Overcoming India's Infrastructure Woes

With India's current logistics and transportation infrastructure better suited to handle the needs of the spice trade of the 18th century rather than the current global sourcing requirements of multinational organizations today, something must be done to bring the region's trading infrastructure up to 21st century standards if the country has any hopes of sustaining its current growth rates. And not all of these infrastructure problems stem from crowded, potholed highways (or a complete lack thereof). Rather, the lack of dominant national carriers and providers is also limiting growth. According to a recent article in Supply and Demand Chain Executive, "transporters with fleets smaller than five trucks account for over two-thirds of the total trucks owned and operated in India and make up 80 percent of revenues. The freight forwarding segment is also represented by thousands of small customs brokers and clearing and forwarding agents, who cater to local cargo requirements."

What will help India to overcome these challenges? According to the above-linked SDCEXEC article, India's 3PL market is set for a huge period of "explosive organic growth" to support market demand. But 3PLs alone will not be enough to speed up the movement of goods internally and externally in India. Given that the "national highways form only 2 percent of the entire road network in India but handle over 40 percent of the national road freight traffic" road build-out will critical. Increased speed limits will also help as well, considering that "on average a commercial vehicle in India runs at a speed of 20 miles per hour compared to over 60 mph in ... Western Europe and the United States." IMHO, mandatory cow bells might also speed-up traffic as well.

-Jason Busch

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