East Zone conference deliberates on cutting down logistics cost

The total cost of logistics is around 28% of the production cost in steel sector, and it needs to be cut down drastically to lower the production cost

East Zone coal states

Bhubaneswar: Union mines secretary Nagendra Nath Sinha on Thursday called upon the stakeholders in logistics to think beyond the conventional modes of transport, as the cost of logistics required to be cut down significantly to enhance the profitability of trade.

Sinha said this at the east zonal conference of coal producing states on PM Gati Shakti (national master for multimodal connectivity) and National logistic Policy organised by the ministry of coal. The programme was participated by the officials of Mahanadi coalfields limited, a government of India enterprise and the governments of Odisha, Jharkhand, West Bengal and Bihar. Odisha chief secretary Suresh Chandra Mohapatra was the chief guest.

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Elaborating on the importance of logistics, Sinha said for every tonne of steel that we produce, four tonnes of material has to be moved. So, for producing 120 million tonnes of steel, about 600 million tonnes of material has to be moved across the country. “The total cost of logistics is around 28% of the total cost of production in the steel sector. If we need to cut down the cost of production, we have to decrease the cost of logistics,” added the mines secretary.

Addressing the gathering, Odisha chief secretary Mohapatra underscored the fact that logistic is the biggest challenge before the country and hoped that the Centre’s initiative would go a long way in ending the silos style of functioning that prevailed among various departments in the transport sector. “Bringing various departments and ministries on a single platform will greatly address the huge volume of transportation of minerals and materials across the country,” he added.

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Mohapatra said the state alone transports thermal coal to as many as 14 to 15 states across the country. Underlining the need of logistic development in the eastern region, he added this region is the growth engine of the country and a robust futuristic plan needs to be put in place and executed in the sector of logistics.

M Nagaraju, additional secretary, ministry of coal, government of India, said the convergence approach, which is embedded in the PM Gatishakti Programme, will enhance production capacity and employment opportunities besides reducing logistic cost and avoidance of waste in building infrastructure. Stating that all the four states that are participating in today’s conclave are rich in mineral resources, Nagaraju said these states constitute the backbone of industrial development of the country. He said a uniform logistic policy will greatly help these states in seamless and cost-effective transportation of goods and materials.

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Jharkhand’s mines secretary Aboobacker Siddique, chairman of NLCIL Prasanna Kumar Motupalli also spoke on the occasion. One interactive session with 10 CEO’s on ‘infrastructure development of East Zone’ was also held.

PM Gatishakti National Master Plan (NMP), a transformative approach for improving logistics efficiency and reducing logistic costs, was launched for integrated infrastructure development in the country. The objective is to bring different ministries/states/departments/industries together for integrated planning and coordinated implementation of infrastructure connectivity projects.

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