Urban freight reforms key to cut emissions, boost logistics efficiency

Increasing freight movements, including by ecommerce firms, and associated first- and last-mile journeys contribute to congestion and noise pollution across Indian cities. To manage urban freight movement and reduce logistics costs, the Department for Promotion of Industry and Internal Trade (DPIIT) has prepared comprehensive City Logistics Plans (CLPs) for major metro cities, starting with Bengaluru and Delhi. The initiative must be welcomed as it aims to streamline freight and logistics management, addressing the negative externalities associated with vehicular activity, such as congestion and pollution, while advancing sustainability goals and improving the overall quality of life. It is also in line with the National Logistics Policy, launched in 2022, which includes support for the development of city-level logistics plans.

 

Estimates by the National Council of Applied Economic Research show that India’s logistics costs ranged from 7.8 to 8.9 per cent of gross domestic product in 2021-22. Last-mile vehicular movement in cities accounts for 50 per cent of total logistics costs in the ecommerce sector in urban India. Further, urban freight amounts to 10 per cent of India’s freight-related carbon dioxide emission and is usually the biggest contributor to in-city transport-related nitrogen oxides (NOx) and particulate matter (PM) emission. This underscores the need to implement a systematic plan of action to rein in logistics costs. Japan and several European countries like Germany and France are pioneers in city logistics. In this regard, India must adopt global best practices related to efficient city logistics. These include route optimisation through the use of analytics to reduce the number of trips and associated costs, improvement in packaging design and practices to enable higher load factors and hence fewer trips, adopting multi-use lanes and night-time deliveries to enhance productivity in urban-freight delivery, and the use of digital platforms for load matching to improve the quality of the match and reduce empty miles and wasted time.

 

Studies have shown that moving freight on larger vehicles leads to higher transport efficiencies and reduction in the emission of carbon dioxide because larger vehicles can haul the same amount of freight with fewer vehicle-kilometres travelled. A report by the NITI Aayog suggests that by shifting bulk goods movement to rail, optimising truck use, and using cleaner fuels, India can save 10 gigatonnes of carbon dioxide and reduce cumulative PM and NOx emission by 28 per cent and 35 per cent, respectively, by 2050. However, implementing CLPs is also fraught with problems. Most Indian cities have only 10-12 per cent of their land area under roads, almost half the global standard. At the same time, bringing more land under roads post-development is highly complex and costly. High human and vehicular density on Indian city roads also results in frequent restrictions in freight movement, either through time restrictions, vehicular size limits, and permissible weight of freight carried by transport vehicles. Thus, the success of CLPs depends critically on state governments and urban local bodies. It is important to back cities with resources. There is little that local governments can achieve without adequate fiscal support.