Several development initiatives to enhance the capabilities of various types of transport in India will lead to a shift in the country's transportation modal mix for logistic users. This shift is expected to favor the railways, which is already a popular mode of transport for freight movement owing to its cost advantages, despite drawbacks such as delays, elaborate procedures, and inefficient connectivity.
New analysis from Frost & Sullivan (transportation.frost.com), Transportation Modal Shift in India and its Impact on Rail Logistics, finds that the railways' cost-effectiveness in long-distance, high-volume cargo movement has ensured it remains a preferred mode of transport for logistic companies. In fact, rail transport is likely to gain transportation share at the cost of the road mode by 2017. The latter's share is expected to decrease by around 6 percent.
"With rising containerization and the development of dedicated freight corridors, the rail mode presents an ideal blend of capacity and cost-efficiency," said Frost & Sullivan Automotive and Transportation Analyst "Schemes such as freight discounts and incentives is expected to encourage private participation, along with procedural improvements through the use of the Internet, which will sustain the popularity of rail transportation."
Logistic service providers are looking to acquire multimodal capabilities to cater to end users that increasingly demand integrated transport solutions. Various projects promoting multimodal transportation, such as the construction of roads linking ports to the highway network, are expected to positively impact the Indian rail transportation industry.
While multimodal transport solutions are possible, insufficient connectivity to every corner of the country restricts the railways to being an independent mode for moving consignments. Further, the lack of integration with most other transport modes, limits the scope of rail use only to long-distance cargo movement.
"Therefore, developments in the country's logistic infrastructure, including the construction of container rail terminals, logistics parks and railway links with Indian sea ports, are critical for better connectivity and reliability," noted the Frost & Sullivan Analyst. "These expansions will persuade end users, particularly those dealing with large container volumes, to sway in favor of rail transport and use roads for just first and last mile connectivity."
Grants for customers that bring high-value and high-volume business will further promote the railways as an attractive mode for goods transportation in India.
If you are interested in more information on this analysis, please send an email to Ravinder Kaur/ Priya George, Corporate Communications, at ravinder.kaur[.]frost.com / priyag[.]frost.com, with your full name, company name, job title, telephone number, company email address, company website, city, state and country.
Transportation Modal Shift in India and its Impact on Rail Logistics is part of the Transportation & Logistics Growth Partnership Service program. Frost & Sullivan's related studies include: Eighth Annual Indian Logistics Industry Benchmarking Study, Opportunities in Outsourced Logistics in India, IT Spend and Trends in Indian Logistics Market, and Logistics Scenario Tracker on Indian Pharmaceuticals Industry. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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Transportation Modal Shift in India and its Impact on Rail Logistics / P712-13
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