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Indian Journal of Fertilisers 16 (9) T. Kallingal and Hitendra
Pratap Singh
AbstractReceived : 05/08/2020 Accepted : 13/08/2020
[email protected]
T. Kallingal and Hitendra Pratap SinghIndian Farmers Fertiliser
Cooperative Limited, New Delhi
Future Outlook for Indian Coastal Shipping andInland
Waterways
Indian Journal of Fertilisers 16 (9) : 886-897, September
2020
34
The Indian logistics sector, relies heavily on road and rail
modes for transportation of goods, whereas the moreefficient,
eco-friendly modes of coastal and inland waterways still remain
grossly underutilised. Despite thetremendous potential of
transportation through water ( both coastal and river) the
initiatives by Government ofIndia and other agencies for promotion
/ popularisation, are yet to culminate into tangible results,
especially infertilizer movement. The Industry is looking for
requisite infrastructure, road connectivity and a conducive
policyenvironment, to wade through the numerous challenges linked
to switching from the conventional ‘tried and tested’modes to this
comparatively underutilised mode. Need of the hour, is to
incentivize, support and extend a bit of‘hand-holding’, to the
fertilizer fraternity for commencing coastal /inland waterways
movement, till this mode getsstabilised.
Key words: Coastal shipping, inland waterways, logistics cost,
container movement, transportation, fertilizer
1.0 Introduction
Coastal shipping and Inland waterways in India, has
a very significant role to play in the country’seconomy, with
the extremely high potential it wieldsfrom the 7,517 km long
coastline and the Inlandwaterways network stretching to around
14,500 km.The Water transportation has a definite edge overothers,
in terms of possessing the highest carryingcapacity and being the
best suited for long distancecarriage of bulky goods. India has the
largestmerchant shipping fleet among developingcountries and ranks
17th worldwide. Coastal andinland water transport is among the
cheapest modesof transport in India, as it takes advantage of
thenatural track and does not require huge capitalinvestment in
construction and maintenance exceptin the case of canals. World
over, many countriesdepend heavily on coastal and inland
watertransport, especially for movement of large andbulky cargo, it
being cheaper, reliable and lesspolluting compared to other modes,
such as road orrail.
The supremacy of maritime and river navigation hascharacterised
the transport of goods in India forcenturies. Megasthenes, the
ancient Greek historian,in his book ‘Indica’ provides a detailed
account ofsailing in Indian rivers to Pataliputra along Yamuna
and Ganga rivers; Ganga with its 17 tributaries andthe Indus
with its 13 tributaries were navigable andbeen used extensively for
transportation. Glancingthrough the pages of ancient World history,
onewould observe that for a long time, India stood outpredominantly
as the heart of commercial activities.India had colonies in
Cambodia, Java, Sumatra, Borneoand in a few Far East countries. The
transport andcommunication with these trade centres were
mainlythrough waterways. Until about a hundred years ago,the Ganga
river, too, was a busy waterway.Through the ages, rivers have
served as effectivewaterways, carrying people and goods over
longdistances.
Coastal shipping refers to movement of goods alongthe coast or
from one coast to the other withincountry or within hinterland
connected neighbourcountries. It is also referred to as short-sea
shipping,marine highway and coasting trade, whereas Inlandwaterways
is a network in the form of rivers, canals,backwaters and creeks
that can be used fortransportation along with other modes, say
roadand rail. Forms of water transport are given inFigure 1.
India is yet to fully develop these cheaper andgreener modes of
transportation. A lion share ofgoods still travel by the congested
road and rail
Figure 1. Forms of water transport
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September 2020 Future Outlook for Indian Coastal Shipping and
Inland Waterways 887
35
networks, decelerating the movement of cargo,adding to
uncertainties, and increasing the costs oftrade. Logistics cost in
India is one of the highestamong major countries. India is ranked
44 out of 160countries in the ‘Logistics Performance Index
2018(LPI)’. In India, the logistics cost as a percentage ofGDP
stands at 13%, as against 8% in Germany andChina, 9% in Japan, 9.5%
in USA, and 10% in EuropeanUnion (EU). Globally, coastal and
inlandtransportation is the most favoured mode followedby rail and
roads. Despite the massive potential ofthe coastal mode,
transportation of goods in India isheavily in favour of road,
accounting for nearly 57%of the cargo moved, followed by rail at
30% and theremaining by the coastal shipping, inlandwaterways and
oil & gas pipeline (Figure 2).
2.0 Coastal Shipping & Inland Waterways - ‘GrowthEngine’
Worldwide
It is well-known that the shipping has always beenregarded as an
important transport sector of nationalactivities in all maritime
countries, and it is wellsuited for transportation of bulk cargoes
at low cost.Coastal shipping and inland waterways, assupplementary
modes of transport are not only aneconomic necessity but also a
valuable asset in timesof exigencies.
Water-based transportation of domestic freight,
comprising of both coastal shipping and inland
waterways, is approximately nine times higher inChina, six times
higher in the EU, five times higher inJapan and twice as high in
the USA compared to India(Table 1).
In Europe and other parts of the world, cities built onthe banks
or at the mouth of rivers historicallywitnessed growth and
development.
For instance, in Europe having more than 37,000 kmof waterways
connect hundreds of cities and majorindustrial hubs; 13 countries
have an interconnectedwaterway network. The Danube-Main-Rhine
routeis one of the most important waterways in the World,besides
others, like the Mississippi-Great Lakes-
Figure 2. Mode-wise per cent share in transportation
Table 1. Countries’ coastal length and domestic cargo share
Country Coastal line (km) % share of domestic Cargo
India 7,517 7
USA 19,924 14
China 14,500 20
Brazil 7,491 23
Japan 29,751 42
EU 68,000 43
Saint Lawrence Rivers in the US, the Amazon inSouth America, the
Nile in Egypt and the YangtzeRiver in China. The Danube, being the
second longestriver in Europe, with a catchment area covering
one-tenth of the continent, is an important part of
theTrans-European Networks. The EuropeanCommission aims to promote
and strengthen thecompetitive position of inland waterways in
thetransport system and to facilitate its integration intothe
intermodal logistics chain. As by 2050, the coastal(short sea)
shipping has a strong role in reaching theEU transport goal of
reducing the green-house gasesemission by 60% and to achieve a
shift of 30% roadmovement over 300 km to other modes, by the
year2030. Under the ‘Paris Agreement on Climate Change’India has
pledged a 33-35% reduction in the‘emission intensity’ of its GDP by
2030, compared tothe 2005 levels. India’s climate pledge outlines
itsintention to promote transport through coastalshipping and
Inland waterways, for its fuelefficiency and cost effectiveness. A
report by MorganStanley in 2016 states that growth in Indian
coastalshipping, at the expense of road movement, couldreduce costs
by $2.5 billion by 2025.
3.0 Coastal Shipping in India
Shipping is an important indicator of both forcommodity and
services trade of any country.In recent years, coastal shipping in
the country hasbeen increasingly recognized as a sustainable
andefficient mode of transport, capable of effectivelysupplementing
the already overstressed road and railnetwork. For the ‘medium to
long distance’ freight
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Indian Journal of Fertilisers 16 (9) T. Kallingal and Hitendra
Pratap Singh888
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economic zone, the country has gained a territory of
around 100,000 sq. km of water surface for productive
purposes. Despite being eco-friendly and its abundant
potential, the Indian coastal shipping has remained
largely un-tapped. The fuel consumption in coastal
movement per tonne-kilometre is just about 15% ofthat by road
and 54% of that by rail.
The Indian coastal shipping has grown to nearly 120million
metric tonnes (MMT) in 2018-2019 as against83 MMT in 2014-15
(Figure 4) and an additionalpotential of 130 million MT per annum
by 2025 hasbeen identified under the ‘Sagarmala Programme’promoted
by GOI through Ministry of Shipping.Coastal movement by sea has
grown in India at aCAGR of 10% during the period of 2015-18,
thoughstill the coastal shipping accounts for only 7% of theoverall
domestic cargo movement, which is not at allcomparable with those
of the developed countries.Vessels play vital role in
transportation of materialthrough coastal mode. The country has
1,429 vesselsregistered under the Merchant Shipping Act, of
whichover 900 vessels are operating at coastal routes.
for coastal shipping is ideal for transportation ofcontainers,
project cargoes, over dimensional cargoes,RORO cargoes, dry bulk
cargoes viz. food grains,fertilizers, steel, coal, salt, limestone
& minerals andliquid bulk cargoes including POL products.
Apartfrom reducing traffic congestion, it can lowercasualties due
to accidents, which are routine in roadtransport. It has been
established that coastal
shipping is the most economical, environment friendly
mode with least emissions of GHGs, lesser carbon foot
print & noise pollution and is a safer method of
transportation for domestic cargo.
India’s potential lies in its 7,517 km long coastline
bordering 9 (nine) states i.e. Gujarat, Maharashtra,
Goa, Karnataka, Kerala, Tamil Nadu, Andhra Pradesh,
Odisha & West Bengal and 4 (four) union territories
viz. Daman & Diu, Puducherry, Andaman & Nicobar
Island and Lakshadweep Islands (Figure 3). Indian
coastal line is studded with 13 major ports (12 ports
governed by Government of India (GOI) & Kamarajar
port i.e. Ennore under the Companies Act and about
200 non-major ports. With 200 miles of exclusive
Figure 3. Coastal states of India
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September 2020 Future Outlook for Indian Coastal Shipping and
Inland Waterways 889
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4.0 Inland Waterways
Inland water transport refers to the transportfacilities
available in the navigable waters, canals andbackwaters. It is the
cheapest mode for certain kind oftraffic provided the points of
origin and destinationare located on water bank. River and canal
transportplayed an important role in the transport system ofthe
country during early years but with thedevelopment of rail and road
transport, this channelsuffered the set back. India has
approximately 14,500km of navigable waterways which comprise of
rivers,canals, backwaters, creeks, etc. with significantgrowth
potential, as a mode of transportation. InlandWaterways Authority
of India (IWAI), an authorityunder Ministry of Shipping, was
established in 1986to develop and regulate the inland waterways
forshipping and navigation.
Considering the benefits and importance of inlandwaterways, to
ramp up the modal share, the GOI haddeclared 106 new National
Waterways under theNational Waterways Act, 2016 taking the
totalnumber to 111. However, a spectacular growth in thismode is
yet to be witnessed. The first five NationalWaterways are depicted
in Figure 5. In India, justaround 0.5% of goods are currently being
transportedthrough inland waterways, compared to 7% inEurope, 8 %
in the US and 8.7 % in China. Nevertheless,it is heartening to note
that, thanks to the efforts ofIWAI, a 2% growth in traffic was
achieved during 2019-20, raising the total movement through
NationalWaterways to 73.64 million MT. Another positivedevelopment
was that 3 more waterways – NW 16(Barak river), NW 44 (Ichhamati
river) and NW 94(Sone river) became operational during
2019-20,making the total navigable waterways to 16.
In India, Iron ore, coal and coke, steel, limestone andfly ash
are the major commodities transported onNational Waterways
constituting around 90 % of thetotal cargo. The balance 10%
comprises constructionmaterial and other commodities such as
fertilizers,food grain and project cargo (Figure 6). The details
ofthe National Waterways which are in operation isgiven here.
4.1 National Waterway-1: India’s most importantNational Waterway
is Allahabad (Prayagraj) – Haldiastretch of the
Ganges–Bhagirathi–Hooghly riversystem having a length of 1620 km
with an estimatedcargo movement of 9.11 million MT. Additionally,
NW-1 functions as a link to Bangladesh, Myanmar,Thailand, Nepal and
other East and Southeast Asiancountries.
4.2 National Waterway-2: It is the 891 km stretch ofriver
Brahmaputra between Bangladesh border nearDhubri and Sadiya. NW-2
has a vital role as mode oftransportation for the state of Assam
(in the NorthEast India), with an estimated cargo movement of
2million MT per annum.
Bhutan-Bangladesh trade via NW 2 has also beentaking place
through this waterway. Bhutan has beenexporting significant
quantity of stone aggregatesthrough the land route for construction
projects inBangladesh. Stone exporters have identified
inlandwaterways as an alternate mode of transportation.
4.3 National Waterway-3: Kozhikode - Kollam stretch ofthe West
coast canal, Champakara canal and
Udyogmandal canal having a length of 205 km with
an estimated cargo movement of 1.0 million MT.
4.4 National Waterway-4: It Consists of Kakinada-
Puducherry stretch of canals and the Kaluvelly Tank,
Nashik-Bhadrachalam-Rajahmundry stretch of river
Godavari and Galagali-Wazirabad-Vijayawada
stretch of river Krishna.
4.5 National Waterway-5: It comprises of Talcher-
Dhamra stretch of Brahmani-KharsuaTantighai-
Pandua Nala-Dudhei Nala-Kani Dhamra-river
system, Geonkhali-Charbatia stretch of East coast
canal, Charbatia-Dhamra stretch of Matai river and
Mahanadi delta rivers.
4.6 Maharashtra Waterways: Maharashtra has 4operational NWs
which are NW-10 (Amba river),
NW-83 (Rajpuri creek), NW-85 (Revdanda creek/
Kundalika river) and NW-91 (Shastri river/Jaigad fort
creek). Maharashtra Waterways constituted
approximately 33% of the total traffic handled on all
National Waterways in the country in 2019-20.
Figure 4. Cargo quantity moved through coastal routes in million
MT
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Indian Journal of Fertilisers 16 (9) T. Kallingal and Hitendra
Pratap Singh890
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protocol routes of the other country. Six ‘Ports of Call’have
been declared in each country under the PIWT&T.Approximately
3.50 million MT of traffic was movedthrough the IBP route in
2019-20. Traffic on the IBProute predominantly consists of fly ash
(about 96.56%of total cargo) movement from Kolkata/Haldia
todestinations based in Bangladesh, basically drivenby the raw
material requirement for the cement plantslocated in the region.
Indo – Bangladesh protocol mapis as per Figure 7.
5.0 Benefits of Coastal Shipping and Inland Waterways
It is well acknowledged that coastal shipping andInland
waterways offer significant benefits over roadand rail transport,
and the same are discussed.
Lower expenses: According to the World Bank, which isfinancing
the National Waterways Project, the freightto be incurred in
transportation of one tonne ofmaterial though waterways is
economical comparedto railway and highways (Figure 8).
As per the report submitted by RITES on ‘IntegratedNational
Waterways Transportation Grid’, one litreof fuel moves 24 tonnes-km
on road, 95 tonnes-km on
4.7 Goa Waterways: Goa has 2 operational NationalWaterways
(NW-68 Mandovi river and NW-111Zuari river).
4.8 Gujarat Waterways: Gujarat has also 2 operationalNational
Waterways i.e. NW-73 (Narmada river) andNW-100 (Tapi river). The
Gujarat waterwaysconstituted 42% of the total traffic on all
NationalWaterways in 2019 - 20.
4.9 The Indo-Bangladesh Protocol Route : Under theprotocol on
Inland Water Transit and Trade (PIWT&T)signed between India and
Bangladesh, inland vesselsof one country can transit through the
specified
Figure 5. ‘First five’ National Waterways
Figure 6. Traffic on National Waterways
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September 2020 Future Outlook for Indian Coastal Shipping and
Inland Waterways
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891
rail and 215 tonnes-km on inland water transport.
Suitable for ODCs and bulk goods: Maritime transport isvery
effective for carrying over-dimensional cargoand bulk goods like
coal, cement, fertilizers,chemicals, hazardous cargoes, POL,
roll-on-roll off. Itrequires minimum land acquisition and
lowinfrastructure costs. River vessel carrying ODC isshown in
Figure 9.
Fuel efficient and eco-friendly: Carbon dioxide emissionby
coastal shipping is roughly half of that by railtransport and about
1/
6
th by road transport.
Lower traffic congestion and lesser fatalities: Modal shift
tocoastal shipping helps reduce traffic on the alreadycongested
roads. Road and rail movements accountfor considerable number of
human and livestockcasualties; in the year 2017, there had been
anestimated death of 17 people every hour in roadaccidents
throughout India.
Generating business and employment: As an alternate modeof
transportation, it can generate a huge employment.According to
World Bank Economic Analysis, about1.5 lakh direct and indirect
employment opportunitieswill be created by interventions under the
‘Jal MargVikas Project in Uttar Pradesh, Bihar, Jharkhand andWest
Bengal.
Waterways have the potential to revolutionise thetransport
sector and it has been receiving significantattention in recent
times. Waterways transport cancontribute at least 2% to the
Country’s GDP
6.0 Efforts to Promote Coastal shipping and Inland Waterways
November 12, 2018 was a historic day for the Indianlogistics
sector, when MV Rabindranath Tagorevessel with 16 TEUs (20 ft)
containers on-boardsailed on inland waterways and reached at
Varanasi,the country’s first multi-modal terminal on the
riverGanga. This initiative became the country’s firstcontainer
movement, post- independence on inlandvessel. Several initiatives
and policy decisionsaimed at promoting domestic movement of
cargoutilizing Inland waterways and coastal shipping,have been
taken to reduce logistics cost.
6.1 Structural Line-up
Jal Marg Vikas Project (JMVP): For capacity augmentationof
navigation and to enable commercial navigation ofvessels with
capacity of 1500-2000 MT on NW1, JMVPwas approved in January 2017
which includeddevelopment of fairway, Multi-model terminal(MMT) at
Varanasi (Figure 10), Haldia and Sahibganj,hi-tech river
information system, river navigation
Figure 7. Indo - Bangladesh protocol route map
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Indian Journal of Fertilisers 16 (9) T. Kallingal and Hitendra
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892
ports on vessel andcargo related charges on coastalmovement. For
Ro-Ro car carriers, eligible discountis upto 80%.
Waterways usage charges: Such charges on all thenational
waterways have been waived off w.e.f.July 2020 for Inland cargo
vessels and cruise vessels.
Priority berthing: The policy for coastal vessels has
beennotified to reduce their turnaround time.
GST reduced on bunker fuel: It has been reduced from18% to 5% to
help the country’s fuel sellers competewith other lower-tax ports
in Asia.
Centre for Inland And Coastal Maritime Technology: It hasbeen
setup at IIT Kharagpur to serve as the technologyarm of the
Ministry of Shipping to provide research,testing and
experimentation facility to IWAI, CSL andmajor ports.
Introducing the Major Ports Authorities Bill 2020: Thisbill has
been introduced to replace the MajorPort Trust Act, 1963 for
providing moreautonomy to the ports. Respective Boards ofmajor
ports are now to be allowed to fix tariffs /SORs for services
provided and use of port assets.
Coastal Economic Zones: Under the SagarmalaProgramme, comprising
of a group of coastal districtsor districts with a strong linkage
to ports in the regionare also envisaged to tap the synergy with
the plannedindustrial corridor projects.
7.0 Fertilizer despatches through Maritime Transportation - An
Industry Outlook
The highly complex nature of the fertilizermovement in India,
could well be gauged from thefact that the 55 million MT
fertilizers (includingimports) need to reach the farming fields in
the 739districts under the 28 states, 8 union territories atthe
right time, at right price, in right measure as perthe local
requirements.
The fertilizer consumption not being evenlydistributed round the
year, majority of themovement to the field happens during 8
months’period i.e. May - December, which poses a challengeto the
industry. The inadequacy of transportationinfrastructure remains a
limiting factor in smooth
system, digital global positioning system, nightnavigation
facilities, construction of navigational lockat Farakka. The
project is expected to be completed by2023.
Sagarmala Project: An initiative by GOI to enhancethe
performance of logistics sector in India. Theprogramme envisages
unlocking the potential ofwaterways and the coastline. The
port-leddevelopment under the project is given in Table 2.
The programme aims to reduce the logistics costs bydoubling the
share of domestic waterways in themodal mix from the current
7%.
Roll-on and Roll-off (Ro-Ro) Waterways Projects: Topromote ferry
services where road connectivity hasbeen a challenge, operation of
Ro-Ro ships designedto carry wheeled cargo, such as cars, trucks,
semi-trailer trucks, trailers and rail-road cars driven onand off
the ship on their wheels or using a platformvehicle, has been
commenced on various waterwayssuch as between Ghogha and Dahej in
Gulf ofCambay and on NW -2 between Dhubri andHatsingmari.
6.2 Policy Initiatives
Cabotage Relaxation: It has been granted to foreign flagvessels
on coastal cargoes for commodities ofagriculture, fisheries,
horticulture, animal produce,etc. subject to the condition that
fertilizers shouldconstitute 50% of the coastal cargo taken
on-board atthe beginning of the coastal leg. It has helped
reducecoastal shipping rates. Indian seaports likeKrishnapatnam and
Visakhapatnam are attracting ashare of cargo which was previously
transhipped atSingapore or Colombo.
Discount of minimum 40%: It is being offered by major
Figure 8. Transportation expenses by three modes
Figure 9. River vessel carrying ODC Figure 10. Varanasi MMT
developed under JMVP
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September 2020 Future Outlook for Indian Coastal Shipping and
Inland Waterways
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893
distribution of fertilizers, having direct impact onagriculture
production. Year after year, 55 MillionMT fertilizers need to move
out of the 50 fertilizerplants (located in 15 states) and the 21
ports (situatedin 8 states) travelling the length and breadth of
thecountry to the 2.27 lakhs sale points (retailers andvillage
level cooperative societies), through theavailable transportation
channels. With no significantaddition in existing rail / road
capacities, the railwaysperennially facing shortage of rolling
stock, it isimperative that new avenues are to be explored. It isin
this context, fertilizer movement through coastaland inland
waterways route assumes highersignificance. Presently, around 85%
movement offinished fertilizer is by rail while rest is by road,
withCoastal shipping and inland waterways accountingfor less than
0.5%. A conservative estimate of thepotential for movement of
fertilizers throughwaterways by the years 2025 would be 3.5
millionMT (Figure 11).
8.0 Concerns for Coastal Shipping and Inland Waterways
There are many challenges in movement ofcommodities inclusive of
fertilizers through coastalshipping and inland waterways (Figure
12).
♦ There is lack of dedicated infrastructure at portsand jetties
viz. space for stuffing or de-stuffing, berthsfor coastal ships,
inadequate draft, no nightnavigation, below-par handling facilities
at theloading and unloading points, have all plagued thegrowth of
coastal and inland waterways traffic.
♦ Connectivity between the hinterland and minorports or river
jetties is poor compared to major ports.
♦ High operational costs due to high duties and taxeson bunker
fuel and high manning scale of coastalvessels render the coastal
shipping as non-competitivevis-à-vis road and rail
transportation.
♦ Low sulphur regulation imposed by InternationalMaritime
Organization (IMO) effective from 1st January
2020 has made it mandatory for vessels to reducesulphur emission
by 85% (permissible sulphurcontent in fuel fixed as 0.5% from
earlier level of 3.5%)thereby escalating the operating cost.
♦ Time bound supply of goods through this modedue to high
transit time remains a challenge, apartfrom the longer ‘working
capital cycle’ and theassociated financial implications due to
multipleuncertainties involved. Higher transit time also
raisesconcerns on cargo quality, with high risk of
moistureabsorption in case of fertilizers being highlyhygroscopic
in nature.
♦ ‘’No return traffic’’ has proved to be a bottle-neckin
operation of coastal /river vessels affecting theoperational
costs.
♦ Absence of uniform tariff has been anotherchallenge. The
coastal vessel operators chargedifferent rates for same
origin-destination pairs fromthe customers depending on the
availability of ships.Often, the rates offered are ‘opportunistic’.
On thelonger run, this may not be a healthy situation for
theoperators as well as the customers.
♦ Ceiling of freight re-imbursement by Departmentof Fertilizers
under the coastal multimodal movementas rail freight upto the
‘nearest rake point to the finaldestination’ is an impediment,
whereas the need ofthe hour is to incentivize switching from
conventionalmode to coastal mode. Railways’ recent decision towaive
‘busy season surcharge’ made it tougher forcoastal movement,
rendering many viabledestinations in the earlier regime now
‘un-viable’.
♦ Excessive siltation in the channels, drasticallyreducing draft
availability, poses a big challenge tooperation of higher capacity
vessels/barges throughwaterways, especially in NW-1.
♦ Night navigation through the National waterwaysis yet to be
established, resulting in unduly long transittime and the
associated challenges in movement ofcargoes like fertilizers.
Table 2. Port - led development under Sagarmala project
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Indian Journal of Fertilisers 16 (9) T. Kallingal and Hitendra
Pratap Singh
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894
♦ Lack of infrastructure tools and tackles forunloading, access
for labourers for unloading the bags,storage facilities at the
jetty locations, roadconnectivity to the jetties, etc. all remain
as majorchallenges.
9.0 The Silver Lining
While the coastal and inland waterways mode maynot be cheaper
for all the destinations compared tothe conventional modes, till
the volumes growsignificantly, the thrust for ramping up
maritimetransport to a larger scale is driven by the
followingdefinite advantages that would accrue on the
longerrun.
♦ In the current scenario of over stressed rail androad
infrastructure, the coastal shipping and inlandwaterways could be a
plausible solution to reducethe burden on the network.
♦ These modes can contribute significantly to fasterevacuation
and enhanced production in the unitslocated along the coast,
especially when the othermodes are already under stress.
♦ Evolution of these modes would promoteinfrastructure
development along the coastal line andthe river banks, triggering
multi-dimensional growthin various sectors.
♦ Once reasonably developed, these modes have thepotential to
reduce the logistics cost and lighten thefreight subsidy burden on
fertilizers and othercommodities under PDS.
♦ Coastal and inland waterways modes have adistinct advantage of
delivering smaller parcels toremote locations along the coast line
or water bankshaving limited or even NIL road access;
smallerparcels mean with same quantity it can effectively
cover larger area – Compare this to rakes with parcelsizes of
2,600 MT - 3,900 MT delivered at one location.
♦ The lower cost of transporting bulk commodities,will benefit
the entire chain of industries availing thesemodes, especially the
India’s manufacturing sectoralready struggling under high logistics
costs, and thebenefits accrued could be redeployed in ways andmeans
to help fuel economic growth.
♦ Recently, a GOI designated Task Force had estimateda 3.50
million MT potential for movement of fertilizersby the year 2025
through the coastal and inlandwaterways to various states. These
modes are alsoexpected to lower the annual fertilizer logistics
costat the national level by Rs. 70 -105 crore.
10.0 Transportation of Fertilizer through WaterChannels :
IFFCO’s Experience
10.1 Coastal Shipping
IFFCO has been undertaking containerized, coastalmovement of
bagged fertilizers from its Kandla &Paradeep plants since the
year 2007, the volumes havegrown since then, 2018-19 recording the
highestmovement at 3.04 lakh MT (Table 3) partially triggeredby the
acute rake shortages during the year.
Table 3. IFFCO’s fertilizer movement through coastal route
Year 2017-18 2018-19 2019-20
Quantity (MT) 137,719 304,463 129,184
The supplies from Paradeep were to destinations in
Tamil Nadu and Kerala, through Katupalli, Tuticorin
and Cochin ports. The supplies made from Kandla
had been to Kerala, Tamil Nadu, Karnataka and West
Bengal through Cochin, Tuticorin, Mangalore and
Haldia ports. In 2017-18, one parcel of 12,000 MT
Figure 11. Fertilizer and Water Transport
Figure 12. Challenges facing by water transport
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September 2020 Future Outlook for Indian Coastal Shipping and
Inland Waterways
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895
was despatched in break-bulk ship to Mangalore and
Tuticorin ports; despatch being in 50 kg bags stuffed
into 2 tonne jumbo bags, handled through hooks at
the sending and receiving ports (Figure 13).
Despatches through break bulk shipments could not
be pursued further due to viability issues, cargo
damages, handling losses, etc. On the contrary, the
quality of supplies in containers was highly
appreciated by the farmers/ dealers/ sales personnel,
as factory fresh, blemish less, untouched bags reach
them, with ‘NO’ hook holes and ‘NIL’ losses as
shown in Figure 14. Containerised supplies not only
helped IFFCO to tide over the crisis of shortage of
rakes during previous years, it also gave extreme
flexibility on the parcel sizes shipped; even one
single TEU ( 25 MT to 28 MT) could be delivered to a
location, which was a definite advantage. Based on
the experience gained over the years, IFFCO still
continues its efforts to widen the domain ofcontainerized
supplies from its coastal plants.
10.2 Inland Waterways
During the year 2013 -14, IFFCO had participated in atrial run
with the support of Department of Fertilizersand Inland Waterways
Authority of India (IWAI), for
movement of urea from IFFCO Phulpur plant to West
Bengal through NW-1, the first attempt though not
very successful, was a learning experience in terms
of the challenges associated with inland water
movement through NW-1.
In November, 2018, IFFCO had again taken part in
another trial run on NW-1 using multi-modal
transportation ( i .e . road-waterways-road), formovement of
‘bagged urea in containers’ from itsPhulpur plant to destinations
in West Bengal. Eightcontainers of 20 ft (TEUs) stuffed with urea
atPhulpur, transported by road to newly constructedVaranasi
Multi-modal Terminal at NW-1, laterloaded on to river vessel MV
Rabindranath Tagore(Figure 15) which sailed through NW-1 to
Haldia
jetty, off-loaded, and delivered the urea at
consuming points by road in West Bengal. This time,
IFFCO did not face any operational issues and the
trial was considered a success.
While there is tremendous potential in the multi-
modal movement of fertilizers using the inland
waterways, there is much work to be done in this
field, before it can develop as a self-sustainable mode
for transportation of fertilizers. Government of
India through the Ministry of Shipping and other
Departments have initiated various concrete
measures, projects, policy interventions, etc. for
furthering the freight movement through inland
waterways. The efforts initiated are certainly
laudable and IFFCO would be keen to be associated
in these endeavours for expanding the operationsthrough
coastal/inland waterways to still higherlevels.
11.0 Future Outlook: The Sky is Pink
The consumption of fertilizers is bound to increase, tokeep pace
with the ever growing demand forproduction of food grains to feed
the 1.38 billionmultitude which is expected to grow exponentially
to1.52 billion by 2030. It is imperative that thedistribution of
fertilizers also need to growcorrespondingly. The human race is
facing thechallenge of conserving the fossil fuel resources,
whichis otherwise fast depleting. Over used roads,congested rail
traffic, shortage of wagons, rising fuelcosts, ever increasing
transportation costs, etc. haveall been the order of the day. The
solution probablylies in promoting the coastal and inland
waterwaysmovement. These modes, though in the present form,have not
been able to make the cut into cargo logisticsin general and
fertilizer movement in particular. Theshort, medium and long term
plans for encouragingcoastal shipping and inland waterways are
illustratedin Figure 16. A slew of measures need to be initiatedfor
addressing the concerns of the Industry and topromote/encourage
shifting from the conventionalrail–road mode to coastal and inland
river movement:
♦ Incentivization and promotion of the energyefficient,
eco-friendly and less polluting modes,
Figure 13. Loading of IFFCO fertilizer in break bulk ship at
Kandla
-
Indian Journal of Fertilisers 16 (9) T. Kallingal and Hitendra
Pratap Singh
rather than restricting the freight re-imbursement, is
vital.
♦ Freight re-imbursement process should be madesimpler and
electronic bill settlement facilities bedeveloped, for the
fertilizer industry.
♦ Disparity in GST rates on various modes (i.e. rail,road &
sea movement @ 5%, multimodal @12%and inland waterways – NIL) needs
to be removedto create a level playing field.
♦ Ensure requisite draft in the National Waterways,round the
year by both capital and maintenancedredging. Current scenario of
either ‘No Water’or ‘Too much Water’ in the rivers depending onthe
season has to get transformed to `consistantlyuniform draft in the
channel’ throughout the year,irrespective of the season.
♦ Policy initiatives for ensuring enhancedavailability of river
sea vessels / barges, whichpresently is a limiting factor.
♦ Develop more number of mechanized, river-side
terminals with unloading facilities capable ofhandling jumbo
bags and containers. Unloadingof smaller quantities, at multiple
points, withinshort distances would mean lesser secondary leadof
surface transport.
♦ High transit time is a major deterrent to growthon this mode.
The simple solution lies indeveloping infrastructure for night
navigation onNWs.
♦ Priority/dedicated berthing arrangement isrequired for
inland/coastal vessels, unloadinginfrastructure and road
connectivity to landingpoints, etc.
♦ Containerized movement of fertilizers throughcoastal/inland
waterways can be 15-20% cheaperthan bagged and jumbo bag based
waterwaysmovement. Automated (pumping) bulk loadingin containers
can reduce turnaround time andmanual handling costs.
♦ Coastal ship operators should also create a
Figure 14. Full cycle of multimodal containerized movement of
fertilizer upto the retail points
Figure 15. River Vessel MV RN Tagore carrying IFFCO cargo to
Haldia through NW-1
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-
September 2020 Future Outlook for Indian Coastal Shipping and
Inland Waterways
congenial environment by ensuring regularvoyages for the
fertilizer industry to rely on thismode, for un-interrupted
despatches of fertilizers.
♦ Efforts should be made by the stakeholders toidentify such
opportunities, where cargomovement through waterways could be
initiatedforthwith, with least effort and little investments.IFFCO
Paradeep could be a classic example of thissort. Dredging of a
small stretch, in NW-64/NW-5 near the IFFCO Pradeep waterfront in
Mahanadiriver, can immediately result in about 1.50 lakhMT annual
fertilizer traffic through NW-1, to thestates of West Bengal,
Jharkhand, Bihar and UttarPradesh. Barges carrying fertilizers from
IFFCOParadeep can also pick urea sourced from itsPhulpur plant as
‘return-cargo’ for the samestates.
♦ Linking NW-1 to NW-2 and NW-6 using IBP routethrough
Bangladesh to form a National Grid inthe Eastern Region of the
country. NW-5(extending up to Paradeep, Bay of Bengal) can bejoined
in the National Waterway grid throughbackwaters of Hooghly and
tidal canal. Theconjoined National Waterways Grid (excludingIBP
Route) can serve 11 states i.e. Uttar Pradesh,Bihar, Jharkhand,
West Bengal, Assam, Meghalaya,Arunachal Pradesh, Tripura, Mizoram,
Manipurand Odisha.
12.0 Conclusion
The acceptability of Coastal shipping and inlandwaterways modes
depend mainly on commercialviability, especially in the present
atmosphere of stiffcompetition. Situation warrants that Coastal
shippingand inland waterways movement are effectivelyintegrated
with the surface transport modes and asynergy is developed between
all modes and thatwould call for a concerted effort by all
stakeholders in
their respective domains, to achieve highest possibleefficiency
and efficacy in Indian logistics sector. Thereis abundant un-tapped
potential and theopportunities are plenty for grabbing, but it
wouldtake some grit and an open mind-set for adopting tothis mode.
Nevertheless, as the saying goes“Opportunities are like sunrises.
If you wait too long,you miss them.”
References
Annebonia, Lavanya Ravikanth and Ravi Kumar, K.S. 2016. Benefits
of coastal shipping: scope for seachange in domestic freight
transportation in India.Working Paper 147/2016.
Annual Report. 2019-20. Ministry of Shipping,Government of
India, New Delhi.
Annual Report on National Waterways Traffic. 2019-20. Inland
Waterways Authority of India, New Delhi.
Department of Fertilizers. Draft note on rationalizationof
fertilizer logistics. Government of India, New Delhi.
Fertiliser Annual Report. 2018-19. Department ofFertilizers,
Government of India, New Delhi.
Fertiliser Statistics. 2018-19. The Fertiliser Associationof
India, New Delhi.
Inland Waterways Authority of India (IWAI). ShortBrief on Indo
Bangladesh Protocol Route.
Pillai, Asha and Paul Jose. 2015. Critical examination ofthe
season for the under utilisation of coastal shipping in India,AMET
International Journal of Management.
Sagarmala-Post-November. 2019-Edition-Viewpoint.
https://www.faidelhi.org/
http://sagarmala.gov.in/
http://shipmin.gov.in/
https://lpi.worldbank.org/international/global
Figure 16. Future plans for coastal shipping/ inland
waterways
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