Context: Recently, the government has increased the concession period for the proposed Multi-Modal Logistics Parks (MMLPs) under the Bharatmala scheme to 45 years from 30 years.

Multi-modal Logistics Parks (MMLPs)

• It is a logistic programme by the government to develop Multi-Modal Logistics Parks across different logistics centres in the country.
• The initiative is led by National Highways Logistics Management Limited under Ministry of Road Transport and Highways (MoRTH) and the National Highways Authority of India (NHAI).
• It is developed in a hub-and-spoke model to improve the country’s freight logistics sector.
• A hub-and-spoke network connects every location through a single intermediary location called a hub.
• It benefits the transportation sector which include lower overall freight costs, reduced warehousing costs, reduced vehicular pollution and congestion, enhanced tracking and traceability of transport consignments etc. 
• It provides accessional facilities like storage, warehousing solutions, value-added services like Custom clearances and IT services

Design of MMLPs

• Ministry of Road Transport and Highways of India was authorized to develop 35 Multi Model Logistics Parks (MMLP) in 2017 by the Cabinet Committee on Economic Affairs (CCEA).
• They are developed under Public Private Partnership (PPP) on Design, Build, Finance, Operate and Transfer (DBFOT) mode.
• The National Highways and Logistics Management (NHLML) plans to construct majority of the proposed MMPLs in public private partnership (PPP) mode.
• It is a special purpose vehicle (SPV) and fully owned by the National Highways Authority of India (NHAI).
• It has 50:50 funding model.

The 35 proposed MMLPs are at

• Nagpur, Chennai, Bangalore, Indore, Mumbai, Hyderabad, Coimbatore, Pune, Surat, Sangrur, Delhi-NCR, North Gujarat, Jaipur, Kolkata, Ambala, Jagatsinghpur, Nashik, Kota, Panaji, Hisar, Visakhapatnam, Bhopal, Sundargarh, Bhatinda, Solan, Rajkot, Raipur, Jammu, Kandla, Cochin, North Punjab , Vijayawada, Patna, Valsad and Guwahati.

Need for the MMLPs

• As per Asian Development Bank (ADB), India’s Logistics sector is having high cost and lower efficiency compared to other countries.
• Compared to other countries road freights in India are higher, while the average speed of freight vehicles is about 50%–60% lower. 

Factors affecting freight movement in India

Skewed modal transportation mix

• Coastal movement and inland waterways are at a nascent stage.
• Rail transport is marginal due to adverse pricing and rake booking practices and lack of intermodal facilities to enable easy transfer.

Underdeveloped material handling infrastructure

• Warehousing landscape is highly unorganized with the presence of a large number of small, private, and unorganized warehouses, providing little or no value-added services.
• The economies of scale associated with integrated and large warehousing facilities is not available to all participants in the value chain, including the small and medium enterprises.

Inefficient fleet mix

• Small and inefficient trucks have lower payloads. 

Outdated/inefficient service model

• Efficiency is compromised as many firms try to compete through the factor advantage of low wages which have led to hiring poorly skilled personnel.

Fragmented institutional and governance structure

• The leading countries follow a completely integrated approach towards logistics, and the government provides coordinated oversight to the entire logistics value chain.

Benefits of MMLPs

• The development of MMLPs is envisaged as a key policy measure to rationalize cost of logistics in India and improve its competitiveness.
• It helps in developing the supply chain in a more quick and cross functional way.
• It could improve the utilization and performance of inland container depots (ICDs) and container freight stations.

The MMLPs can provide

• Infrastructure for enabling seamless multimodal freight transfer;
• Mechanized warehouses and specialized storage solutions including cold storage;
• Mechanized material handling and intermodal transfer container terminals, and bulk and break-bulk cargo terminals;
• Value-added services such as customs clearance, bonded storage yards, quarantine zones, testing facilities, and warehousing management services;
• Late-stage manufacturing activities such as kitting and final assembly, grading, sorting, labelling, and packaging activities, reworking, and returns management.