Coastal Shipping

Topics: Transport, Cargo, Logistics Pages: 8 (2468 words) Published: April 17, 2013
Avalon Perspectives

Uncharted Transport mode....
Coastal Shipping & Inland waterways Potential in India

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India’s Maritime Story
India is blessed with a long coastline of 7,517 km., dotted with 13 major ports and 176 non-major ports and a vast hinterland. India’s geographical setting has played a vital role in the progress of maritime activity Water way trade can be divided into Inland Waterway (IWT) and Shipping (Coastal & Overseas). The focus of this paper is primarily on Coastal Shipping and Inland Waterways.

India’s maritime EXIM trade has risen from 544 Mn T in FY 2006 to about 915 Mn T in FY 2011(E) @ CAGR of 11%. In comparison with the overall maritime trade growth, coastal cargo volumes are estimated to have risen by only 5% CAGR between FY06 and FY11E to touch about ~ 160 Mn T. In the past, the flow of bulk goods from west coast hinterlands to the east coast hinterlands always followed the coastal route. For instance, coal from Kolkata was carried in bulk on regular basis by coastal vessels to ports around the country right up to Kandla and Bhavnagar and salt in bulk was carried back to Kolkata either from Kutch ports or Tuticorin. Coastal shipping at a policy level has not received any significant impetus over the past decade because of which the competing modes of transport viz. Rail and Road have been predominant. Primarily the environmental friendliness, safety and cost efficiency makes waterway an interesting and attractive inland transport option as compared to road and rail. Globally, countries such as Japan and USA have realized the cost and environmental advantages of coastal shipping and the percentage of cargo freight moved by this mode is substantially higher as compared to India. Whereas India’s share of coastal shipping amongst modes of domestic freight transport is just 6%, it is 14% in the USA and 30% in China. In case of Inland water ways, share of this mode is less than 0.15% of the domestic freight in India as compared to14% in USA, 20% in Germany, 32% in Bangladesh and 46% in Netherlands.


Why have Coastal Shipping/Inland Waterways Transport been under-utilized in India? Despite the several benefits of waterways transport, it has failed to take off in India at a significant level. Not surprisingly the key reasons for such inactivity have been at a policy formulation level itself  Lack of active policy measures to promote coastal and inland shipping  High import duties on bunker oil and spares only for coastal vessels, bunker oil is 28-39% more expensive than for an ocean-going vessel  Lack of jetties with modern crane equipment and warehouses, typically needed every 100km to promote inland waterways  Incidence of corporate tax as against tonnage tax for oceangoing vessels and personal income tax which discourages quality officers from continuing on coastal vessels  Rivers need to be dredged to have even drafts for long haul movements  Infrastructural and logistics bottlenecks are also posing a threat to development in the sector. Absence of separate berthing facilities for coastal vessels and inadequate cargo handling facilities at ports results in abnormally high dwell times  For inland waterways, there is a lack of jetties with modern crane equipment and ware houses, typically needed every 100 km. River drafts are not maintained at the required 1.5-2 m which restricts long haul movements. A major and unnecessary bottleneck exists for coastal vessels due to the mandatory requirement of Customs declarations at the destination despite being domestically bound vessels who have already cleared the required procedures at the first port of harbouring in India Drivers of change: Despite the benefits of inland waterways, the mode did not pick up in the past, however there are signs of positive change being seen on the horizon;     Increasing investments in the port & maritime services sector in India Growth of...
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