As India's logistics infrastructure is modernizing, temperature-controlled rail transport and state-of-the-art warehouses are being set up. The government sees the logistics industry growing to $215 billion a year around 2021 -- up more than 30% from 2017 and reaching the equivalent of the Japanese market. The state-owned Container Corp. of India, or Concor, is in the thick of it, as it looks to launch a commercial refrigerated rail service for the domestic market by October.
Concor Chairman and Managing Director V. Kalyana Rama told Nikkei Asian Review that such services have mainly been used for export-bound goods until now. The company seeks to tap demand from consumers desiring quality foods, he said, and is eyeing nationwide expansion by 2021.
Evolution of consumer preferences
Driving the strategy is the evolution of consumer preferences, which has increased the need for low-temperature transportation. Shoppers who used to buy food at small retailers and stalls near their homes are increasingly heading to modern supermarkets that offer a wider variety of goods.
According to Euromonitor International, India's retail sales totaled about $630 billion in 2018, 57% of which came from small and medium-sized grocery vendors, which have limited refrigeration and freezing equipment.
Cold-chain operations also require other elements of infrastructure, including warehouses for storing products. Concor has a network of 83 dry ports, and Rama said "we are planning to increase them to 100, and we'll be adding 20 more distribution logistics centers. So, in the next three to four years, it [will be] a network of 120 centers. This country needs this vast network" to maintain an effective cold chain.