GST enables seamless containerisation
Ajit Venkataraman, MD, APM Terminals India, in an exclusive interview, throws light on the significance of dry ports in the country and how GST aims to push the containerisation sector into an organised space.
How will GST affect the containerised cargo of the country?
Two important operational expectations of GST are the consolidation of warehouses, and the expansion of the consignment sizes being transported. GST is likely to push the overall environment into an organised space, reduce inefficiencies, and shorten the supply chain logistics cycles. This is expected to make containerisation a widespread movement bringing more cargo into the realm of containerisation. For example, a farmer will be able to see value in using containers for transportation, and provided with access to the necessary infrastructure, would have the incentive to make the transition.
The cost of containerised cargo may come down due to factors such as induced price competitiveness among the existing players, enhanced efficiencies due to fewer, but larger nodes, and better utilisation of ICDs and the rail network. Containerisation will also drive scale that will bring logistics costs down. Could you apprise us of the current scenario of dry ports in the country?
With improvements in rail and road infrastructure, connectivity to dry ports will improve and will make a significant impact to the hinterland. The industry is also undergoing realignment with more focus on value added services for end-customers. What measures need to be taken for more containerised cargo?
The containerised trade accounts for approximately 55 per cent of the country’s total EXIM trade volumes. Containerisation has proven by far to be the most efficient and cost-effective option, enabling faster and safer transportation. First and foremost, containerisation offers the seamless movement of cargo across rail, road and sea, reflecting the increasing importance of modern multi-modal logistics infrastructure. Other aspects include encouragement of the agriculture sector to move towards containeristion (highly underutilised for this sector), establishment of ICDs in the hinterland, and consolidated and specialised large-format warehousing facilities. Also, the key is the push to coastal shipping. Impetus to the container manufacturing industry and availability of containers at the customers’ doorstep can be a game changer. How was 2016 for Indian container market? Your outlook for 2017-18?
The recent numbers in cargo traffic make us believe that the sector is in a growing phase. Containerised cargo traffic, which stood at 11.5 million TEUs in 2015, grew to 12.5 million TEUs in FY 2016, and is projected to reach 13.5 million TEUs in FY 2017. The holistic approach towards the container market, logistics and infrastructure, aimed at enhancing global trade with higher efficiencies, indicates a positive outlook. The Government’s decision to open up new sectors to FDI has sent a positive signal to the investors. The easing of FDI norms is likely to attract more investment in the market and further the ‘Make in India’ agenda, converting into enhanced global trade for India.
Improvements in rail & road infrastructure, connectivity to dry ports will improve and have a significant impact to the hinterland