How Hyundai Leads Sustainable Procurement in Logistics
Hyundai Motor India Limited (HMIL) is championing sustainability in India's supply chain logistics by integrating rail freight into its vehicle distribution network.
This strategic shift not only enhances delivery efficiency across the country but also slashes carbon emissions, setting a benchmark for sustainable procurement in the logistics sector.
Rail freight: A sustainability game changer
In 2024, Hyundai transported 156,724 vehicles domestically via rail, representing 26% of its total wholesale volume. This bold move led to a reduction of 18,352 tonnes of carbon dioxide (CO2) emissions. Over the past three years, from 2021 to 2024, Hyundai's commitment to rail freight saw the company deliver 537,499 vehicles by rail, cutting 63,452 tonnes of CO2 emissions in total.
In the North-East region, Hyundai achieves 100% of its vehicle deliveries using rail transport. This focus maximises India’s railway infrastructure, especially in areas where road freight might be less viable or efficient. Hyundai’s main dispatch hub in Sriperumbudur, Chennai, serves as the backbone of this operation, ensuring vehicles are transported nationwide on time and with minimal environmental impact.
India’s ongoing investments in rail infrastructure further enhance Hyundai’s strategy. Projects like the Dedicated Freight Corridors (DFCs) aim to improve freight efficiency and address congestion on older rail routes.
These initiatives promise to increase freight-handling capacity, supporting companies like Hyundai in aligning their procurement and logistics operations with sustainability goals.
Tarun Garg, Hyundai’s Whole-time Director and Chief Operating Officer, highlights the company’s commitment: “At HMIL, we have been relentless in our pursuit of promoting sustainability in all facets of our operations, be it manufacturing, dispatches, sales or after-sales support.
“By utilising Indian Railways’ extensive rail network for delivering Hyundai vehicles from our plant in Sriperumbudur, Chennai, to multiple locations across India, we have effectively prevented 18,352 tonnes of CO2 emissions in CY 2024, dispatching 1,56,724 units in the process."
India’s expanding rail network
India’s railway system is the fourth-largest in the world, moving 3.37 million tonnes of freight daily. With fully electrified tracks spanning 14 states and union territories, the rail network plays a vital role in the country's logistics framework.
Recent advancements have significantly boosted freight capacity. Between 2021 and 2023, Indian Railways increased its freight handling by 157%, from 1,231 million tonnes to 3,167 million tonnes annually.
This transformation is driven by national projects like the DFCs, launched in December 2020 as part of the National Rail Plan. The plan aims to elevate rail’s share of freight transport from 28% to 44% by 2051.
Aligned with these developments, Prime Minister Narendra Modi’s National Logistics Policy seeks to cut logistics costs from 15% of GDP to 8% by 2030, making freight transport more efficient and environmentally sustainable. According to research from the University of New South Wales, the DFCs could add ₹16,000 crore to India’s GDP. Rail freight is also shown to produce 81% less particulate matter than road freight, underscoring its environmental advantages.
A model for sustainable procurement
Hyundai’s efforts demonstrate how private companies can align their supply chain strategies with government infrastructure projects to achieve shared sustainability goals. By leveraging India’s rail network, Hyundai optimises costs while significantly reducing its carbon footprint.
As the DFC network expands, Hyundai is well-positioned to improve its logistics efficiency further while contributing to a greener future. The company’s proactive approach serves as a blueprint for other organisations aiming to adopt sustainable procurement practices in their supply chains.
The synergy between Hyundai’s logistics strategy and India’s rail modernisation initiatives underscores the potential for public-private collaboration to achieve large-scale economic and environmental benefits. With sustainability becoming a critical focus globally, Hyundai’s rail-based approach to logistics reflects a practical path forward for achieving environmental and economic resilience.
As Tarun concludes: “As the Government of India continues to upgrade the rail infrastructure with dedicated freight corridors, and modern and energy efficient rolling stock ensuring faster movement of goods, HMIL remains committed to utilising rail freight to optimise its logistic operations, leading to long-term reduction in emissions."
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