India: When shipping industry set sail on smooth seas

When shipping industry set sail on smooth seas
Lalatendu Mishra 29 Dec 2018 https://www.thehindu.com/business/Industry/shipping-industry/article2586...

The year 2018 was a significant year for the shipping, ports and logistics sector.

Following policy interventions like amendment of Model Concession Agreement, revision of tariff guidelines and the various steps taken towards facilitating ease of doing business, India’s major ports reported improved performance in terms of capacity addition and efficiency.

The ‘Sagarmala’ programme also witnessed speedy implementation with the completion of 89 projects. As per Shipping Ministry data, 443 projects worth ₹4.32 lakh crore were under various stages of implementation and development.

Inland water transport sector also got a leg up. The year witnessed the inauguration of the multi modal terminal on River Ganga at Varanasi, the movement of container cargo from Kolkata to Varanasi on the river, and the commencement of integrated movement of cargo from Kahalgaon in Bihar to Pandu in Assam over three waterways — Ganga, Brahmaputra and the Indo-Bangladesh Protocol Route.
Cruise tourism

Cruise tourism also saw developments like the inauguration of a international cruise terminal at Chennai Port and the introduction of Mumbai-Goa cruise service from Mumbai Port Trust.

During the year, the government continued its efforts to enhance infrastructure and port capacity to meet the requirements. Over the years the cargo handling capacity of the major ports has been growing steadily from 744.91 MTPA in 2012-13 to 965.36 MTPA in 2015-16 and 1,359 MTPA in 2016-17 (when port capacity was re rated based on Berthing Policy as per international norms) to 1,451.19 MTPA in 2017-18. The figure for 2018 is not available.

Similarly, traffic handled at the major ports had also seen an increase. In 2012-13, the traffic was 545.79 MT which increased to 697.37 MT in 2017-18. The traffic in 2018-19, up to October 2018, was 403.39 MT as per Shipping Ministry data.

Port modernisation also saw hectic action. Under Project Unnati, global benchmarks were adopted to improve the efficiency and productivity in terms of key performing indicators (KPIs) for 12 major ports.
Unlocking capacity

About 116 initiatives were identified across 12 major ports to unlock more than 100 MTPA capacity through efficiency improvement. Out of which, 91 initiatives have been implemented to unlock around 80 MTPA capacity.

In addition to projects for capacity expansion of major ports, six new port locations, namely Vadhavan (Maharashtra), Enayam (Tamil Nadu), Tajpur (West Bengal), Paradip Outer Harbour (Odisha), Sirkazhi (Tamil Nadu), Belekeri (Karnataka) — have been identified to increase overall cargo handling capacity.

The number of ships under Indian flag has also increased. As on December 31,2017, there were 1,374 ships while as on October 31, 2018, the number had gone up to 1,399 [12.79 million tonnes]. The number of seafarers in India has also seen an radical growth of 42.3%. The number of seafarers in December 2017 was 1,54,349 while the number of seafarers has now increased to 1,79,599.

Commenting on the logistics sector of which shipping is an important constituent, Samir Lambay, co-founder and CEO, FreightCrate Technologies said, “The Indian logistics sector has not been able to reach its full potential due to insufficient integration of technology, warehousing and transportation networks, which ultimately leads to increased prices and shipment delays.

“India logistics cost as a percentage of GDP is extremely high, 14% compared to advanced economies (Japan is 10%, U.S. is 9.5% and Germany 8%). This increases the price of not just local products but also our export products in overseas markets,” he said.

“Hence, technological, infrastructure and skill-related advancements are not only beneficial but are absolutely crucial for us to service the expected consumer demand for products from a growing population and also to ensure our export companies can be price competitive in global markets,” he added.

However, Chander Agarwal, managing director, TCIEXPRESS, said that after the introduction of Good and Services Tax (GST) and e-way bill the efficiency of the logistics sector has improved.

“Before e-way bill, the logistics industry was spending 50-60% of its time on tax compliance, inter-state checkpoints maneuvering, scrutiny, and tracking of inter-state sales tax, etc.

“This new ecosystem, based on the GST framework, has managed reduce the overall time spent on tax compliance using technology and has helped the logistics industry to increase operational efficacy,” he said.