Project Cargo: On the move
A cargo, sometimes, require its own unique solution, by means of sensitivity of risk with sheer weight or odd CARGOTALK size. unravels the nuances of ‘Project Cargo’, for the industry.
Every cargo doesn’t fit in a standard logistics solution. High level of risks is associated with cargo shipments due to its nature. Cargo with larger dimensions requires a completely different set of equipment, infrastructure and experienced personnel. Dealing with cargo of peculiar dimensions is always a challenge for a transporter. Last year, a transparent system for movement of cargo through over dimensional vehicles was launched and an online nod for movement of 5,000 such vehicles including machinery was given by the government to prevent middlemen and lengthy and time-consuming paperwork involved in the process. Exploring the intricacies of transportation of project cargo, CARGOTALK decodes the potential of this segment for the Indian logistics industry.
Amit Tandon, Managing Director, Asia Shipping India, shares, “Over Dimensional (OD) cargo is defined based on weight and dimension. Anything above 40 feet length, with 8.25 feet height, and 8.25 feet width would be considered as OD cargo. The industry is witnessing a 15-20 per cent growth.”
Raj Malani, Director, Shree Balaji Shipping & Projects, says, “A project cargo is something where we cannot take chances in handling the cargo each time. The cargo, if damaged while stuffing, loading or unloading, will be of no use to consignee and it will be a loss of time and money for everyone involved in this cargo. So, we definitely need people who can handle this cargo with utmost care using appropriate equipment to stuff it with proper lashing/ chocking, etc. Additionally, the cargo handling team needs to be present from manufacturing stage itself to ensure proper hooks are
provided on the cargo for safe handling of the cargo till the time cargo is handed over to shipping line/airline.”
“The OD cargo business has seen tremendous growth in India over the past few years. Especially over last year, ever since ‘Make in India’ was launched, we have seen good increase in the OD cargo business as people have started exporting plant and machinery making goods from India. This is a good sign for the country to expand its horizon to all those countries that were not importing goods from India,” tells Malani.
Infrastructure boom
“The last five years or so has surely witnessed a boom in the Indian infrastructure industry particularly in the setting up of large scale power projects, installing of telecom equipments, setting up industrial plants in different sectors such as automobiles, cement, fertilizers, minerals and metals, as a consequence, demand for moving ODC. In the past three to five years, there has been a sudden surge in the power sector although one to two refineries are in the pipeline. The manufacturing industry has witnessed a rising demand in both domestic and export market and in turn
project cargo movement has increased, e.g. boilers, heat exchangers, melting pots, crucibles, windmill blades, structures, monuments etc,” informs Tandon.
“Project cargo would involve a variety of cargo; some sensitive to handling and others sensitive to transportation or both. Handling of cargo would always require special types and capacities of crane or fork lifts and related lifting gears. Similarly, for transportation by road, special types of pullers with right capacity and trailers would be required to ensure safety of the cargo en route,” explains, D.S. Bharara, Vice President – Logistics, ACTL NDLI.
The Central Government has framed a policy for granting permissions for movement of ODC packages by road in India Only an experienced team with specific skill sets and core competencies can make project handling successful We also need to check for center of gravity of the cargo while loading on the truck or even while stuffing on container for safe movement Though we now have better roads from many ports, there are always challenges for movement to a plant location
“The market for heavy and oversized cargo is fast expanding on account of Indian government’s special thrust on developing infrastructure. Project cargo movement is rising in industries like power, oil and gas, mining, etc. The government’s decision to attain self-sufficiency in power generation has resulted in the sanction of power plants, - small, large and very large - to be set up across the country. The heavy items of cargo to be handled include wind turbine, refinery equipment, power components, and defence related equipments, etc. It could even be fragile and dangerous goods that need specialised handling. The ODC packages, constituting equipment and machinery for these projects are fairly large and they weigh from 150 to 450 metric tonnes,” notes Tandon.
“Only an experienced team with specific skill sets and core competencies can make project handling successful. Core competencies of a project manager are knowledge, proven experience and personality. From aggressive negotiation to closing post sales fixtures to using right equipment for the right cargo, the key lies in the confidence of the team during execution level. The growth in the OD cargo industry is not consistent, there are times when the market is sluggish and there are times when there is a boom due to sudden influx of orders mainly in the import of capital machinery,” shares, Shama Mathew, Senior Manager -Projects, Jeena & Co.
“For instance, bidding for EPC contract requires past experience as tender will have lots of terms & conditions and one has to study this document minutely along with legal or insurance team to understand the pitfalls and to ensure due diligence,” states Mathew.
“Loading and unloading of such cargo requires expert supervision, because of the greater risk of damage or accidents. Customers usually are large thermal power plants, the nuclear power sector, sugar factories and fertiliser units. Managing the transportation of power equipment imports into India and metro coach transportation projects in India are typical examples of managing ODC cargo,” adds Tandon.
Intricacies involved
Sharing the intricacies involved, Malani points, “Every ODC that is transported by road has to be loaded properly on a truck/ trailer with proper support like dunnage, lashing etc. We also need to check for center of gravity of the cargo while loading on the truck or even while stuffing on container to ensure safe movement of cargo. One also needs to ensure that while transporting the ODC cargo by road, road safety norms are taken care of like, providing red lights at the extreme ends (right /left side etc.) of the cargo, use proper routing via road, etc.”
According to Tandon, “India lacks road, rail and air connectivity to the regions where huge industrial projects are being constructed or installed. Though we now have better roads from many ports, there are always challenges for movement to a plant location. Also, there is lack of technology and availability of equipment, trucks and container systems to handle these ODC. One has to depend on road transportation only as in India the coastal ways is neither well defined nor developed. Many old bridges are decades old with no proper maintenance, which, makes the ODC/OWC transportation difficult. The condition of the road, its load bearing capacity and axle weight limitation, the capacity of the bridges/culverts en route to be able to take the weight/ dimensions of the cargo are important parameters to be considered. Moreover, moving OD cargo requires clearances from multiple agencies. There is an urgent
need for the government to set standards and regulations for this sector.”
We require clearances from multiple agencies such as the Public Works Department, the National Highways Authority of India for using roads and bridges; the State Electricity Boards for overhead wires; and the Railway Board for railway bridges. Lack of uniform and standardised rules across the states make this more difficult.
Rules and regulations
“The Central Government has framed a policy with stringent rules and regulations for granting permissions for movement of ODC packages by road in India. However, over and above these regulations, the state governments with their respective RTOs and highways add on to the confusion of these regulations and implement them with their own riders making transportation of ODCs within India, a very cumbersome and tedious task and with heavy costs,” says Bharara.
Adding to that, Mathew says, “Most of the power plants or projects are located in highly inaccessible terrains and transporting OD cargoes to these destinations is risky to both the equipment and man. So, development of good roads is a primary concern especially to ODC transport operators.’
Outlook
“Project cargo is already being considered as sunrise segment in the logistics sector. The market for heavy and oversized cargo is fast expanding on account of Indian government’s special thrust on developing infrastructure. Project cargo movement is rising in industries like power, oil and gas, mining etc,” believes Tandon.
On the other hand, Malani feels, “As per the current scenario, we are looking at a considerable growth in this industry in coming years. However, the present infrastructure needs to be more developed like in Far East countries. Even today, the movement of ODC cargo is at 160-170 km per day, which should ideally be 300 km per day enabling faster movement of cargoes. For this, we will need wider and better roads. The present road conditions too are not good.”
Bharara thinks the demand over the next few years for project cargo could be going up with FDIs and ‘Make in India’. He continues, “The demand for OD cargo could be declining further in view of the intricacies/ regulations involving handling and transportation of ODC packages, while the technology in assembling and manufacturing the ODC packages in India is rising and getting better in years to come.” “Faster implementation of policies and makeovers will enable us to meet the future surge in project logistics demands. For this, trade leaders must have regular interaction with respective government officials along with the various regulatory bodies to make them accountable,” suggests Mathew.