Port Connectivity Enhancement

Connectivity is one of the critical enablers for ports and the end-to-end effectiveness of the logistics system drives competitiveness for the maritime industry as well. With infusion of new technology and capacity building, the cumulative/ total capacity available at ports can match demand but will not be able to handle additional traffic if the evacuation to and from the port is restricted. It is, therefore, important that connectivity of major ports with the hinterland is augmented not only to ensure smooth flow of traffic at the present level but also to meet the requirements of projected increase in traffic.

India's hinterland connectivity is mainly based on surface transport i.e. road and rail, wherein, domestic waterways (coastal shipping and inland waterways) playing a very limited role. Pipelines are predominantly used only for transporting crude oil, refined petroleum products and natural gas.

In India, smooth connectivity to ports is even more important as the cargo generating centers are mainly in the hinterland instead of in the coastal region. The long lead distance increases the logistics cost and time variability within which the cargo can be delivered.

Under Sagarmala Programme, endeavor is to provide enhanced connectivity between the ports and the domestic production/consumption centres. More than 213 connectivity projects at an estimated investment of more than Rs. 2.50 Lac Crore have been identified. Some of the types of connectivity projects considered are listed below:

  • Coastal Berths at various major and non-major ports
  • National waterways prioritized for development in the first phase
  • Heavy haul rail corridor from Talcher to Paradip
  • Connectivity to Dedicated freight corridors
  • Last mile rail and road connectivity projects
  • Major rail connectivity projects
  • Freight friendly Expressway projects connecting the major ports
  • Development of Multi-Modal Logistics Parks
  • POL Pipelines

Coastal Shipping &Inland Waterways

Despite having an extensive network of inland waterways in the form of rivers, canals, backwaters and creeks freight transportation by waterways is highly under-utilized. Waterways currently contribute around 6% to India's transportation modal mix, which is significantly less than that in developed economies and some of the developing economies as well.

It is estimated that coastal shipping traffic of about 180-200 MMTPA can be achieved from current and planned capacities across coal, cement, iron and steel, food grains, fertilizers, POL by 2025. Additionally about 135 MMTPA of cargo is expected to be moved via inland waterways by 2025.

Availability of dedicated infrastructure will go a long way in promoting coastal shipping as a mode of freight transportation. Hence infrastructure at ports and supporting infrastructure using rail/road and waterways to facilitate coastal movement are being created. These include development of dedicated coastal berths, bunkering and storage at ports and creation of supporting hinterland transport infrastructure with last mile connectivity.

Domestic waterways are more cost effective as well as environmentally friendly means of transporting freight. The cost of transporting coal via coastal shipping is one-sixth of the cost of transporting it by railways. In consideration of the above, National Waterways 1, 2, 4 and 5 can be developed to play an important role in transportation.

The optimised modal mix using inland waterways and coastal shipping would not only reduce logistics cost but also cut down emissions, reduce energy and fuel consumption. It is estimated that reduction of 12.5 MT in total CO2 emission (2.5% of current emission through transport sector) and 1 Million KL in liquid fuel consumption (1.5% of current liquid fuel consumption by transport sector) can be achieved via modal mix optimization. Reduction in logistics cost will give impetus to our manufacturing sector and enhance export competitiveness.

The Government has taken various initiatives for promotion of Coastal Shipping such as dedicated Coastal Berths in Major Ports, financial assistance to State Government for Coastal Berth, concession in Cargo related and Vessel related charges to the extent of 40%, encourage to Ro-Ro/Ro-pax services and offering 80% discount in Port charges and ease of customs procedures, etc. To further encourage coastal shipping relaxation in cabotage laws have been made.

Cabotage laws require foreign flag vessels to apply for specific licenses before carrying coastal cargo. Also, many foreign flag vessels have spare capacity available on the coastal leg of their voyages. With an aim to tap this unutilized capacity which can be made available in the short term at economical rates, relaxation under cabotage laws has been granted to foreign shipping lines and vessels chartered, in full or in part, by a citizen of India or a company or a cooperative society to carry agricultural commodities, fertilizer and containers on the Indian coast.