Sep 11, 2018 0

Stepping Towards Demand Driven Coal Logistics

While a major part of coal movement in India is aimed for thermal plants, coking coal and coke for steel and manufacturing industries also have a fair share. This in turn determines how coal logistics is organized and has evolved over the years. While domestic coal mining fell short of satisfying the demand-supply cycle, importing coals has become vital. Hence, the trend of relocation of thermal power plants near seaports has emerged in order to have easy access over imported coal. It is for this reason that seaport locations such as Mundra and Krishnapatnam have seen the emergence of some big coal logistic firms. Giants such as Coal India and Coal Sales Ltd. by KCT group are doing their best to ensure that regular demand-supply requirements related to coal logistics are met. The logistic challenges however have seen no improvement and there’s still a lot to be done in that case.

The movement of domestically produced coal over long distances has added up to the cost. Moreover, there has been a considerable shift in focus from coal supply to the efficiency of coal demand. Hence, large power plant companies such as Coal Sales and KCT Group by Varun Thapar are setting up new logistics solutions such as conveyor lines.

India faces major drawbacks in terms of infrastructure and network availability for transportation of coal. Hence, it is this poor quality evacuation which has resulted in high logistics costs and delays in meeting the demand-supply. While there is a general norm among power plants of keeping at least 7-15 days of coal inventory, most of them still suffer due to their inability to maintain the same. Synchronization of coal and rail linkages moreover is one of the top challenges faced by key logistics in India. One possible solution to the problem is to add new railway lines. Better inventory planning, cutting down idle rake time, finding out alternative sources for coal movement hence are the need of the hour. All these initiatives when taken together can transform coal logistics from being supply-driven to demand driven.