LOOKING BEYOND COAL DIVERSIFICATION OF FREIGHT BASKET FOR SUSTAINABLE LOGISTICS MIX

BY: K AUST UVA D I PTA PANY

I RTS (P) 2 015

CO2 Emission of various modes of transport

PASSENGER (GM/PKM) FREIGHT (GM/TKM)

PASSENGER CARS – 175

RAILWAY - 75

AIRWAYS - 229

ROAD – 160

RAILWAY – 29

SHIPPING -31

Need to move from truck to rail and inland shipping, which is 5-6

times less carbon intensive

Sustainable Commodity Mix- Advent of DFC

Potential Commodities

Bulk Oilfield

Equipment(POL)

Automobile

White goods, e-Commerce

fly ash, edible oil, caustic soda, chemicals, petrochemicals,

alumina, bulk cement, marble, glass,molasses

RAILFRESH

refrigerated goods (shrimp export, AMUL trains for

perishable commodities), horticulture (fruits & vegetables)

Upstream oilfield equipment: Is it the next bulk traffic?

The O&G Industry is Zero-Basing its Supply Chain. Rail-Freight can Emerge as a Strategic Control Lever

Railways use 1/3rd fuel compared to

road transport and is safer from a

per/km travelled perspective

Several Factors are Disrupting Supply Railways: The Knight in Shining Armor

Hyper-cyclicity in oil prices mandates

frequent Mobilization/De-Mobilization

of tools and services

The industry is coping with aggressive

emission reduction targets via

agreements such as COP21

Technological advancements in enhanced

oil recovery and fracturing are allowing

more production from existing fields

Rail-freight offers a cost effective

transportation option at 50% of

trucking costs

Ability to add more rakes allows supply

chain agility to transport sand and

polymers needed for fracking & EOR

Is Oil and Gas industry ready to collaborate? Win-win situation for both?

Volatility

• Volatile but range bound oil prices

Uncertainty

• Regulations, governments, OPEC, geopolitics

Complexity

• Multiple moving parts, Many different vendors/products

Ambiguity

• Growth of renewables and rise of electric cars

Is the drop in crude oil price from the

highs of 2014

Bulk cargo in POL segment

Oil field equipment containerisation:

• Drill pipes

• Drill collars

• Frac sands & proppants

• Steel coils

• Heavy machinery

According to EIA study estimated the amount of upstream truck trips required for just one multi-well

pad (assuming two rig and equipment deliveries for 8 wells) to be between 5,850 and 8,905 trucks

Potential OD pairs

• Mundra, Kandla Port to Barmer (Cairn Energy)

• Kolkata Port to Guwahati (ONGC, OIL) serving north-east

India saving a significant amount of transit time over

roadways

Potential customers:

ONGC, OIL, Cairn India, Schlumerger, Halliburton, Baker Hughes

CAN OUR MODIFIED BOY WAGON & Foldable bulk head-BFNS/BOST BE USED?

PIPELINES-EUR /Modified BRN WAGONS

FRAC SAND WAGONS

Indian Context- Modified BCCW Wagon for Frac sands

Containerized White Goods + e-Commerce

•GATI/DHL VPU trains for courier service

•Twice a week timetabled ecommerce container train for different customers through aggregation

Chartered Cargo Train

• leasing out rolling stock as per agreed schedule to a private

operator

• levying only haulage charges allowing operator to fix their

tariff according to market conditions

Automobile segment-Potential OD pairs

Manufacturing hubs - Pune, Chennai, Sanand, Maruti plant – Gurgaon to metros

Focus on Specialized Rolling like BCACBM/NMG (New modified goods)

Concept of moving dump yards • Delivery of new cars using Kandla/Mundra port and rail connectivity and then bring back

used cars for recycling to Alang

North east-Guwahati takes six days by rail compared to 14 days by road

International freight linkage- CONCOR to Bangladesh

Electric cars transportation in the future- get your wagon charged while you are transported

Issues -specialised ramps for multi-level loading of the wagons & rail terminals that handle finished vehicles often do not have sufficient space for aggregation and truck manoeuvring.

Automobile segment DETROIT- Automobile terminal

Despatch: 700 per day by rail

Agri-Logistics – ’’Rail Fresh’’

Rail Transport requirements-

• Reefer Stock

• Aggregation

• Temperature Controlled Warehousing

• Modified refrigerated luggage vans

• Clone trains/long hauls for horticulture produce

• Refrigerated goods

Challenges transformed into opportunities

• More investments may be needed for port connectivity routes.

• Prepare dynamic demand and supply matrix

• Tariff based on input costs

• Le erage rail ay’s stre gths i lo g haul a d ulk.

• Introduce differential pricing in the bulk segment

What Should Be The Strategy?

Thus, Sustainable Logistics is both a responsibility and an opportunity

• transforming rail ays as a ful ru i I dia’s gree tra sportatio grid y di ersifyi g the commodity basket

• tying up with logistics providers & freight forwarders to aggregate diversified freight basket.

• Investment in technology to ensure service predictability and cargo control to the last mile

• setting up of Logistics Corporation.

• reset of I dia’s logisti s se tor fro a poi t-to-poi t odel to a hu -and-spoke odel.

Thank you Please write to me regarding questions, feedback and suggestions at kdpany@gmail.com