“It is an easy and cost-effective method as the logistics cost has a big impact on supply chain management”
At a time when the Shipping Ministry is encouraging transportation of cargo through inland water transport mode to solve the problem of congestion, the CII–Institute of Logistics (CIL) has an alternative.
Titled ‘Development of coastal domestic shipping’, the CIL proposal calls for moving the goods or commodities through the coasts – Chennai to Kolkata/ Mumbai or vice versa or to other ports – so that the load on the road could be reduced considerably. Currently, 57 per cent of goods are transported through roads and 36 per cent by rail. Some firms are planning to move coal, fertilizers and food grains through water ways.
Talking to The Hindu, R. Dinesh, co-chairman, CIL Advisory Council, described coastal movement as an easy, cost-effective and environment-friendly method as the logistics cost in India had a big impact on supply-chain management due to its heavy dependence on road transport. Rising fuel and wages added to the overall cost and hence the key challenge was to keep the cost at minimal through alternative ways.
Acknowledging that it would be a challenge to bring about a shift in the attitude of people towards coastal shipping, Shipping Minister G.K. Vasan recently said coastal shipping was the most-suited model to move bulk goods, hazardous goods and over-dimensional cargoes.
According to a recent study, during 2009-10 coastal traffic accounted for 19 per cent out of total traffic at major ports. The share of inland waterways in the total cargo handled in the country was 0.4 per cent though India has a potential of 14,500 km of navigable waterways. So far only 2,716 km have been developed for commercial transportation.
On Thursday, CIL and ATKearney released a study on ‘Building world-class automotive supply chains in India’ at two-day Auto Supply Chain Management 2013, which stated that Indian automotive industry was expected to emerge as the world’s third largest in the world by 2020 with strong growth potential. However, the demand would continue to be volatile amid prevailing economic uncertainty.
“Considering the challenges the automotive sector faces, the coastal movement will certainly benefit the car manufacturers hugely. The automotive sector is facing pressure from several fronts. Any benefit that would accrue from this sector will make automobile sector competitive,” Mr. Dinesh said.
“We have to work out the cost factor as only some of the sectors might be economical. We have sent our proposal to the Shipping Ministry and are yet to get their response."