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After the commissioning of the Puducherry Satellite port the containers will go through the coastal route

(Interview Continued)

Sagar Sandesh: The Satellite port for Chennai at Puducherry has not taken off though the project has been talked about for more than two years.  When will the project take-off?

S. Narasimhan: Puducherry is not conceived as a full-fledged port. Barges used to carry cargo to ships anchored outside the port. Now dredging of the port to a limited depth is being undertaken. The work has not been completed as yet. It would take at least six months to one year to complete the dredging project. The port with limited depth will then be commissioned.

We had a trial run of a ship carrying containers from Chennai to Puducherry  a few months ago. It was successful. Once the project is commissioned it will decongest the Southern Highway linking Chennai with Puducherry.

Thousands of boxes move by road from Puducherry to Chennai port now.

About ten thousand boxes (containers) move every month from Puducherry to Chennai port. They now move by road. After the commissioning of the Puducherry Satellite port the containers will now go through the coastal route and be loaded into the ships directly in Chennai port. In the return voyage the ship will take containers meant for Puducherry and south Tamil Nadu to the satellite port. The customs formalities will be completed at Puducherry itself, so that containers could be directly loaded into ships in Chennai port.

For the benefit of the readers.

Summary of the interview with S Narasimhan, Vice President Sattva Logistics Chennai.

The Shipping industry is going through consolidation phase because of the price wars unleashed by them. The price wars they let loose to capture the market has led them to the present situation where they are forced to go in for consolidation. I hope the Logistics industry should not fall a prey to the price war and get into the same situation as the shipping industry.

Consolidation has also done some good to the industry. Everyone in the industry talks of size of the company. As long as the size of the company is huge, you have the right and the authority to run the company in a better fashion.

 A Lot of shipping companies are downsizing their units in an effort to cut costs. Multiple offices they were running various parts of the world have been reduced. There has been reduction in manpower in the industry. Logistics segment will soon emulate the shipping industry in terms of consolidation and the industry will settle down.

The Direct Port Delivery of Imports and Direct Port Entry of Exports introduced by the Government as part of ease of doing business for the trade is expected to play a major role in the way the Logistics industry will run in the EXIM cargo side of the country. It will also have an impact on the transportation sector which is currently run on a traditional basis without scientific approach.

In India still Eighty five per cent of movement of goods is done through Roads. The time has come when government and other stakeholders in the Logistics industry look at converting the cargo moving by road on to trains and the coastal shipping segment. 

The latest decision of the Shipping Ministry to permit Indian cargo to be carried by foreign vessels will pave the way for increased movement of non EXIM cargo through coastal sector. This will also help the development of ports in the East Coast. He saw a great potential in movement of coastal cargo from East Coast Ports

On the trade war being unleashed by the United States against China and other countries, he said it will have a great impact on India, since it is caught between the two economic giants. India is  therefore forced to have a re-look at the duty structure on goods manufactured in United States and China. There will however be little impact on the movement of goods because of the trade war. The impact will be more structured and organized.

On the imbalance in port traffic between the Ports in the West and East Coast he said the Railway Connectivity to West Coast Ports from Central India, National Capital Region and Northern India, the manufacturing base of the country have improved over the year and will become even  better with the commissioning of Mumbai Delhi Dedicated Rail Freight Corridor next year,

There were times when 95 per cent of cargo meant for Hyderabad or Nagpur used to go from Chennai Port. At present 100 per cent of the cargo meant for Central India and Hyderabad are moving through JNPT and Mundra Ports because of the better Rail connectivity. The only way to increase the traffic throughput of East Coast ports is through improving the rail connectivity.

Both Chennai-Bengaluru and Chennai-Visakhapatnam Industrial Corridor has no railway component. Karnataka government is putting up a Multi Modal Park, about 60 kilometers from Bengaluru without rail connectivity. Without rail connectivity, the project cannot be called a Multi Modal Logistics Park. I donít know how far this project will be successful.

On the lack of adequate rail connectivity to east coast ports he said we have taken up the matter with successive central government in various meetings. We raise the issue in every meeting we have with them he said.

The introduction of direct port delivery and direct port entry aimed to bypass container freight stations has not affected the business of the freight stations. Instead nearly 45 per cent of the customs cleared DPD cargo at Chennai Port land up in container freight stations for last mile connectivity.

Small scale importers and MSMEs do not have adequate space in their factories to store and hence they prefer to keep the customs cleared DPD cargo at container freight stations.

Meanwhile the existing Container Freight Stations are reorienting and reinventing their business models to cope with the situation. We have created specific areas within the station to store the DPD containers. We are also adding more space for storage and ware housing inside the CFS.

On ways and means to reduce the Logistics cost which is as high as 14 per cent of the GDP in India, he said development of rail connectivity to East coast ports and movement of goods through trains will considerably bring down the Logistics cost in the country.

The Direct Port Delivery of Imports and Direct Port Entry of Exports are good initiatives of the government to bring down the Logistics cost.

The proposed construction of eight lane highway between Chennai and Salem is a first concrete step to make Salem, a Multi Modal Logistics Hub of Southern India.

Salem has the location advantage of being situated in close proximity to South Tamil Nadu, Kerala, Southern Karnataka and Andhra Pradesh besides Chennai. Ware housing business has taken off in a big way in and around Salem in the last few years taking advantage of the location.

But there must be an organized attempt by the government to develop Salem as the Multi Modal Logistics hub of Southern India. The government should not end with the construction of the eight lane highway. A net-work of modern highways needs to be constructed to connect Salem with Tuticorin, Karaikal, Cochin Ports and the proposed Vizhinjam transshipment terminal. Salem needs to be developed on Hub and Port model.

Commenting on the statement by an official of a container terminal that India needs more cargo and better rail connectivity between ports and hinterland and not new ports he said he agreed with his contention. The container terminal chief would have emphasized on containerization of cargo as large volume of Indian cargo remains bulk. They need to be containerized so that transportation is quick, When containerized quality of the goods transported are not affected. More facilities should be created for the trade in the hinterland including Inland Container Depots.

The government is currently encouraging setting up of more Inland Container Depots and have stopped issuing fresh licenses for Container Freight Stations around Chennai, Mumbai, Visakhapatnam, Mundra and JNPT Ports.

Though Krisnapatnam port has made success in transshipment of cargo during the last two years and Chennai port is about the enter the business, both the ports are not meant to be transshipment hubs since they are not near the international shipping lanes like Vizhinjam or Colachel.

The chronic issue of Road congestion in Chennai port was not attended to over a decade by successive governments. Had the EMRIP road project intended to provide six lane road connectivity between Chennai and Ennore ports implemented ten years ago, Chennai port would have been ahead of JNPT or Mumbai.

Shipping lines started skipping Chennai port when congestion resulted in delay of 48 to 72 hours for delivery of cargo. Industries were reluctant to invest in Southern India when a robust port like Chennai was hit by congestion.

The situation in Chennai has improved since the commissioning of EMRIP project, Container delivery and intake of exports into the port at present does not take more than eight hours on an average, The Elevated corridor project between Chennai Port and Maduravoyal which was stalled for the past five years is about to recommence,

The present chairman of the Chennai port Raveendran who belongs to the Railway Services has initiated several measures to improve the rail connectivity to the port.

Chennai Port will soon become a Ultra Modern Container Port.

The Puducherry Satellite Port project conceived to decongest Chennai Port will take off in Six months to One year once the dredging work at the Puducherry port is completed. The Puducherry industrial belt provides nearly ten thousand containers per month to Chennai Port which are currently moved b y road. Once the project takes off, the containers, after cleared by Customs at Puducherry port itself can move directly to the ships in Chennai port.

The project will decongest the highway leading to Chennai from the Union territory.

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