More reports on: Government policies

Coastal shipping gets a big boost with new traffic from Vizag, Chennai

02 November 2017

Nitin Gadkari, minister of shipping, road transport and highways, water resources, river development and Ganga rejuvenation, digitally flagged off a consignment of steel cargo from Vizag Port through coastal shipping route, two days after flagging off the first Ro-Ro vessel transporting cars from Chennai to Bangladesh.

The consignment of 230,000 tonnes of steel cargo from Rastriya Ispat Nigam Ltd (RINL) sailed off from Vizag Port to Ahmedabad, Mumbai and Kochi through coastal shipping route on Wednesday.

Coastal transportation of these products will help RINL save 380 million tonne km of rail transportation per annum and bring down logistics costs, the minister said while flagging off the service.

This is especially significant since RINL has doubled its production capacity to 6.3 million tonnes per annum, and to cater to the increased volumes it is important to economise on transportation costs to be globally competitive

RINL has, till now, been transporting its products to 22 stockyards through road and rail mode.

The minister urged all other manufactures also to make use of coastal shipping for transporting goods as this can be a key enabler for reduction of logistics cost for domestic and EXIM trade of India.

Coastal movement has been on RINL's radar for a long time because of its proximity to the ports and to ease the pressure from the over optimised road and rail systems. RINL recently finalised a one year Multi Modal Transportation contract covering end-to-end logistics from plant at Visakhapatnam to its stockyards at Ahmedabad, Mumbai and Kochi.

The Rs75 crore annual contract has been awarded to the consortium led by Shreyas Shipping & Logistics Ltd, Mumbai, a member of Transworld Group, Dubai.

The contract involves taking delivery of material from plant, shifting by road to VPT or GPL, shipping the material by sea to a port near the stockyard and finally delivering the material to RINL Stockyard. The quantities expected to be transported are 90000 tonnes, 75000 tonnes and 60000 tonnes to Ahmedabad, Mumbai and Kochi stockyards, respectively.

Movement of cargo through coastal shipping has inherent advantages over land modes of transport such as road and rail as it is more cost effective, causes much less pollution, reduces congestion on land and can cater to huge parcel sizes . In view of this, the government of India has initiated several measures for promoting coastal freight movement. The Sagarmala project is one such strategic and customer-oriented initiatives to modernise India's ports to augment coastal movement so that ports become drivers of economic growth.

Globally countries such as China and Netherlands have achieved a modal share of 24 per cent for coastal shipping and inland water navigation. Increasing the share of coastal shipping and inland navigation in the transport modal mix is one of the key objectives of the Sagarmala Project. Sagarmala programme envisages doubling current share of coastal shipping in India's overall modal mix from 6 per cent to 12 per cent by 2025.

The government has taken several steps to promote coastal shipping. Vishakhapatnam Port Trust has totally removed CHD levy on steel cargo from earlier 265 per cent to boost shipment of steel cargo. Also, 40 per cent concession on vessel related and cargo related charges are applicable for such coastal movement.

For coastal movement through Ro-Ro vessels, 80 per cent concession on vessel related and cargo related charges are applicable in Indian ports. These initiatives have helped increase container tonnage from 351,276 DWT in 2015 to 654,883 DWT as of 31 October 2017, an increase of 86 per cent.

A fleet of 14 Indian flag containers with DWT of 31,846 have been added after the tax on bunker fuel for Indian flag container vessels was abolished in 2015.  Twenty-one projects worth Rs729.6 crore have been provided financial assistance of Rs205 crore under the coastal berth scheme in Sagarmala to promote the development of dedicated infrastructure for coastal shipping of goods and passengers across India's major and non-major ports.

Gadkari said that this new era of transport will give a boost to the economy, encourage industrial growth, create more employment and raise the GDP of the country.

Chaudhary Birendra Singh, union minister of steel was also present at Vizag Port. He lauded the efforts of the shipping ministry in ensuring that ports and waterways ably support the transport requirements of the steel industry. He said that the growth of ports would help the steel industry immensely.

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