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Logistics Park: The Core of Logistics Operations

sahil bajaj

Sahil Bajaj

Senior Specialist - Marketing @ Shiprocket

April 8, 2024

8 min read

Logistics parks have earned popularity in different parts of the world among businesses operating in various industries. They allow companies to operate efficiently and serve customers in local as well as international markets. Businesses using these industrial spaces agree that freight distribution has become easier for them as they facilitate efficient organisation and management of inventory. The concept of logistics parks caught the attention of the Indian Government owing to the increasing logistics cost in the country. It has been observed that our logistics cost is way higher compared to the countries where businesses are using logistics parks. In an attempt to reduce this cost, the Indian Government plans to develop Multi-Modal Logistics Parks (MMLPs) in various parts of the country.  The National Logistics Policy of India aims to decrease the country’s logistics expense from 14% of GDP to below 10% by investing in logistics parks.

In this article, we have covered all that you need to know about a logistics park. From its layout to the advantages it offers and how it will shape the future of businesses, you can learn all about it as you read through it. We have also shared information about the upcoming logistics parks in India and the country’s national logistics policy.

Logistics Park in India

Logistics Park: A General Summary

A logistics park provides space to businesses for storing their inventory. It allows business owners to manage their goods systematically and carry out activities such as assembling, packaging, processing, and distribution. These facilities are also equipped to enable companies to manage light manufacturing of products. They have high-security systems in place to keep your inventory safe. They also offer warehouse optimisation for better management of your inventory. Also known as multi-modal logistics hubs, these spaces offer good connectivity to major roads, national highways, railway stations, and seaports. This way the goods transportation can be done smoothly and its cost can be reduced substantially.

Layout of Logistics Parks

Logistics parks are strategically located near industrial areas, mainly the major manufacturing units of a city. They usually include an integrated transportation terminal to facilitate intermodal transport. A large area of land forms the basis of a logistics park layout. It includes dedicated sections for the storage of inventory, packaging, re-processing, labelling, unitisation, and other activities offered at the park. Special space is constructed for the warehousing of goods that require a temperature-controlled storage environment. Open stockyards, transport depots, and fuel pumps also form a part of these facilities. Many of them also provide accommodation facilities for the labour.

The Operations Centered on Logistics Parks

Different kinds of operational activities can be managed in a logistics park. Here is a look at some of these:

  1. Warehousing of goods is the primary task that can be managed in a logistics park.
  2. You can employ your staff members to assemble your products at these huge facilities. They mostly provide a separate section where you can carry out this task.
  3. Activities such as packaging, labelling, and re-processing are also done here.
  4. Consolidation and de-consolidation, transshipment, inter-modal transportation, and distribution are among the other tasks that can be handled at these parks.
  5. Many of these facilities also enable you to accomplish services such as customs clearance.

Role of Logistics Park in Enhancing Supply Chain

Logistics parks play a vital role in enhancing supply chain management. Here’s how:

  1. Fulfill All the Logistics Requirements

Logistic park fulfills all the logistics requirements under one roof by providing huge warehouse spaces for conducting different logistical activities. Different sections are allotted for storing different kinds of items. They also include office working spaces where your staff members can carry out essential logistics tasks. Transport depots also form a part of these large spaces. So, loading, unloading, and distribution can also be done from here. The cost involved in managing the supply chain is thus brought down substantially with the use of these facilities.

  1. High Security

Logistics parks are laced with high-security systems. This ensures that the goods of different companies remain safe inside these large spaces. Security alarms, cyber security software, fire extinguishers, CCTV cameras, and other safety measures are in place. The security personnel are well trained and deployed across the logistics park to keep an eye on all the activities happening in and around the same.

  1. Use of Advanced Technology

These spaces make use of the latest automated solutions to ensure seamless operations and maintain high security. The advanced digital platforms used here connect buyers, sellers, and distributors to ensure easy communication and hassle-free transactions for efficient supply chain management. These digital solutions help them track shipments in real-time and promote transparency.

  1. Sustainability Factor

A logistics park enables the carrying out of multiple activities within a huge building. Moreover, these parks are located at places that are well-connected to national highways, railway stations, airports, and seaports. This helps cut down on fuel consumption, thereby bringing down the emission of harmful gases. Thus, they help reduce the carbon footprint.

Why Location Matters for Setting Up a Logistics Park?

When it comes to setting up a logistics park, the government identifies the ideal location based on the below-mentioned considerations:

  1. Transportation of Goods

Since goods will be shipped for distribution from this point, a logistics park’s location should be such that they can be transported quickly and smoothly. As stated above, areas that are well-connected to main roads, highways, railway stations, and other such places serve as ideal locations.

  1. Security Reasons 

The land selected for setting up a logistics park must be a part of a safe neighbourhood. The area should not be prone to burglary or other criminal activities. With so many valuable goods stored inside, it is imperative to ensure that the place is devoid of such crime even if the government aims to equip the facility with a high-tech security system.

Advantages of Building a Logistics Park

Here is a look at the various advantages of building and using a logistics park:

  1. Lower Transportation Expense

Research shows that logistics parks help in lowering transportation expenses by around 10%. This is not just because they boast good connectivity but also because they enable moving huge quantities of goods together in bigger trucks.

  1. Customised Storage and Distribution Solutions

Logistics parks offer different kinds of warehousing solutions including cold storage, conventional storage, and product-specific storage. There are customised solutions to match the specific requirements of different businesses. They also provide different facilities to transport a variety of goods.

  1. Reduction in Pollution Levels and Traffic Congestion

Logistics parks help avoid the use of smaller vehicles to transport different items. As they use large-sized trucks and trains to transport goods from one place to another, the pollution level decreases and so does the congestion on roads. As per MoRTH, there can be a reduction of 12% in CO2 emissions if large-sized vehicles are employed for goods transportation.

Upcoming Logistics Parks in India

The central and state governments of India have announced several schemes to encourage the development of logistics parks in the country. Here are some of the locations where logistics parks have been planned as per the Logistics Efficiency Enhancement Programme 2017:

  • Delhi – NCR
  • Mumbai
  • Guwahati
  • Patna
  • Raigad District
  • Raipur
  • Surat
  • Hyderabad
  • Bhatinda
  • Sangrur
  • Vijayawada
  • Kochi 
  • Nagpur
  • Jaipur
  • Kandla
  • Bengaluru
  • Pune
  • Rajkot
  • Solan
  • Ambala
  • Jammu
  • Valsad
  • Hisar
  • Kolkata
  • Chennai
  • Kota

The National Logistics Policy of India

Here is a look at some of the aspects of India’s National Logistics Policy which was launched in 2022:

  • Integrated Digital Logistics System – This is meant to ensure digital integration of systems used by various departments such as railways, road transportation, commerce ministries, commerce, foreign trade, and aviation.
  • Appointment of System Improvement Group – A system improvement group for monitoring logistics-related projects.
  • Unified Logistics Interface Platform (ULIP) – This is for the smooth movement of cargo and getting information about the same in real-time.
  • Ease of Logistics (ELOG) – This is to ensure transparency and accessibility to ease the logistics business.

How Businesses Can Benefit From a Logistics Park?

Logistics parks are meant to improve the logistics infrastructure and transportation quality for businesses. They do so by providing customised warehousing solutions in addition to dedicated areas for conducting activities such as packaging, processing, distribution and even manufacturing. Businesses can carry out these tasks at a substantially lower cost when they choose a well-equipped logistics park. These facilities help businesses enhance their supply chain by fulfilling their logistics requirements with the use of the latest technologies.

How Will Logistics Park Shape the Future of Businesses?

Logistics parks provide customised logistics solutions for businesses and help optimise the supply chain process. You can choose the space specific to your needs and carry out your operations with ease in these well-equipped facilities laced with high-security systems. They are not just beneficial for businesses but also ecologically sound as they help reduce pollution levels. These facilities are likely to become the backbone of numerous big and small businesses in the times to come. They will provide support and boost business growth by offering personalised solutions.

Conclusion

Logistics parks serve as a hub for carrying out logistics operations in a quick and hassle-free manner. They provide a supporting environment to help businesses flourish. The need for logistics parks is being felt by the Indian Government and thus there are plans to set up these huge facilities in different parts of the country. It will not only reduce the logistics and operational costs of businesses but also help in the growth of the Indian economy. The plan to develop Multimodal Logistics Parks aims at improving India’s logistics infrastructure and services.

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