Coastal Shipping And Private Ports: Paving the Way For Commerce and Trade

Coastal Shipping And Private Ports: Paving the Way For Commerce and Trade

The recent incentives provided for coastal shipping have paved the way for increased trade and commerce. These incentives could bring down costs and reduce the price of transportation of key goods and items to domestic as well as foreign destinations. As coastal shipping will now attract more cargo, this is expected to impact private as well as non-major ports in a big way.

Coastal ships will now get priority birthing and other facilities. With highways in India becoming increasingly congested, coastal shipping looks to be the way forward. Steelmakers suchas Jindal and TATA are now looking to avoid long land routes and opt for coastal shipping services instead. Rashtriya Ispat Nigam, which is the corporate entity of Vizag steel is now looking to buy barges and opt for coastal shipments instead of rail or road shipments.

The Food Corporation of Indian last year was able to move a massive tonnage through sea routes. The cost was very cheap as compared to transportation through rail routes or roadways. So they opted for coastal shipping since then. Coastal shipping has been able to replace rail and road shipments as a more viable option because there are fewer chances of accidents and the cost is also very low.

Even in other countries, coastal shipping works out to be cheaper. In the EU, cost of coastal shipping is 20% cheaper than roads. It is 40% cheaper than rail routes. Several committees have calculated that it costs 1 rupee to ship goods through this method as compared to 5 rupees by road or 2 rupees by rail. Air shipments are the costliest. They are valued around 15 rupees.

Container shippers will now get incentives of around 50 paise per tonne for every nautical mile for a total of 8 commodities including cement, fertiliser and steel. Container shippers will also get an incentive of Rs. 1000 for eery TEU or 20 foot equivalent units in terminal handling charges. While such incentives are available to shippers at major ports, it is also expected that private ports and non-major ports will come into the ambit of the laws.

While private ports are coming up with the latest facilities, there are also changes in the manner of development of non-major ports so that they can keep pace with the transitions. The aim should now be to develop public ports further and bring them at par with private ports. Private ports are funded by industrialists who can work towards improving the capacity of the facilities. Public ports should also be developed so that they can be within the same range when it comes to facilities and amenities.

The successful functioning of any democracy is only possible if there is no monopoly and the public sector grows well. Sick PSUs have been languishing due to lack of resources and initiatives, Private enterprises are also facing their own hurdles. While one cannot eliminate the role of lobbyists, it would be better if business lobbying were to be legalised.

This would then make it easy for all companies to get their point across. It would also faciliate private-public partnerships and ensure that there is private investment in public sector undertakings. With uniform levels of growth in both private and public sectors, India can look to becoming the superpower it aims to be.