Objective of Study: Factors retarding the growth of coastal shipping in India

Policies and Incentives provided by government in order to promote coastal shipping

Market trends for Indian coastal shipping

Forecasting the growth of coastal shipping in India.

Introduction: Coastal trade consists of the transport of cargo & passengers

through sea

Typical cargoes mainly include, cement steel, coal, scrap, oil products, grain, fertilizers, containers and passengers

Coastal Shipping refers to the movement of cargo via ships between different ports along the coastline of India.

Coastal shipping in India is still in its nascent stage

Contd. Coastal shipping in India accounts for a low share domestic cargo

moved by different modes of transportation.

The cargo moved through coastal shipping in India accounts for only 6 - 7 % of the total local freight

The main advantages of coastal shipping includes alleviation of congestion, reduction of air pollution, overall cost savings to the shipping and a government or company.

Coastal shipping Advantage: Tremendous cost-advantages to Indian trade

Immense benefits of energy savings to the country’s economy

Boost transshipment at Indian ports

Enhance competitive edge of Indian exports

Contd. Increase port’s potential to develop as hub-ports

Increase revenues and opportunities for generating both direct and in-direct employment.

Catalyze the development of an efficient and integrated transport and logistics system.

Comparison between different modes of transportation:

0

1

2

3

4

5

6

7

8

9

10

Coastal Shipping

Rail Road

Accidents

Climate Change

Noise

Infrastructure

Pollutants

Congestion

Coastal shipping versus road and rail transportation: Fuel Consumption

Emissions

Cost of Carriage

External costs

Major contributors to the cost of coastal shipping are Handling costs (35 % - 50%)

Charter Hire costs (20% - 33%)

Port Dues (10% - 20%)

Bunker Costs (13% - 30%)

State wise coastal cargo breakup:

30%

22%14%

12%

7%

5%

5%4% 1% Gujrat

Maharashtra

Andhra Pradesh

Tamil Nadu

Orissa

Karnataka

West Bengal

Kerala

Goa

Factors retarding the growth of coastal shipping in India Competition provided by rail and road transportation

Double handling costs involved and lack of active policy

Cumbersome and lengthy customs procedure

High import duties on bunker oil and spares

High manning scales which increase operational costs

Contd. Stringent specifications for construction of vessels leading to

higher capital costs

Personal income tax, which discourages quality officers from continuity on India coastal vessels.

Lack of separate berthing facilities at Major ports and inadequate cargo handling facilities at the minor ports

Absence of institutional mechanism for inter-sector coordination

Research Design: Descriptive Research

Former researches are used as references for understanding the current scenario

Data Collection: The research is based on secondary data:

Internet

Journals

Conferences

Books

Magazine

Analysis: Despite having advantage over rail and road transportation

coastal shipping is the neglected mode of transportation in India.

Coastal shipping is an important arm of the transportation system of any country as it has cost and environmental advantages over other modes.

Recommendations: A clear-cut policy for the development of an integrated transport

system needs to be evolved

Coastal ships have to pay duties on bunker oil. It increases the cost of operation of coastal vessels. This duty should be removed or decreased.

As coastal shipping is much more environment friendly and fuel efficient than other modes of transport; it should be provided tax concessions both for fuels and spares.

Recommendations Contd. import duties on capital goods and spares should be removed.

Facilitative policy and supporting systems, rules and regulations and procedures similar to those existing in leading maritime nations should be implemented in India.

Government should grant special status to coastal shipping so as to exempt it from Customs and other procedures that apply to the bigger cargo-carrying vessels.