Roadblocks to Sustainable Logistics in India’s Auto Industry

This is an excerpt of the original article. It was written for the December 2018 edition of Supply Chain Management Review. The full article is available to current subscribers.

December 2018

It’s December and time once again for our annual Executive Guide to Supply Chain Resources. This is a comprehensive guide to services, products and educational opportunities targeted specifically to supply chain professionals. As with years past, we’re also featuring several articles we trust will offer food for thought in your supply chain in the coming year.

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A study carried out by the Malaysia Institute for Supply Chain Innovation (MISI) and the Indian Institute of Management suggests that the industry can use waterborne transportation to deliver more autos. Strategies such as encouraging more collaboration between stakeholders and targeting investments in water infrastructure could facilitate a shift from road to water modes. There are lessons that other developing countries could learn from the research findings.

Untapped potential

In 2017, roughly 4.6 million passenger and commercial automobiles were produced in India, out of which 3.7 million were sold domestically, according to the Society of Indian Automobile Manufacturers. The domestic industry is scattered across the country, but there are at least three main clusters of activity: One near the capital city of Delhi, another in the southern city of Chennai and a third cluster in the western states of Maharashtra and Gujarat.

About 95% of the autos produced are delivered through roadways on specially designed trucks, reports the SME Times, with the remaining units delivered through railways as long-distance cargo. Waterway-based logistics solutions are almost non-existent, and there have been few trials of the coastal shipping mode for the transportation of autos.

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