The road, railway, and shipping ministries recently signed a Memorandum of Understanding (MoU) to develop Multi Modal Logistics Parks (MMLP). The agreement was signed under Bharatmala Pariyojana.
Who signed the MoU?
The agreement was signed between RVNL, IWAI, and NHLML.
- RVNL: Rail Vikas Nigam Limited
- NHLML: National Highways Logistics Management Limited
- IWAI: Inland Waterways Authority of India
The objective of the MoU
The objectives of the agreement are as follows:
- To reduce logistics costs in the country from 14% to 10% of GDP
- Centralize freight consolidation
- To improve the standards in the country at par with international standards
What will the MMLP do?
- According to the MoU, the MMLPs will handle freights
- The parks will be accessible through rails and roads
- The MMLPs will have cargo terminals, material handling facilities, warehouses, container terminals, and cold storage
- The MMLPs are to adopt technology-driven freight management systems
- They will provide value-added services such as labeling, repackaging, and packaging
The special feature of the MoU
The MoU aims to make the MMLPs a one-stop solution for cargo movements such as parking, custom clearance, maintenance of trucks, etc.
Developed under Hub and Spoke model
The MoU says that the MMLPs are to be built under Hub and Spoke model.
The Hub and Spoke is a distribution method. The model has a centralized hub. The goods are either transported to the hub for distribution or originate in the hub. They are then distributed to smaller companies from the hub. These smaller companies or sub-locations are called spokes. At spokes, the goods are processed or distributed to towns and villages.
Outcomes
The MMLPs will help in improving the efficiency of freight movement in the country. It will also increase the warehouse capacity of the country.