Road infrastructure is the lifeblood for international trade. Good road infrastructure is the key to competitive advantage, for exports and imports of a county, and deficiency in such infrastructure can obstruct the trade and increase the cost of freight and carriage.
India’s road network contributes to 90% of the passenger traffic and around 65% of the Goods Traffic. All imports and exports take place via roads for long distances throughout the country due to the large spread of landmass in the Indian subcontinent and lack of inland water transport. For the last two decades, the demand for multi axle Commercial Vehicles that carry containers to and from ports has been increasing rapidly in the country. Road Infrastructure has a multiplier effect on GDP growth incl. exports and imports of a country.
World Bank LPI (Logistics Performance Index)
The LPI is a benchmarking tool to measure the performance on trade logistics. The LPI 2018 does comparisons across 160 countries .
|Country||LPI Rank (2018)||LPI Rank (2014)||Customs (2018)||Infrastructure (2018)||International Shipments (2018)||Logistics Competence (2018)||Timelines (2018)|
|China incl. HK||12||15||3.81||3.96||3.77||3.93||4.14|
*Scoring on a Scale of 5 /5 as the highest and 1 as lowest.
These 2018 rankings provide insights into the overall logistics and infrastructure ranking of India as compared to other countries from export and import aspects. India ranks 44 (as compared to 54 in 2014) and top being Germany, whereas China is way ahead at 12.
Average time to reach ports in India
The arrival timings of vehicles with the shipment and logistics of goods at the ports via roads have improved rapidly over years. However, a lot of improvements are yet to be done to reduce stoppages and delays. Government, is also encouraging truck drivers to replace their old fuel-inefficient vehicles with new generation fuel-efficient vehicles. It will reduce the breakdowns of the engines and facilitate the smooth running of vehicles for longer hours facilitating better logistics. With e-way bill and GST tax collection at state borders, stoppage times and delays has reduced and has also led to lower fuel consumption.
Growth in last decade in India
In 2012, the major milestone project called the Golden Quadrilateral under NHDP (national highway development project) was completed connecting the four metro cities of India namely, Mumbai, Delhi, Kolkata and Chennai.
The construction rate of roads in India has been rapid in the last decade due to prioritizing the development of roads since the 2000s. There was a reported increase of the road network at the rate of 21.44% in the financial year 2016-19.
In 2017, the Bharatmala project was initiated aiming to construct 83677km of new highways at an estimated cost of Rs. 5.35 trillion. The country’s target is to construct 40km of roadways per day.
Tracking and Tracing
It is critical to digitalise the MSMEs, that contribute more than 45% of Exports and Imports of India. Further there intermediaries (CHAs, Freight Forwarders, CFS/ICDs and Ports) who catalyse Export and Import Goods Flow and need to be empowered with Technology.
Digitisation of Logistics and documentation related to freight movement is a critical aspect of Import and Export. GPS Trackers, Electronic documentation and door-to-door tracking of cargo are important to improve the Logistics Performance.
Impact of Pandemic
While last year has been an abnormal year and has impacted the pace of growth and with the present second wave of COVID – 19 might once again have an adverse impact on the construction of roads.
Hopefully this will be a small blip in overall capability strengthening of Indian Logistics Infrastructure journey and transforming the country to a $5 Trillion Economy with $1 Trillion of Exports.