The Huge Untapped Potential In Coastal Shipping
Indian Transport & Logistics News|November - December 2018
The Huge Untapped Potential In Coastal Shipping

Placing his bet on the coastal shipping for being the most economical and clean mode of transportation, avi Dutt highlights the untapped opportunities and the current challenges in india’s maritime ecosystem.

India’s long coastline, array of ports on the east & west coast; and a large & resilient domestic economy provides a perfect ecosystem for the country to develop a substantial coastal shipping industry.

In India, domestic movement happens primarily through road, followed by railways and a meagre share is through waterways. Coastal shipping can be a great enabler to develop economy and reduce logistics costs as evident from the experiences in other developed regions.

The European Union experience has demonstrated that cost of coastal movement of cargoes was about 20 percent and 40 percent that of road and rail movement, respectively. The ‘Marco Polo Scheme’ of the EU aims to free Europe’s roads of an annual volume of 20 billion tonne-km. of freight. China is also estimated to move one billion tonnes of coal, steel, grains and fertilizers along its coast through about 12,000 specially-built coastal vessels.

Current Status

Currently, in India, the coastal shipping primarily handles POL, coal, and iron ore, which account approximately 80 percent of the total coastal movement. An overview of the geographical location study indicates techno-commercial viability and feasibility of moving various cargoes such as cement, fertilizers, food grains, steel, marble, salt, sugar, cotton, and automobile. There is a huge untapped potential to be exploited across the sector.

There has been several deliberations by various bodies and committees on coastal shipping in the past, yet the industry has not developed and faces a stiff competition from road and rail transportation.

Many key initiatives have been taken to facilitate the coastal cargo movement. Some of which are discounts on port charges, policy changes as cabotage relaxation across various cargoes, facilitation for coastal berth in various ports. Various stakeholder meetings across commodities and geography have been conducted at various levels and joint study of techno-commercial viability has been carried by government, private companies and logistics service providers.

Coastal Cargo: major issues and recommendations

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November - December 2018