MoU for Multi Modal Logistics Park (MMLP)

August 25, 2022

The road, railway, and shipping ministries recently signed a Memorandum of Understanding (MoU) to develop Multi Modal Logistics Parks (MMLP). The agreement was signed under Bharatmala Pariyojana.

Who signed the MoU?

The agreement was signed between RVNL, IWAI, and NHLML.

RVNL: Rail Vikas Nigam Limited
NHLML: National Highways Logistics Management Limited
IWAI: Inland Waterways Authority of India

The objective of the MoU

The objectives of the agreement are as follows:

To reduce logistics costs in the country from 14% to 10% of GDP
Centralize freight consolidation
To improve the standards in the country at par with international standards

What will the MMLP do?

According to the MoU, the MMLPs will handle freights
The parks will be accessible through rails and roads
The MMLPs will have cargo terminals, material handling facilities, warehouses, container terminals, and cold storage
The MMLPs are to adopt technology-driven freight management systems
They will provide value-added services such as labeling, repackaging, and packaging

The special feature of the MoU

The MoU aims to make the MMLPs a one-stop solution for cargo movements such as parking, custom clearance, maintenance of trucks, etc.

Developed under Hub and Spoke model

The MoU says that the MMLPs are to be built under Hub and Spoke model.

The Hub and Spoke is a distribution method. The model has a centralized hub. The goods are either transported to the hub for distribution or originate in the hub. They are then distributed to smaller companies from the hub. These smaller companies or sub-locations are called spokes. At spokes, the goods are processed or distributed to towns and villages.