General Studies IIIEconomyINFRASTRUCTURESchemes

Freight Smart Cities

Ministry of Commerce & Industry


Commerce Ministry’s Logistics Division unveils plans for ‘Freight Smart Cities’. 

About ‘Freight Smart Cities Initiative’:

  • Freight Smart Cities Initiative aims to improve the efficiency of urban freight and create an opportunity for a reduction in logistics costs.
  • Under the initiative, State Governments will identify ten cities, initially, to be developed as Freight Smart Cities.
  • In these ten cities, city-level logistics committees would be formed. These committees would have members from the government as well as from the private sector.
  • These committees would co-create City Logistics Plans like developing peri-urban freight centres, night-time deliveries, developing truck routes, Promoting electrification of urban freight among others.
  • Further, the initiative will be expanded to 75 cities in the next phase before scaling up throughout the country. It will include all state capitals and cities that have more than one million population.


  • Under the initiative, city-level logistics committees would be formed. 
  • These committees would have related government departments and agencies at the local level, state and from the reacted central ministries and agencies. 
  • These would also include private sector from the logistics services and also users of logistics services. 
  • These committees would co-create City Logistics Plans to implement performance improvement measures locally. 

Need for: 

  • Final-mile freight movement in Indian cities is currently responsible for 50 per cent of total logistics costs in India’s growing e-commerce supply chains. 
  • Improving city logistics would also enable efficient freight movement and bring down the logistics costs boosting all sectors of the economy. 
  • Besides, Demand for urban freight is expected to grow by 140 per cent over the next 10 years. 

Current Urban Transport System in India

  • Since the 1990s the spur in economic growth has created a huge demand for transport infrastructure and services.
  • Despite increasing level of urban mobility in Indian cities, urban transportation is becoming increasingly difficult in terms of convenience, cost and time.
  • There is a high level of congestion, air pollution and increase in road fatalities.
  • Unaffordability of private transport and lack of proper public transit option has become a major concern, especially for the urban poor.
  • As the cities are spreading outwards rapidly, the growth of urban transportation has not kept pace with it.
  • Rapid urbanization, motorization, low share and popularity of non-motor transport are influencing the urban mobility in India.
  • India’s current urban transportation has inadequate intra-regional connectivity. Public transportation has become largely unsafe and unreliable.

Urban Transportation problems in India

  • Road congestion: Due to increase in urban population, the number of vehicles has increased to a level where the road infrastructure is unable to meet the demand of commuters.
  • Parking problems: Unplanned and faulty designing of buildings without foreseeing the future have caused problems of parking space. Most of the people park their vehicle on the roadside causing congestion.
  • Air pollution: According to CPCB(Central Pollution Control board), around 180 Indian cities face severe pollution concentration. In Indore, transport contributes 30 percent of PM10 but 46 percent of PM 2.5, while in Chennai it is 20 percent of PM10 and 35 percent of PM2.5. Air pollution is the fifth leading cause of death in Indian cities.
  • Deteriorating road safety: The increase in the number of vehicles had increased accidents especially pedestrian fatalities.
  • Caveats in law and regulations: Currently there is no comprehensive central or state legislation covering urban transport requirements of Indian cities.
  • Problems in land acquisition for transport infrastructure development.
  • Human resource challenges: There is lack of skilled personalities in urban transport management.

Benefits of Smart Transport:

  • According to Mckinsey Global Institute, Intelligent Transport System offers a superior option to the addition of physical road capacity.
  • It helps in increasing efficiency of economy and productivity.
  • Congestion can be managed in an intelligent way thereby reducing time in accessing places.
  • It helps in reducing traffic delays and boost smart management of vehicles.
  • Instead of building more infrastructure, using technologies, existing infrastructure can be optimized focusing on operational outcomes and customer experience. This help government to plan with a limited budget.
  • Urban transport also plays a role in the reduction of poverty, better access to the labour market, thus increasing the income of poor.
  • Smart urban transport can reduce pollution thus help in fulfilling the INDC target of India.
  • Elderly people who are reluctant to travel due to the difficulties in transportation benefit from barrier-free transportation.

Source: PIB

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