ASSOCHAM moots proposal for freight villages to establish cluster of related logistics activities

ASSOCHAM has mooted a proposal to the Transport and Shipping Ministry for introducing 'freight village' concept on the line of European model that takes the clustering of related logistics activities to a new level.

In a note submitted to the Road Transport and Shipping Minister, Nitin Gadkari, ASSOCHAM said freight villages are logistics concentration points, which are developed at strategic locations to provide various logistics-related activities such as warehousing, packing, re-packing, break-bulk centre, and truck parking.

In Europe, the chamber says freight villages are typically a private sector business, developed by large scale operators that host complimentary services and related operators.

Freight villages are often operated under public private partnership mode, where an area is defined as a freight village by the public sector usually at the intersection of major multimode routes, and then private sector operators develop the facilities. Freight villages can vary in size, from few hectares to thousands of hectares, depending on their functions.

Currently no such facilities exist in India. As a result, the surroundings of the larger cities are congested with on the rise disorganized parking and waiting areas. With an ever growing truck fleet, the situation is more worrying than ever before. Long stretches of roads leading into cities or circumvallation roads around them have de facto been turned into truck queuing and waiting areas.

In parallel, unlicensed workshops, service facilities and spare parts outlets have emerged in such areas. ASSOCHAM further says this combines with a widespread lack of metropolitan regulations (or enforcement when these exist) on specific timings for trucks to load, unload and circulate inside metropolitan areas, contributing to traffic jams and pollution.

Essentially, the chamber spokesman said, a freight village is a European concept which comprises an area of land that is devoted to a number of transport and logistics facilities, activities and services, which are not just located in the same area but also coordinated to encourage maximum synergy and efficiency. Central to a freight village is an intermodal terminal that is connected to major freight corridors and a nearby seaport. This enables flexible, quick movement of containerized and de-containerized cargo between wharf, warehouse and ultimate destination by both road and rail.

The juxtaposition of the intermodal terminal with facilities such as container storage (full and empty) and handling areas, and warehouses that are linked to rail, is intended to significantly reduce cargo handling costs and time, and reduce the use of roads for container transportation.

The second distinguishing feature of a freight village is shared access to other facilities, equipment and common user services. A centralized management and ownership structure is the third distinguishing feature of a freight village.

This is similar to the strategic management role of a port authority/corporation. Centralized management has the responsibility for planning the long-term investment and growth of the freight village as well as the short-term maintenance of the village infrastructure.

The chamber says a well thought out application of these concepts to India could bring in immense user benefits at much lower resource costs to the economy. Within the Asia Pacific region there are well-established logistics centres and distriparks that share many of the features of the freight village.