Poor logistics infra could cost Rs 7 lakh cr by 2020: Assocham

National losses due to inefficiency in logistics infrastructure could mount to Rs 7 lakh crore per year by 2020 as compared to over Rs 2 lakh crore at present, industry body Assocham said today.

Economic losses due to bad condition of roads are conservatively estimated at over Rs 30,000 crore per year.

A potential annual saving of Rs 800 crore can be made by merely shifting the movement of goods through multi-axle and trailer trucks, Assocham said in a statement.

Over half of the motorised traffic is carried by 2-axle trucks that constitute 30 per cent of vehicles on the highways. Truckers ignore the real negative economics of overloaded vehicles in search of short-term gains, and add to inefficient fuel and road usage all along.

"The government should set up a time-frame for all drivers of commercial vehicles to be trained on modern equipment. Well-equipped driver training schools could be set up in all states as part of the National Skill Development Programme," Assocham Secretary General D S Rawat said.

With low rates, long delivery times, high competition and poor operator margins, the road transport industry finds high level of investments in equipment utilisation and trained personnel unaffordable. "Thus the industry hides a huge level of inefficiency, including fuel use inefficiency, which weighs it down and costs the nation more in terms of higher fuel needs," he said.

While the Railways carry 30-32 per cent of total goods traffic, road surface transport carries nearly 65 per cent.

Even if all highways in the country adopt concrete pavement, fuel savings per kilometre work out to Rs 6.7 lakh per km.

Rawat advocated use of high volume fly ash concrete (HVFAC) technology for all road constructions and even replacement of existing structures as a national priority for significant savings on fuel use and improving quality of road transport of goods and passengers.

Saving diesel through better roads and efficient goods traffic would enable the government to introduce market price in phases.

"Energy prices should eventually be de-controlled.There is no escape from allowing diesel and other oil product prices to rise and fall in line with international prices of crude oil," he said.

Assocham also urged the government to improve turnaround time of Indian Railways through the proposed dedicated high-speed corridors and related industrial hubs so that more road transport traffic can shift to the Railways.

It supported the proposal to scout for investments in more such rail corridors and eight-lane highways to create efficient transportation infrastructure connecting all corners of the country.