January 6 , 2022
8 mins read

What Is a Logistics Park and What Purpose Does It Serve?

Punit Chotia
Punit Chotia
What Is a Logistics Park and What Purpose Does It Serve?
What Is a Logistics Park and What Purpose Does It Serve?
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In the industrial sector, companies stored their goods in warehouses during the earlier days. With changing times and growing industrial demands, the use of warehouses is rapidly going down. The reasons attributed to the same include frequent instances of mismanagement, heavy taxes, lack of insurance covers, etc. It puts undue pressure on company resources. More often than not, these warehouses are not well maintained, and the expense of their upkeep is also quite high.

That is where a logistics park steps in!

What is a Logistics Park?

There are specific industrial areas where different activities relating to logistics, transport, and distribution of goods take place. Such an area is known as a logistics park. Through such parks, international and/or national transit can be carried out by different operators. There are multiple facilities within that area, including storage areas, break-bulk centers, warehouses, offices, etc. These facilities are owned and used by operators. The logistics parks are steadily growing in popularity and catching the attention of several manufacturing companies.

The design of this entire area is such that it helps in the efficient control and storage of goods and services. The operation covers processes right from the production point to consumption centers. The operational functions involve planning, implementing, and controlling the efficient flow of goods and services.

The location of a Logistics Park is always strategic. It has the best road and rail connectivity. There is ample space for vehicles and constant security. Logistics companies have the option of taking up leasable space in the premises or choosing the services offered by various warehouse service providers within the same park.

There are two significant functions of such an industrial park which make it possible to offer a wide range of services. The first is the logistics organization, and the other is logistics management functions.

What is the need for a logistics park?

A logistics park is necessary for several reasons and comes with plenty of benefits. Let’s take a look at some of those:

The requirements of demand and supply within the industry can be easily met on time with the help of a logistics park. Logistics service providers can plan out their inventories without any problem. The services offered in a logistics park also cater to the needs of other industries. For example, construction companies, equipment suppliers, trucking companies, consultants, etc.

Logistics parks are located in industrial belts, i.e., near ports, airports, and inland container depots. As they are connected through all essential means of transportation, the shipping and transferring of goods becomes very easy.

Logistics parks are constructed over a large area for the storage of goods and products. Those are way larger and better managed than regular warehouses. The warehouses and cold-storage facilities are here state-of-the-art. The roads within the premises are sufficiently wide for free flow of traffic round the clock. The area is suitable for accommodating multiple customers and logistics businesses for further expansion.

The management of a logistics park includes general maintenance, landscaping, waste control, and security. The entire area is covered with the necessary security arrangements. Other amenities are also available, including accommodation, office space, banking and insurance, catering, and other service facilities.

The system of a logistics park is such that middle-men are marginalized or eliminated leading to the streamlining of the supply chain. Logistics services, particularly goods transport, become cost-efficient. All these features combined have the potential of promoting growth expectations in freight.

The setting up of a logistics park’s infrastructure promotes economic growth by attracting businesses, which results in the generation of employment. Moreover, the reduction in the number of trucks on roads enables the improvement in environmental quality.

Top logistics services providers in India

The logistics sector has witnessed immense growth in the last couple of years. Innovations have majorly contributed to this growth. Let’s take a look at some of the prominent logistics companies in India:

  • Allcargo Logistics Ltd.

This well-known logistics company was founded way back in the year 1993. Based out of Mumbai, it has consistently performed well in the industry. It primarily offers multi-modal transportation services. The company has more than 300 offices and operates across 160 countries.

  • Blue Dart Express Ltd.

This company reaches approximately 35,000 pin codes across 220 countries. Their USP is that numerous services, such as COD, automated proof-of-delivery on fulfilment, express delivery, slot-based delivery, etc., are bundled together for the ease of customers and availing services.

  • Container Corporation of India Ltd.

This company is mainly engaged in the operation of logistics facilities, including private freight terminals, container freight stations, and dry ports, among others. Some of its domestic services are door pickups/delivery, volume discount scheme, terminal handling, etc.

  • Apollo LogiSolutions Ltd

Set up in 2009, this firm is new but has already garnered a reputation for providing end-to-end integrated logistics services through its global network.

  • Mahindra Logistics Ltd.

This company offers logistics services to both external and internal customers. Apart from providing inbound and outbound logistics, it also offers customized services to various organizations in transporting the employees from home to work and back.

  • Transport Corporation of India Ltd.

Founded in 1958, this company is one of the earliest logistics companies set up in India. It is an integrated supply chain and logistics

Importance of technology for transportation in India

At present, India’s logistics costs are approximately 13% of the Gross Domestic Product (GDP). There is sufficient room for improvement. Technology has the potential for empowering the transportation industry, particularly in the backdrop of the COVID-19 pandemic. There is a steady emergence of a low-touch economy that is making sure that services are rendered remotely at high speed and scale.

In the context of a logistics park, it becomes necessary to improve asset and people productivity. It would also require a reduction in costs and cutting of waste. Digitalization becomes highly important for effective route planning. In addition, there have to be seamless linkages with the associated sub-sectors in every logistics park. All these have a cumulative impact of improving customer experience and safety while reducing pilferage. The additional benefits involve gaining access to new markets and better environmental performance.

Within the present logistics costs of India, 70% of freight moves by road. The cost is around ₹2.58 per tonne-km. In comparison, ₹1.41 per tonne-km is incurred for railways, and ₹1.06 per tonne-km by waterways. Adoption of technology becomes crucial to increase logistics competitiveness through the development of inland waterways and ports. It enables the increase in goods transport by competitive modes.

Take a look at how technology impacts the different modes of transportation in India:

  • Roads and vehicles

These days, autonomous vehicles, with sensors, actuators, and microcomputers, are increasingly making their way on our roads. The sensors connect one vehicle to another, as well as the surrounding infrastructure. It not only helps smoothen the traffic flow but also prevents collisions. IOV or the Internet of Vehicles assist in timely maintenance apart from using acoustic sensors for managing traffic flows. It also reduces emission intelligently.

  • Railways

The railway sector is evolving fast to compete with shipping for freight. Technology covers a lot of ground. It includes enhancement of infrastructure and network capacity, improvement in operational metrics, and reduction of waste. It is only recently that Indian Railways started using 3D printers for designing and printing coach components. Another important development in railways is the usage of IoT or the Internet of Things, leading to Hot Axle Box Detection. This technology detects critical conditions in freight wagon axles quickly and helps prevent serious failures and consequential accidents.

  • Airports

IoT is applied for infrastructure development in airports. It improves the safety and security among various teams like crew transportation, security, ground support, etc. Furthermore, it enables closer coordination among the teams. This reduces aircraft turnaround time and makes way for more take-offs.

  • Ports and inland waterways

The digital revolution has already started in India’s different container ports. For example, sensors monitor all movements in ports, facilitating higher traffic levels. The introduction of technology is mainly in the form of IoT helps in predictive maintenance of various assets, energy saving, and checking of pipeline corrosion for preventing hazardous leaks. Drones now help with video streaming and image processing round the clock, ensuring constant vigilance.

Regarding the whole transportation system, the future holds - autonomous aerial vehicles, vehicles as computers on wheels, Hyperloop, greening, and energy efficiency, advanced traffic management, and fully integrated multi-modal logistics. All these together have the potential to disrupt how transportation services providers operate.

Technology-enabled logistics parks in India

Under the monitoring of the Ministry of Road Transport and Highways and the National Highways Authority of India, Multi-Modal Logistics Parks (MMLPs) are being developed. The core objective is to improve the freight logistics sector. MMLPs are technology-intensive. Following are some applications of cutting-edge technology -

  • Blockchain

A large volume of documentation is involved in procurement, transportation, order tracking, and customs collaboration, not to mention the subsequent verification of such documentation. It is in this aspect that the application of blockchain technology becomes crucial. Blockchain is a distributed ledger system shared by relevant parties, the entries to the ledger being in the form of blocks. These blocks are synchronized across the network and cannot be changed once registered. If any alteration is required for the entries, another block has to be substituted with the desired adjustment. The design of blockchain makes it impossible for data fabrication. Technology is optimizing the time and costs associated with documentation. Information sharing is protected, and there is higher transparency.

  • Machine Learning (ML) and Artificial Intelligence (AI)

Artificial Intelligence is the parent technology of Machine Learning. It is used for the automation of the supply chain to gather insights from a large volume of data, with insights related to tracking, backend of logistics, internal functions, etc. With the streamlining of the supply chain, the turn-around time for different processes also decreases in every logistics park.

  • Internet of Things (IoT)

IoT has proved to be highly useful for tracking. Monitoring of packages is on a real-time basis with the help of GPS, RFID tags, and specialized sensors. Bottlenecks in the supply chain are eliminated by geotagging, geofencing, proximity alert, etc.

  • Augmented Reality

Augmented Reality and Facial-Recognition Technology address the security threats that arise in the case of high-value consignments. Building recognition and indoor navigation are paving the way for last-mile delivery.

  • Autonomous transport

E-vehicles like autonomous ships, drones, and self-driving cars are the future of logistics. Approximately 20% of current fuel costs can be saved by aiding transportation, warehouse operations, and last-mile deliveries.

Services offered at a logistics park

A logistics park provides a connection between the production centres and the consumption markets. The major operations of the facility include warehouse operation, warehousing space services, transportation through efficient distribution services, among others. A logistics park offers storage spaces to businesses and allots areas for businesses within their premises, extending a wide range of facilities in the same areas.

Suitable warehousing solutions are available, along with efficient and modernized transportation connectivity. These lead to higher efficiency in the supply chain and cost savings. The Government of India is trying to improve efficiency and reduce logistics costs by at least 10%. The MMLPs are expected to serve four main functions, including appropriate distribution of freight, facilitation of seamless freight movement, and a wide range of value-added services. The amenities of these parks help the businesses in re-configuration, storage, and distribution, among others. With the advancement of technology, the infrastructure in every logistics park will also undergo a rapid transformation and pave the way for innovation.

Conclusion

There are a few things that you should note while looking for a logistics park for lease, such as:

1. Make sure the logistics park has been developed by firms having global expertise and network.

2. Make sure that the designs and technologies are custom-built for a particular facility, apart from being just efficient.

Once you have sorted out your logistics park needs and are ready to transport, head on over to Vahak! The Vahak transport app is every transporter’s preferred platform for finding loads and lorries. With the logistics services sector having gone digital, it is important for transporters to grow their business online. Register your business on Vahak, find 10,000+ loads and lorries and say goodbye to your logistics problems!

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