Solving the North India imbalance

At the NISAA Business Forum, panellists deliberated on North India’s hinterland connectivity and its future, and addressed the many challenges confronting the ex-im cargo, logistics, and shipping industry. They also laid the road map for a well-establishe

NISAA Business Forum 2019, organised by Northern India Steamer Agents Association (NISAA), brought together maritime stakeholders from across the country to present to them the sector’s untapped potential, while deliberating on challenges being faced in attaining a larger, more inclusive, and sustainable growth of the maritime industry in North India and the country as a whole.

Setting the tone for the debate,

Capt Sanjeev Rishi, Advisor, Inland Container Depot – Loni, said, “Ever since the inception of hinterland facilities, there has been an oscillation of exports and imports due to a number of factors such as currency fluctuation, the international economic scenario, etc. Now, over the last one or two years, the imbalance has been capitalised on by road transportation. With impunity, they have reigned away the railway traffic. Four factors that have assisted in this are a 25 per cent increase in load per axle, elimination of delays on state borders post GST implementation, improved condition of highways, and the government’s attempt to regulate the sector.” Rishi also stressed that even though rail transportation was cheaper than road, it was perceived that road transportation was cost-effective for short hauls but not for long hauls. He added that the scenario today had changed, and that road transportation was being used for long-haul deliveries as well. Pointing out reasons for the imbalance, Rajnish Kumar, Director, Pristine Logistics, said, “We are not coordinating our efforts. Moreover, road is very efficient now; rates have come down and the biggest advantage to roads is that they have a flexible rating structure. Indian railways and container train operators have a very flat structure. Whatever freight rate we are charging in imports, we are charging in exports. This needs to be addressed.” Kumar stated that when there is an imbalance in general cargo movement, empty containers can move out of ports but what actually happens is that they again move by road. “If we move our racks empty, we still pay haulage charges to Indian railways and the wastage of assets continues,” he explained. “Our freight industry is growing at the rate of 8.5 per cent and the logistics cost which is contributed to the GDP is about 6.9 per cent. This is because road movement has increased to five per cent over the last 10-15 years, whereas the rail movement contribution to the GDP has dropped to one per cent,” explained Capt Viren

Bawa, CEO, CMA CGM Logistics Park (Dadri). He said that capacity, cost, and the opening of more and more highways had created this door-to-door service that cannot be defeated even if DFC comes in. “No matter what happens, road movement is going to stay and it goes in tandem with rail. The movement will be faster with DFC, but what about connectivity from origin to destination, first-mile and last-mile,” he questioned. Sharing a similar sentiment,

Ajit Venkataraman, MD, APM Terminals Inland Services South Asia, said, “It’s not a debate about rail or road; whatever is best for the customer and for the trade is what we should facilitate. This is a dual-sided imbalance, one being natural and the other being manmade. Another powerful factor is that when trains move from origin to destination, they spend almost 40 per cent of their time waiting for containers to either be offloaded or on-loaded, which itself is a huge underutilisation of assets. This needs to be looked at.”