Prasenjit Chakraborty

The encouraging growth of chemical industry in India has naturally brought the issues concerning hazardous chemical transportation into sharp focus. Besides the bottlenecks pertaining to infrastructure, suitable storage facility, equipment and technology, the lack of continuous interaction between the chemical industry and logistics service providers is posing serious challenges to the growth of the sector. However, with the government providing a few sops in the areas of storage facility, equipment, etc., the logistics sector seems to be moving on the right track.

The unprecedented growth of the chemical industry in India has led to the increase in the proportion of hazardous chemicals in the total freight traffic. There is a rising demand to store and distribute temperature-sensitive products in potent conditions, which has resulted in a higher need to monitor cold chain supplies in the country. Hazardous materials transportation risk management involves establishing, organising, planning, executing and monitoring a set of operations that aims to decrease the probability of accidents and reduce the relevant potential consequences. This risk management process pertains to preventive and repressive safety measures.

The preventive measures aim to eliminate the potential causes of accidents, i.e., the roadway system defects, mishandling by drivers, mechanical errors in vehicles, etc. Besides, driver training, policies related to driving hours, container specifications, vehicle and mechanical conditions monitoring equipment and routing through safe roadway segments are other important elements. Such norms are hardly being followed in India, despite the growth of logistics business.

According to Sanjay Tejwani, director of Ocean Freight, DHL Global Forwarding, while the  logistics business in India is on the rise, transportation of chemicals is still marred by certain challenges with respect to real-time tracking and tracing, qualified personnel to handle chemical cargo, cost-effective special packaging solutions, immediate custom clearance, retaining the temperature at trans-shipment hubs and gateways, and compliance to regulatory requirements at the origin and at the destination.

Frequent changes in regulations

The rules for transportation of chemicals in India are quite stringent. The Indian government has constituted various regulations to ensure that proper precautions are taken while transporting chemicals. While frequent changes in policy can be irksome, one has to keep in mind that this is aimed at ensuring safety for people and product, and not meant to bother the logistics industry. Reputed companies follow the norms, and hence stay ahead of competition. Such companies work closely with their customers to make sure all requirements pertaining to safety are adhered to. “DHL has a highly secure transportation system for smooth movement of chemicals throughout India as well as abroad,” maintained Tejwani. “Any change in the regulations is implemented in the supply chain at the earliest and due care is taken to ensure that it does not affect the customer’s consignment, thus reducing the time taken at port,” he Tejwani.

There is a need for frequent interaction between chemical manufacturers and logistics service providers. This will benefit the chemical industry in many ways when it comes to reduction of losses, handling issues related to environment and difficulties in transportation, etc. “Over the years, we have been working closely with our customers in the chemical industry, thus enabling the Indian chemical industry become environmentally responsible and globally competitive,” he asserted.

Road versus rail

The process of globalisation is expanding India’s position in the world trade, leading to a rapid climb in transport volumes in recent years. The expansion of the logistics infrastructure has been unable to keep up with this pace of globalisation and increase in transport volumes in the country. For this reason, transport capacities have already reached their limits. This calls for the need to look at other avenues.

“We have been making efforts to shift freight from road to rail,” revealed Tejwani. However, the rail infrastructure in India, although the largest in the world, is yet at a nascent stage as far as freight transportation is concerned. The Indian government is currently striving to exploit the potential of its railroad infrastructure and the same has resulted in investments into this particular sector. Perhaps, in the next decade India’s railroad network would emerge as an important part of the logistics matrix. “Currently, railways has its own constraints in terms of end-to-end connectivity, time-bound distribution of cargo, etc. This results in preferred option for road transport,” pointed out Pradyumn Sharma, General Manager - Operation, JWC Logistics Park.

The industry players are optimistic about the initiatives taken by the government as far as rail transport is concerned. In future, it is likely that the share of railways in terms of freight transportation may go up substantially. Sharma stated, “There are some positive steps by the government in terms of dedicated rail-freight corridors. But all these measures are at a nascent stage to overtake transportation by truck.”

In future, many companies will definitely opt for transportation via rail route more than what is currently been seen. “We plan to improve the existing freight capacities in the country and implement further techniques to ensure smooth movement of hazardous chemicals, while also trying to gauge the possibilities of boosting transportation of hazardous chemicals in India by rail mode,” says Tejwani.

India vis-à-vis developed countries

Despite its unique production and distribution qualities, matching supply to demand has specifically impacted the chemical industry. While the shift means increased use of ocean transport for imports and exports, companies managing smaller shipments are opting for truckload and rail intermodal services in place of rail bulk. Forward staging of inventories in tank storage and bulk facilities appears to be declining as many third party logistics (3PL) service providers report more products moving directly to consumption.

“The infrastructure facilities for storage and transportation of hazardous chemicals are not up to the mark in the country. The poor road conditions and the age-old technology that is used in the functioning of the Indian rail lead to excessive time consumption and delay in the transportation of hazardous goods,” points out Tejwani.

The government regulations in the country are stringent but are ignored. The lack of trained staff to handle the packaging and transportation of hazardous chemicals, lack of awareness about the new trends and technologies used in the developed countries and clustered third party logistics supply chain are some of the issues that plague the transportation of hazardous chemicals in India and have prevented the emulation of the current trends in the market.

Elaborating on the adoption of technology, Sharma says that in foreign countries temperature-sensitive cargos are tagged with temperature measuring units and are monitored through GPS throughout the supply chain system. “If at any given point of time it is noticed that there is an imbalance in set temperature, corrective measures are immediately taken. Whereas in India, though such facilities are available, due to the cost factor such practices are not in use, barring few reputed companies,” laments Sharma.

On a positive note

Everything is not bad for hazardous chemical transportation segment. Growth of the chemical industry has been the most encouraging factor for players in the logistics space. For this reason, many domestic and international logistics service providers are investing extensively in this space, which will result in best practices and added expertise being brought into this particular segment. “In the next few years, we shall also see a lot of innovation being brought into this space as Indian customers will look to expand as they try and meet global demand,” opines Tejwani. It is worth mentioning here that DHL Global Forwarding has invested $ 10 million in its Free Trade Zone facility in Tamil Nadu earlier this year and has sections devoted to packaging & transporting of hazardous chemicals.

The Indian government has been making positive moves in the direction of encouraging the industry. Grants to establish new storage facilities to the tune of 25 per cent of capital expenditure, reduction in peak import duties on equipment imported for storage facilities and taxes on them, are some of the incentives provided. The measure will definitely boost the morale of the logistics players and facilitate the smooth functioning of hazardous chemical logistics sector.