Given the national economic significance of freight efficiency in cities and the prospects of greater urbanisation, the government should provide financial support to cities.
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Freight transport refers to the total movement of goods from one place to another. Standard freight includes commercial goods, commodities, and bulk merchandise. Such freight could be moved by ship, air, rail, or road. Globally, ocean shipping is accountable for driving 90 percent of traded goods. Air freight transportation is the fastest but the most expensive within a country. Rail freight transport has the advantages of accessibility and lower costs. However, the shipment is time-consuming and sometimes the waiting queue may be long. Road freight transportation has the advantages of low cost and ready availability. However, all roads may not have the capacity to allow the smooth passage of large trucks and containers. In the context of cities, urban freight transport allows goods and commodities to be picked up and delivered to destinations in cities from where citizens and businesses can be serviced. Such goods have to contend with traffic, quality of roads, challenging routes, and local traffic policies.
Freight transport refers to the total movement of goods from one place to another. Standard freight includes commercial goods, commodities, and bulk merchandise.
Many strands of issues are intertwined in urban freight transport. Firstly, rising urbanisation would mean the increasing concentration of economic activities in cities. This is estimated to hike demand for urban freight transport by 140 percent in the next decade. Secondly, the first- and last-mile freight movements in Indian cities are accountable for 50 percent of the total logistics cost in India’s rising e-commerce supply chains. This is even though urban delivery, distance-wise, is the shortest leg among all stages of transport. However, urban freight is vital for the economy of a city. It provides products to citizens for consumption and businesses with materials they need to run their enterprises.
It is imperative, therefore, to make urban freight transport much more efficient than it currently is. This has significant value in terms of improving the competitiveness of Indian goods both in domestic as well as export markets. This also aids the Government of India (GoI)’s initiative, ‘Ease of Doing Business’. Unfortunately, city freight transport contributes significantly to environmental pollution. Urban freight is estimated to be accountable for 10 percent of India’s freight-related Co2 emissions and the biggest contributor to in-city transport-related Nox and PM emissions. Thus, the need to protect the urban environment also demands that urban freight transport be well-organised. Therefore, urban freight policy's key objective is to maximise the quality of goods delivery by doing this as quickly and as cheaply as possible and minimise the negative impacts on the city and the environment by keeping freight movement as non-polluting, non-congesting and as safe as possible.
It is imperative, therefore, to make urban freight transport much more efficient than it currently is. This has significant value in terms of improving the competitiveness of Indian goods both in domestic as well as export markets.
To improve urban freight transport in India, GoI decided in 2021 to identify 10 cities that could be developed as ‘Freight Smart Cities’. At the same time, state and city governments were encouraged to establish peri-urban freight centres and night-time deliveries, create truck routes, use intelligent transportation systems and modern technologies, and promote electrification of urban freight and parcel delivery terminals. Over time, GoI also planned to scale up the number of freight smart cities to 75 and eventually include all state capitals and all metropolitan cities, that is, urban settlements with more than 1 million population.
In September 2022, the Prime Minister launched the National Logistics Policy (NLP). The primary objective of the policy is to reduce logistics costs and improve the country’s logistics performance index ranking. Among its key objectives is to assist the development of city-level logistics plans along with an institutional framework. The NLP spelt out a comprehensive logistics action plan. It identified problematic issues and proposed solutions. Among its significant propositions was to develop a system of unified logistics interface to link multiple data sources and develop cross-sectoral use cases for logistics stakeholders, enhance interoperability, minimise handling risks, undertake process optimisation, and improve ease of doing business. From the specific point of view of cities, the NLP advised that each city should prepare a city logistics plan (CLP) and set up a city-level institutional framework to measure and monitor city-level action.
In September 2022, the Prime Minister launched the National Logistics Policy (NLP). The primary objective of the policy is to reduce logistics costs and improve the country’s logistics performance index ranking.
A city’s CLP will enable the local body to appreciate the nuances of urban logistics and identify the gaps that exist in it. The identification of deficits will allow the urban local body (ULB) to plan its future course of action in terms of infrastructure, technology inputs and environmental planning to improve urban freight transport efficiency. It would be critical for the ULB to engage in stakeholder consultations comprising the people, private players in the sector, and a wide array of individual and business consumers.
In urban transport, the attention of cities has been concentrated on public transport and car traffic. Road freight transport and its requirements have been a neglected area. The fact is that, as cited earlier, urban freight transport is enormously significant. On the one hand, it sustains productivity and living in cities and plays a vital role in servicing industrial and trading activities that generate city wealth. Enhancement of its efficiency has a significant impact on the cost of commodities consumed and industrial competitiveness. On the other hand, its environmental and health impacts on pollution and noise must be addressed.
In terms of imparting efficiency to urban transport, technology has a vital role to play. Technology can aid vehicle routing and scheduling. This would cut the distance that vehicles need to negotiate. They can assist in load planning systems that could improve the utilisation of vehicle load space. The technology could also help to organise the supply chain management systems that would guarantee greater consolidation of freight flows. This would result in fewer but larger vehicle consignments. Technology is also critical in promoting online shopping and home delivery services.
However, a whole set of problem areas lie in injecting efficiency into urban freight transport. Indian cities are notorious for economising on land they are prepared to put under roads. Most cities have, on average 10 to 12 percent of their land area under roads (barring exceptions such as Delhi with about 18 percent). That is almost half of the global norm. Bringing more land under roads post-development is both complex and highly costly. With high human and vehicular density on Indian city roads, urban freight transport is the first casualty as congestion is managed locally by restricting freight movement, either through time restrictions, vehicular size limits and permissible weight of freight carried by transport carriers. This offsets any improvements in the automobile sector in improving vehicle productivity through greater fuel efficiency and utilisation and vehicular emissions. Such restrictions do not help reduce costs or improve freight efficiency. A more daunting task before cities is finding money to improve their freight infrastructure. As most cities eke out a hand-to-mouth existence, they may not find any resources to put into tasks related to urban freight.
In such a situation, given the national economic significance of freight efficiency in cities and the prospects of greater urbanisation, it would be advisable that GoI, along with city-level prescriptions, backs cities up with resources. In the absence of such support, there is little that the ULBs would be able to achieve. It would also be advisable that states prescribe a minimum criterion set regarding spatial provision in land use planning for roads. Any city that does not abide by such a prescription may not have its master plan approved. Without such measures, as vehicular densities of Indian cities rise, traffic congestion is not likely to go down. Local restrictive policies would remain, and urban freight would continue to face the daunting challenges of time and cost.
Ramanath Jha is a Distinguished Fellow at the Observer Research Foundation.
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Dr. Ramanath Jha is Distinguished Fellow at Observer Research Foundation, Mumbai. He works on urbanisation — urban sustainability, urban governance and urban planning. Dr. Jha belongs ...
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