Logistics in Cement Industry

India is the second-largest producer of cement after China in the world. In India, the cement plants process 502 million tonnes of cement every year with the help of 210 large cement manufacturing plants and 350 mini plants. The growth of cement consumption has increased to many folds in India in recent years. The government of India has launched so many infrastructure developments projects like planning of converting 100 cities of India into smart cities, expansion of Indian railways and storage yards, up-gradation of 1,25,000kms of the road in the next 5 years, etc. The real state sector and housing development are also the major demand drivers of cement accountable to 65% consumption of the total cement consumption rate in India.

To meet such an enormous demand for cement is very challenging for the cement manufacturing industries. The cement industry logistics plays a vital role in striking the fine balance between supply and demand ratio. Logistic is not only limited to meeting the demands of users but it plays a crucial role at the moment the cement manufacturing process starts. To meet such enormous demand, it is very essential for cement industry logistics to acquire and bring raw materials such as limestone, coal, gypsum, etc., from their respective mining sites or from the stockpiles to the cement plant on time. The finished product requires to travel for at least 400 km to reach its destination on time. This is where the transportation plays an important role in bringing raw materials for cement plant process and transporting the finished goods at the consumption sites.

Mode of Transportation Used

The mode of transportation also decides the pricing of the cement and it generally holds up to 20% of the retail price of cement. Today the cement manufacturing industries use multi-modal options for transport to meet such high demand.

The cement manufacturing industry in India is the second-largest revenue source for the Indian railways with a contribution of US$1.2 billion per annum in freight revenue. To make it a more economical and accessible government of India has launched schemes like long term tariff contract scheme, freight incentive scheme, incentive scheme for auto traditional empty flow directions and general-purpose wagon investment scheme. In the recent few years, the cement industry logistics of large cement manufacturing companies signed long term freight contracts scheme to cut down their operational cost and also to get preference in allotment of racks for transporting cement bags.

Apart from Indian railways, road transportation has also benefitted in the last few years due to the construction of new highways and up-gradation of existing roads. Today majority of the cement plants have their own fleet of trucks to transport the cement bags directly from the manufacturing plants to the distributors, dealers, and franchises.

Bulk Cement Suppliers

The cement transportation results in various lose due to bag burst, seepage, and loss of cement while multiple handling. To minimize such loses cement industries have started promoting bulk cement suppliers. The bulk cement suppliers deliver cement in bulk at construction sites in specially designed vehicles. At large construction sites like infrastructure development sites, multi-story building construction sites, etc the bulk cement supply proves beneficial and convenient over procuring cement bags. This is very economical for the project developer also to procure cement in bulk without traces of moisture as the bulk cement is always untouched and directly transported to the construction sites.