Logistics in Karnataka.
The economy of any nation depends on a lot of factors, some discernable, some hidden. Logistics and transportation sector comprises a major stake in developing economy, there is no denial of this fact. Take a look at the industries which depend upon logistics for product or raw material maneuverability. Automobile, retailing, healthcare, Industrial goods, food & Grocery and the list goes on, all of these manufacturing giants depends heavily on transportation and keeping products on the move around the clock.
Indian Logistics sector is estimated to have grown at a flourishing 15 percent in last five years with Empirical evidences suggesting the growth at 1.5-2 times the GDP growth. Having said that, the growth seems quite evident given the fact that India spends 14 percent of its GDP,making it the second most capital investing country in logistics and transportation sector after China. Being one of the most propelling field of development, the sector offers lush opportunities across a wide spectrum for companies which are into transportation, warehousing, packing & distribution and allied services. With several factors influencing the rate of growth including ramping up in transport and storage infrastructure, E- commerce penetration and many more, Government ‘s constructive steps to revive GDP and impending GST implementation has aided the existing and budding entrepreneurs in logistics industries to a great extent.
The South-western Logistics Scenario
Karnataka is the eighth largest state of India, geographically. The state expects a significant growth which is likely to hike up to 2.80 Crore around the next decade from current 2.08 Crore. According to Survey of Industries, the share of Karnataka in net value added was 7.80 percent making it the seventh highest contributing state in the country. The transportation and logistics industry sector comprising of storage, distribution and supply chains is a key driver of the state’s competitiveness in domestic and international market. Being a contributor of 5.2 percent of the sub-continent’s GDP, share of tertiary sector has more than doubled from 24.8 percent to 56 percent, thanks to service sector boom. Primal industries dependent on Logistics in Karnataka are- Agriculture/ Horticulture, Iron Ore, Steel plants, Cement Factories, Automobile/ Auto components, Textiles
Modes of Transportation
Transportation of cargo is basically carried out by four modes- railways, Road ways, Air ways and Sea. Being near to Water body, in Karnataka, goods are transported predominantly by roadways, railways and water ways. The total road network in the state being close to about 60,000 km and the railway network around 3000 km. Roads carry about 70 percent of the freight in the state connecting Karnataka to neighboring states and other parts of India through 14 National highways which comprises for 6 percent of total NH network in India. The district centers are connected with each other through 114 State highways.
Karnataka has five operational airports located at Bengaluru, Mangalore, Hubli, Belgaum and Torangallu. Currently only Bengaluru and Mangalore airports cater to domestic and international destinations while rest of the airports cater only to domestic destinations.
Having endowed with a vast coastline of around 300 kilo meters, the state has favorable strategic port locations which makes “through water” transportation possible easily. At present, there is only one major port in Karnataka- The New Mangalore Port. Situated at the southern end of the coastline and hence predominantly being utilized by the southern districts of the state. The coastline between karwar and Mangalore is lined with several minor ports, although not ready for huge transporting exploitation.
Karnataka has nine transshipment centres catering to the imports and exports of the state. The bulk of import and export cargo is handled through the Inland Container Depot, Bengaluru International Airport and the ports at mangalore.
E-Commerce role
Ever thought what makes your online shopping so easy and hassle free? One call and a touch of your smartphone is enough to deliver from a smaller thing as pin to a whole set of sofa. With increasing more and more of E Commerce giants from shopping companies to Food delivery startups, Logistics and transportation industry has become the backbone of these companies. The evolution of logistics sector has seen an interplay of three most vital factors- Infrastructure, Technological innovation and wide spread network of services. Bottlenecking some of primal constraints of logistics industry have somewhat stifled the sector’s growth. Inefficiencies due to high transit time and capacity constraints over the shipments in Railways are a major factor which could be improved. Another constraint which is holding back the sector is Administrative delays. With a slow fashion in paper works, logistics cost becomes high leading to huge inventory investments and wastage with a complex tax structure. Low penetration of advanced technology in supply chain process is resulting in slowing down too.