The Central government recently announced and assured the steel players of the country that it will take all the required measures to reduce the logistics cost for the industry which currently goes as high as 28 percent. Minister of State for steel Faggan Singh Kulaste told the members at FICCI organised webinar on Supportive Logistics for Indian Iron and Steel Industry that high cost of logistics is one of the grave concerns of the ministry.

According to Kulaste, the nation targets to increase its steel production of 255 million tonnes by 2030. Keeping that mind around 800 million tonnes of raw materials would need the support of the logistics industry and we need to work on building the required infrastructure for the same. With the needs of future in place, the government sector has begun the work on realistic to fulfil the demands.

As of now, the transportation cost of iron ore, for every 250 kms. is around Rs. 800 to Rs. 1000 through rail, Rs.450- Rs.550 via waterways, Rs. 2000 to Rs.2500 through roadways and Rs.80-Rs.100 through slurry pipeline. V R Sharma pointed out that an additions of Rs.8000 per tonne is the cost to above for steel transportation, brunt of which is borne by the last mile customer.

A long term agreement with railways to provide suitable rates was also suggested as this will the logistics industry to plan their supply chain management process in a better way. Logistics being important for industry, a suggestion to set up dedicated road corridors, double railway lines and new slurry lines were also suggested for transportation.