Multimodal transportation of finished goods in automobile industry

Abstract

After a major truck strike in 2009, most of the auto manufactures in India has started looking for other options for automotive logistics. Most of the manufacturers got hugely affected during the strike, because of huge dependence on road transport for their finished vehicle transportation. In India, nearly 98% of Finished Vehicles (FV’s) are transported through road whereas in North America (70%) and in Europe (30%) FV’s are transported through rails. Indian passenger vehicle sales are going to increase from 3.2 million in 2013 to 8.6 million in 2020. Within 2020, India’s share in global passenger automobile market is going to double to 8% from 4%. The major challenge for automobile manufacturers is getting the finished vehicles into the hands of potential buyers. It is not possible to depend totally on road transport for delivering vehicles. With present road transport carriers for FV’s, Auto Manufacturers are facing severe problems like infrastructure, availability and quality of fleet drivers, as well as an absence of professional management at transport level. With dissatisfactioin over low standard of vehicle distribution, automobile manufacturers want to see viable rail option for transportation of FV’s. There have been several attempts by Auto Manufacturers like Maruthi to make use of rail but not much shift has happened in automotive logistics. Though there are long term benefits for using rail for shifting FV’s not much investment is made by either railways or auto manufacturers.