and 70% by value is

    done through maritime transport.

    India has 12 major ports and 205 minor

    and intermediate ports. Under National

    Perspective Plan (NPP) for Sagarmala,

    six more ports will be developed. While

    we have a cost line of 7517 km, the full

    potential of this wide cost line is yet to be explored fully. The GOI has allowed 100% FDI under

    automatic route for port and harbour construction and maintenance projects. There is also a provision

    of 10 year tax holiday to the enterprise who develop ports, inland waterways and ports.

    The cargo traffic at major ports in the country during FY 2019 was 669.05 MT and in the current year

    till Nov 2019 it was 463.07 MT. The major ports had a capacity of 1514.09 MT per annum. As per the

    GOI’s Maritime Agenda 2010-20, the total

    capacity build up of 3130 MT has been

    targeted for FY 2020.

    The sector witnessed three major M&A deals

    in 2017 for USD 29 million. GOI plans to

    develop ten costal economic regions as part

    of revival strategy of Sagarmala Project.

    During the year 2019, National Waterway-2

    (cargo on Brahmaputra in NE India) was

    initiated. Technological upgradation such as implantation of RFID based Port Control System (PACS) at

    Kolkata Dock System has been initiated.

    In March 2018, a revised Model Concession Agreement (MCA) was approved to make port projects

    more investor-friendly and make investment climate in the sector more attractive.

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    Though the civil aviation industry in India

    has been identified as one of the fastest

    growing industries of the world, the

    sector has its own challenges. The capital

    intensive industry operates on razor thin

    operating margin. Any inefficient

    management or service quality leads to

    downfall of the industry, leading to

    resource constraints. The sector has seen

    two major bankruptcies (Jet &

    Kingfisher), while the state run Air India is

    also witnessing its gradual demise.

    Despite these challenges and setback, the Indian Aviation market is growing steeply and is expected

    to overtake UK to become worlds third largest air passenger market by 2024.

    The sector has rich potential for investment and as per DIIP, FDI inflow in the country’s air sector

    reached USD 1904.07 million between April

    2010 and June 2019. The Govt has 100 percent

    FDI under automatic route in scheduled air

    transport service. FDI over 49% require

    Government approval.

    The GOI is planning to invest USD 1.83 billion

    for development of airport infrastructure

    along with navigation services by 2026.

    • As per the Union Budget 2019-20, government will promote aircraft financing and leasing

    activities to make India's aviation market self-reliant.

    • In February 2019, the Government of India sanctioned the development of a new greenfield

    airport in Hirasar, Gujarat, with an estimated investment of Rs 1,405 crore (US$ 194.73


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    Economic Growth of India |Multimodal Transport

    The sustainability of growth and development of Indian economy can be facilitated by development

    of integrated and robust transportation network. A multimodal solution for developing an integrated

    and sustainable infrastructure network is not only the sufficient but also a necessary condition for a

    progressive India.

    The key benefits of developing a sustainable multimodal transport network in India are:

    1. Increase in production, distribution and logistical capability. GDP & Employment growth.

    2. Reduces time, improves allocation of resources and helps in increased ROI.

    3. Changes aggregate demand (called the infrastructure effect)

    4. Saves cost, improves fuel consumption, reduces energy consumption.

    5. Helps in creating less carbon footprint, reduces green-house gas emission. A sustainable


    6. Targets universal education and healthcare

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    Transport Infrastructure Growth In India : An Economic Perspective

    The above nexus indicates that the transport infrastructure and economic growth are deeply


    Two different hypothesis thus exists for building

    up relationship between economic growth and transportation infrastructure development :

    Hypothesis 1 : TILGH

    Transport Infrastructure Led Growth Hypothesis

    Hypothesis 2 : GLTIH

    Growth Led Transport Infrastructure Hypothesis

    As per the Keynesian economic model, the state needs to pay the toll for infusing economic

    development, thus make investment to create demand. India witnessed demand led development

    model post liberalization (1991 onwards). In the present paper we have tried to capture the effect of

    rail and road infrastructure development to understand the economic growth.

    In order to analyse the interrelation

    between Transport infrastructure and

    economic growth, the following function

    has been used :

    EG = f ( TINF, GCF)

    Where, EG is Economic Growth

    TINF : Total Transport Infrastructure

    GCF : Gross Domestic Capital Formation

    (GDP has been used as a proxy for

    economic growth for analysis)

    A mathematical prognosis based on

    Granger Casualty test (VECM approach) which has not been elaborated in the present work (beyond

    the scope of present paper) indicates that there exists a bidirectional causality between road

    infrastructure and economic growth and vice versa.

    Demand Driven Growth






    Supply Driven Growth







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    Multimodal Transport in India : A basic perspective

    End to End delivery of goods and services in a county like

    India with huge geographic and demographic divide is a

    humongous job.

    Multimodal transport service in India can shape its own

    perspective for different service providers of the county.

    Majority of report and logistic firms in India are family

    owned or small dis-integrated players.

    This acts as a major challenge and dissuading factor for

    creating a robust and efficient multimodal transport


    Development of an integrated multimodal infrastructure

    requires huge capital investment as well as coherent and

    transparent policy initiative.

    In 1960’s Indian Railways played a crucial role in

    promoting multimodal transport in India.

    Standardized ISO containers began to be used 1970

    onwards and in 1981 the first ISO container was moved.

    In 1988 CONCOR was established as an offshoot of IR

    Multimodal Transport Act was passed in 1993 by Indian

    Parliament to establish a standardization in the sector.

    Director General of Shipping was identified as the

    competent authority.

    This act paved way for Multimodal Transport Operators


    IT has been the major enabler in this sector. Use of RIFD,

    E-Way Bill, GPS Tracking, Robotics, Analytics and AI,

    Blockchain, IoT, ICT and Augmented Glass has been the

    new generation technological revolutions transforming

    multimodal transport infrastructure.

    Complete supply chain and documentation process has

    been revolutionized due to integration of technology.

    Completion of dedicated freight corridors (DFCs) will

    enhance the share of rail freight in the country from the

    current 30% to around 60-70%

    Private players have been given licence to own their

    freight trains. This will reduce monopoly of CONCOR

    while improving the infrastructure due to private


    NE India has taken a lead in development of MMT

    Infrastructure in India.

    In Varanasi, a freight

    village is being developed

    along the river to enhance

    the potential of Eastern

    DFC and to augment traffic

    capacity along the National

    Waterway 1. Inland

    waterways cargo

    movement has already

    started from NW-1 by

    PepsiCo, Dabur, Emami,

    IFFCO from Kolkata to

    Varanasi where a freight

    village is being developed

    to connect it to the

    eastern DFC

    TOP 15 Logistics Firms in


    1. Indian Railways

    2. House of Patels

    3. VRL Group

    4. TCI

    5. CCIL

    6. Gati Ltd.

    7. Ghage Patil Transport

    8. Logistics Post

    9. Eastern Cargo Carriers

    10. ABC India Ltd

    11. Aegis Group

    12. Allcargo Logistics

    13. DTDC

    14. Safeexpress

    15. Global Vectra Helicorp


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    Multimode Transport System & Sustainable Growth Study : System


    In order to understand the major constraints and need for development of multimodal transport

    network, we have tried to draw a system archetype diagram for a system’s approach view :

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    The system’s approach in the diagram above indicates that though there

    are positive reinforcing loops created by robust

    development of infrastructure thereby promising

    the growth needed for growing needs and

    demand of an ever increasing population, in

    the hindsight it is constrained by a multiple of

    factors such as policy delays, infrastructural

    bottlenecks, disintegrated players, high

    consumption of energy and fuel and carbon

    emission. These have adverse effect on sustainability.

    In order to overcome the challenges, a system’s approach is needed. This implies that a concerted

    effort of all the stakeholder’s such as Government, General Population, Investors, Industrialist,

    NGOs, World Organizations etc need to act simultaneously to build a robust multi modal transport


    The development of a robust infrastructure can help India save more than 10% of its cost of logistics

    and thus boost the exports by more than 5-6% annually due to cost differentiation from transport

    system itself.

    Energy Consumption : Mathematical Decomposition

    We have tried to formulate a mathematical model keeping in view the following objectives:

    ➢ To determine cause for the change in

    energy consumption in transport

    sector in India.

    ➢ To understand pattern of energy

    consumption and their causes for


    Changes in energy consumption (increase)

    attributed to :

    1. Growth in Transport Volume (increase

    2. Structural change or modal

    3. Energy Intensity (decline)

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    India is a low carbon county, but the growth engine are fast accelerating which means demand led

    growth in transport infrastructure. While growth is not only a sufficient but also a necessary condition

    for feeding the mouth of more than 1.2 billion population and give them a basic standard of living, the

    huge dependence on limited resources are fuelling unsustainable growth model.

    Thus, the need of the hour is to frame policies

    to develop model that are environmentally


    The major problem faced by India is high

    volume of road transport vis-à-vis

    benchmarked countries. The Indian policy

    needs to focus on developing a robust and

    integrated Multimodal Transport System.

    In order to over inefficacy, consumer behaviour

    needs to be changed. It thus implies in the pure

    economic terms, the utility function of the consumers needs to be radically changed to develop a

    sustainable consumer class.

    We are the 3rd largest CO2 emitter after US and China and as per International Energy Agency (IEA) we

    account for almost 5% of the global carbon emission. IEA states that China & India increased their

    emission from road transport by a factor of four and three respectively since 2000.

    Transport sector in India is responsible for 10% of total energy consumption. India has witnessed a

    growth story of about 7% in last one decade. This has led to inequitable growth of wealth. This is

    against the sustainable growth objectives of PPP ( People, Planet & Profit)

    In order to understand the energy consumption by transportation sector we have analysed the

    mathematical decomposition as accounted in the research paper of Piyush Tiwari & Manish Gulati

    published in journal

    Mathematical model that decomposes the

    passenger and freight transport energy

    consumption changes into three factors :

    1. Change in transport volume

    2. Change in transportation energy


    3. Structural changes to examine the trend

    and importance of each factor in

    contributing the growth of energy

    consumption by these transport segments.

    Source : International Energy Agency

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    Mathematical calculation for changes in transportation energy consumption for passenger and

    Fright transportation :

    E = total energy use in passenger transport or Freight transport measured in PJ

    P = total volume, measured in passenger-km or tonne-km as appropriate

    I = vector of modal energy intensities with elements [Ei/Pi]

    S = vector of structural (mix) coefficients, or mode shares, with elements [Pi/P]


    𝐸 = ∑𝐸𝑖

    𝐸𝑖 is the energy consumption by mode i of transport

    The energy intensity of mode i ( i.e. the ratio of energy consumption to transport volume) is :

    𝐼𝑖 =𝐸𝑖


    For passenger or freight transport, a change in

    modal transport energy consumption between a

    base period (t =0) and a later period (t = n) can be

    algebraically stated as :

    𝛿𝐸 = ∑𝐸𝑖𝑛 − ∑𝐸𝑖0 ………. Eq A

    = ∑𝑃𝑖𝑛𝐼𝑖𝑛 − ∑𝑃𝑖0𝐼𝑖𝑜

    = ∑𝐼𝑖𝑛𝑃𝑛�̂�𝑖𝑛 − ∑𝐼𝑖𝑂𝑃0�̂�𝑖0……………….Eq B


    Sit = Pit / Pt

    Eq A above representing 𝛿𝐸 is a function of three variables i.e total transport volume (Pt), energy

    intensity of individual mode of transport (Iit) and the structural parameter, or the share of individual

    mode in total transport volume (Sit). Applying total differential formula, Eq B can be decomposed as

    follows :

    𝛿𝐸 = 𝑃𝑛∑𝐼𝑖𝑛�̂�𝑖𝑛 − 𝑃0∑𝐼𝑖𝑂�̂�𝑖0

    = (Pn-P0) ∑𝐼𝑖𝑂�̂�𝑖0 ( transport volume effect) + P0 ∑(𝐼𝑖𝑛 − 𝐼𝑖0) 𝑆𝑖0 energy intensity effect + P0

    ∑(𝑆𝑖𝑛 − 𝑆𝑖0)𝐼𝑖0 Structural effect + interaction terms (R ) ……. Eq C

    Thus any change in energy consumption is sum total of transport volume effect, energy intensity effect,

    structural effect and relative interaction term.

  • 27

    The interaction term can be further broken into

    four combinational product terms of three

    variables. The same is has not been incorporated

    in the present scope of research. However, these

    are joint effect of transport volume and energy

    intensity, joint effect of transport volume and

    structure, joint effect of energy intensity and

    structure and joint effect of all three variables.

    Based on the above it can be inferred that

    introduction of an efficient multimodal transport

    system can reduce energy consumption substantially due to overall reduction in transport volume, energy

    intensity, structural positivity and interaction between these variables.

    Multimodal Transport in India : A Low Carbon Model for the policy Makers

    Overdependence on Road Transport leads to increased consumption of fuel especially oil. The

    increasing burden on fossil oil consumption is a concern because of three major factors :

    a. Energy Security

    b. Local Environment

    c. Climate Change

    Burgeoning cities, growth in urbanization and change in standard of living has contributed further to

    environmental pollution and congestions. The increased use of fossil oil contributes substantially to

    CO2 emission which is a against the Millennium Development Goal for Sustainability set by UN. The

    Government’s thrust to achieve climate goals through sustainability approach can be fulfilled by

    development of Multimodal

    Transport System. A

    mathematical decomposition

    in previous section gives

    quantitative proof of how a

    multimodal transport system

    can help reduce energy


    Media Reports

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    Technological Enablers in

    Multimodal Transport System

  • 29

    Technological Innovations as enablers : Multimodal Transport


    Role of Information Communication

    Technology in development of Multimodal

    Transport System is omnipotent. However,

    the uptake of ICT in development of

    multimodal transport in Europe as well as

    in India is slow.

    ICT functions as a nervous

    system in logistics and supply

    chain management. Quick,

    fast, efficient and reliable flow of

    information on real time basis can be a

    game changer in developing a modern

    sustainable multimodal transport network system and infrastructure. Real time accessibility, quick and

    efficient exchange of information and flexibility to react to dynamic flow of information in a responsive

    and time bound manner is the key next generation logistical solutions.

    In an Multimodal Transport System, the Multimodal Transport Operator is primarily responsible for

    performance of entire haulage contract from shipment to destination. The destination can be within

    the boundaries of same county or an international location which involves custom clearances. The

    figure T-1 below illustrates international transportation process :

    The communication between all the intermediaries has got to be fast, accurate, timely for efficient

    movement of goods to destination. The role of ICT is thus non-trivial and indispensable for an

    efficient network design.

    Generation of e-Challans for faster movement of invoices, lorry receipts, shipment

    documents, bill of lading etc. This improves efficient delivery of goods and service,

    improves quality check as well as reduces hassles to all parties involved in the


    Figure T 1

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    Blockchain technological application in intermodal transport system can be the

    next generation game changer. This will induce reliability, appropriateness and

    trust ability of real time data transmission for super-fast information flow and

    decision taking matrix generation.

    Augmented Realty Glass is another technological revolution that will redefine the

    way logistics are staked, loaded and transported. This will reduce warehouse

    searching time and cost, damages and pilferage loss as well as timely delivery of


    Artificial Intelligence through it’s predictive and prescriptive analogies can

    determine demand and supply forecast, inventory movement vs container

    availability, pre & post shipment transportation gap analysis etc. This technology can

    be extensively used to create a harmonious inter-relationship between various

    modes of transport. Space availability, dock availability.

    Internet of Things (IoT) can be used to track inventory, suppliers and buyers stocks, in

    transit inventory tracking mechanism, GAP analysis and foundation for logistical

    connectivity on real time basis.

    Cloud Technology will help in accessibility of data on multiple platform and vendors

    through one source. This improve data transferability while maintaining security and


    Apart from these innovative new age technological interventions, a container door-to door transport

    chain is conducted through the use of advanced technology, Supply Chain ERMs, CRMs and cloud


    ICT Application Key Benefits Application Example

    Freight Resource Management Systems and application

    • Operational efficiency

    • Reduced empty runs

    • Improved utilization of resource

    • Customer satisfaction

    Intra-Company Resource Management System ( COREM)

    Terminal & Port Information & Communication System and application

    • Reduced loading, unloading time

    • Interface between modes of transport

    • Reduced operating cost

    Automatic Equipment Identification for monitoring (INTERPORT)

    Freight & Fleet tracking and management system and application

    • Operators ability to monitor improves

    • Positive utility of available infra resource

    • Improves security and safety

    Intermodal Fleet and Cargo-Monitoring System (MULTITRACK)

    Integrated operational information exchange /platform/portal

    • One shop marketplace

    • Custom authority check integration

    E-Commerce system : Booking, scheduling, brokerage, payment, invoice etc (DOLPHINS)

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  • 32

    MTS | Pricing Strategy

    The existing traffic systems in the

    economics of transport service pose

    severe theoretical and empirical

    limitations in realistic applications. The

    main reason for this is that the present

    system link travel cost functions, which do

    not accurately describe the intra-day

    traffic dynamics and relate them to urban-

    scale network characteristics in a way that

    is computationally tractable and

    consistent with the physical properties of

    traffic. This failure constrains the ability of

    economic models to support efficient

    development of a network of multimodal

    traffic management and weaken

    congestion externalities

    Most of studies on the congestion in the

    traffic with regard to treatment of

    congestion dynamics (utilized traffic

    models), most of the aforementioned

    studies assume a steady-state have shown

    that the traffic condition or demand-type of

    capacity-supply functions, models ignore

    the fact that the level of congestion is not a

    memory-less function of demand at a given

    time, but dependent on the history of the

    system, i.e. the same demand profile can

    influence differently the system if this was

    uncongested or congested at the current

    state . Further with regard to the

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    application of the pricing schemes, pricing based on individual links is extremely difficult to implement

    in practice, and it is computationally complex for large-scale networks.

    So, while designing the pricing for

    multimodal transport the balancing the gain

    of all users have rarely been studied, with

    respect to multimodal transport the other

    alternative modes are not taken into

    account in most approaches.

    Integration of multimodality consideration

    in pricing is challenging and reserves further


    While the classical approaches focus on the

    link- or corridor-level of application, existing

    pricing schemes for macroscopic

    (large-scale) level have similar ambiguity.

    To develop efficient pricing schemes that allow higher user acceptance, we consider the following

    objectives in our current work.

    (i) Integrate the behavioural adaptation of the users during pricing

    (ii) Promote a multimodal solution combined with pricing, to maximize the efficiency of


    (iii) Recognize the heterogeneous effect of pricing on users, to design pricing strategies with


    (iv) Use value-of-time based pricing rates or redistributing toll revenue to improve public

    transport service, can significantly enlarge the efficiency of the pricing and the

    sustainability of urban mobility. In particular, we reveal that considering the effect of

    pricing on multimodal mobility improves remarkably the system performance, which has

    not been studied thoroughly.

    (v) Development of Transport pricing exchange, which will help in disseminating the

    information about the transport and logistic pricing

    (vi) Motivation for Public Private Partnership in the Multimodal Transport System

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    Further we need to also understand the following when deciding the Pricing for multimodal transport

    • How pricing rates should be adjusted when

    congestion conditions change due to user’s

    behavioural changes?

    • What are the impacts of different types of

    incentive programs for using public

    transport (PT) on the performance of

    congestion pricing? The studies have

    highlighted that in spite of the vast studies

    in pricing, field assessments are quite

    limited and this is one of important reasons

    of user acceptability for multimodal


    • The type of incentives to other modes of

    transport (e.g. return a fraction of the tolls paid to users that switched to public transport

    mode) can make such policies more attractive for real cases.

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  • 36

    Multimodal Transport System : Legal Framework

    International Institute for the Unification of Private Law

    (UNIDROIT) in 1930 first tried to formulate legal regime for

    multimodal transport. These were mostly theoretical

    concepts rather than practical models. The term Multimodal

    was first officially introduced by UN’s Multimodal Transport

    Convention in 1980.

    A legal recognition to Multimodal Transport System was

    however, given by UNCTAD / ICC in 1992 with introduction

    of Multimodal Transport Rules. In India, initially there was

    no uniform rule for this segment. The Multimodal Transport

    Act, 1993 (the “Act”) enacted on 16th October 1992 provides

    for registration of a person as multi-modal transport


    After incorporation of the “Act”, Multi-Modal

    transportation can only be carried out by a person

    registered as Multimodal Transport Operator. This model

    reduces the cost of an exporter and enhanced competitive


    The “Act” was amended in 2002 to simplify the procedures. Section 4 of the act states that “ any

    person may apply for registration to the competent authority to carry on or commence the business of

    multimodal transportation”.

    The Director General of Shipping has been identified as the nodal officer and competent authority to

    perform the functions of the Act.

    This is a progressive act and has borrowed few ideas from Carriers Act and UN Convention on

    Multimodal Transport of Goods held in Geneva in 1980.

    ( Annexure 1 : Draft copy of Draft National Logistics Policy)

    FDI Limits

    Industry Type

    Entry Route

    % of FDI allowed

    Logistic Services

    Automatic 100

    Courier Services

    FIPB 100

    Storage and Warehousing including warehousing of agricultural products with cold storage

    Automatic 100

    Transport and Transport support service

    Automatic 100

    Ports and Harbors

    Automatic 100

    Air transport services

    Automatic 100

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    Challenges and constraints

  • 38

    Challenges and Constraints As per World Bank Logistics Performance Index Report, all is not well as India slipped in the league

    from 35th position to 44th position in year 2018. Logistics is a $3.4 trillion industry globally and a robust

    channel of transport supported by infrastructure, technology & innovation in multimodal transport

    can substantially reduce cost and increase competitive advantage for exports.

    The logistics performance index (LPI) is the weighted index of the country scores on the six key

    dimensions :

    1. Efficiency of the clearance process (i.e; speed, simplicity and predictability of formalities) by

    border control agencies, including customs.

    2. Quality of trade and transport related infrastructure (e.g., ports, railroads, roads, information


    3. Ease of arranging competitively priced shipments

    4. Competence and quality of logistics services (e.g., transport operators, customs brokers).

    5. Ability to track and trace consignments.

    6. Timeliness of shipments in reaching destination within the scheduled or expected delivery


    The county faces multi-variant challenges in all the six parameters discussed above. The bureaucratic

    hurdles supplemented with non-congruous legal framework are major roadblocks that are a

    hinderance to efficient model development .

    Apart from these challenges, the policy implementation, corruption and multiple state laws apart from

    central laws are key challenges.

    The sector also lacks appropriate investments as thee mega projects are capital intensive with long

    gestation period for being a profitable institution.

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  • 40

    Key Recommendation

    A. Investment Environment

    • Design robust routes for demand-responsive transport system

    • Initiate policy guidelines to allow hundred percent foreign direct investment through

    automatic route

    • Improve Ease of doing business for Multimodal transport operators

    • Establish regulatory bodies in the segment to mitigate buyer supplier conflicts

    B. Infrastructure Development

    • Develop SEZs for MMT Hubs

    • Robust Road, Rail & Port infrastructure for multi-factor transport network.

    • Build up dry ports, inland ports, logistical hubs to decongest ports and supplement

    movement of goods through various models of transportation.

    c. Technological Development

    • Technological interventions and innovation in the sector for efficiency

    • Incentivise investment in technology, research & development activities

    • Set up MML data and logistic centres

    • Introduce industry 4.0 interventions

    d. Environmental protection for sustainability

    • Improve fuel economy through MMTS

    • Reduce CO2 emission by reducing burden on roads and transport cargos through rail or


    e. Policy framework

    • Make a coherent state and central law for all clearances. Custom checks, inter state

    border checks ets needs to be made more transparent

    • Simplification of laws and rules

    • Decomposing bureaucratic hurdles

  • 41





    An analysis of trends in passenger and freight transport energy consumption in India Piyush

    Tiwaria,*, Manisha Gulatib aUniversity of Melbourne, Parkville, VIC 3010, Australia bWWF South

    Africa, Sandton, South Africa

    Assessment of interstate freight vehicle characteristics and impact of future emission and fuel

    economy standards on their emissions in India Leeza Malik⁎, Geetam Tiwari

    Transportation Research and Injury Prevention Programme, Indian Institute of Technology, Hauz

    Khas, New Delhi, Delhi 110016, India

    The design, management and operation of flexible transport systems : Steve Wright, C.David Encade,

    Designing robust routes for demand responsive transport system : M.E.Bruni, G.Guerriero, P.Beraldi

    Effect of Transportation infrastructure on Economic Growth in India : Rudra P.Pradhan,


    ICT in multimodal transport and technological trends: Unleashing potential for the future : Irina

    Harris, Yingli Wang, Haiyang Wang


    Wagener & Herbst Management Consultants GmbH, Potsdam, Germany

    Transport infrastructure, economic development and urbanization in India (1990-2011) : Is there any

    casual relationship ? Tuhin Subhra Maparu & Tarak Nath Mazumdar

  • 42