In the earlier part of the exclusive interview to Sagar
Sandesh, Mr. K.G.Ramakrishnan, MD, BLA, had said that 2018 would be a tough
year for the shipping industry; and mere reduction of freight on
at best convert some low value cargoes from bulk to Containers and will not
influence cargo volumes sizeably. He has rightly pointed out that what matters
is the cargo and nothing else. Asked about the East Coast ports, Mr.KGR said
that the infrastructure of rail and road connectivity needs to be substantially
enhanced on par with the West Coast and this can only happen through government
policy and action. Talking about the
terminals in private ports and the government ports, he brought out the
difference between the two in terms of performance. While private ports are
more recent and with deeper drafts unlike the terminals in the govt ports;
moreover, the support from the marketing while it is effective with regard to
the private ports, it is lacking for the government facilities .Replying to the
question why the coastal shipping has not developed despite govt consistent
support, KGR said that
The government policies alone
cannot drive coastal shipping. Though we claim to have a coastline of 7500
Kilometers, you cannot compare our coastline with China. Most of the shipping
in our country is one way, movement from north to south. North India being a
production centre and southern parts consumes it. It is one-way traffic, with
very little return cargo. Asked about what ails East Coast ports, he replied:
Majority of ports in the East
Coast are working 40-50 per cent
of their cargo handling capacity because of the inherent nature of the Indian
industry which is based in the north and finds its comfortable, infrastructure
wise to move exports to ports in Western India… Moreover the Railway tariff has
been designed in such a way that the freight for moving from
the North to the Ports in
Western India is much cheaper than to the ports in the East coast. .. On an average,
movement of cargo by rail from North to East Coast ports works out 40 per cent
more expensive. The ports in the east coast may be efficient but are unable to
attract more cargo since large volume of export cargo from
the hinterland is not available
Now, to continue with the interview
SS: Why Coastal Shipping has not taken off in India?
KGR: Government policies alone cannot drive coastal shipping. Though we
claim to have a coastline of 7500 kilometers, you cannot compare our coastline with
Most of the
Coastal shipping in our country is one way movement from North to South, with
North India being a production centre and south which consumes it.
shipping has been used by heavy industries to ship raw materials like iron ore and
coal from the East to the western ports. However, Coastal shipping cannot be
panacea for all our transport issues as it needs different logistic environment
for non bulk goods.
movement of cargo has been active in the west coast from ports in Gujarat to
Cochin and Tuticorin, mostly dealing with imports from Gujarat. There is also
an effort to link the eastern states with south and west by transshipping
within the country.
popular myth, moving goods from one inland point to another through coastal
shipping need not necessarily be cheaper than the road. Citing an instance he
said car movement by coastal shipping from Chennai to the dealers in Rajasthan,
via Gujarat ports did not work out since it involved one coastal and two road
movements. While there will be a marginal reduction in freight costs due to the
coastal leg, the longer transit due to multiple handling may not be acceptable
to the end consumer.
not take into account the environmental benefits of moving cargo over sea and
based more on commercial reality.
coastal container shipping has achieved in the country has been due to the
efforts of smaller companies or entrepreneurs who have converted road cargo to
ships through their endeavour. The absence of our bigger shipping companies in
this domain is noticeable.
hindrance coming in the way of coastal shipping is our customs and immigration
Rules. While a truck load needs just a way bill, the documentation to send by
sea is elaborate. Also there is variation in the way these are applied from
port to port and from officer to officer. The arrangement is ad hoc since the
government is yet to formulate the standard operating procedure to deal with
basis of alleged security concerns, immigration authorities have made most of
our anchorages outside Ports unusable even in ports in southern India. Ships
are not allowed to bunker, undertake repair work or any activity connected with
shipping in outer anchorages. This is another disincentive to coastal shipping
and shipping in general. It also curtails commercial activity at most ports
with most service providers opting to close down in the absence of
opportunities. The claim of 7500kms of coastline falls flat when much of the
seafront and anchorages cannot be put to any meaningful use.
SS: On the outlook for container shipping industry in 2018.
KGR: Hopefully the industry will get over the consolidation phase in a
year’s time. But with so much of tonnage being added to container ship fleet,
it is unlikely to the freight rates will go up.
industry is in for two added pressures of rising cost of fuel and introduction
of restrictions of Sulphur emissions. With prices of petroleum looking up it is
only question of time before bunkering costs move up and the time lag between
this cost increase and freight increase can be crippling.
upcoming restrictions on sulphur content in fuels to 0.5 per cent in the next
two years imposed by the International Maritime Organization would mean serious
investment to upgrade ships. With freight rates expected to remain low, the
going will be tough for the industry. This will be a serious challenge to the
domestic shipping companies and coastal shipping as well.