Transportation through shipping is an important part of the logistical sector. At present, maritime customers care more about the quality of services as compared to delivery prices. The operation of maritime logistics can be divided into three types. Liner shipping refers to business based on the same ships, routes, price, and regular voyages. Tramp shipping refers to a kind of shipping that includes irregular transport prices, unsteady transport routes and schedule and is usually used to deliver goods such as dry bulk cargo and crude oil. Industry shipping is a variety of maritime logistics where the supply of raw materials is given primary importance. This needs specialised containers, such as high-pressure containers for natural gas. According to many shipping industry insiders, there is huge scope of improvement in shipping related logistics in India. Such improvements will auger well for trade and business as India has a strong coast line. Captain S. B. Majumdar, Chairperson, Shipping Committee, Bengal Chamber of Commerce and Industry, told BE that the last mile connectivity to the ports is the major challenge. He said, “All the major ports came up many years ago and the cities grew up around these ports. Today the connecting roads to these ports are encroached and congested. There is literally no space to move out cargo from the ports. Last minute cargo connectivity is a major bottleneck in the shipping related logistics sector.” Captain Majumdar added, “For the said reasons, Indian shipping ministry over the last five years has opened the shipping industry and port development for the private sector. There are plenty of private ports that have come up with beautiful approaching roads. Dhamra, Gopalpur, Gangavaram and Krishnapatnam are some of the examples. They are giving good competition to the pre-existing major ports. Visakhapatnam has now a very advanced private container terminal, which is performing well with fast turnover timing. Krishnapatnam port in east coast also has a good feedback in terms of efficiency. Mundra port in the west coast, owned by Adanis, has taken the pole position in India.”
Impact of fuel price
The continual volatility in the price of crude oil is affecting the shipping sector in a big way. First of all, it is affecting freight transportation costs. Hence, shipping companies prefer larger bulk shipments than frequent smaller shipments. This may save the shippers’ and receivers’ money, but causes yet another negative impact on the logistics industry. Lack of shipment frequency increases the number of empty miles sailed by a carrier. The more stops a carrier makes in a given route, the more will be the profit.
Technical advancement and integration is needed
There is an intense need of integration – connecting port authorities, shipping lines, road transports authorities, railways authorities and inland waterways systems. Too many authorities with too many rules are hampering smooth operations. There is a growing need of single document clearance of cargo and this global trend needs to be incorporated in India and requires advancement of technology and integration of relevant regulations. Captain Majumdar added, “Infrastructure is one of the important issues in the field of shipping related logistics where technical advancement is the need of the hour. But I must say that since last 10 years, technical advancement in infrastructure is on in all the ports.”
Advantages of inland water ways or coastal shipping
Presently, most of India’s cargo is transported through roadways and by rail. “People have a mental block for shifting to inland water ways or coastal shipping,” said Captain Majumdar. He explained that there are reasons for this behaviour. “Truck transports cargo from point A to point B whereas transporting through ship means multiple loading and offloading processes and multi-handling.” He added, “But at the same time, because of the lower cost, many traders are availing shipping for their cargo movement. The government is also insisting on cargo movement through shipping because of its advantages. First of all, the roads get less congested. The fuel consumption is also comparatively less in shipping. But the Indian shipping lines are not much interested in coastal shipping as they think that they should get more concessional rates on the fuel price from the government.”
Cutting costs to grow stronger
The Indian government has reportedly been making efforts to pull down Indian logistics rate and to smooth bottlenecks in logistics sector. However, according to a PwC report titled ‘The Future of the Logistics Industry’, companies need to bring their logistical costs down but not only for the sake of efficiency. They also need to prune what doesn’t matter and thus free up resources for the key areas of focus – such as digitisation, asset productivity and innovation and invest more to support the company’s key capabilities and value propositions.