Sagarmala has placed the spotlight back on challenges of last-mile connectivity for ports, logistics, & warehousing.

- Manikandan Ramachandran

Chief Operating Officer, TVS Industrial & Logistics Parks

What kind of opportunities do you foresee for the warehousing and logistics sectors in the wake of the ambitious Sagarmala programme? 

Sagarmala is the most ambitious programme of the Union Ministry of Ports, Shipping and Waterways. It is spearheading port-led industrialisation and also aims to reduce logistics costs for EXIM and domestic trade. 

However, Sagarmala is still a work in progress, focusing on developing multi-modal transportation systems and attracting investments for industrial projects. 

The opportunities for the warehousing and logistics sectors will open up once the manufacturing and industrial projects start producing goods. The flow of goods will require logistics and warehousing storage. 

But unlike traditional warehouses, port-based industrialisation will require automated warehouses and transhipment centres for more Just-in-Time operations. Due to this, logistics parks may undergo a different model compared to the traditional warehousing.

Consider the port of Antwerp in Belgium. It has developed into a major international seaport given its unique estuarine location and proximity to the North Sea. The port is not just for handling cargo, but also houses the largest integrated petrochemical cluster in Europe. It gets business because such clusters around the port create high-value cargo. For managing the cargo, customised logistics and warehouses offer their services. It gets distributed by long and short duration sea voyages, inland navigation, and road and rail transportation. 

Similarly, for Sagarmala to prosper, an integrated transportation and cargo centric approach is required. Sagarmala has enormous potential for the warehousing and logistics sector, and the same would be realised in a phased manner over the next few years. 

For TVS ILP, which has a pan India presence, Sagarmala could provide many opportunities. Its industrial parks are strategically located and en route between industrial production sites and large ports. 

Last mile connectivity is crucial. How do you assess the challenges in the wake of the Sagarmala programme? 

Last-mile connectivity has been a challenge for the Indian ports, logistics, and warehousing sector for many years. Thankfully, the Sagarmala programme has placed the spotlight back on the issue. 

But we need to remember that hinterland and last-mile connectivity is mainly driven by road and rail transportation systems. The cheaper and faster inland and coastal waterways roles are very minimal in handling the cargo.

On the other hand, cargo generating centres are mainly in the hinterland, which adds to the distance and increases logistics costs. 

To solve the last-mile connectivity issues, multiple states and central agencies such as NHAI and State PWD Department and dedicated road development corporations of the State Governments should come together and identify routes with higher port-driven traffic. 

During the first Covid lockdown, several government agencies greatly facilitated container cargo movement from JNPT port to the final destination. Many lessons can be drawn from such teamwork. The agencies on a joint platform can identify bottlenecks and ease cargo movement. 

Last month, the Government of India launched Gatishakti, a national master plan for multi-modal connectivity. It is a good step in that direction.

Today, logistics and warehousing companies operate on, Hub and Spoke Distribution Model and try to be in the vicinity of major transportation routes. TVS ILP's parks leveraging its locational advantage have become the hub of industrial goods distribution. 

The Sagarmala programme is expected to give birth to coastal logistics hubs. Will it provide further impetus to the warehousing and logistics sector? 

The whole focus of Sagarmala is to optimally shift the cargo from the origin where it gets generated to the final port of destination. The warehousing and logistics sector is dependent on cargo, and the same applies to coastal logistics hubs. Certain other dedicated facilities such as dedicated coastal berths must be developed at existing ports for such hubs to flourish. It must be noted that several coastal berths are under development at major and minor ports in the country. Regular traffic at the dedicated berths will open up opportunities for the warehousing and logistics sector.

As the scope of work under Sagarmala expands, TVS ILP could consider expanding its business to new strategic locations across various states and regions. 

It will definitely provide an impetus to the warehouse and logistics sector. In the current situation, most of the coastal metro cities enabled by ports are handling the highest cargo volumes. This cargo has to be transported to the hinterland, leading to lower efficiency. 

However, with the Sagarmala being implemented, many other cities shall come in focus for logistics business as well as industrial development. This will lead to a paradigm change in the cities from a warehousing point of view.

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