India Resets Logistics Sector to “Hub-and-Spoke” Model
Introducing a multi-modal program to reduce logistics costs and make the economy competitive, India has abandoned its previous “point-to-point” logistics model in favor of a “hub-and-spoke” one, where railways, highways, inland waterways and airports will in tandem to form an effective transportation grid.
Nitin Gadkari, minister for road transport and highways, shipping and ports said in an interview, “It is for the first time that we have taken an integrated approach for the country’s transportation. This will increase India’s exports, provide employment opportunities, will be cost effective, and will make goods cheaper in the country.”
The plan envisages setting up 35 multi-modal logistics parks at an investment of $10 billion for the development of 50 economic corridors. An investment template for the states and the private sector will be prepared. The infrastructure will include installation of cooling plants, cold storage facilities, warehouses, gas stations as also facilities for truck maintenance. These logistics parks will serve as hubs for freight movement enabling freight aggregation and distribution with modern mechanized warehousing space, reports Mint.