Port of growth & op­por­tu­ni­ties

Port-led de­vel­op­ment has been given high­est pri­or­ity through the com­mis­sion­ing of projects like the Sa­gar­mala. CARGOTALK delves into the fac­tors for sus­tain­able in­fra­struc­ture un­der Sa­gar­mala for boost­ing growth for ports.

Cargo Talk - - Front Page -

With the aim to mod­ernise coun­try’s ports, so that port-led de­vel­op­ment can be aug­mented, and coast­lines can be de­vel­oped to con­trib­ute in In­dia's growth, the gov­ern­ment of In­dia had launched Sa­gar­mala pro­gramme in 2015. The Sa­gar­mala is a se­ries of projects to lever­age the coun­try’s coast­line and in­land wa­ter­ways to drive in­dus­trial de­vel­op­ment. The con­cept of port-led de­vel­op­ment is cen­tral to the Sa­gar­mala vi­sion. Por­tled de­vel­op­ment fo­cuses on lo­gis­tics in­ten­sive in­dus­tries (where trans­porta­tion ei­ther rep­re­sents a high pro­por­tion of costs, or timely lo­gis­tics are a crit­i­cal suc­cess fac­tor). The flag­ship pro­gramme by the Min­istry of Ship­ping will help in re­duc­ing the lo­gis­tics cost for both do­mes­tic and EXIM cargo with op­ti­mised in­fra­struc­ture in­vest­ment. The gov­ern­ment is aim­ing a dou­ble-digit growth rate for the coun­try with this pro­gramme. CARGOTALK sought veter­ans opin­ion on what op­por­tu­ni­ties Sa­gar­mala project opens for the mar­itime lo­gis­tics trade. Shar­ing his take on how this pro­gramme will en­hance ef­fi­ciency of ports with mod­erni­sa­tion of in­fra­struc­ture and last mile con­nec­tiv­ity to ma­jor port, Di­nesh Gau­tama, Pres­i­dent, Navkar Cor­po­ra­tion, says,

“Ports are a key fac­tor in the de­vel­op­ment of any coun­try. In­dia is blessed, of­fi­cially (and as per the Con­sti­tu­tion) with about 199 ports (12 be­ing ma­jor that in­clude 11 trusts and one cor­po­rate port). About

40 per cent of the ports are op­er­a­tive while many oth­ers have been sub­sumed into the lo­cal mu­nic­i­pal in­fra­struc­ture. A port be­comes ef­fec­tive when it has an ef­fi­cient con­nec­tiv­ity. So, there is a cry­ing need to look into the con­nec­tiv­ity fac­tors of evac­u­a­tion of im­ports and feed­ing of ex­ports. With to­days’ JIT (Just In Time) con­cept, last mile con­nec­tiv­ity fea­tures high on the list of ex­porters and im­porters and it is to­wards this that all should con­cen­trate in.”

Sus­tained growth in long run

“Port-led de­vel­op­ment is def­i­nitely a good way to achieve sus­tained growth in the long run. Ports are ma­jor source of em­ploy­ment and since cen­turies, large ci­ties have de­vel­oped around the ports due to the com­mer­cial ac­tiv­ity which the ports cre­ated. The gov­ern­ment has ini­ti­ated 21 projects for last mile con­nec­tiv­ity by rail mode, un­der the Special Pur­pose Ve­hi­cle (SPV) of In­dian Port Rail Cor­po­ra­tion and Min­istry of Ship­ping, has signed an MOU with NHAI for 79 projects for con­nec­tiv­ity by road,” in­forms, Vivek Kele, Im­me­di­ate Past Pres­i­dent, AMTOI.

Scope for re­duc­tion in costs

Ashish Ma­ha­jan, Man­ag­ing Di­rec­tor, Land­mark Lo­gis­tics, be­lieves, “Glob­ally, mar­itime na­tions such as China, South Korea and Ja­pan have ef­fec­tively used their coast­line for port led de­vel­op­ment. Port mod­erni­sa­tion and new port de­vel­op­ment, port con­nec­tiv­ity en­hance­ment, port-linked in­dus­tri­al­i­sa­tion and coastal com­mu­nity

de­vel­op­ment un­der the Sa­gar­mala project has an im­mense scope for re­duc­tion in trans­porta­tion and lo­gis­tics costs and boost­ing ex­port com­pet­i­tive­ness through de­vel­op­ing port-prox­i­mate in­dus­trial clus­ters.”

Prakash Tul­siani, Ex­ec­u­tive Di­rec­tor & COO, All­cargo Lo­gis­tics, shares, “Pri­or­ity should be given to aug­ment­ing the op­er­a­tional ef­fi­ciency of ex­ist­ing ports through in­fra­struc­ture mod­erni­sa­tion es­pe­cially on the land side. Em­pha­sis should be placed on in­stalling ad­vanced cargo han­dling pro­cesses, scal­a­bil­ity in pro­cesses and mech­a­ni­sa­tion of port op­er­a­tions.”

New ini­tia­tive in pipe­line

“For trade to boost, in­dus­trial de­vel­op­ment of ar­eas in and around the port is cru­cial. Im­prove­ment of last-mile con­nec­tiv­ity re­mains crit­i­cal to re­duc­ing de­liv­ery lead times through con­nect­ing ma­jor ports with in­dus­trial hubs and re­gions of pro­duc­tion/con­sump­tion ac­tiv­ity. Height­ened pace of road con­struc­tion along with the de­vel­op­ment of DRFC are pos­i­tive re­in­force­ments in this di­rec­tion. Fast-pac­ing last­mile con­nec­tiv­ity ini­tia­tives and de­vel­op­ing road and rail link­ages will lead to port-led in­dus­tri­al­i­sa­tion and play a key role in the de­vel­op­ment of the econ­omy,” Tul­siani ex­plained

“The gov­ern­ment plans to de­velop six new ports across five coastal states of In­dia which means more busi­ness op­por­tu­ni­ties for mar­itime trade,” adds Ma­ha­jan. Con­tin­u­ing the op­por­tu­ni­ties given by Sa­gar­mala pro­gramme, Gau­tama shares, “Lo­gis­tics plays an im­por­tant role in con­nec­tiv­ity of ex­port-im­port trade. Sa­gar­mala is all about con­nec­tiv­ity. Ef­fi­cient con­nec­tiv­ity will bring about a ma­jor change in the way the cit­i­zens life will im­prove.”

Sea of op­por­tu­ni­ties

Ac­cord­ing to Tul­siani, “The am­bi­tious Sa­gar­mala project will pro­vide a much-needed uptick to mar­itime lo­gis­tics trade and po­si­tion In­dia as a global lo­gis­tics hub. It has the po­ten­tial to lay the foun­da­tions for the set­ting up of in­dus­trial zones and lo­gis­tics parks around ports. It also en­com­passes in its scope to cre­ate coastal eco­nomic zones and im­prove em­ploy­ment op­por­tu­ni­ties for coastal com­mu­ni­ties through ed­u­ca­tion and train­ing pro­gramme. The project can also fast­pace the de­vel­op­ment of off­shore en­ergy projects in the coun­try.” “The new in­fra­struc­ture cre­ated un­der the Sa­gar­mala pro­gramme will give lo­gis­tics ser­vice providers an op­por­tu­nity to con­fig­ure new lo­gis­tics so­lu­tions for their cus­tomers which will be op­ti­mised for costs and time,” feels Kele.

“A study re­leased by the Min­istry of Ship­ping es­ti­mates that the Sa­gar­mala project can save up to `40,000

crore per year on lo­gis­tics spends by key in­dus­tries. In­dia pro­vides a sig­nif­i­cant po­ten­tial for move­ment of cargo us­ing the coastal ship­ping line — which is sig­nif­i­cantly cheaper than road or rail trans­port. The project aims to lever­age to drive in­dus­trial de­vel­op­ment, thereby, re­duc­ing the load fac­tor of goods trans­ported through roads,” in­forms Tul­siani.

“Po­lit­i­cal pres­sure, lack of au­ton­omy, ab­sence of in­cen­tives, ex­ces­sive bu­reau­cracy, and hi­er­ar­chi­cal rigidi­ties are con­trib­u­tors to the cur­rent state of the In­dian ports. There are also prob­lems with av­er­age pre­berthing turn­around time, which is around three days and is quite high as com­pare to other in­ter­na­tional ports like Sin­ga­pore, Hong Kong etc. These low per­for­mance in­di­ca­tors are pri­mar­ily be­cause of the poor road and rail con­tainer evac­u­a­tion in­fra­struc­ture from the port,” elu­ci­dates Ma­ha­jan.

Cur­rent trends

Ac­cord­ing to the Min­istry of Ship­ping, around 95 per cent of In­dia's trad­ing by vol­ume and 70 per cent by value is done through mar­itime trans­port. To ex­plore the un­tapped po­ten­tial of long coast­line of over 7,000 km, veter­ans throws light on the trends af­fects ports de­vel­op­ment. “There is a grow­ing trend to look into con­tainer­i­sa­tion and liner ship­ping where sea­ports are con­cerned. Con­tainer Ter­mi­nals are com­ing up in many re­gions. How­ever, the move­ment of car­goes to­wards new ter­mi­nals is tak­ing time due to road in­fra­struc­ture, reg­u­la­tory fac­tors, non-digi­ti­sa­tion and pro­ce­dural wran­gles. These fac­tors should be at­tended to as they af­fect the sea­port de­vel­op­ment,” points Gau­tama.

“The cur­rent trends in In­dia will see more pri­vate play­ers par­tic­i­pat­ing in the sea port de­vel­op­ments, there is a likely hood of some con­sol­i­da­tion hap­pen­ing in this space as APM ter­mi­nals is look­ing to sell their as­sets in In­dia, un­der the Sa­gar­mala project. We will see more ter­mi­nals be­ing de­vel­oped for han­dling coastal cargo at all ma­jor, mi­nor and pri­vate ports,” notes Kele.

“Coastal Eco­nomic Zones (CEZs) have been pro­posed as eco­nomic re­gions host­ing in­dus­trial clus­ters. CEZs are aimed at re­duc­ing time and costs re­quired for ex­port/ im­port move­ment and do­mes­tic cargo, thus be­com­ing a fo­cal point of port-linked in­dus­tri­al­i­sa­tion. In ad­di­tion, they have the po­ten­tial to cre­ate di­rect and in­di­rect em­ploy­ment of 4 mil­lion and 6 mil­lion re­spec­tively,” tells Ma­ha­jan.

“For sea ports to be ef­fec­tive and ef­fi­cient, land side de­vel­op­ment is key. Ports are ef­fi­cient only when there is ef­fec­tive and timely evac­u­a­tion else ports would be choked. CFS, lo­gis­tics parks, road and rail net­work are needed for ports to evac­u­ate. Fur­ther, de­ploy­ment of ad­vanced tech­no­log­i­cal tools for seam­less freight man­age­ment and cargo han­dling are im­pact­ing the man­ner in which mod­ern sea­ports func­tion,” ex­plains Tul­siani.

Dig­i­tal­i­sa­tion is the key

“Tech­no­log­i­cal dis­rup­tions and dig­i­tal tools are chang­ing the func­tional par­a­digms of the lo­gis­tics in­dus­try and help­ing in the process of port de­vel­op­ment. Tech­nolo­gies like big data and ad­vanced GPS nav­i­ga­tion sys­tems are emerg­ing as key fac­tors in mon­i­tor­ing the move­ment of prod­ucts. De­ploy­ment of sensors and ra­diofre­quency iden­ti­fi­ca­tion (RFID) tech­nol­ogy is largely help­ing in track­ing con­tainer move­ment and cal­cu­lat­ing busi­ness vol­umes. Im­ple­men­ta­tion of ad­vanced data se­cu­rity sys­tems to pro­tect cru­cial data against cy­ber-at­tacks can also go a long way,” points Tul­siani.

Agree­ing with the fact that dig­i­tal­i­sa­tion is a way ahead, Kele says, “The in­dus­try as­so­ci­a­tions are al­ready col­lab­o­rat­ing with In­dian Port As­so­ci­a­tion to launch PCS 2.0. This is en­vis­aged to be in state of art dig­i­tal plat­form which will bring stake hold­ers to­gether with re­duc­tion in trans­ac­tion cost and time.”

A port be­comes ef­fec­tive when it has an ef­fi­cient con­nec­tiv­ity. There is a need to look into the con­nec­tiv­ity fac­tors Pri­or­ity should be given to aug­ment­ing the op­er­a­tional ef­fi­ciency of ex­ist­ing ports through in­fra­struc­ture mod­erni­sa­tion Port led de­vel­op­ment is a def­i­nitely a good way to achieve sus­tained growth in the long run Sa­gar­mala project has an im­mense scope for re­duc­tion in trans­porta­tion and lo­gis­tics costs and boost­ing ex­port com­pet­i­tive­ness


Di­nesh Gau­tama Pres­i­dent Navkar Cor­po­ra­tion

Prakash Tul­siani Ex­ec­u­tive Di­rec­tor & COO All­cargo Lo­gis­tics

Vivek Kele Im­me­di­ate Past Pres­i­dent AMTOI

Ashish Ma­ha­jan Man­ag­ing Di­rec­tor Land­mark Lo­gis­tics

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