Freight Traffic Impacts and Logistics Inefficiencies in India: Policy Interventions and Solution Concepts for Sustainable City Logistics

The primary aim of this paper is to present a comprehensive review of the freight traffic impacts and logistics inefficiencies in India, which is an area of significant practical and research interest in the context of coordinated global efforts to reduce transport emissions. The following are the specific research questions explored in this review:

An overview of the review questions, methodology and the discussion structure adopted in this paper is presented in Fig. 1. As can be seen, the first research question (RQ1) is designed to map the extent of literature related to freight transport planning in India through a review of published literature, policy documents, and reports. The second research question (RQ2) follows from the previous question as it is to analyse and discuss the freight system performance in India based on the papers identified and screened as a part of RQ1. The third research question (RQ3) is to discover the underlying reasons contributing to logistics inefficiencies in India as a logical extension of RQ2. The fourth research question (RQ4) is to assess the environmentally negative externalities of freight transport, going beyond the operational efficiency focus in RQ3. The final research question (RQ5) is aimed at discussing the potential solution concepts in practice across the world to improve the freight system performance (RQ2), logistics inefficiencies (RQ3), and negative externalities (RQ4) in India.

To ensure the review covered the most recent published literature on freight in India, Scopus, Web of Science, and TRID were combined with Google Scholar. The initial search used the general keywords ‘freight transportation/transport’ but this was later narrowed down to ‘India’, and subject areas ‘engineering’, ‘social sciences’, ‘environmental science’, and ‘decision science’. The search process was repeated using additional keywords of interest to this study, such as ‘logistics inefficiencies’, ‘freight traffic’, and ‘freight system performance’. Only peer-reviewed articles (including both review and original papers) were considered but these were combined with grey literature reports and government (e.g. Government of India) and international organizations (e.g. the World Bank) publications. The initial 290 unique records published between 1990 and 2020 were screened and purged down to 49. Many papers were irrelevant to the present study, as they dealt with issues unrelated to the research questions posed, despite having come up in the search exercise. The limited number of relevant papers found in the published literature underline the urgent need to focus on these research problems.

The papers that survived the pruning were papers published in the following journals: Transportation Research (TR) Part A, TR Part B, TR Part C, TR Part D, Transport Policy, Transportation, Transport Geography, Transportation Research Record, Research in Transportation Economics, Travel Behaviour and Society, Sustainable Cities and Society, Transport Reviews, Journal of Cleaner Production, Energy Policy, Transportation Research Procedia, KSCE Journal of Civil Engineering, Transportation Letters, and Research in Transportation Business and Management. To quantify the extent of literature relevant to freight transportation in India (RQ1), the number of papers published in each of these journals is presented in Fig. 2 and the total number of publications in each year is presented in Fig. 3. As can be seen in Fig. 3, there has been substantial growth in freight studies since 2018. This jump in the number of papers underlines the increased research attention given to this topic area in recent years. Out of the 49 papers, 41 were published in Elsevier journals (83.67%), 3 were published in Springer journals (6.12%), 3 were published in Taylor and Francis journals (6.12%), and 2 were published in SAGE journals (4.08%). The 49 papers can be categorized into four areas: (1) development of disaggregate-level freight demand estimations at seaports [5, 6] or urban establishments [7‐11], (2) development of aggregate-level freight generation [12, 13] or distribution models [14], (3) design of establishment-based freight surveys [15, 16] and zoning systems [17‐20], (4) analysis of freight transport parking practices [21], emissions [22, 23], expenditure patterns [9, 24, 25], and logistics sprawl [26]. Since the relevant statistics on freight system performance (e.g. modal share, logistics cost) or specific logistics inefficiencies related to India were missing in these publications, the review scope was also extended to collect aggregate-level data from publicly available sources, such as the Logistics Performance Index from the World Bank [39] and the Freight Transport Indicators from the OECD [38]. Additionally, policy briefs and reports published by government agencies in India were also referred to gain insights into the status of freight transport policies. The Indian Government National Transport Development Policy Report [27] was reviewed with the aim of capturing the policy discourse. The discussion derived from the identified literature follows the structure shown in Fig. 1. The thematic discussions on three specific topic areas are provided in the next three sections: freight system performance in India (RQ2), logistics inefficiencies in India (RQ3), and negative externalities of freight traffic in India (RQ4). The solution concepts for the issues identified in the thematic discussions are discussed in the penultimate section. The final section concludes this paper.

In line with the rest of the world, freight transport is undergoing important changes in India, most of which are simply a result of market trends, and most of which are already shaping and will continue to significantly shape the way freight transport performs in the future. This section is devoted to scrutinizing these trends, putting them in context, and understanding their potential impact in the short and medium term.

The Indian economy is growing rapidly, partly thanks to its ongoing industrialization. One of the consequences of this is that freight movements are growing exponentially—both in the last-mile and long-haul trucking sector [27]. A major share of this demand is carried by road transport due to the flexibility provided for first-mile and last-mile logistics. The freight transport sector in India, as a result, is heavily skewed towards road transport with a modal share of 64% [28]. This compares with 75% in Europe [29] and 63% in the USA [30]. The historical trend of modal share between road, railways and inland waterways is presented in Fig. 4 using secondary data publicly available from a report published by the “Sustainable Urban Transport Project”, an organization devoted to the study and promotion of sustainable transport in urban areas [31]. The rail market share, as it can be seen, has gradually declined over the years. This trend is concerning because the economies of scale for bulk cargoes can be better achieved using a combination of railway, inland waterways, and coastal shipping. In 2018–2019, freight mode share in India stood at 27% rail, 64% road, 5% coastal shipping, 2% inland waterways, and less than 1% air (plus a 2% via pipelines for gas, water sewerage, etc.) [28]. Considering the less than optimal rail share, Indian Railways, a government entity under the Ministry of Railways that operates India’s national rail system, has set a target of having at least a 50% share of the country’s freight traffic by 2030 [32]. To achieve this, Indian Railways is investing heavily on network expansion projects and dedicated freight corridors. The strategic planning of these large-scale projects requires accurate freight demand models [24, 25, 33, 34].

Achieving an efficient modal share is important for a country and the environmental impacts of different transport modes are evaluated in several studies [35]. An efficient modal share is one that maximizes volumes transported and does so at the minimum social cost, to include not just time and vehicle operating costs, but also externalities, especially noise, air pollution, climate change, caused by greenhouse gas (GHG) emissions, and accidents. For example, large, regular flows of goods with low-value density are historically suited for transport by railways, because: (i) origin/destination points tend to remain the same; (ii) commodity fragmentation can be avoided, and (iii) emissions can be minimized. Medium-valued goods are also increasingly transported by railways due to the availability of modern intermodal services around the world [36]. Due to significant economies of scale, railway or inland waterways have the potential to move these goods at a much lower unit cost than trucks with far lower GHG emissions and cost variability. A recent comparison of freight mode performance in India [37] suggests that the unit costs of moving goods is highest for road transport (2.58 INR/ton-km or 3.4 US cents/ton-km at April 2022 exchange rates), followed by railway (1.41 INR/ton-km or 1.86 US cents/ton-km at April 2022 exchange rates) and waterways (1.06 INR/ton-km or 1.40 US cents/ton-km at April 2022 exchange rates), respectively. Despite the high unit costs and road freight externalities, freight transport is road dominated in India (and other regions of the world such as Europe and the USA, as already highlighted above) because it offers greater delivery flexibility and shipment size. This trend is reflected in the growth of (road) freight transport in emerging Asian countries, such as China and India, as shown on Fig. 5. The data were collected from the OECD Freight Transport Indicators Database [38]. The figure shows a clear growth of road freight in emerging economies, in line with the growth of the freight sector in those countries, and of the economy in general. Freight flows in OECD countries of North America and Europe, on the other hand, have reached a steady-state.

Road freight transport offers lower transit times and higher reliability, making it better suited for transport of perishable goods and commodities with high value density [17]. The other operational advantages of using trucks include saving in packaging costs, ability to track and trace cargoes, door-to-door serviceability, and ability to schedule the delivery. An effective mode share of a country should thus concomitantly satisfy two criteria: (i) minimizing transport costs and (ii) meeting the operational requirements of shippers. While there is no consensus on the “ideal” modal mix for freight transport, India’s geographical features (extensive coastlines, predominance of hinterland economic activity, longer length of hauls) and the need to reduce freight emissions point in favour of rail transport.

Logistics costs are a significant component of total trade costs. The high logistics costs constrain the competitiveness of the economy and are often the result of shortcomings (physical, regulatory, or institutional) in the transport sector. Nearly one-third of India’s logistics costs (~ 4% of GDP) are attributed to inefficiencies in infrastructure. An important logistics measure that can be used to compare the performance of India’s logistics system against its competitors is the Logistics Performance Index (LPI) produced by the World Bank [39]. The LPI scores are based on data on six dimensions of trade: customs efficiency, infrastructure quality, ease of transporting international shipments, logistics quality and competence, trackability of consignments (also called tracking and tracing), and delivery timeliness [39]. The World Bank uses the LPI to rank countries [39], and a summary of this ranking, relevant to the present paper, is presented in Fig. 6. As it can be seen in Fig. 6, the logistics infrastructure in India lags behind that in Germany, the USA, the UK, and China. Jumping up the LPI rank, as currently proposed [40], will require a fundamental reorientation in the way logistics infrastructure caters to freight demand in India.

Pairwise comparisons of LPI scores between major OECD countries and India are given in Fig. 7, to highlight the deficiencies across different aspects of logistics.

One important challenge in the freight sector is linked to the changes that have taken place and continue to take place in the context of E-commerce [41]. The purchasing options of consumers in the past were limited to retailers in the city centre, whereas these are now competing with wide-ranging options provided by online retailers. To maintain a competitive edge in the market, shops are increasingly adopting just-in-time inventory practices, which result in stocks being kept to a minimum. Another noticeable change is the increased requirement for better logistics outsourcing service levels [9]. Many customers expect delivery within 24 h after placing an order [10]. Retailers are forced to respond and adapt to changing consumer requirements or risk losing them to the nearest competitor. Compounding this challenge is the consumer experience, which has become highly personalized and specialized, thanks to the digital transformation that has taken place since the early 2000s. This implies more customized orders, stricter quality controls, tighter compliance standards, shorter delivery windows and an overall intolerance to delays in shipments. The role of “fulfilment centres” became increasingly important over the first two decades of the 2000s, and is now a component in many supply chains, with a prime example being Amazon. The changes in logistic strategies of many stores (and warehouses) and the expectations from end consumers have had significant impacts on the demand for freight transport as follows: (i) there is a higher demand for goods, (ii) there are higher service levels, and (iii) shipment sizes tend to be smaller than they used to be.

There are different types of freight flows. These are depicted in Fig. 8, based on the typology suggested in a report by the Ministry of Housing and Urban Affairs and Rocky Mountain published in 2019 [42]. As shown in Fig. 8, there are four different types of shipments: (i) low-value, bulk freight (LVBF), (ii) medium-value, medium-density freight (MVDF), (iii) business-to-business freight (B2BF) for urban consumption, and (iv) business-to-consumers freight (B2CF) for urban residents. LVBF refers to shipments of construction materials (concrete, sand, gravel) and industrial goods (oil and petrochemicals). LVBF accounts for a significant share of freight shipments, especially in cities where the majority of the infrastructure is still in the process of being built. These low-value shipments tend to be shipped in large quantities (and heavy-duty vehicles), which cause high external costs. The next spectrum of shipments refers to MVDF, which are inputs or outputs of light industry (raw material oriented and less capital intensive), such as, for example, paper products, plastic products, leather, and textile products. The B2BF shipments are typically directed towards retailers so that they can be sold to urban residents. These shipments include fast-moving consumer goods, such as, for example, food products, beverages and pharmaceuticals, and they are typically stocked on the shelves of consumer stores. B2BF shipments are characterized by a high frequency of trips, although they are typically transported in light or medium-duty vehicles. Restricting the movement of B2BF shipments is generally contentious, because B2BF shipments directly cater to the needs of urban residents. Instead of reducing the freight volume, restrictions are typically found to force the shippers to move freight in less efficient ways. B2CF shipments typically are of high value and have specialized handling and delivery requirements (e.g. food deliveries, document packages, parcels). These types of freight are transported in light-duty vehicles, vans, two wheelers or even by foot, directly to the end consumer. Formerly a relatively small segment of urban freight travel market, B2CF shipments have become critical in urban logistics with the rise of E-commerce. Much like B2BF shipments, B2CF shipments cater to urban residents and policy interventions should focus on efficiency rather than demand management. While these diversifications are unique in each supply chain, a general conceptualization of urban supply chains is presented in Fig. 9.

B2CF shipments have experienced an important growth in the last few years, mainly due to increased Internet penetration. In the organized retail market, the share of online purchases was 25% in 2019, with forecasts predicting it could reach 37% by 2030 [43]. The presence of online platforms also enables consumer-to-consumer online markets; this form of E-commerce is rising in popularity [44]. Due to the influx of online platforms, many traditional retailers feel the need to participate in E-commerce as well, further increasing the urban freight flow levels. Many retailers are choosing to sell goods held in their inventory through E-commerce and Omni-channel delivery systems to offer better options to consumers [45]. In the context of increasing B2CF flows, reverse logistics of goods are also becoming more important. These streams involve not only the return and exchange of goods purchased online, but also services such as waste collection. As it can be seen in Fig. 9, shippers also produce additional freight activity in the form of waste and “reverse logistics” of returns and exchanges. Policymakers should therefore customize policy interventions to different types of freight traffic. For instance, shippers or retailers can offer customers (end node of supply chains) unique value by incentivizing reuse of raw or finished materials through a seamless “return” policy. By creating these feedback loops in supply chains, cities can transition towards a circular economy with significant societal and economic benefits [46]. Classifying the type of goods entering the city through different supply chains can be the first step for understanding the diverse needs of the freight market segments and, in turn, examining what challenges they present. Existing freight studies in India have largely focused on freight flow, and limited attention has been given to reverse logistics and service activities [9, 16, 47].

Productive investment on freight transport infrastructure is vital for improving the freight system performance and, in turn, enabling seamless deliveries and pick-ups of goods in urban areas [48]. An integrated approach to infrastructure spending, with investment schemes driven by transport policy goals that are coordinated with land-use and industrial development objectives, is critical for India. Since much of the freight movements have a destination in cities where ports or airports are located, infrastructure investment needs to be prioritized in those cities and regions, especially as freight vehicles share road space with passenger traffic. A comparison of infrastructure investment in India over the period 2004–2017 is presented in Fig. 10.

There have been several initiatives for increasing capacity, such as for example, the construction of dedicated freight corridors (DFCs). DFCs are expected to ensure that long-haul freight demand is catered efficiently in existing trunk routes on the eastern and western corridors (Howrah-Delhi and Mumbai-Delhi), which are currently saturated with line capacity utilization of 115%–150% [27]. The diversion of freight traffic from the long-haul trucking sector to DFCs on truck routes is expected to decongest the existing highway network for passenger movement. However, appropriate transport supply improvements require a demand assessment toolkit which is still missing for India [18].

There are a number of inefficiencies in both freight transport and freight policies in India. These inefficiencies can be broadly categorized into four areas: (i) long-haul trucking, (ii) last-mile logistics, (iii) freight distribution (inventory level), and (iv) policies and regulations. Reducing these inefficiencies will reduce the generalized cost of moving goods and the externalities of road transport. It will also improve the satisfaction of urban residents.

The inefficiencies in trucking costs are driven by three factors: (i) avoidable running costs created by empty backhaul of trucks, (ii) usage of trucks with reduced fuel economy and (iii) insufficient fleet size and mix of logistics providers, which lead to inefficient utilization of trucks for forwarding shipments. The root cause of these inefficiencies is related to the inability of trucking firms to achieve economies of scale, thereby resulting in low productivity and efficiency. This is partially linked to the rise of small trucking firms, which attempt to reduce logistics costs through overloading, service violations and poor maintenance. These unlawful logistic operations artificially lower the price of trucking services and make the traditional carriers with large efficient fleets unable to continue operations. Large trucking firms, on the other hand, can achieve economies of scale through efficient dispatching and scheduling, which is critical to increasing fleet utilization and reducing empty running. Another important contributor towards inefficiency is the suboptimal load size observed in emerging countries [37]. The highways in India are also inadequately maintained, inconsistent in road width and heavily congested [27]. These infrastructure shortfalls underline the need for targeted capacity increase to improve the inefficiencies in long-haul trucking.

Last-mile logistics involves delivering packages to end consumers or retail shops in urban centres. It typically follows different trip patterns, uses different vehicle types and has a different spatial extent of travel, compared to long-distance trucking. Due to the nature of multi-stop delivery tours carried out in last-mile operations, priority is given to maximizing the amount of freight delivered in an average tour. This is in contrast with the priorities given to achieving improved shipment size in long-distance trucking. The importance of last-mile logistics, despite being the shortest link in supply chains, stems from the fact that it constitutes up to up to 13%–72% of total logistics costs in many supply chains [50], and up to 55% in supply chains involving E-commerce [37]. The variation in costs is because of several potential causes of inefficiencies that exist in last mile, as explained below.

Inventory is a critical element of logistics costs, as it requires facilities for storage and holds up the working capital of firms (i.e. receivers) in a freight system [55]. To reduce these costs, firms typically attempt to minimize inventory levels without compromising their ability to serve end consumers. Due to uncertainty in lead times (i.e. time taken by shipper to deliver goods), excess inventory costs are typically incurred by shippers in the freight system, thereby increasing the overall logistics costs. The reduced reliability in transit times leads to higher buffer stocks to guard against uncertainty. The highly fragmented and inefficient distribution system poses major challenges to buffer stock reductions. Another challenge is the limited digitization of links connecting the stakeholders in a freight system, which restricts the ability of retailers to reduce cycle stock (i.e. the inventory held in shelves to satisfy normal sales demand). The ability to implement just-in-time (JIT) ordering practices that can accomplish reductions in cycle stock hinges on two factors: (i) digital capabilities to track inventory drawdown and (ii) digital links to distribution centres and supplies to avail dynamic replenishment of products. Due to limited advances in JIT systems in India, efforts to reduce the total amount of inventory in the distribution system and the amount of inventory lost have not been very successful [37].

Policies intended to reduce the negative externalities or inefficiencies from freight can actually backfire and yield the opposite result. The National Urban Transport Policy (NUTP) in India acknowledges that freight traffic will grow substantially [31, 56]. Timely and seamless freight movements are also mentioned as a priority for the economic development of the country [31, 56]. The freight-related policy measures recommended in the NUTP report can be summarized as follows: (i) using off-peak hours for freight deliveries, (ii) restricting the entry of heavy-duty trucks into cities during daytime, (iii) building bypasses through public–private partnerships so that long-haul trucks can go around the city, instead of adding to the city traffic, (iv) reorganizing land use by locating wholesale activities in the periphery of cities, along the interstate highways, rather than in city centres, (v) building truck terminals and parking facilities outside the city limits to encourage the shifting of wholesale activities, (vi) provisioning parking space at appropriate locations for on/off street with the use of intelligent transport systems, (vii) planning ring roads to relieve traffic congestion in central areas, and (viii) implementing auto-fuel policies that call for tighter emission regulations and fleet upgrades [31, 56]. Following the recommendations of the NUTP report [31, 56], some cities, including Ahmedabad, Bangalore, Hyderabad, and Kochi, have set up committees, known as Unified Metropolitan Transport Authorities (UMTAs), charged with the mission of integrating the functioning of agencies associated with passenger and freight mobility. These top-down policies may deliver positive impacts and help achieve more efficient freight movements in urban areas.

Another policy that has been suggested is the implementation of time-based or cordon-based restrictions. These restrictions have been introduced in some cities in India [7]. They can entail, for example, banning vehicles exceeding 7.5 tons during specific time periods of the year or specific times of the day [7]. Delhi has also banned non-destined transiting trucks (heavy, medium or light-duty vehicles) from passing through certain regions in Delhi [23] and has imposed entry time restrictions to freight destined for Delhi. Shifting freight travel into times of minimum residential use can force deliveries at night, greatly increasing the share of last-mile cost in total logistics cost. Furthermore, it can, and it has, resulted in good deliveries by vans or three wheelers, which are not subject to bans, and this can, and indeed has, in turn, increased overall traffic.

In addition to the above, the imposition of pollution taxes can help freight face the environmental costs they cause. Delhi, for example, introduced a pollution tax in 2015, payable by trucks passing through Delhi [23]. The tax is 700 INR and 1400 INR (USD 9.24 and USD 18.49 at April 2022 exchange rates) for light-duty vehicles and heavy-duty vehicles, respectively. Reorganizing land use by moving wholesale markets to outer town suburbs or satellite towns can help reduce the pressure from freight movements. Mumbai did exactly this to reduce traffic levels in the congested south part of the city. Another initiative is that of Urban Consolidation Centres (UCCs) [57]. These schemes aim to reduce the number of goods delivery vehicles in urban areas by consolidating multiple shipments at centres located in the city periphery [58]. There are several informal examples of such centres in India, especially in the perishable product sector (e.g. Azadpur vegetable market, sabzi mandi in Delhi). Another example of consolidation is the ITC e-Choupal project in which internet-based kiosks reach out directly to farmers and eliminate the middleman in agri-business supply chains [31]. Finally, many cities, such as for example Chennai, are planning to have truck terminals and parking zones on the city periphery [31]. However, there are several institutional, practical and legal barriers for long-term success in UCCs implementation, as reported in some European cities like Oslo [57].

Despite the publication of the NUTP and the setup of UMTAs in some cities, freight transport policy in India is still in nascent stage [42], in contrast with passenger transport policy. Save for the policy initiatives aimed at increasing capacity and building facilities (truck terminals, consolidation centres), freight policies in India have largely been restrictive in nature [23]. A scenario building approach, perhaps taking into account individual perspectives [59], has the potential to yield participatory decision-making outcomes related to freight policies.

The environmental impacts from freight transport include air pollution, climate change caused by GHG emissions, noise, and water pollution. A multimodal emission assessment shows that the emissions from transport are expected to grow by 4.1–6.1% per year, leading to an increase of seven times by 2050 [62]. Air pollution is caused by emissions of particulate matter (i.e. microscopic solid or liquid particles in air), carbon monoxide, ozone and hazardous air pollutants such as benzene, which causes cancer and other serious health effects. Most trucks run on diesel, which is more polluting than petrol. Climate change is caused by GHGs. Excessive noise can negatively impact human health, disturb sleep, and cause cardiovascular and psychophysiological problems [63]. Most of the external costs from trucks in Europe come from noise [64, 65]. Water pollution can result from freight transport when there are spills, leakages, or disposal of cargo material in water bodies. Although freight traffic constitutes merely 3% to 15% of total traffic in urban arterials and expressways [66, 67], it is estimated to be responsible for up to 50% of road transport emissions [68]. In the case of noise pollution and vibration hindrance, in general, road freight has a much larger impact than cars [64, 65]. Compounding these impacts is the fact that freight trucks used for urban deliveries are generally older and more polluting than trucks used for long-haul shipments [69]. Finally, land-use changes associated with freight flow and transport infrastructure development are an increasing source of concern as they can cause visual intrusion on environmental landscape, and destruction of habitats and species loss.

The main negative externality from freight with social impacts is accidents. A significant share of road accidents can be attributed to trucks, as shown in Fig. 11, based on crash data published by the Transportation Research and Injury Prevention Programme at the Indian Institute of Technology in Delhi [70]. The vehicle types include motorized two wheelers (MTWs), three wheel scooter taxis (TSTs), buses, cars, trucks, and others. As it can be seen in Fig. 11, 72% and 65% of fatal crashes in six-lane national highways and urban highways are associated with trucks as one of the impacting vehicles.

The main externality from road freight that has economic impacts is congestion. Congestion caused by road freight has become a common problem in cities around the world [71]. In Europe, most of the external cost from trucks comes from congestion (and noise) [64]. Trucks take between two and four times the road space that cars take, and their speeds also tend to be lower. In addition, due to scarcity or inadequate configuration of loading or unloading bays/zones, freight trucks often double park during their delivery tours [72], thereby blocking the road for other vehicles. Traffic congestion has substantial negative impacts in terms of reduced productivity and wasted fuel. A high-level estimate of the economic loss resulting from congestion in major cities in India is over 22 billion USD per year [61]. Two conflicting interests emerge regarding congestion—public authorities aim to reduce freight traffic to improve the attractiveness of their city to residents as well as tourists, while private companies seek to operate at lowest cost with quick deliveries to satisfy consumers’ expectations in a highly competitive market [61]. The regulations and restrictions brought by public authorities can cause “detour” of delivery vehicles through narrow streets and unsafe delivery areas with low vertical clearance, further exacerbating traffic congestion [73].

These solutions include improving the quality and capacity of the road and railway networks and providing multimodal hubs and warehouses. Analyses of commodity movements and freight demand are critical decision-making tools for provision of infrastructure solutions. These solutions are imperative for developing a balanced modal mix and reducing the overall logistics cost, as explained below.

To enable logistics chains, reduce costs, and improve services for customers, freight systems need to be enriched in various technologies. Digitization, coupled with adequate technological support and targeted investment schemes, can integrate the supply chain from demand forecasting stage to shipment consolidation, truck routing and dispatch scheduling [76]. The potential solutions through these technological, digital and operational advancements can be explained on seven fronts: (i) developing more accurate demand forecasting models through enhanced inventory visibility, (ii) automation of warehouse processes, (iii) deploying inventory data insights in distribution network design to deal with demand volatility, (iv) implementation of just-in-time inventory systems and fostering lean ordering behaviour among establishments, (v) achieving efficiency in truck routing and dispatch through real-time information, (vi) implementing intelligent transport systems (ITS), such as weigh-in-motion systems, delivery space booking systems, and route planning systems, and (vii) promoting carrier collaboration and accomplishing higher levels of operational efficiency through “Internet of Things” applications. These technological solutions are increasingly explored by the new third-party logistics providers, freight forwarders, and trucking companies emerging in the Indian market. For instance, driver relay models are increasingly adopted to reduce the continuous driving time of truck drivers to less than a day, and in turn reduce the turnaround time on long-haul routes (eliminating the driver idling time in the prior operational models). Increased adoption of location tracking solutions and growing presence of fulfilment centres in Indian cities have been helping the emerging logistics companies to eliminate the inefficiencies in the traditional hub-and-spoke model of delivering parcels. By utilizing distributed delivery models (i.e. each arc in the network acting as a hub and a processing centre by itself), the delays in routing the shipments through a hub before reaching the spoke can be avoided with the help of technology. As a result, most of the emerging logistics companies are positioning themselves as supply chain enablers with their own in-house order management systems. The challenges faced by small fleet owners have also come to the focus of the emerging market players in the logistics space with a vast number of software-as-a-service (SAAS) companies working towards hassle-free truck bookings and real-time vehicle tracking. The ongoing efforts as a part of Government of India’s Gati-Shakti national master plan to develop a unified logistic interface platform (ULIP) are expected to further accelerate the efforts of trucking companies and SAAS providers to reduce the overall costs of logistics and time in India.

Policy interventions play a crucial role in translating the first two solution classes into action, both in terms of energy demand and economic consequences [77]. Government departments, such as the Ministry of Shipping and Logistics, can employ a wide-range of policy measures, ranging from taxation instruments (e.g. fuel taxes, excise taxes and tolls) to financial incentives (e.g. tax rebates for supporting greener modes, capital grants) and regulation orders (e.g. vehicle design, entry time, emission standards), as explained below.

The final class of solution concepts is related to the market-driven changes that can be implemented in the freight transport sector. These solutions include three broad categories: (i) technological advances, (ii) crowd shipping on transit (COT) programs, and (ii) planning and cooperation initiatives, as explained below.