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INDIAN DREDGING troubled sector gets a lifeline Indian dredging companies that have been facing multiple challenges are likely to breathe easy with new guidelines. 02 MARITIME GATEWAY / MARCH 2016 Maritime Gateway- 20.5x27.5 CM

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Boost trade, strengthen relations. If India’s relations with Bangladesh government of India has expressed have notably improved, it is largely its interest in developing a new deep because of Prime Minister Narendra sea, all-weather port at Payra close to Modi’s visits both by the Minister of Chittagong. This too we believe, is after For India to enjoy External Affairs and senior government Dhaka snubbed a few Chinese proposals officials to iron out pending issues and to build a port at Sonadia, closer to continued success improve bilateral trade and cooperation. Andaman and Nicobar Islands. with its closest ally In the last one year there have been With continued effort from private many important developments that lend ports and the Shipping Corporation of it should make sure credence to India wanting to strengthen India mainline vessels now ply between road and rail networks ties with its Bangla brethren. During ports in India and Bangladesh. With his first visit, Modi finalised the land the standard operating procedures between Bangladesh boundary agreement despite strong of the coastal shipping agreement opposition from the Congress and almost finalised, more cargo flow will and North India Mamata Banerjee earlier. India has even take place between the two nations. agreed to sell 100 MW of power from a India has also pushed for connectivity are considerably plant located in Tripura to Bangladesh. between Bangladesh, Bhutan and India improved. We hear that many infrastructure that is now come to be known as the projects are also in the works. Indian BBIN corridor where an extensive road independent power producers beat a network is waiting to be developed. Chinese conglomerate in developing a $ 1.6 billion power plant and will soon For India to enjoy continued success develop and sell power in the energy with its closest ally it should make starved country. There are also talks of sure road and rail networks between a trilateral agreement between India, Bangladesh and North India are Bangaldesh and Myanmar for improved considerably improved. While trade cooperation and trade. flow is important in maintaining a cordial relationship, what will really These developments tell us that India keep the nation together is also people has realised the benefits of a strong and and cultural ties that help in bringing continued relationship with Bangladesh. the two countries closer. And to sustain this relationship, India is using trade as an important tool to build trust and gain confidence with this neighbor. Since the two countries share the Bay of Bengal, maritime trade can be used as an effective tool to R Ramprasad improve trade flow between them from Editor and Publisher the $ 7 billion currently. The Union [email protected] Automate, connect and control with Cavotec’s inspired engineering.

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TPS-Ad-QM-A4-EN-India.indd 1 16.11.15 11:22 contents volume 8 | issue 06 | march 2016

28 22 EXIM: indo-bangladesh cvo er story: Short sea shipping: Waiting to be unlocked Once the coastal shipping commences it is going to be the Indian dredging direct short distance trade ever made available between the two companies who have neighbouring trade partners. been facing multiple challenges are likely to breath ease with new ecmbs review guidelines and projects like Sagarmala. 30 44 indian dredging ce o roundtable summit review: session one troubled sector gets Ease of doing business: H uge growth ahead for the "embrace technology at a lifeline east coast ports" End users pinpoint the At the second edition of CEO bottlenecks to be eased out in roundtable where "Ease of doing port operations as the east coast business at ports" was discussed gears up to handle larger cargo in participants felt that technology the backdrop of huge industrial 52 could play crucial role in and manufacturing activity lined east coast: ports improving business environment. up in the southern and eastern B righter days ahead hinterland Ports on eastern coast have always played second fiddle to those on the western coast, partly due to the country’s policy on trading partners and lack of industrialisation. But, this may be about to change as investors pledge billions of dollars to set up industries in southern states. 56 PORTS: efficiency Direct Port Delivery: Less dwell time In line with the ease of doing business campaign of the central government, JNPT has extended the direct port delivery (DPD) facility 40 46 to all ACP clients irrespective of their import volume. summit review: inaugral summit review: session TWO session Improve infrastructure, 64 Focus on user needs speed up cargo evacuation Logistics Industry leaders from all segments Panelists stressed on the need Wheels of change came together to debate and for development of necessary Green logistics can help a company improve its distribution efficiency, understand opportunities and infrastructure, skilled manpower, reduce distribution cost, and increase service differentiation. challenges existing on the east cargo evacuation and last-mile coast of India, more so the connectivity across the east coast. requirements of the end users – shippers, exporters and importers. INTERVIEW

62 Iznna Ku netsova Jim Whalen President & COO President Asia 48 INTTRA INTTRA perspective East Coast Maritime resurgence Others Complex customs procedures and ambiguity on rules at ports need to 10 News in Brief be done away with and decisions announced by the government should see the day light, if ease of doing business is to be implemented in its 12 Point Blank true sense. 14 News brief NEWS

Shipping O pen art gallery at ICD Tughlakabad lines waive 20,000 working hours and detention 24 artists from across the charges world have transformed the Majority of the space, using more than 100 shipping liners in shipping containers and Kolkata have started 1,000 litres of paint. waiving 25 to 40 per The free exhibition at the cent of the detention ICD will eventually turn charges accrued due into traveling art as the to delays in returning containers get going. containers caused by the blockade at The exhibition, which Nepal-India border. Over the past couple of The venue is the container launched on January 31 and However, shipping months, over 100 shipping parking lot, “WIP (Work functioned through Febru- liners are reluctant to containers at Concor ICD in Progress): The Street Art ary, is part of a street art provide concession in Tughlakabad have gone Show,” a massive walk- festival curated by Delhi- in detention charges through a metamorpho- through art installation based organisation St+Art for containers that sis with vibrant colours has turned the ICD into an India Foundation in col- arrived at Kolkata and geometric patterns. open-air gallery. More than laboration with Concor. prior to August 30.

Cleveland- Nagpur to get logistics hub Flipkart Europe Express offers eKart Finance minister Sudhir Mungan- expands to India tiwar is likely to make provisions to third-party The Cleveland-Europe for establishment of a logistics hub Flipkart Ltd has Express liner service will and park in the city in the budget opened its logistics add India to its route, as the to be presented by him for 2016- services eKart to two ships that travel between 17. Mungantiwar has also an- third-party e-com- Cleveland and Antwerp, Bel- nounced he would provide `5,500 merce firms even as gium, will also stop in India. crore for construction of roads in the company is gear- The Spliethoff Group, the Vidarbha's 11 districts. The city has potential for logistics ing up to roll out an shipping line’s investment hub and park as it is situated in the nation's centre. The hub inter-city customer- partner, and their Bengaluru can be used for packaging and repackaging. to-customer courier partner will cover the costs service called eFlash. of the India venture. The e-commerce Indo-Thailand logistics cooperation logistics service has New Wharf at JN Prime Minister Gen Prayut Chan-o-cha and Vice President of already found takers Port India Hamid Ansari have inked an agreement for coastal logistics such as online fash- cooperation. Thailand and India will set up a transport route ion store Jabong and His Highness Sheikh between a seaport in the Andaman Sea and those in India. Thai- online marketplace Mohamed bin Zayed Al land will study a new Indian investment law before proposing the Shopclues. Flipkart Nahyan, Crown Prince of establishment of a free trade area agreement with India. is planning to build Abu Dhabi, inaugurated eKart as an indepen- a new wharf at the DP dent business and World’s Nhava Sheva Gate- IndoSpace to invest $1 billion separately raise capi- way Terminal at JNPT. DP Leading developer of industrial and logistics parks IndoSpace tal for the logistics World’s new investments plans to invest $1 billion in the country in the next five years to unit. Online retail cover expansion of existing take its total investment to $1.75 billion. This additional invest- sales could touch be- terminals and long-term ment will increase IndoSpace’s development pipeline from 20 tween $48 billion and management contracts for million sq. ft to 50 million sq. ft. Currently IndoSpace oper- $60 billion by 2020 new terminals and contain- ates industrial and logistics parks in Pune, the National Capital from $4.47 billion in er. DP World is India’s only Region, Bengaluru and Chennai. The company has plans to fund 2014, according to foreign port operator where and expand its 17 industrial real estate projects across the country a report by financial it has invested $1.2 billion to support manufacturing, consumer and third-party logistics services firm UBS in its activities. companies operating in India. Group AG.

10 maritime gateway / march 2016 Adani Ports expansion plans DB Schenker celebrates 20 years of operations in India Schenker India Pvt Ltd celebrated 20 years of successful opera- tions in India. Started in 1996 with five branch offices in India, today DB Schenker is operational in more than 44 offices in 37 cities across India. The company operates with 12 DB Schenker logistics centers (Multi Client facilities) and 42 customer-specific warehouses, covering millions of square feet of warehousing area across India. Customers can expect a shorter response time, availability of products and seamless last mile deliveries to their destinations.

Colombo Port growth declines In India the company is looking to expand pres- ence in Maharashtra and West Bengal. Overseas Colombo Port has made a they are scouting for opportunities in Sri Lanka, downward slide of around 6 Bangladesh, US and Europe, apart from the ports per cent growth last year com- planned in Australia. The overall objective is to pared to a 14 per cent growth make APSEZ a transshipment port company. They in 2014 and Jaya Container are partnering with Terminal Investment Ltd SA Terminal fully managed by for transforming Mundra into a regional transship- the Sri Lanka Ports Authority ment hub, while a similar port is being developed in (SLPA) has continued to make Kerala as well. losses, SLPA statistics showed. Colombo Port's annual throughput for 2014 was 4.9 million teu compared to 5.1 million Hyundai disposes bulk fleet teu last year that accounted for a 6 per cent increase, which was Hyundai Merchant Marine (HMM) signed a con- reportedly lower than the previous year’s increase in growth by 14 tract to sell its dry bulk division to H-Line Ship- per cent. In 2013, annual throughput was at 4.3 million teu. ping, in a deal reportedly worth KRW120 billion ($100 million) with H-Line also assuming debts of around KRW420 billion. Credit ratings of HMM have recently taken more of a hammering with local M T DistyaAkula - First suezmax tanker to agency Korea Ratings downgrading the under pres- load Iranian crude oil in post sanctions sure line to B- in its latest report. HMM’s 12 bulkers will help make H-Line a growing force in dry bulk. after the removal of sanctions It is also likely to sell off its terminal at Pusan to pay against Iran. It has the capac- off debts. ity of carrying a full load of about 149,000 metric tonnes of oil cargoes equivalent to Cochin Shipyard to build 4 about 6,000 oil-carrying road catamarans M T DistyaAkula, co-owned trucks of standard size. Built by Mitsui Ichihara Engineer- Cochin Shipyard is making its maiden foray into by Elektrans Group, is the first Indian suezmax tanker ing and Shipbuilding, Disty- catamaran manufacturing. They will build four ves- aAkula previously known as sels for cruising and other purposes for Andaman to load 130,000 mt of Iranian crude for Litasco, the trad- Front Glory, is 269 metres long and Nicobar Islands. The vessels are expected to with a draft of 17 metres. be ready in about two-and-a-half years and are part ing arm of Russia's Lukoil of the 'Make in India' drive. The vessels will cost `1,400 crore and will be used for cruising. Recently, the shipyard has also collaborated with GTT France APM Terminals Pipavav receives maiden for developing cryogenic carriers to transport natural gas frozen in liquid form. RoRo vessel APM Terminals Pipavav hosted the maiden call by leading RORO operator Höegh Autoliners vessel – m v HOEGH ANTWERP at New ports in Bangladesh Pipavav Port. The carrier berthed at Pipavav Port in late January, India has expressed interest in developing the deep 2016 to load Ford’s small and midsized cars, being exported from sea port at Payra in Bangladesh. Separately, Japan its Sanand plant in Gujarat. In August 2015, APM Terminals may develop another deep sea port, Matarbari, in Pipavav commenced RoRo operations and successfully berthed its Cox's Bazar. However, Dhaka has cancelled a port first RoRo vessel m v Grand Dahlia at the port. So far over 10,000 that China proposed to build at Sonadia, on the cars have been shipped from Pipavav Port since the commence- south-eastern corner of Bangladesh, ment of the RoRo facility.

mar ch 2016 / maritime gateway 11 POINT BLANK

If consolidation occurs, we have reached the next We are keen on getting level of uncertainty in global into shipping...as a non-vessel ocean shipping. owning common carrier to start with. That is one of – Chas Deller Partner, 10XOceanSolutions Inc. our strategic plans. We will have slots on ships. Shipping now is not in good shape. We are in the business of transporting containers, so it is either forward or backward integration. – V Kalyana Rama Director (Projects & Services), CONCOR

Operating costs are likely to rise in the future, as the scope for further cost cutting is in most cases quite limited. However, the expected increases in 2016 and 2017 are likely to be modest in nature as we anticipate only small rises in the cost of lube oils and other commodities; with a relatively weak global economy inflation is also expected to India is Hong Kong's remain low. seventh-largest trading – Nigel Gardiner partner, with bilateral trade Managing Director, Drewry of $23.7 billion last year. We are looking at increasing trade with India manifold. Lines operate jointly, Both the nations will sign covering loops in the Investment Promotion and trade lanes, with most Protection Agreement to loops being single- further strengthen ties. operator loops. Alliance – Margaret Fong cooperation will allow Executive Director, Hong Kong Trade Development Council substantially greater efficiency and lower costs for its member lines.”

– Bill Payne Vice-Chairman, NYK Line

12 maritime gateway / march 2016

NEWS

top 20 narrowing. Liner Shipowners vessels were demolished SHIPPING on-time performance rose refrain from in India, followed by 16 by 13.3 percentage points in in Bangladesh, 4 in China December compared to the newbuilding and 3 in Pakistan, while Road funds to be same month the previous Shipowners around the the rest was demolished in year, to reach a global score used for Inland globe are trimming down other countries. Dry bulk of 84.6 per cent, reported their investment plans as a carriers amounted to 70 Waterways Lloyd's Loading List. plunging freight rate market per cent of the total ships Wan Hai retained its top for both dry bulk and con- demolished in January position in its December tainer segments, coupled 2016, with only three Global Top 20 carrier rank- with mixed prospects for tankers and seven con- ings with 91 per cent on- the tanker market’s elevated tainer ships demolished time performance, followed rates and their sustainabil- during the same period. by MOL at 90.1 per cent, ity, have contributed to a Maersk at 89 per cent and more conservative stance. Hamburg Sud at 87.7 per Coastal shipping The debts faced by many cent. At the other end of shipbuilders in some cases to grow in India The Shipping Ministry is the scale, CMA CGM was grossly outweigh the value looking to divert part of 84.1 per cent on time, Zim of fixed assets they hold. the funds from the Central 84.2 per cent and NYK 85.2 The unknown question as Road Fund – meant for per cent. development and mainte- to most of these shipbuild- nance of roads and railway ers in regards to the current over-bridges-to develop In- Maersk merges orders they still hold, while land Waterways. The fund Singapore and most of these have already accumulated `40,000 crore been put on hold as the Consultants McKinsey & between 2012 and 2014. Hong Kong offices troubles faced by both the Co. and AECOM have Currently, the private sec- shipbuilders as well as the completed a study regarding tor is arguing they cannot reluctance to accept deliv- the nation's maritime freight see any great returns from ery of these vessels from traffic, and have concluded the investment they would the owner under the current that optimisation – primar- make towards this sector. freight market conditions ily boosting coastal shipping The Shipping Ministry, means that there is little in and speeding up container therefore, needs that initial terms of incentive to push exports – could lead to cost investment to demonstrate their construction forward, savings in the billions. The that things can change Allied Shipbroking said. Maersk Line has merged its study estimates 20 per cent in this sector if funds are Singapore and Hong Kong annual growth in coastwise infused. Only then can the Dry bulk vessel regional offices. Hong Kong bulk freight traffic through private sector be invited to is now headquarters for the recycling up by 43 2025 – an increase from 150- invest in those projects. combined operations, while per cent YoY 250 million tonnes per year the Singapore outlet is a today to 750 million tonnes The first month of 2016 country cluster office over- per year by the end of that Improvement saw 53 dry bulk vessels seeing the shipping line's period. The consultants also recycled, 20 per cent more in shipping business in South-east Asia. expect container volume at than in December 2015, lines schedule As part of reorganisation Indian ports to double, to while marking a 43 per cent efforts, Maersk has reduced 21 million teu by 2025. If reliability increase from January 2015, the number of its regional government initiatives like Last year has proved to be Greek sales-and-purchase offices from eight to seven the Make in India program one of the best years for shipbroker Golden Destiny by merging its Asia-Pa- are successful, that volume schedule reliability among said. The average age of cific (South-east Asia and could be as much as 25 mil- container shipping lines, es- dry bulk vessels scrapped in pecially the second half of Oceania) and North Asia lion teu, McKinsey said. regions. January 2016 was 24, while 2015 when "global schedule the average deadweight To facilitate growth of reliability reached consider- Combining the two regions was 78,682 dwt. Out of the coastwise shipping, the ably higher performances will enable simpler and 53 vessels demolished, 23 firms recommended con- from September to Decem- more standardised process- were Panamaxes, averaging solidation in the sector, ber compared to previous es. This will allow Maersk 72,186 dwt, while January dedicated port capacity for years," said SeaIntel CEO to create a leaner organisa- 2016 also saw 11 VLOCs coastal bulkers, a transship- Alan Murphy. Furthermore, tion to operate with greater and nine Handymaxes ment port at the southern last year saw the differ- transparency and alignment demolished, averaging tip of the subcontinent, and ence between the best and on a regional as well as 164,039 dwt and 44,224 dwt improved bunkering and worst ocean liners in the cluster (sub-regional) level. respectively. 24 dry bulk shipyard facilities.

14 maritime gateway / march 2016 standards. With more ves- all imports/exports from CMA CGM eInvoice sels to be recycled in the Fulfillment by KPCT to Far East, USEC, dashboard future, the current cost of Amazon going USWC, Latin America, sustainable ship recycling is global Europe and Inter Asia. This CMA CGM eBusiness not feasible. Today, respon- direct container shipping has continued its much sible recycling is only fea- service is expected to give anticipated foray into the sible in a limited number of a filling to the trade on the next level of service en- yards in China and Turkey. East Coast particularly for gagements with customers In order to improve condi- exports of granites, tobacco, with the launch of Invoice tions on a broader scale at shrimps, cotton yarn, lint- Dashboard. It allows Alang, Maersk is working ers, along with imports of customers to manage their on building a coalition automotive parts, furniture, invoices. The move offers with shipowners and has tiles, news print, coffee benefits of visibility and initiated engagement with a powder, fruit juices etc. access to freight, detention number of selected yards. and demurrage and deposit Amazon has received its invoices. It assures informa- Chinese shipping license, Hyundai Motor tion visibility to clientele on Mercator to sell signaling the massive their Invoices, available 24 its Singapore bulk retailer is further along India takes to sea X 7. Key features include with its plans to become a all eInvoices in one single cargo business transnational fulfillment dashboard, sorting, filter- and shipping company. ing and grouping capacities Last month, the company with the usage of customis- had got its license to act able views of invoices, plac- as a wholesaler for ocean ing the invoice information container shipping from the in the context of its related US Federal Maritime Com- shipment, invoice payment mission. Having licenses on status information and ca- both ends means Amazon pacity to mass print invoices can now buy space on ship- or export to PDF/XLS. ping containers at wholesale Hyundai Motor India is now using ships to move The invoice detail page pro- Shipping and logistics com- rates and resell it at retail pany Mercator Ltd has sold rates. The move appears to cars across domestic mar- vides visibility on the whole kets, saving on costs and invoice lifecycle such as its Singapore bulk cargo be about connecting “two business to three investors giant markets to each other, reducing carbon footprint. time line showing the initial As many as 800 cars were invoice and the potential for a token amount of three the Chinese producers and Singapore Dollars. The the American consumers,” loaded on to the M V IDM adjustements credits, one- Symex at the Chennai Port click access to all the in- token amount is consider- while cutting out American ing the negative networth resellers, said Ryan Peters- and the cargo was trans- voices related to the current ported to Pipavav Port in shipment, visibility on the of the Singapore unit. The en, CEO of Flexport. company has entered into Gujarat. Though Hyundai Invoice PDF and possibility had been using Chennai to download it an agreement for the sale of all 900 million shares of Hanjin Shipping Port for exporting cars, this Mercator Lines Singapore starts new service is the first time it is trans- Maersk to help to Singapore’s Bellerophon porting cargo through the Holdings Pte Ltd, MIB from KPCT sea for domestic market. shipyards upgrade Investments Pvt Ltd, and Hanjin Shipping India Pvt It normally takes three to Wroclaw Holdings Ltd. The Ltd made its maiden call at four days for Hyundai to sale will help take roughly KPCT on February 1, 2016. move vehicles from the `1,000 crore debt of the Vessel production centres near Singapore unit out of the MV Hanjin Florida exchanged 553 teu at the Chennai to Gujarat region parent company’s book. port out of which 109 teu through trailers. However, Mercator’s Singapore unit are imports and 444 teu are shipping them is seen to currently carries a debt of exports. cost less as the Centre has `1,000 crore and reported a promised to provide incen- The Port Rotation for this loss after tax of `424 crore tive of `3,000 a car to those service is: Krishnapatnam for fiscal year 2013, `140 using coastal route. Chen- Maersk has announced a – Tanjung Pelepas – Sin- crore for fiscal year 2014, nai Port Trust officials are commitment to help select- gapore – Qingdao – Xin- `768 crore for fiscal year also talking to other OEMs ed ship recycling yards at gang – Busan – Shanghai 2015 and `136 crore for six such as Nissan and Ford Alang in India to upgrade – Nansha. facilities and practices to months of the current fiscal to start using the coast for comply with the company's year. This service will cater to moving cargo.

mar ch 2016 / maritime gateway 15 NEWS

bid of 31 per cent to win There are 22 container ships mooring dolphin structure, Nepal to use Vizag a contract for mechaniz- departing from the Beibu surpassing the previous Port for trade ing berth no 12 at the New Gulf each week for major maximum combined total Mangalore Port for loading ports in the ASEAN region. LoA of 334.05 metres. 6.73 million tonnes (mt) of Guangxi is now looking to This achievement is a result bulk cargo, mainly coal, for extend its shipping routes of the constant endeavour 30 years with an investment to more Middle East and of traffic department and of `470 crore. European countries to boost marine department of foreign trade. At Kandla Port, United JNPT with cooperation Liner Agencies of India from vessel master to maxi- (Pvt) Ltd put a price bid of T ruck parking yard mise utilisation of available Nepal will now be able to 10.44 per cent to become at Vallarpadam infrastructure, helping to use India’s Visakhapatnam the highest bidder to run a reduce the pre-berthing Port for its trade with third container handling facil- detention of liquid cargo countries, with the two ity with a capacity to load vessels. countries signing a Letter 600,000 teu a year from of Exchange in New Delhi. berth numbers 11 and 12 India has so far been provid- at the port located on the ing a single transit route to western coast. Modernising the sea—the Kolkata Port. Chittagong Port India had agreed in principle Port auctions had ear- to allow Nepal to use the Vi- lier fetched revenue shares The Bangladesh govern- Cochin Port Trust has al- sakhapatnam Port in 2009, exceeding 50 per cent but ment has undertaken vari- lotted 3.5 acres of land at but a final agreement was some of them failed to ous projects to modernise Vallarpadam to Indian Oil delayed after Nepal opposed materialise as lenders found Chittagong Port aimed at Corporation Ltd (IOCL) for the double lock system the projects un-bankable turning it into a busy port in developing a modern truck that India implemented on due to the steep revenue the world. “We have formu- parking yard with various Nepal-bound cargos. share. lated a 25-30 year strategic amenities for drivers. The master plan with technical The Nepal-India Transit Yard will come up in close support Treaty has stipulated a Container service proximity to ICTT Vallar- from Asian single-lock system which from Iran to China padam and will have ameni- Develop- means that Nepal-bound ties like ATM, food court, ment Bank third country imports enter rest room, toilet blocks for (ADB) for via Kolkata with a one-time drivers etc. The land has Chittagong lock put on the container. been allotted to IOCL for a Port,” Nepal initially opposed the period of 30 years. informed double lock system, but later Shipping Minister Shajahan agreed to the provision after Khan. finding this would not result in procedural delays. One of The government has the main benefits of getting ports already constructed backup access to an alternative sea Iran has launched a new T wo vessels berth facilities behind 4 and 5 port is it would help reduce shipping route linking Ban- berth of the Newmoor- traffic congestions that dar Abbas with Qinzhou simultaneously at ing Container Terminal Nepal-bound cargos face in Port in the Beibu Gulf, BPCL Jetty along with Chittagong Port Kolkata. south China's Guangxi Trade Facilitation Project Zhuang autonomous With the berthing of MT (CTMS). Vessel Traffic Bidders turn region. Iranian container Ginga Panther (LoA of Management Informa- ‘realistic’ in port ship "Perarin," with a 158.98 metres) at LB-01 tion System (VTMIS) and 3,280-teu capacity, arrived (South) along with MT Tugboat having capacity of auctions at Qinzhou Port recently, Atlantic Polaris (LoA of 4,500 BHP were brought Revenue shares offered by offloading 978 containers 183.21 metres) which was and set up respectively at private firms in auctions for from several countries along berthed at LB-01 (North), the port. The government running cargo terminals at the 21st Century Maritime a record has been set for has collected sea going major ports located in New Silk Road. This marks the accommodating two vessels water supply vessel having Mangalore and Kandla are opening of the first shipping at a time at JNPT, having capacity of 1,000 metric an indication of bidders tak- route directly linking the maximum combined Total tonnes, 29 container and ing “realistic” calls on port Middle East and the Beibu LoA 342.10 meters (dou- cargo handling equipment contracts. Chettinad Inter- Gulf, which has three ports ble- berthing of vessels) and three reconditioned national Bulk Terminal Pvt. – Qinzhou, Beihai and on 300-metre long BPCL container vessel and other Ltd quoted a revenue share Fangchenggang. jetty with the help of the projects.

16 maritime gateway / march 2016 text message to the driver’s capacity of the terminal is IFC to finance cellular number containing 4 million teus per year. The Paul Antony Myanmar all information concerning terminal in Kochi began to continue as Industrial Port the shipment and PIN. The commercial operations in Cochin Port Trust application also has a feature 2011, and has recorded a The International Finance for the CFS to generate a 28 per cent growth year- Chairman Corporation (IFC) is report listing all transaction on-year for January 2016, Paul increasing its exposure in events against the PINs gen- against the same period last Antony will Myanmar. It is looking to erated for the selected period. year. In December 2015, it continue as inject $200 million, in the handled 64 ships as against chairman form of debt financing, to DP World 68 in January 2016. of Cochin Myanmar Industrial Port appoints group Port Trust in central Yangon. This is as the IFC’s first investment in chairman and CEO Adani Hazira Port deputation transport infrastructure and DP World connected by rail period has been extended comprises of $40 million has an- to central India by the Shipping Ministry as loan, $40 million as nounced for three more months. convertible C loan and $120 the appoint- He was principal secretary million in parallel loans. ment of (Power), Kerala prior to his His Excel- appointment as Port Trust e-Forms speed lency Sultan chairman. A member of container traffic Ahmed bin Sulayem as Alappat family in Thrissur, Group Chairman and CEO. Paul Antony, assumed at APM Terminals His Excellency became charge as CPT chairman on Mumbai Chairman of DP World in February 17, 2011. May 2007 and has overseen DP World's expansion, in- Adani Hazira Port Pvt Ltd cluding the acquisitions of is now connected to ICD Provisons CSX and the P&O Group Pithampur - Ratlam in to operate to become a leading global Central India through rail. marine terminals operator. Concor has begun running container ports in rakes from ICD Pithampur Bangladesh DP World Pvt Ltd has plans - Ratlam to Adani Hazira to invest over $1 billion in Port on a regular basis and Private entrepreneurs seek- India for augmenting its APM Terminals Mumbai the port has received eight ing to obtain customs bond port-related operations. The laden export rakes from licence for operating private became the first Indian investment will mostly go container terminal to go these ICD’s already. inland water container into brownfield container terminal (IWCT) will have to paperless by providing ship- Through this regular rail terminals, greenfield con- comply with a multipronged ping lines electronically with movement EXIM Trade set of guidelines, including the required Export Form 13 in Central India has got DP World Kochi to one on adequate facilities for export containers enter- an alternative rail gateway for external trade. A private ing the terminal by truck. grow its capacity which will provide them container-handling company Building upon the success of faster turnaround of trains. must be registered as a lim- the Export e-Form 13, APM Hazira is around 270 km ited company, should have Terminals Mumbai has shorter in distance from five years’ experience in han- also introduced an ‘Online Pithampur in comparison dling inland water container, Import Delivery Process’ to to Nhava Sheva and rail cargo transportation or seven streamline the import cycle freight paid for Hazira is years’ experience as ship- to enable faster container lower when compared to building industry or charter movements into and out of Nhava Sheva Port. the terminal. agent or owner of cargo- Major shipping lines like carrying vessel or seven The Web-based application India’s first transshipment Maersk, MSC, CMA CGM, years’ experience as shipping allows CFS’ registered with terminal operated by DP UASC, Balaji Shipping, licence-holding company the terminal to get real- World in Kochi is expected Goodrich are using this rail in commercial water-vessel time updates on the status to double its capacity in the services to connect their operation. The customs wing of import deliveries. PIN next two years when it adds export boxes to Hazira. of the National Board of numbers are established for two more shipping berths. M/s National Steel, M/s Revenue recently issued the an online submission of the The current capacity with Lanxess India, M/s Shakti policy with comprehensive tractor trailer (TT) number two berths can handle a Pumps and M/s Krasoma guidelines with some 36 and cell phone number of maximum of 1 million teu Laboratory are some of the conditions binding private the driver, triggering an SMS per year, while the designed regular users of this service. IWCT ventures.

mar ch 2016 / maritime gateway 17 NEWS

Shipping ministry will issue MoU during the upcom- tainer terminals, logistics Dong Nai tenders for appointment of ing Make in India week. parks, inland container cracks down on a consultant by March for The new port, which will depots, container rail facili- unlicensed ports the proposed transshipment cost around `10,000 crore, ties and basic infrastructure port at Colachel. is expected to ease con- facilities required for busi- Unlicensed river ports gestion at JNPT that will ness expansion. hold a 74 per cent stake in remain very common in the Sulayem said the tariff the proposed port project, southern province of Dong Largest container rates are at least 30 per cent while the Maharashtra Nai, Vietnam, despite the lower in Colombo and it ship put on China- Maritime Board will hold fact that local authorities will take some more time to the rest. The proposed port had previously announced USA route compete with this scenario. will provide a draft of 20 plans to crack down, even “Shipping lines are ask- metres, making operations eliminate all of them, by ing to match the Colombo for bigger ships easier. 2010. Of the 96 ports still rates,” Sulayem said refer- in operation, only a third The Wadhawan site was ring to competition. are legal. More than half of chosen because of its con- the unlicensed ports (35) are nectivity with the Western in the vicinity of Bien Hoa Railway network, which Adnoc to store oil City and are mostly used is a double-line, unlike the in India to transport construction single-line Konkan Railway materials, with sand and network. The proposed stone brought to them by port will have a capacity barge and lifted into trucks CMA CGM-owned of 40-60 million tonnes. by crane. "Benjamin Franklin" - the JNPT will build the port According to a Department 200,000-tonne container ves- and invite private firms to of Transport spokesperson, sel traveling between China operate it. Proximity to the "We have raided many of and the US – has set sail upcoming dedicated freight these ports. But by the time from Guangzhou Port re- corridor and Delhi-Mumbai we check one, all others cently. The vessel can carry industrial corridor will Two-thirds of the crude close down. Many even up to 18,000 containers and ensure captive cargo for the oil India plans to store have barges docking at connects major Chinese port. in its strategic oil storage night, meaning we cannot Ports, including Xiamen, will come free as the UAE catch them.” Guangzhou, Yantian, and national oil company Abu Hong Kong, with the US Dhabi National Oil Com- west coast. JSW Infra get pany (Adnoc) has agreed Finance Ministry According to Ludovic Re- green nod for jetty to store crude oil in India's to announce 4 nou, General Manager for maiden strategic storage JSW Infrastructure has major ports in CMA-CGM Shipping Co.'s facility and give two-third South China region, the got environment clearance of the oil to it for free. India Budget company has put its largest for setting up of an all- is building underground container ship on this route weather greenfield jetty in storage facilities at Vi- In the Budget for 2016-17, Maharashtra, entailing an sakhapatnam, Mangalore Finance Minister Arun because it was confident in the Chinese market. China's investment of `1,175 crore. and Padur in Karnataka, Jaitley is likely to propose The proposed multi-cargo which together could hold four new major ports to be ocean freight to the US west coast has increased 5 captive jetty, to be devel- about 5.33 million tonnes constructed, which include oped in Nandgaon village of crude oil to ward off Dahanu (Maharashtra), Co- per cent and CMA-CGM's freight volume grew 30 per in Thane district, is ex- an oil shock due either to lachel (Tamil Nadu), Sagar pected to handle 8.4 million supply disruptions and price (West Bengal) and Dugaraj- cent. CMA CGM offers 12 shipping lines in Guang- tonnes of cargo in next five spikes. Adnoc is looking for apatnam (Andhra Pradesh) years and up to 16.7 million a safer and closer storage at an estimated cost of zhou, connecting the Chi- nese Mainland with Europe, tonnes in 10 years. facility and is keen on tak- `32,000 crore. A study by ing half of the 1.5-million North America, Africa, and The jetty would cater to lo- Mckinsey and Aecom for tonne Mangalore storage Southeast Asia. cal demands of the Maha- the shipping ministry un- facility. derlined the need of build- rashtra Industrial Develop- ing coastal capacities to ment Corporation (MIDC) India is now looking at meet future cargo volume. Wadhawan Port and the partial demand of building four more strategic It estimates that in 2025, on the cards the nation as far as the con- crude oil facilities at Bi- bulk traffic will increase tainer traffic is concerned kaner in Rajasthan, Rajkot to 1,850 mt a year. Exim Wadhawan near Dahanu at a later date, when the in Gujarat, Padur in Kar- bulk will rise 4 per cent may soon get their satellite Dedicated Freight Corridor nataka and Chandikhole in to reach 1,000 mt a year. port, with the signing of the is operational. Jajpur district of Odisha.

18 maritime gateway / march 2016 Chennai Port soon new projects will help keep India's 1st multi- of 5.25 MMTPA. The pace with competition from environmental clearance to launch RFID neighbouring ports such as modal hub in document states that the L&T Kattupalli Port, Karai- Varanasi proposed LNG terminal consists of development of kal, Tuticorin, Chennai Five multimodal logistics marine facilities for LNG and Krishnapatnam. With park are being set up in import, berthing/moor- the completion of these Gujarat, Punjab, Rajas- ing of FSRU, storage and projects, KPL’s terminal than, Uttar Pradesh and regasification of LNG with handling capacity will touch Maharashtra, including Kakinada Deep Water Port 100 million tonnes by 2020, one in Varanasi, along the harbour, a high pressure said M A Bhaskarachar. 3,342-km-long Dedicated subsea pipeline to transport The major projects that Freight Corridor at a cost of regasified LNG to coast and are in the various stages of `5,000 crore for hassle-free, an onshore receiving facil- RFID and e-seal are construction are container cost-effective cargo move- ity for gas metering skid, expected to be launched terminal, coal berths III ment across the country. control room and supply to soon at Chennai Port. M A and IV, multi-purpose cargo The process of acquiring gas grid. Bhaskarachar said that live berth, one LNG termi- land is in progress. Varanasi demonstration of the use of nal and capital dredging. will get a first-of-its-kind RFID was held at the port Besides, tenders have been logistic hub at riverfront to Government and it would be introduced floated for general cargo connect inland waterways, for all vehicles so that they berth-II and multi-liquid rail and road for fast move- roping in need not wait for manual terminal. ment of cargo. multilateral checking for entry. The e- Various options such as seal would be a part of the agencies for JNPT to comply PPP, state government par- RFID programme. Sagarmala with VGM ticipation and debt equity The problem of congestion are being explored for the Shipping ministry is roping had also been addressed at purpose. It will facilitate in global multilateral the port, a task force had door-to-door services for agencies to extend a helping been formed that monitored customers besides giving hand to entrepreneurs within the port and a group value addition including looking to explore `3.5 checked the trailers for packaging, retailing, label- lakh-crore of investment documents outside the port ling, transportation of the opportunities under area and this had brought goods on the dedicated the Sagarmala project. down congestion. tracks. Sagarmala Development Container terminals at Company, with an equity Jawaharlal Nehru Port base of `1,000 crore, would Kamarajar Port Trust are gearing up to meet chip in for investments and the July 1 implementation Kakinada Port expanding viability gap funding to help of new container weight gets green nod for capacity rules under SOLAS conven- entrepreneurs achieve viable tion. FSRU returns on their investments. The ministry of environ- The company was also Gateway Terminals India ment, forests and climate seeking the support of Asian has had several trial runs change has accorded Development Bank and of the IMO requirements environmental and coastal other multilateral agencies and the terminal is fully regulation zone (CRZ) for programme loans to prepared to comply with the clearance to AP Gas various initiatives under the new process. It has inte- Distribution Corporation Sagarmala project. grated container weighing Limited (APGDC) for the system within normal yard The investment development of the Float- operations. All laden export opportunities for the ing Storage Re-gasification containers, including those entrepreneurs include Kamarajar Port is all set Unit (FSRU) based LNG that have entered the ter- setting up of greenfield to commission five proj- terminal at Kakinada Deep minal with a verified gross seaports, modernisation of ects, including its maiden Water Port in East Goda- mass from the shipper, will existing ports, augmenting container terminal and vari district. multi-purpose cargo berths, be weighed at the terminal cargo handling capacities, within the next three years yard, using its rubber-tired The APGDC is undertak- harbours, dry ports, coastal at a cost of `8,100 crore. gantry cranes. At present, ing the project with a 3.5 economic zones, lastmile The project will increase APMT Mumbai does not MMTPA design capacity of port connectivity through cargo handling capacity by plan to levy any additional the proposed LNG terminal rail and road, container 44 million tonnes to 80 mil- fee for providing a VGM to and appropriate operational freight stations and inland lion tonnes per annum. The the shipper. flexibility up to a maximum container depots.

mar ch 2016 / maritime gateway 19 NEWS

state. As the state is in the country as a major invest- interested in allocating land Business forefront of automobile ment destination as well for setting up factories, community asks manufacturing, several as an important hub for rather than warehousing, to automate trade companies including Ashok exports. According to the stated Siddiqur Rahman, Leyland, TVS as well as business climate survey con- president of Bangladesh and logistics Maruti are looking to set up ducted by Swedish Chamber Garment Manufacturers more production facilities in of Commerce India, about and Exporters Association. After years of putting up the state. 70 per cent of the Swedish Setting up the warehouse in with multiple procedures companies see India as a West Bengal would be com- and documentations major hub for exports. mercially viable for Bangla- involved in export and deshi garment makers and "This is against only 30 per import of goods through exim the state government has cent of the companies ex- India’s seaports, the also expressed interest in pressing such sentiment last country’s maritime China’s EXIM in providing land for the same. community is mustering its year," it said. "The compa- collective strength to lobby January shrinks nies also feel that for India for a common IT platform further to truly take its place in the to facilitate ease of doing global value chain, there SEBI wants business at ports. The China's January trade per- are key reforms that need to to regulate discussions in the maritime formance was worse than materialise," it added. expected as tepid demand warehouse service industry these days revolve Maharashtra continued to persisted both at home and around the urgent need to be a very important hub for providers abroad, raising expectations roll out a so-called pan-India Swedish businesses, with of further government mea- port community system one out of three companies sures to arrest the slowdown (PCS). There are some 21 having their head office in and to quell market jitters. government departments the state, while most manu- January exports fell 11.2 per involved in the export- facturing companies have cent from a year earlier – import chain in some way some presence. Companies the seventh straight month or the other. It takes about have chosen Maharashtra of decline, while imports 7-10 days – seven for exports mainly because of the strate- tumbled 18.8 per cent – the and 10 for imports – for gic location for imports and 15th month of decline. completing documentation exports and proximity to China posted a record trade in India, compared with four strategic business partners, it surplus of $63.3 billion SEBI is planning to bring days in Germany. reasoned. in January – partly due to warehouse service providers soft demand and falling under its regulatory ambit Haryana receives commodities prices, versus Garment to keep an eye on all aspects $60.09 billion in Decem- exporters target of the commodity market. `20,000 crore ber. Exports to the United Currently, commodity investment States, the country's biggest West Bengal exchanges come under Sebi, market, fell 9.9 per cent in but the activities related to proposals dollar terms in January from storage of underlying com- a year earlier, while exports modities linked to futures The Haryana government to the European Union, the are not under its purview. said it has received invest- second biggest market, fell The existing norms only ment commitments worth 12 per cent. ensure that warehouses are `20,000 crore in various registered with Warehouse sectors such as renewable Development and Regula- energy, retail and logis- Sweden looks at tory Authority (WDRA). tics. The state government expects to cross the target India for exports If SEBI is able to bring in of `1 lakh crore worth of Garment makers are no controls over the warehouse investment deals ahead of longer looking to set up service providers, a signifi- the investor summit next warehouses in Gujarat but cant part of the commodi- month. The Wanda Group looking at West Bengal due ties market will come di- of China had signed a to its proximity to Ban- rectly under its control and MoU worth `65,000 crore. gladesh, revealed Abdul it will be easier for SEBI Haryana recently unveiled a Matlub Ahmad, President to keep a check on undue new 'Enterprise Promotion FBCCI. Facility in Guja- activities that often create Policy', which is target- rat will not be beneficial unfair speculations through ing ease of doing business Swedish companies which for Bangladesh due to the derivatives contracts, result- and transparency to attract are into manufacturing are long distance. Further, the ing in unwarranted fluctua- more investments into the bullish on India and see the Gujarat government is more tions in commodity prices.

20 maritime gateway / march 2016 on hand to open the event. a YoY growth of nearly 40 India to import Ports and shipyards will Algor launches per cent. During the year, LNG from Australia form the majority of invest- temperature demand for industrial and ment opportunities. About controlled warehousing space reached 750 million tonnes of cargo an all-time high of approxi- is projected to pass through logistics mately 10 million sq. ft. Del- India’s ports by 2025, more Algor Supply Chain Solu- hi National Capital Region than three times today’s fig- tions has introduced tem- and Mumbai led demand, ure. On the container front, perature controlled logistics followed by Bengaluru and box volumes could more and supply chain services Chennai. than double to 25 million targeted at the enterprise- teu by 2025. class customers. Starting GAIL (India) Ltd, NTPC with Mumbai and Gujarat, Snapdeal invests Ltd and Petronet LNG Cargo moves from the company will extend its more in logistics Ltd are exploring plans to Faridabad to Iraq services to Nagpur, Raipur, import natural gas from Hyderabad, Bengaluru and Australian companies, the Emirati logistics firm Fleet- Chennai. It plans to expand details of which will be line Shipping has delivered its operations pan-India in finalised in two months. a 45-tonne heavy load cargo the next two years. It will Australia has about 2.8 from Faridabad in India to also offer refrigerated ware- trillion cubic metres or 2 per Kirkuk in the north of Iraq housing and transportation cent of world gas reserves. in 20 days. The shipment for small consignments (less It is also a major exporter had a total gross tonnage of than a truckload). The high of coal, gas and uranium 51 tonnes, including con- quality logistics service is with energy exports ac- tainer tare weight, and was equipped with a world-class counting for $71 billion transported using the firm’s fleet management system, Backed by Japan's SoftBank in 2013-14. Power Min- super-heavy-duty, flat-rack satellite navigation and on- Group Corp, Snapdeal ister Piyush Goyal urged container. line temperature monitoring plans to spend more on Australian firms to supply in real time. logistics and technology to gas at an affordable price Algor has invested in HAC- better compete with Flipkart considering the fact that CP-certified quality cold and Amazon India. The India is looking to replace logistics storages, operating in five $200 million investment it coal, which is abundantly temperature zones in order received would be utilised available in India. India is to meet the requirements of to strengthen logistics also keen to access Austra- handling various products and financial technology lia’s clean coal technologies with ease. The temperatures (fintech) side of the business. to reduce carbon emissions that can be maintained Ontario Teachers’ Pension from thermal power plants, range from +25ºC to -25ºC, Plan, one of the world's which account for 70 per and be changed as per largest pension funds, and cent of India’s 284 gigawatt customer-requirement. The Singapore-based investment power production. IOC against right level of humidity can entity Brother Fortune import duty on also be maintained along Apparel recently invested Wooing investors crude oil with temperature as deemed 200-million in the company. necessary. Snapdeal has already spent Indian Oil Corporation nearly $35 million to buy (IOC) has urged the gov- 50 per cent stake in logistics ernment not to consider Demand for services company GoJavas. reimposing a five per cent customs duty on crude oil industrial and imports arguing the levy logistics space Galex Consortium would jack up costs. growing calls at Hazira The Ministry of Shipping “Considering the current will host the inaugural Mar- burden of steep and con- About 10 million sq. ft. Adani Hazira Container itime India Summit (MIS) tinuous fall in the prices of of industrial and logistics Terminal recently celebrat- in Mumbai from April 14 to finished petroleum products, space across leading cities ed the first ship call of the 16. Seeking millions of dol- the refining companies are was taken up during 2015, Galex service, an intra-Asia lars in foreign investment, not in a position to absorb said a CBRE report. In the loop operated jointly by the ministry will showcase the additional cost of impo- second half of 2015, healthy Emirates Shipping Line, more than 200 maritime- sition of customs duty on demand was noted from Hanjin Shipping, Korea related projects with Prime crude oil,” said, IOC Chair- traditional as well as emerg- Marine Transport Co. and Minister Narendra Modi man, B Ashok. ing sectors, translating into Regional Container Lines.

mar ch 2016 / maritime gateway 21 c over story dredging

indian dredging troubled sector gets a lifeline Indian dredging companies that have been facing multiple challenges are likely to breathe easy with new guidelines by Ritu Gupta

22 maritime gateway / march 2016 he maritime policymakers port. Where any capital dredging has in India seem to be waking to be carried out...costing up to `200 up to some ‘deep’ realities, crore...geotechnical and geophysical and this might be the reason investigations of the sea bed must be why the Modi government's carried out by the ports to identify the recentT guidelines may bring some type of soil and rock to be dredged respite for indigenous dredging and to define physical and mechanical firms. To date, many of the big- properties like particle size.... ticket dredging projects have been Bathymetric surveys to define the bagged by European firms as few water depths in and around dredging Indian companies have been able to area and disposal site should also be compete and bag projects for these conducted. Inclusion of such aspects require much technical expertise and in the new guidelines is of significance successful execution of projects.It is as most ports do not undertake any said that there are no protectionist marine surveys at present, which has policies in place like those existing been posing numerous problems for in several other countries. The new small Indian private players. guidelines may reverse the market Experts hope that the new trend to a certain extent. Now all guidelines will have some balancing the 12 state-owned ports will opt for effect on the sector which was last long-term maintenance dredging estimated to be more than `20,000 contract of as much as five years crore. Now, an ocean of opportunities instead of the current practice of waits for the sector due to Modi one year. Furthermore, these ports government's recent initiatives – the will continue to finalise capital and Sagarmala project and development maintenance dredging contracts on of inland waterways. Experts concede the basis of open competitive bids, as that such projects will create huge has been the case since the last few opportunities for the contractors. The years. Another important point is that government’s maritime agenda for among the major ports, “depth-based 2010-2020 has also envisaged that dredging contract” may be adopted in all major ports will have a minimum ports like Kolkata, Cochin and Kandla depth of 14 metres and all hub ports where sufficient data of previous will have 17 metres to handle bigger years is available and dredging is ships. Indeed, the prospects for the required throughout the year, and the industry are bright but dredging contract may be linked with incentive has been a dirty word in India with and disincentive mode of payment many on-going dredging port projects for guaranteeing the depth. When running immensely late and with dredging is only seasonal, quantity some small players facing arbitration based on in-situ quantity measurement due to non-target achievement. The or hopper volume measurement of state of affairs can be gauged by specific densities may be adopted for this simple fact – under the eleventh payment. In exceptional circumstances Five Year Plan, the target for capital where dredging is required to be done dredging and maintenance dredging for very short period, day-hire charges was set at 675.3 million cubic metre of dredgers may also be adopted. (cu. m.) and 430 cu. m. respectively. Because of frequent variation in price However, the achievement for capital due to deregulation of fuel prices, and maintenance dredging was only the price adjustment shall be allowed 40.29 per cent and 67.82 per cent irrespective of contract duration and respectively. The shortfall in capital this may be incorporated in the tender dredging in the case of major and documents, state the new guidelines. non-major ports was 68 per cent Previously, no price adjustment was and 53 per cent respectively. This permitted in respect of contract less was due to several factors such as than six months’ duration. delay or failure in implementing port Another very important facet projects, financial and environmental relates to marine survey. It is constraints and poor response from stated that ports will be engaging bidders. geotechnical or geophysical survey Another major black spot is the agencies to carry out bathymetric high cost of dredging in India as surveys, geotechnical investigations compared to those in other countries. if the same is not available with the Currently, dredging costs about $3-4

mar ch 2016 / maritime gateway 23 c over story dredging

per cu. m for maintenance and $5-7 Meka Dredging, Ocean Sparkle and per cu. m for capital dredging. “The Dharti Dredging are at present among dredging costs are enormous. They the leading domestic private players. have gone up by about 80 per cent Currently, dredging costs But these companies often are at the in the last few years. They also have about $3-4 per cu. m for receiving end because of the market a rippling effect as the vessel-related dynamics tilted towards the European charges levied by ports are pretty high maintenance and $5-7 per cu. giants. in India, primarily because of high m for capital dredging. They What ails the private companies? dredging costs, and port development Indian private companies face projects also get badly affected," says have gone up by about 80 per numerous problems. They are too Ashwin Sinha of Alar Infrastructure cent in the last few years and small and fragmented to be able to Private Limited. compete effectively. The plight of Experts hope that the new policy have a rippling effect – the the small players can be gauged from aspects such as long-term contracts vessel-related charges levied what happened to Kandla-based Jaisu and open competitive bidding will Shipping Company Private Limited lead to the sector witnessing a by ports are pretty high in one of the biggest contractors in sea change, especially as a lot of India, primarily because of Indian waters, which had a fleet of business is in store. At present, all about 40 dredgers. The company is international giants – Van Oord, high dredging costs, and port said to have run into trouble after Jan De Nul, Royal Boskalis and development projects also get a contract with the Cochin Port Dredging International, part of the authorities fell through. There had big four club – are active in India by badly affected. been delay in completion of capital having an Indian subsidiary. These dredging work for ICTT, Vallarpadam companies give cutthroat competition contracted to Jaisu and it claimed to local peers. Dredging Corporation that the delay in its work in the berth of India (DCI), which is the biggest basin was due to various obstacles Indian public sector player, is severely encountered during the work that constrained to meet the huge demand 30-35 per cent. Furthermore, DCI's resulted in the damage of dredgers due to several reasons. Modern operational and project management coupled with heavy siltation due to dredging requirements place a heavy capabilities do not match that of excess rainfall. It also claimed that the emphasis on cutting edge capacity, foreign players, especially in complex delay in starting the work was also due high degree of operational capability projects. These challenges are further to the delayed completion of berth and highly trained manpower, none of compounded by financial problems dredging by the terminal operator which has been DCI's strong points. related to under-recoveries from port DP World. Besides, Jaisu said that it Many of its Trailer Suction Hopper trusts and the government. While the had only been paid for 65 per cent of Dredgers are more than 25-30 years equipment capacity issues are being its completed works, despite capital old and same holds true for the Cutter addressed, DCI's operational and and maintenance dredging awarded Suction Dredgers. Their individual financial issues require significant to it at a cost of `525.5 crore after capacities are a fraction of what the time to be resolved. Several small local it gave a discount of `23.5 crore on latest dredgers in the market can companies have forayed into the sector the original offer of `549 crore to provide, and even these capacities attracted by the money, but only a few make the Vallarpadam project viable. have been under-utilised by up to have survived its vagaries. Mercator, The contract was scrapped by port authorities after the default occurred on the project objective of attaining the required depth despite multiple extensions; following the incident, and having one more setback with another project, Jaisu had to file for bankruptcy. The Vallarpadam contract was then awarded to another well-recognised player, who after several months of effort, had also admitted that the siltation volumes overwhelmed its capability to achieve the depth. This incident according to private industry players, highlights a systemic failure in policy support for private companies, and also showcases the lopsided nature of dredging contracts where the onus of risk is solely on the contractor. Hemanth Meka Rao, Director

24 maritime gateway / march 2016 of Meka Group, claims that what happened to Jaisu can happen to any Indian dredging company as the PAIN POINTS DREDGING UNDER system from beginning to end isn't Ÿ India lacks dredger construction and repair THE ELEVENTH FIVE YEAR PLAN conducive for fostering the growth of capabilities. Most of the repair is done in Sri the Indian companies. "Our problems Lanka. commence with lack of scientific Ÿ Lack of scientific marine surveys with most of marine surveys with most of the the ports to provide required seabed data to CAPITAL MAINTENANCE dredgers ports; they expect the contractor to DREDGING DREDGING Ÿ Conjectured estimations about the work undertake these surveys as part of quantity lead to delay in completion of work the dredging project and this means and losses to dredging company giving project estimates based on Ÿ Lopsided nature of dredging contracts where

40.29 % presumptions, because of which at the onus of risk is solely on the contractor 67.82% times a small to medium size dredging Target – 675.3 Target – 430 Ÿ The dredger owners have to pay high tariffs in (cu. m) company has to suffer big losses. port areas to dock their assets. (cu. m)

Even if information is available, it is Ÿ Lack of adequate dredging fleet with Indian not sufficiently shared. Conjectured players due to high capital investment for each dredger estimations about the work quantity Achievement (in per cent) can also lead to delay in completion of work, again for which the dredging company is held responsible, as was the case with Jaisu. On the other hand, giant foreign players, having the expertise and heavy assets, are better 100 another set of problem for Indian placed to evaluate the risk, and are 90 companies – they are not geared to able to budget for the incidence of the 80 offer the entire range of dredging risks beforehand on a project basis 70 services. With a mere two or three and are able to manage the ground 60 dredgers they are left to depend conditions below the seabed more 50 more on chartering for meeting any prudently. 40 exigencies, which need not necessarily 30 Another pothole for the private 20 be a reliable and cost-effective option. players is that lack of adequate 10 According to Victor, the remorseful dredging fleet due to high capital 0 situation exists as India lacks dredger investment for each construction capabilities. There is also dredger, says Prof a lack of dredger repair facilities and Dr G Y V Victor, 2012-13 2013-14 2014-15 2015-16 2016-17 drydocks in India. Most of the repairs who represents India of dredgers is carried out in Sri Lanka. in the board of the Capital Maintenance Availability of marinas for safe storing Eastern Dredging Dredging requirements proposed by MoS for the years 2012-17. of dredgers is another grey area. The Association. A new dredger owners have to pay high tariffs dredger from the in port areas to dock their assets. Netherlands may cost `300 crore, Clearly, the problems plaguing while the one built in China comes the sector are many and have deep at about `100 crore, though the latter in hand do the banks agree to provide ramifications, warranting a much are not considered very efficient, loans because this assures a source more holistic approach than currently and projects mostly go to companies of income for paying back the loan offered by the policymakers for having high-end dredgers. What's amount. But only if the company has addressing the various dimensions more European and Chinese dredgers the proper dredger for of the issue. There is on one hand are built for soil strata suited to the job to be contracted an urgent need for dredging activity, their country which may not prove one gets the job. It's is and on the other a need for building efficient in India. Another drawback Catch 22 situation.” a sustainable domestic dredging of importing dredger is that it takes According to R R K industry that in the long term is about 2-3 years for the delivery to Raju, Director, Akash both capable and competitive. take place (especially of an European Dredging and Marine The government's 'Make in India' dredger) and this means an escalation Services Private campaign can prove to be very vital for in the capital cost of a company Limited, there is no subsidy available the sector. "This is an excellent period without earning any profits from the for buying dredgers and interest rates to target for indigenisation of dredger asset. “Indian companies have to put are as high as 12-14 per cent, which manufacturing. Locally manufactured up with several hurdles for acquiring is a sharp contrast to some other dredgers not only reduce costs of dredgers,” says Rao. “For one, the countries that offer interest rate as low dredging but also encourage business banks don’t give loans easily. Only if as three per cent. climate," says Raju. "In the long the dredging company has a contract Lack of adequate fleet poses term, the sustainability of the Indian

mar ch 2016 / maritime gateway 25 c over story dredging

dredging industry will be critically it can ease the legal environment in Delivering solutions. dependent on the ability to build which they operate. quality dredgers in India," says Indian companies According to experts, there is Victor. A positive trend in the last also a need for a nodal institution few years is the advent of several have to put up under the Ministry of Shipping on private shipyards along the Indian with several the lines of the Central Electricity coastline, including those with a high Authority that is able to identify and degree of engineering expertise. Since hurdles for prioritise key issues and required commercial shipbuilding has slumped interventions, influence far-reaching in recent times, such shipyards are acquiring policies, prescribe guidelines and actively on the lookout for demand dredgers. For one, the banks standards and also design equitable for specialised vessels from other and fair contractual structures for industries like defence and offshore don’t give loans easily. Only dredging activities. "In the immediate exploration. The government should future, dredging contracts need to be urge these yards to step up to the if the dredging company has far more focused on the quality of engineering challenges of making and a contract in hand do the results, competencies and efficient repairing dredgers with indigenous delivery. Port authorities should technology. banks agree to provide loans invest significant time in survey and More Solutions because this assures a source studies that clearly establishes the Apart from building dredgers, work effort before inviting bids," the government should also develop of income for paying back says Rao. Such measures can move Best Freight Forwarder of the Year at a viable environment for Indian the industry towards a quality-based Express Logistics & Supply Chain Conclave 2015 companies to buy adequate fleet the loan amount. But only if approach. Another issue that needs urgent National Award for of dredgers. Till now funding from the company has the proper Supply Chain & Logistics Excellence by CII financial institutions has been hard attention from the government is the to come by as they looked for long- dredger for the job to be stretched finances of port authorities term projects. Most projects to date contracted one gets the job. that constrain their ability to meet have been short-term. With the dredging costs. The government new guidelines in place and having It's is Catch 22 situation. should step in and provide contracts of five years may hopefully appropriate capital and operational prove to be a game changer. The subsidies for large dredging projects guidelines will also go long way in as is the case in several other Faster, more reliable, Hemanth Meka Rao resolving some problems such as lack Director, Meka Group countries. "By raising the bar on the of marine surveys. But many other cost threshold, the port trusts may grey areas still need to be addressed. be able to focus better on achieving According to Raju, the bid document to develop skilled manpower by reliable results, sustainable over a more flexible should be framed in such a way investing in research and development longer term. This will improve the that the risks are shared between and training centres. The working competitiveness of the ports, as the the contractors and the ports. "The paper for the Twelfth Five Year effect of high dredging costs on vessel- government can encourage private Plan had also identified the need related charges will get mitigated," operators by addressing their critical to develop trained manpower to says Sinha. Availability of subsidies As one of the world's leading ocean freight forwarders, DB Schenker offers outstanding capability gaps by employing a compete on the global platform. To will also free the hands of port logistics solutions tailored to meet the ocean's transportation needs of our customers. combination of policy and financial this effect, the paper emphasised on authorities to provide more water- interventions. This may include, for strengthening the existing All India tight guarantees on their obligations Be it import or export, we ship your goods in a reliable, flexible and efficient manner. Each of example, providing greater support Dredging Cadre training scheme as part of the licensing agreements of the ocean freight products are designed to meet the highest standards of comprehensive for equipment procurement through and measures to retain the trained dredging contracts, resulting in a more door-to-door ocean transport services with online tracking throughout the route. adequate subsidies, exemption from personnel. Moreover, change in the equitable contractual structure. This taxes and duties, and also providing legal definition for dredging is also in turn will enhance the confidence DB Schenker Advantage incubation support for adoption of required. Presently, dredgers have been of the private players when they are innovative technologies and industry- included within the ambit of coastal bidding for projects. In summary, One stop solution for all your ocean freight requirements leading practices," avers Raju. trade/cabotage laws (vide sections there is an urgent need to resolve Door-to-door reliability & flexibility Dredging sector can be considered 406 & 407 of the Merchant Shipping the fundamental issues plaguing Faster lead times with serving over 2000 locations for grant of 'infrastructure' status Act, 1958). Dredgers do not engage in the dredging industry, rather than Customized ideal options for variety of shipments enabling it to receive tax benefits. coastal trade and are specially fitted adoption of quick-fix methods to treat Value-added services To support domestic fleet growth, vessels which undertake deepening the symptoms. This can be driven only while import of dredgers is exempted by a sustainable policy framework and land reclamation activities within Visit us today at www.dbschenker.com/in or write to [email protected] to from customs duties, the import of that views this sector with a long- the contracted port waters. The stress know more about our Global Ocean Freight Services. repair equipment/spares can also be of cabotage laws is for cargo support, term perspective, and recognises the exempted, till such time domestic and since dredgers are not involved in multiple dimensions of the problem manufacturing capabilities get the transport of cargo, their inclusion and addresses them through targeted Gurgaon +91 124 4645 000 Mumbai +91 22 4039 3939 developed. within the ambit of coastal trade/ interventions over the short, medium Furthermore, there is a need cabotage laws needs to be reviewed as and long term. Chennai +91 44 4222 5222 Bangalore +91 80 4037 6700 Kolkata +91 33 4002 1900 26 maritime gateway / march 2016 Delivering solutions.

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Terminal Manager of Chittagong Port and the special designated operating officer of Pangaon Port of Short sea Bangladesh talked at length with MG about the prospective move and the Bangla government’s special attention to the Indo-Bangla coastal shipping shipping: Waiting initiatives. According to Karim Chowdhury, after the two countries entered into the treaty last year, the Bangla government initiated activities to be unlocked like enhancing port infrastructure and shipbuilding designated to coastal Once the coastal shipping commences it is going movement among others. to be the direct short distance trade ever made “After the treaty was being made the government had asked to build available between the two neighbouring trade as many as 32 ships, RSVs for the partners purpose of the coastal shipping alone and now three RSVs are ready from liner companies like Karim group, by Mohammed Shareef MP waiting to enter the sea for the coastal shipping between Bangladesh and India,” says Karim Chowdhury. Dhaka and the surrounding suburbs are the textile industrial hub of the country which are the backbone of the economy. However, connectivity to port of Chittangong is at present cumbersome as it is located far off; the logistics of sourcing the raw cotton from countries like India is still a huge task. However the Bangladesh government is finding a way in mitigating these bottlenecks by developing and enhancing infrastructure at a nearby port, Pangaon. This port is going to be the hub port for Bangladesh for the coastal shipping. As per the plan of getting direct access to the port from the industrial hub of Dhaka and improve the inland shering in a new era of Though every technical aspect as per waterways and coastal shipping, the connectivity and enhancement the Standard Operating Procedures shipping ministry of Bangladesh Uof bilateral trade, coastal (SOP) between the two countries has chalked out a plan to improve movement of vessels between were followed, the operation of these infrastructure at Pangaon Port. In India and Bangladesh is all set vessels has been delayed because the getting business, the government to commence. With India and its Finance Ministry hasn’t endorsed the has decided to divert 40 per cent of biggest trade partner in South Asia SOP in order to make the tariff on par Chittagong Raw Cotton Cargo to Bangladesh signing a treaty on coastal with domestic rates or even close to Pangoan Port, which would come shipping in June last year, deliberation that, Bangla shipowners say. around 54000 teu, according to Karim and development of special River Bangla officials at the port sector Chowdhury. Sea Vessels RSVs are made from the are excited and hopeful about the new Though the diversion plan of this Bangla side and by the first week of initiative to boost the trade between cargo is taking shape up slowly as March, 2016, three laden RSVs would the two countries, especially to bring planned, the road cargo movement commence its voyage between ports of laurels to the textiles industry of hasn’t shifted even to a small percent East Coast India and port of Pangoan Bangladesh with augmentation of the as the tariff at the Pangaon Port is of Bangladesh. raw cotton from India would become not competitive enough compared to This, provided the final clearance easier and cost effective with the new the Inland Port (ICD) of Petrapole on tariff is accorded by the Finance initiative getting shaped up. of Indian side and Benapole of Ministry, Government of India (GoI). Ahmedul Karim Chowdhury, Bangladesh side.

28 maritime gateway / march 2016 “In a month or so we would movement from India to Bangladesh, sort the tariff issue of Pangaon port at least three times of cargo shifting in order to divert the road cargo In the bleak stage of the happens and in adverse weather movement to coastal movement. conditions the road movement results There would definitely be a easier way already dull international in an undesired end result. These are out as Bangladesh government is keen shipping scenario, short sea positive aspects which would work for in realizing the coastal trade of the the coastal movement initiatives, Shah country, especially with India,” said shipping or coastal shipping Alam added. Currently, Bangladesh Chaudhury. between the nearby countries is imports goods from Visakhapatnam Bangladesh imports as much as 52 Port in Andhra Pradesh, Haldia Port lakhs bales of raw cotton from India what developing countries like in Kolkata or any other ports in India annually on an average and of this India have to look forward to. via Colombo or Singapore which 44 per cent comes via road and rest makes transportation of sea cargoes of 56 per cent transshipped through costlier – up to $110 per tonne. Colombo and Singapore to Chittagong The Indian side of the port sector Port. While road transport would take is also very hopeful of the new venture at least 15 days, transshipment via Haldia and East Coast ports of India of coastal shipping between India Colombo takes a week’s time and via and there would be bi-weekly service and Bangaladesh. Talking about Singapore it takes less than two weeks. between these ports and also the the initiative Sushil Mulchandani, The time taken to send raw cotton Pangoan port of Bangladesh. Chief Operating Officer of Visakha from India is a costly affair and the According to Shah Alam, on an Container Terminal, Visakhapatnam coastal shipping is considered to be a average, Bangladesh imports 900,000 Port Trust, said, in the bleak stage of viable alternative any day, according million tonnes of goods from India already dull international shipping to traders and liner group who are including Raw cotton, yarn, fabrics, scenario, short sea shipping or coastal venturing into coastal shipping. machineries, fish, fruits, spices, shipping between the nearby countries Capt. S M Shah Alam, AFNI, construction project items, coals, stone is what developing countries like India Executive Director, Karim Group has chips, fly ash etc. While initially raw have to look forward to. already anticipated the potential of the cotton seems to be the main target for “We are hopeful of starting the new initiative and that is precisely the coastal trade according to Alam, plans operation of handling the cargo from reason they are ready with three RSVs are afoot in getting Fruits and Capital the RSVs services soon. Bilateral to be sailed to the east coast ports of Machineries from South of India and trade between the South Asian India and are waiting for a positive fish from places like Krishnapatnam neighbouring countries is what we intervention from Indian Finance and Vishakapatnam. have to look forward now. We are Ministry in sorting out the tariff On the export front, Bangladesh now handling Bangladesh bound related issues. ships garments and sarees, rice bran, cargo at VPT but there is no direct “As per the SOP we have the bamboo, fish, cement, food and calling from Bangladesh as all of it is vessels and Long Distance Radio beverage, finished goods from export transshipped through Singapore,” told Communication (LDRC) installed. processing zone, leathers, betel nuts, Mulchandani. We are hoping the confusion with the betel leaves, among others to India. “Shipping to ICT Pangaon via Indian Finance Ministry in endorsing Targeting a lion’s share of the road KPCT will provide exporters with the SOP would be sorted out soon cargo movement is on the go plan, a smooth, hassle -free, faster transit and we would be able to start our according to Shah Alam. Road and cost efficient shipping service. operations,” says Captain Sha Alam. movement of raw cotton is always Exporters and importers from The Karim Group expects to start cumbersome, it is time consuming and Bengaluru, trading with Bangladesh operations by the first week of March costly affair, he adds. can utilise and benefit by our weekly and would ply three RSVs between Deterioration of the cargo is also train service from ICD Bengaluru Krishnapatnam, Vishakapatnam, a matter of concern as in the road to KPCT or road services by trailer /truck,” says Vinita Venkatesh, Director, Krishnapatnam Port Container Terminal. The coastal shipping is going to be the direct short distance trade ever Economies of coastal shipping made available between the two trade Bangladesh imports as much as 52 lakhs bales of raw cotton from India annually partners. Vessels up to 6000 GT shall on an average and of this 44 per cent comes via road and rest of 56 per cent be engaged and over a period the transshipped through Colombo and Singapore to Chittagong Port. While road number of ships could be increased as transport would take at least 15 days, transshipment via Colombo takes a week’s the trade between these two countries time and via Singapore it takes less than two weeks. The time taken to send raw increases. Then, all movement of cotton from India is a costly affair and the coastal shipping is considered to be a cargo could completely be transferred viable alternative any day, according to traders and liner group who are venturing to coastal shipping. This revolutionary into coastal shipping. change is what cargo agents, liners and traders look forward to.

mar ch 2016 / maritime gateway 29 ceo rountable ease of doing business: "embrace technology at ports" At the second edition of CEO roundtable where "Ease of Doing Business at Ports" was discussed participants felt that technology could play crucial role in improving business environment

30 maritime gateway / march 2016 mar ch 2016 / maritime gateway 31 ceo rountable

he fourth edition of ECMBS was user perspective of conducting ease organised at Visakhapatnam as of business at ports – how to make it Tit is a central location for people less cumbersome, more transparent, doing business on the east coast right efficient and user friendly, reason for from West Bengal to Tamil Nadu. customers to prefer a port. To gain While the west coast has become S k Khader Rehman customer feedback on operational Commissioner of Customs saturated and mature, the east coast efficiency of ports, Maritime Gateway is the rising land of opportunities. conducted a small poll among 300 Many ports dotting the east coast have port users. developed infrastructure, facilities and 2016 has been declared as Digital The participants cited road and connectivity. Customs Year. Focus is on use of ICT, rail connectivity as the most important A major addition to the event thing, followed by quick Customs last year, which has turned out to be digital management of documents. clearance, customer friendliness, a highlight, is the CEO roundtable, efficient cargo handling equipment a focused platform for discussion and number of vessel calls – when on chosen topics which brings lot asked about the reasons for choosing of value, where industry leaders a port. participate and the outcome of the Majority of participants were discussion can be presented to the positive when asked about safety and state and central governments. security of cargo at ports. The levels Last year, the topic of discussion at of pilferage or loss of cargo has come the roundtable was the ‘Role of state Adarsh Hegde down. Entry and exit procedures governments in port development.’ Executive Director, Allcargo Logistics Ltd at the gates have also been cited as There seems to be disconnect between smooth by a majority. Transparency the cental and state governments of procedures remains a concern as when it comes to port development. T echnology at ports world over has 60 per cent voted as not being very The role that states should proactively transparent. 52 per cent said that time play in facilitating the ports’ business reached to altogether a different taken for cargo clearance needs to be needs to be well defined. It is not just level, we are still a decade behind. brought down. allocation of land for the project, there Major issues with Customs are more issues for which the ports clearance include too much need to be facilitated, including rail, documentation and ambiguous road, infrastructure which we call the rules. On the positive side, 56 per ecosystem of the port. Some of these cent said that the ports they are vital issues discussed in the past event dealing with have a single window include cargo evacuation by road after clearance system, 61 per cent agreed delivering it by rail, providing soft Anil Yendluri on efficient customer service. 69 per infrastructure to ports like provision Director & CEO, Krishnapatnam Port Company Ltd cent said ports need to upgrade on use of Customs officers, necessary of technology. On storage capacity, permissions. State government has 85 per cent responded as sufficient. to liason with the cental government Detention and demurrage charges are in addressing some of these issues. People should update details said to be unreasonable by majority of Roads and bridges need to be the respondents. strengthened for movement of project online and walk into the port Citing a verse from Kautilya’s cargo, creation of maritime clusters for without any documentation. Arthashastra – “The ruler should act coastal development and timelines for like a honey bee which collects honey obtaining clearances from concerned without causing pain to the plants,” departments. Sk Khader Rehman, Commissioner For 2016, ‘Ease of doing business’ of Customs, set the ball rolling at the has been chosen as the theme of the CEO Roundtable. Elaborating on how conference because we have seen Customs is heading towards making countries, economies and states being business easy for benefit of port users, ranked on the ease of doing business. he commented that government P L Haranadh, IRTS Today it is imperative for a country Deputy Chairman, Visakhapatnam Port should collect taxes without causing as well as states to attract investment, pain to the payers and in this regard facilitate business environment for Ministry of Finance, Department of growth of economy, to be user and Revenue and Central Board for Excise investment friendly. As competition has increased, if we and Customs have been working to Ports being individual entities, it cannot compete we will not be able some extent trying to facilitate as should be easy for people or businesses much as possible, but little bit has to conduct business with them. The to survive been done and much more needs to be session tried to bring forward the done. For the past two years Customs

32 maritime gateway / march 2016 have been seriously working on this. as “Digital Customs Year.” Since Tax administration reforms January this year, digital signatures commission has been set up to rework are being used while filing documents. on the taxation system, particularly Onsite post clearance audit has been the indirect tax mechanism. Certain introduced measures have been implemented for Rajeshwar Bhatt Certain importers have been ease of doing business, for instance, Director, Suraj Informatics identified as “Accredited Clients,” last year was declared as the ‘Year for whome facilitation levels are very of Tax Payers’ Service’ and the high. Importers/exporters, Customs Directorate of tax payers service has Ports in India have the perception brokers, container terminals and been formed. Since 2011, to facilitate that advanced technologies that warehouse holders can apply for EXIM, self-assessment has been AEO status. Single window clearance introduced to ease documentation work globally may not work in scheme is expected to be introduced filing. Shipper can assess his own India. this year wherein few government bill of entry and shipping bill. Only departments will come under one certain items have been kept for umbrella. assessment seperately. Instead of Electronic delivery of orders for having transaction audit for every shipping lines is been introduced. shipping bill, onsite post clearance Ultimately the aim is to reduce paper audit has been introduced. The work, transaction time/cost. As 2016 shipper will no longer have to wait has been declared as Digital Customs at the Customs station, instead the S Varadarajan Year, progressive investments will Customs officials will perform the CEO, Shreyas Relay Systems Limited be made and the focus will be to audit at the shippers’ premises. involve people for more use of ICT, Risk Management System has digital management of documents, been introduced wherein only selected Technology solutions are available implementation of enterprise data bills of shipping are taken up for warehousing from this year. One major assessment and this has reduced off the shelf, Indian ports just need of the major reforms to happen in the number of levels in assessment to implement them. indirect taxes is GST and Customs and examination. Krishnapatnam Port department is planning to lineup has been recognised as AEO by World with it. We will ensure maximum Customs Organisation (WCO). At facilitation for trade, while protecting both Kakinada and Krishnapatnam the interest of the revenue department ports, Customs operations are through enforcement. available 24X7, particularly at The Customs department is Krishnapatnam Port the supply surging ahead with ICT but the ports are still way behind, remarked chain is very easy, which means Sushil Mulchandani Adarsh less examination is done for cargo COO, Visakha Container Terminal Pvt Ltd Hegde, Executive Director, Allcargo exported/imported through this port. Logistics Ltd. When it comes to Tax payers’ facilitation centres rules and regulations at ports, safety have been set up and designated is of utmost importance and law has officers are available for complying If technology is developed to to be enforced, but having said that with any documentation procedure capture the seal number of there has to be a way to ease this out or obtaining information. Customs to ensure free flow of trade happens. clearance facilitation meetings containers at the gates then cargo One thing that can make this happen are being conducted with all the can move in and out in 20 minutes. is the usage of technology. Technology stakeholders involved to bridge the at ports has reached to altogether a gaps in Customs operations and different level in rest of the world ensure quick clearance of cargo at and has eased out business. We are Customs. Every Wednesday has still a decade behind when it comes been declared as “Tax Payers’ Day” to technology implementation. We wherein customers can walk into any still have to fill in a number of forms Customs office without any prior and produce lot of documents at appointment for grevience redressal. Capt. Sriram Ravi Chander the ports due to which the trade is Electronic Data Interface has been Executive Director, Krishnapatnam Port Company Ltd suffering. Hence, the first and foremost introduced since 1998 wherein online factor should be usage of updated filing of shipping bills and payment technology and it should be looked at has been enabled through ICE GATE as a disruption. Manual intervention (e-commerce portal). This year Government should standardise should be minimised and green ‘Digital CBEC’ has been introduced technology and make common channels should be introduced for aimed at improving use of IT and rules for major / non-major ports. quick movement of cargo, but without 2016 has been decleared by WCO compromising on security. Labour

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central and state governments are focusing on ease of doing business Summary of the poll and Andhra Pradesh stands at second position in India in this scenario, • Road and rail connectivity – major port departments have their own criteria for port preference Capt Vivek Kumar Singh procedures, followed by railways, • Faster cargo clearance and customer CEO, Shreyas Shipping & Logistics Ltd transportation department, merchant friendliness – influences port users’ shipping department, service tax choice department, mining and minerals • To much documentation and F eeder services or coastal services department, CISF, Forest, civil ambiguious rules at Customs – cause are often sidelined as soon as big supplies and ministry of roads, to delay in cargo clearance ships start calling. name a few. • Technology upgradation – can “Is it possible to integrate all these improve customer satisfaction departments and come up with simple • Tariffs and demurrage charges - are set of procedures? Can documentation on the high side be simplified and Customs integrate the operations of all its sister • Movement at gates – is smooth departments into a single format?” • Cargo handling – safe asked Anil hinting at the possible options for streamlining procedures. Capt Shah Alam Sometimes, different departments Executive Director, Karim Group ask for different documents while PAPER WORK fulfiling the same set of procedures. Some suggestions he offered include, A lot of cargo can be shifted to self-certification system needs to be Less 22% More coastal shipping provided ports brought in, KYC norms need to be 34% improved, certain procedures can offer a level playing field. be outsourced to third party so that Customs can focus on their core job. A review of ease of doing business at ports needs to be done timely so that we can assess where we stand Average and where we need to go. Like the 44% airports, green channels should be made available at the seaports. These things can bring down the turnaround TRANSPARENCY Capt Dheeraj Bhatia time for ships, rakes and trucks. A MD, Hapag Lloyd robust customer feedback system is essential to ensure continuous development. Technology will play a More very crucial role in improving the ease 28% In developed economies there is more of automation, while in India of doing business at ports wherein Less people should be able to update all the 48% there is more of documentation. details at the portals and walk straight into the port without any manual documentation required. Average Bringing the scenario at major ports % 24 into focus, P L Haranadh, Deputy Chairman, Visakhapatnam Port said, as a major port we operate under laws at the ports should be streamlined several restrictions and regulations, but because operations at ports get the situation has changed a lot now stopped due to labour problems and it Capt D K Manral as competition has increased, so if we is labour laws that can make or break CEO, Vizag General Cargo Berth Pvt Ltd cannot compete we will not be able to a port. survive. Realising this the ministry of As many as 21 departments are shipping has taken a number of steps involved when it comes to moving The best use of IT can be seen in at the Visakhapatnam Port to enable EXIM through ports which gives consumer services and the tax customers do business much more us a glimpse of the cumbersome easily than earlier, understand their procedures involved, revealed department needs to take a leaf greviences and improve upon them so Anil Yendluri, Director & CEO, out of their book. that Visakhapatnam Port can become Krishnapatnam Port. While the a key driver in coastal economic

34 maritime gateway / march 2016 development. Some of the steps taken Relay Systems Limited said, port at the port for ease of doing business community systems and cargo are – ERP is being implemented movement automation systems have to provide a common electronic been implemented about 20 years gateway for exchange of documents ago in ports around the world. The and reduce paper work. E-payment Capt Swaminathan Rajagopalan systems are available off the shelf, system has been introduced and the Commercial Director, CMA CGM, India Indian ports just need to implement port is planning for gate automation them. Calculating the ROI on using RFID for which tenders will technology implementation, for a `100 be called soon. This is expected to While VGM under SOLAS ensures transaction the cost of implementing be implemented by July 2016 to stability of ships but it should not technology can be recovered in 4-5 streamline movement of trucks in and years, he said. out of the port. Customs operation further increase the paperwork. “Customs systems are not talking at the port has to be 24X7 because to port systems,” remarked Sushil the port operates in similar manner, Mulchandani, COO, Visakha especially with a single window Container Terminal Pvt Ltd, clearance mechanism. highlighting another glitch in IT Evacuation problems at implementation and the lack of Visakhapatnam Port has been compatibility in operations. The solved. Chhattisgarh being the port community system has separate major hinterland to the port, rail Prahlad Tanwar servers while ICEGATE of Customs is electrification process is in progress Director Transport and Logistics, on a separate platform. Another major and expected to be complete by KPMG Advisory Services Pvt Ltd hitch is the tracking of seal number of December 2017, thereby improving the containers during both entry and exit. turnaround time for rakes. To improve If technology is developed to capture road connectivity two important Ports in India need to be the seal number of containers at the projects are in progress converting two gates then all the terminals can be lane into four lane, to enable seamless globally competitive, it is not automated and cargo can move in and movement of cargo to various ICDs just incremental change but out in 20 minutes. without disturbing traffic on the roads. exponential transformation Suggesting a solution to these An elevated corridor is being planned issues, Capt. Sriram Ravi Chander, from the port to the Anandapuram- Executive Director, Krishnapatnam Anakapalli highway. The port has Port Company Ltd, said government withdrawn levy on foodgrain, granite should take lead in standardising and steel to bring down the handling technology implementation and charges at the port. Technology make common rules for major and automation is in progress at the non-major ports. E-payment systems container terminal for submitting of S anjay Dutta should be brought in and extended forms and issue of acknowledgements. Head – Marketing, Adani Vizag Coal Terminal Pvt Ltd to every government organisation. Major focus will be on bringing down Container pre-notification system the cost, time and documentation for is being used in Europe wherein customers in dealing with the port. container details can be shared with Route rationalisation is being planned If the slump in global trade Customs in advance, such technologies to attract more cargo by next year. continues then the ports will need to be brought in India as well. Putting forward the perspective of Capt Vivek Kumar Singh, CEO, a solution provider, Rajeshwar Bhatt, largely depend on coastal shipping. Shreyas Shipping & Logistics Ltd Director, Suraj Informatics elaborated gave a different twist to the discussion on why ports do not want to use or as he lamented the ports and Customs improve on technology. Ports in India for not using properly even the existing have the perception that advanced technology. In spite of technology technologies that work for global ports being available it is not being put may not work in India. The current to optimum use, as a long list of processes at Customs, CISF, don’t allow documents is still being submitted them to even evaluate the technologies Capt Ashok Kumar Bhattacharjee at the Customs and the same thing Secretary General, Indian Private Ports and currently available off the shelf. “We Terminals Association is happening even at the ports. have been talking to lot of people about Along with focusing on updation of technology for gate automation, RFID, technology, we should not forget to use OCR, but there are only few ports who the existing technology, he averred. have gone for it with Adani Hazira Essential Service Maintenance Another issue is every port has being one of them.” Act should be enforced at ports to its own rules for documentation and Talking on similar lines, improve their service standards. functioning which makes it difficult S Varadarajan, CEO, Shreyas for shipping lines to comply. To

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resolve these issues, a committee was Hapag Lloyd said, in developed Director Transport and Logistics, formed under shipping ministry on economies like the US there is more KPMG Advisory Services Pvt ease of doing business in 2015, but of automation, while in India there Ltd. Ease of doing business is about no action has yet been taken on the is more of documentation which we increasing efficiency – doing the most ground level on the recommendations need to get rid of. Another issue that in minimum cost. Ports in India need of the committee. Presenting a shipping lines face is high detention to be globally competitive because it not gloomy picture of coastal shipping he leverage tariff. Shipping lines have just incremental change but exponential said, at most of the ports/terminals started to look at this because the transformation – ports on the east/west feeder services or coastal services are number of rounds that a container coast should start competing with those often sidelined as soon as big ships makes is getting less. When a in Sri Lanka or Singapore and this is start calling. container comes to India it takes 40 possible by visiting and learning from Capt Shah Alam, Executive days for an import cycle and about 60 global best practices. Director, Karim Group, too shared days for an export cycle which leads to To increase efficiency, one essential the views of Capt Vivek as he said, a customer asking for more free time, element is to move cargo from road ports welcome coastal ships when else he will abandon the container. to rail, said Sanjay Dutta, Head trade is dull but when trade improves Touching upon the financial – Marketing, Adani Vizag Coal coastal shipping is ignored. A lot of aspects, Capt D K Manral, CEO, Terminal Pvt Ltd. But this is not imports come to Bangladesh from Vizag General Cargo Berth Pvt Ltd happening as the loading and transport India while exports are less. About 52 said finance departments at ports cost through trucks is lower than that lakh bales of raw cotton are exported are not up-to-date with the lastest of rail. Railway haulage charges need to Bangladesh, of which 44 per cent financials particularly service tax as to be reduced and frequency of rails is through road and this takes about a result customers get penalised. Its should be increased. Coastal movement 13 days for the cargo to reach the time the service tax department gets of cargo should be encouraged because destination. This cargo can be shifted udpated with digitalisation. The best if the slump in global trade continues to coastal shipping, provided ports use of IT can be seen in consumer then the ports will have to largely offer a level-playing field. services and the tax department needs depend on the coastal shipping. Even though India and to take a leaf out of their book. While Around 1,000 to 1,500 tonnes of Bangladesh have come close for rail connectivity at ports needs to coal is moved daily to steel plants in coastal trade with a treaty formally increase, it is noticed that rakes when Vizag and it is done through road signed, but there are certain issues that inbound to a port are not inspected rather than rail as road transport is need to be ironed out – for instance, whereas rakes that are outbound are much cheaper, said K V Bhaskar, there seems to be a disagreement on inspected and the mishandling of Managing Director, VPL Integral port tariffs with Indian Customs. cargo like coal is affecting the bottom CFS Limited. Railways offer 50 per Responding to the remark on lack line of customers. Even though fuel cent discount for less than 100 km of level-playing field, Anil Yendluri, costs have declined, the same has not tariff whch makes movement of coal Director & CEO, Krishnapatnam been passed on to customers. by rakes unviable. Port said that international shippers Adding to the list of woes, Role of TAMP is no more relevant, pay more compared to coastal Capt Swaminathan Rajagopalan, remarked Capt Ashok Kumar shippers hence they gain the priority. Commercial Director, CMA CGM, Bhattacharjee, Secretary General, However, there is immense potential India reflected on the leverages and Indian Private Ports and Terminals for coastal shipping in India and the demurrage charges impacting the Association, as he highlighted the government should promote it through bottom line of shippers. While VGM lack of level-playing field among subsidies. A lot of coastal cargo moves under SOLAS is necessary to ensure ports. Landlord ports have lopsided from Paradip Port to Krishnapatnam stability of ships but it should not rules wherein the user is punished for Port, Vizag Port and Chennai Port. further increase the paperwork. mistakes but there is no accountability The secondary treatment for coastal “Nothing is as redundant as for the port. Essential Service shipping may be only in containerised technology and it is time operators in Maintenance Act should be enforced at trade as there are loading and different ecosystems adopt it together ports to improve their service. unloading costs involved. so that every body is on the same Towards the conclusion, S k Comparing with the international platform and systems can better talk Khader Rehman, Commissioner of scenario, Capt Dheeraj Bhatia, MD, to each other,” said Prahlad Tanwar, Customs summed up the issues raised by users: lack of coordination among various departments in Customs, for which single window clearance system has been introduced at some ports. Message exchange system under ICEGATE has to be improved and ICEGATE should be made compatible with port community system to avoid duplication of procedures. Indirect tax system is hampering the profits of shippers but this problem will be solved once GST is introduced.

36 maritime gateway / march 2016 summit report

the Coromandel. The following day had two business sessions dedicated to users of ports and the second to summit marked service providers. The seminar's aim was to accord equal importance to the user side of the story this year. Port by deliberations users, who hold considerable sway over how business is done at these mega infrastructure facilities, made and bonhomie public their bucket list of wants and musts to the many representatives of ports who attended the conference. The participants discussed the need for better The presence of trained manpower, infrastructure and quick resolution of issues by necessity of a cold chain facility and lowering of cost of handling cargo at the government. For the sector to grow, efficiency ports were among the top asks of the is the best value that can be offered to customers, users. As representatives from pharma, steel, textile and other industries made was the broad consensus arrived at the summit their opinions vocal, the audience sat rapt in attention concurring to every concern that was raised. The second business session had panelists from service providers, namely shipping lines, Custom house agents, terminal owners and a representative from the Inland Waterways of India. The participants discussed the need for better infrastructure, improved rail connectivity and quick resolution of issues by the government. They all agreed that for the sector to improve, efficiency is the best value that they could give a customer. Once the sessions in the designated halls were over, they spilled on he fourth edition of the East firms, CHA representatives and to the lunch areas, lounges and Coast Maritime Business Summit cargo owners encircled the main arc around dessert tables. This helped Twas a picture of jubilance, of presentation, many voices rose all the participants realise profitable bonhomie, business and serious higher than hands to make their point relationships as they rubbed shoulders thought as more than 300 honchos on issues that needed immediate with influential decision makers and from the shipping, ports and logistics attention. What was most interesting allowed their personalities and opinion industry gathered in the expansive to observe was solutions came as to stand out from crowd be heard. It halls of Novotel Varun Beach in the swiftly as problems began to be was a perfect platform to promote one’s third week of January. This is not an stated. While there was consensus interests as the exhibition hall provided invitation you don’t accept. It was on vital issues such as the need for ample opportunity for the stall owners a reunion of sorts where thinkers, better connectivity and faster Custom to showcase their strengths to the decision makers and performers clearance, the invitees agreed to hundreds that set foot to take notice of congregated to put their heads together disagree on other pain points that the newbies on the block and the older and see how maritime business on the troubled each segment from putting ones that had reinvented themselves. east coast can be advanced amending up a better show they were engaged by There was something for everyone small issues hindering ease of doing their customers. who came for the conference. And business. As the CEO Roundtable for everyone there was hope. The It was to discuss this important concluded, the seriousness too wore ECMBS is not just a conference. It is issue that almost 70 senior level off and the executives were back to a confluence of some of the greatest executives assembled day prior to being chummy, patting each other’s minds in the industry. To attend the main conference to state, debate backs as old pals would do. After this, some decided to come weeks in and find a solution to all concerns – a musical night that enthralled the advance. Some decided at the spur small and big. The CEO Roundtable audience to many a Bollywood of the moment. But neither regretted was a dynamic, free-flowing session number, the gathering retreated only being here as they went back rich in that lasted more than two hours. As to come back the next day armed with thought with a confident stride that the heads of shipping lines, logistics suggestions to improve business along Acche Din were already in the making.

38 maritime gateway / march 2016 summit report

he muted global trade growth, Sabyasachi Hajara, former Chairman 2016, we must remember that the economic slowdown in emerging – SCI and Chief Advisor, Elektrans pace of growth in China and India Tmarkets and poor performance Shipping Pvt Ltd said, we have been is completely different. Even if of container and bulk segments have deliberating on the east coast for the growth in China is about 6 per cent been a drag on the maritime industry. last few years and it’s an undoubted and India grows by about 30 per As a result, in 2016 too performance fact that India’s growth story vis-à-vis cent, in absolute terms we will be no will be under pressure. Slow growth in the eastern part of the globe is likely to where near China. China has already China and the incomplete transition of be much more robust than compared emerged to be the largest trading power to the developing nations will to the western part of the globe partner with India and definitely, with pose several significant risks because simply because most of the western involvement of Indian leadership China accounts for two-thirds of economies have become mature and with Japan, South Korea, South global iron ore imports and 20 per cent whatever growth is still coming – the Asia, Southeast Asia and far eastern of world coal imports. The weakened Chinese economy is down but in countries, the growth in India’s exim demand is expected to lead to over spite of that they will have a growth trade with them will be far higher than capacity further plighting the sectors of about 6.8 or 6.9 per cent which is the growth with the western world. In recovery and put pressure on freight. much higher than the US or Europe. this context it makes sense that ports Industry experts warn that 2016 While India is projected to clock on the east coast become gateways for is going to be much worse than the more than 7 per cent growth in this trade. previous year for container segment. One of the main reasons for this panic is the imbalance in the supply and demand that has worsened because of over capacity of vessels in 2015. Shipping lines will have to Focus on user idle a bigger portion of their fleet. India’s merchandise exports fell for the thirteenth successive month in December 2015 as orders from needs US and Europe shrank and due to weaker Chinese Yuan. According to Industry leaders from all segments came together the Ministry of Commerce report, exports fell 14.75 per cent compared to to debate and understand opportunities and previous year. challenges existing on the east coast of India, The only silver shining in the midst of this economic turmoil is that more so the requirements of the end users – for the second year in a row, India is shippers, exporters and importers expected to grow faster than China by clocking 7.7 per cent growth in 2016 and will be a star performer among emerging economies. India’s east coast maritime business plays a pivotal role in the country’s stable economic growth. Trade through major ports on the east coast has witnessed a considerable growth of 7.01 per cent during financial year 2014-15. On the flip side, growth on the west coast is 5.74 per cent. Among the major ports, east coast manages about 50 per cent of the total traffic. Ports like Ennore and Krishnapatnam have posted stellar performance, container operations at Kolkata Port have improved, the Kakinada Port has developed a container terminal and the Visakhapatnam Port is on its way to iron out several age old problems. Coastal shipping services on the east coast are set to increase. Bringing into context the government’s act east policy, R adm L V Sarat Babu, NM, IN (Retd), Chairman & Managing Director, Hindustan Shipyard Limited

40 maritime gateway / march 2016 Ports on the west coast have guiding the audience away from the emerged to be the front runners gloomy market scenario. for a long period when it comes The logistics cost Opportunities galore, looking to containerised trade. JNPT at the developments happening alone handles 50 per cent of the in India is more around the world and the visits of containerised exim trade, but this is than 13 to 15 per our Prime Minister to southeast only a sub-optimal solution. Asian countries, the look east policy. With many ports coming up on cent of our GDP, is While the statistics say that there is the east coast and Kolkata and Haldia one of the highest a bit of concern about the market also gearing up for transloading both in the current year, but if you look bulk and containers, there is lot of in the world. We are more holistically at the maritime business scope with ports at Vizag, Kakinada, than double (in terms of cost) activities 80 per cent of the cargo Kattupalli and Dhamra. The Adani’s is moved by ships and will never be are very ambitious about Dhamra and than most of the developed over taken by any other means of are projecting to reach the 100 million countries in logistics cost ratio. transport. The shipping industry is tonnes mark soon. the greenest compared to all other Bringing forth the plight of If the east coast ports become modes of transport and this aspect logistics in India Hajara said, the the gateways for the east is particularly taken care of in the logistics cost in India is more than Navy. Recently, the shipbuilding 13 to 15 per cent of our GDP, is one bound trade then I am sure the industry has got the infrastructure of the highest in the world. We are logistics cost can come down. status and the government is aiming more than double (in terms of cost) to take both public and private sector than most of the developed countries shipbuilders on the same footing, so in logistics cost ratio. If we can make the government has lot of work to sure that the east coast ports become S abyasachi Hajara do in terms of getting ships built for the gateways for the east bound trade Former Chairman – SCI and Chief Advisor the coming decades, which presents Elektrans Shipping Pvt Ltd then I am sure the logistics cost can a huge opportunity. The Ministry come down. of Defense is looking at diversifying Placing bets on the tanker sector the container and dry bulk scenario. its activities and involving private he said, 2015 was a record year for The only relief is in the tanker market partners in and around the east coast. delivery of container ships, around which performed well in 2015 and is Shipping industry in Korea and China 1.7 million teu have been added and expected to do pretty well in first half has developed by focusing at and total supply has gone up to 20 million of 2016. achieving certain goals and we need to teu. In 2016 again there is expected I don’t think there is any reason for learn lessons from them. to be higher growth for demand by us to be pessimistic, remarked Rear Presenting a brief on the 4 to 5 per cent but it will not suffice Admiral L V Sarat Kumar, Chairman operations of IIC Technologies and to take care of the glut in capacity in & MD, Hindustan Shipyard Ltd, solutions offered by it, Rajesh Alla,

F rom L to R - P L Haranadh, IRTS, Deputy Chairman, Visakhapatnam Port Trust, Sabyasachi Hajara, Former Chairman, SCI & Chief Advisor, Elektrans Shipping Pvt Ltd, Ramprasad, Editor in Chief & Publisher, Maritime Gateway, V Kalyanarama, Director (Projects & Services), Container Corporation of India Ltd, Walter D'Souza, Convenor - Ports & Logistics Committee, FIEO, Rajesh Alla, CMD, IIC Technologies Pvt Ltd

mar ch 2016 / maritime gateway 41 summit report

CMD of the company detailed on crore for capacity augmentation and the projects handled. At the Cochin modernisation. It has pioneered in Port the company is doing a study to When it comes implementation of PPP model for come up with models for siltation. to cost of finance berth allotment which has drastically They have brought to the market a increased the efficiency. In the coming new concept called nautical depth India is the three years another `3,000 crore will which will help ships with greater highest in the be spent in these process. The port tonnage call the port despite siltation currently has about 93 million tonnes issues. Another application being world, except for of handling capacity and it will developed will help predict shoals so be scaled up to 124 million tonnes that barges can navigate around them. few African countries. It is 1-3 in coming years. BCG has been All these applications will be offered per cent in most developed appointed by the ministry of shipping through Nautiluscharts.com that will to the study the modus operandi of be a data and solution provider for countries and 6-7 per cent in the ports, understand the bottlenecks end-users like fishing community and developing countries, while it and unleash their potential. In the past ports – offering a one-stop shop for year, the average turnaround time at hydrographic survey and port charts. is 10-12 per cent in India. the port has reduced by 30 per cent The portal was inaugurated by Rear and average output per ship berth day Admiral Sarat Kumar. has increased by 20 per cent. Hinting at the growth potential on Walter D’Souza Resolving the evacuation problem, the east coast, P L Haranadh, Deputy Convenor, Ports and Logistics Committee, FIEO. the Raipur-Vijayanagaram railway line Chairman, Visakhapatnam Port is being doubled and electrified. The Trust said, in the past year 2014-15, port has been able to move 30 per cent total cargo handled by all the major more trains this year compared to the ports together is 1,050 million tonnes, Maharashtra and 15 million tonnes to previous year. Roads connecting to of which roughly 40 per cent or 397 Gujarat. Most of this is transported the port are being expanded to four million tonnes was handled by the through rail which is costly and time lane for easy movement of cargo. east coast and the remaining by the consuming considering the saturation Electronic communication, cost west coast. Even though the east coast of the railway lines. If this cargo is and time of operation are the three handled less than the west coast, we shifted to coastal shipping the cost of elements that enable ease of doing have a huge potential here to grow at a power generation will come down by business at ports and Vizag Port is much bigger rate compared to the west 35 per cent. focusing on these to increase efficiency coast, said Haranadh. The key to economic development continuously. The act east policy will definitely is reduction of logistic cost, averred Emphasising on the significance spur up the momentum on the east Haranadh. At present it is 17-18 per of infrastructure development, coast. At Vizag Port, for the past cent of the production cost in India Walter D’Souza, Convenor, Ports 2-3 years the growth has been a bit which should be brought down to and Logistics Committee, FIEO, muted but it has huge potential in the 7-8 per cent. Vizag Port has taken indicated at the development in coming years. The Vizag cluster has certain prudent steps for attracting Singapore. Even though Singapore got 30 per cent of the mineral production traffic to the east coast. In the past five independence a decade after India, in India within 600 km radius of the years the port has spent about `2,500 the city-state and other countries like port. Andhra Pradesh is going to become the manufacturing hub with the coming up of the Vizag-Chennai industrial corridor and PCPIR the manufacturing activity is going to increase and boost the demand for raw material. Pointing at the potential in coastal shipping Haranadh said, as the entire coal production is concentrated in eastern and western India, there is a huge potential for coastal shipping considering it to be the most economical and eco-friendly mode of transport. Vizag Port will play a major role in this scenario because of its proximity to the coal production hinterland. About 25 to 26 million tonnes of coal is transported from Odisha and Chhattisgarh to Tamil Nadu, about 20 million tonnes to

42 maritime gateway / march 2016 the UAE have focused on developing But on the east coast the imports infrastructure and promoting are more by 0.6 million teu. This entrepreneurship. However, post The MMLPs cross movement of containers from independence, India did not focus east coast to the west to balance the much on infrastructure development, planned by Concor shortage is adding to the cost. So as a result many ports in India still will have CFS, there is an urgent need to increase lack last mile connectivity which adds exports from the east coast. This side to the transaction cost making indian warehousing, of the Indian coast is well positioned exports less competitive. When it automobile to trade with pacific nations and the comes to cost of finance, India is the US west coast. Industrialisation also highest in the world, except for few addition facilities, aggregation needs to be developed near the east African countries. It is 1-3 per cent in and distribution facilities, coast as currently it is more biased most developed countries and 6-7 per towards the north west region, but cent in developing countries, while it is specialised warehousing for infrastructure development should 10-12 per cent in India. liquid products so that a lot preceed industrialisation. The government has however The capacities of our ports are taken certain measures to reduce of processing can happen in 60 per cent more than the cargo they cost of finance a bit and exports are the MMLP itself and this is not handle today. The Chief Minister of looking up since October last year. Andhra Pradesh aims at making the If proper infrastructure is provided limited to containers only but state logistics hub of the nation. In and a level-playing field in the world for bulk and breakbulk cargo this regard, Concor has also chalked market is offered (currently Indian out certain development plans for the exportes are at a disadvantage of 10-15 as well. east coast. Currently Concor operates per cent compared to global levels in five facilities on the east coast from obtaining finance), Indian exports can Kolkata to Chennai and is planning perform much better. In many parts V Kalyanarama to add eight more facilities on this of the country the cost of frieght is Director (Projects & Services), Concor side of the country, of which, one will 100 per cent more as compared to be developed in Vizag on 100 acres. moving by ocean. In India 60 per cent Concor is going for bigger facilities, of exim cargo is transported by road the average size of ICD/CFS is being while 35 per cent goes by rail; here increased from 25-30 acres to around coastal shipping can play a pivotal role 100 acres and more. The idea is to in bringing the cost and time down. create infrastructure at one place Maritime transport constitutes 95 and reduce logistics cost. This will per cent by volume and 75 per cent help in concentrating all the value by value of the global trade, so any addition and processes at one place. growth in the maritime sector will The MMLPs planned by Concor will influence the economic development have CFS, warehousing, automobile of a country. addition facilities, aggregation and On the ease of doing business distribution facilities, specialised index India was at 142 and has warehousing for liquid products so come down to 132 position, but still that a lot of processing can happen countries like Mexico, Thailand, in the MMLP itself and this is not Brazil, indonesia are above us. This limited to containers only but for can be improved if exports shoot bulk and breakbulk cargo as well. up and it is possible only if the Concor today operates 63 facilities minimum comfort level of exporters across India which will be increased is not tampered. India logistics report to 90 soon. Concor is partnering with reveals a loss of $45 billion due to state governments and they are also logistics inefficiencies. It also projects appreciating the importance of a good that Indian logistics sector will grow logistics network. State chief ministers by 150 per cent in the 2010 to 2050 is the best solution for that. There is have showcased the facilities of period, so a lot of opportunities do a misconception among the business Concor to foreign nations for attracting await us. community that containerisation adds investments in industrial hubs. The Linking economic development to the cost, but it actually reduces facility at Khatua in Rajasthan on to containerisation of trade, V the cost and increases the safety 280 acres is an example which has Kalyanarama, Director (Projects and quality of the product. As far attracted industrial plants from Korea & Services), Concor said, a as containerised trade is concerned and Japan. Logistics and infrastructure developed economy goes more Indian exports are more than imports. need to preceed industrialisation towards containerisation with more According to the 2013-14 figures and the development seems to be thrust on ease of doing business and published by the shipping ministry happening at the east coast, putting ecofriendliness, and containerisation exports are more by 0.9 million teu. India on the world map.

mar ch 2016 / maritime gateway 43 summit report

F rom L to R - Mr Antti Halonen, Sales Manager-Port Cranes, Konecranes, Capt S M Shah Alam, AFNI, Executive Director, Karim Group, Mr N Krishna Kumar, Vice President - South India, MSC Agency (India) Private Limited, Mr Ramprasad, Editor in Chief and Publisher, Maritime Gateway, Mr Rajan Sharma, President, Nepal Freight Forwarders Association, Mr Kapil Rawat, Executive Director - Logistics, Jindal Steel & Power Limited, Dr K Satyanarayana, Director - International Logistics, Dr Reddy's Laboratories

Business session one “Industrial and manufacturing growth on the east coast – hinterland development” Huge growth focused on how the east coast is emerging as a major hub and is slowly going to outpace the west coast in terms of handling cargo volume ahead for the east in the backdrop of huge industrial and manufacturing lined up in the southern and eastern states. With many smart-cities coming up coast in these states including new locations such as Krishnapatnam, Bhubaneswar, End users pinpoint the bottlenecks to be eased Visakhapatnam, Warangal, Hyderabad, Tirupati, Kakinada, the out in port operations as the east coast gears up 12 smart cities in Tamil Nadu and four to handle larger cargo in the backdrop of huge in West Bengal, along with national manufacturing investment zones industrial and manufacturing activity lined up in (NMIZs), industrial and dedicated the southern and eastern hinterland freight corridors, the hinterland for east coast is widening. The panelists spoke about how the booming industrial and manufacturing ‘ ustomer is the King’ is an age-old they still lage behind on quite a few scenario in addition to expanding adage that is oft used to draw parameters making the conduct of maritime infrastructure is going to attention to the importance of a business uneasy for customers. And change the dynamics of the ports on C the east coast. customer’s needs while doing business. so to discuss and put a finger on areas This mantra holds true in every where ports should improve, the first Kapil Rawat, Executive Director business as much as it does for ports business session was dedicated to port (Logistics), Jindal Steel & Power that deal with all sizes of cargos and users. A motley mix of users from Limited, “On the infrastructure their customers demanding the best different segments places on record development front, we are talking any facility could offer. While most their views on how ports can do better about 100 smart cities, which ports have put in operating procedures and pointed new areas of opportunity will require huge infrastructure in to make processes easy for customers, in the east coast. the coming years. It will lead to

44 maritime gateway / march 2016 tremendous rise in demand for cement Infra bottlenecks and steel.” The east coast, despite having Talking specifically about the steel We are talking huge opportunities and several industry, he said, the steel projection advantages on its side, is suffering in India is going to touch 200 million about 100 smart from several infrastructure bottlenecks. tonnes. We expect sourcing of raw cities, which will For instance, though the eastern material for the steel industry will be coast has all the pharma companies doubled in next 2-4 years. require huge manufacturing in large volumes does It’s not just the domestic infrastructure in not have infrastructure to support hinterland, but the east coast has pharma exports. plethora of opportunities to boost the coming years. It will lead Expressing his concern, Dr trade with neighbouring countries. to tremendous rise in demand K Satyanarayana, Director - With government’s Look East International Logistics, Dr Reddy's policy, the trade relationship with for cement and steel. The steel Laboratories, said, most of the neighbouring countries such as Nepal, projection in India is going to eastern ports are not yet infrastructure- Bangladesh and Mynamar is set to ready, especially when it comes to grow further. touch 200 million tonnes. some temperature-controlled facilities. The trade relations between India “Even if we intend to export from and Bangladesh were not significant the east coast, the ports here do not in past years; the two-way trade in the have temperature-controlled facilities fiscal year 2013-14 totaled $6.6 billion, Kapil Rawat and direct vessel calls, which forces with exports from India amounting Executive Director (Logistics), Jindal Steel & Power Ltd us all the way to the west coast, to to $6.1 billion. However, with the JNPT,” he said adding that though change in policies and initiatives, the some pharma exports is carried out trade volume is set to get a boost. via air cargo, the pharma industry Recently, the two countries signed the prefers the ocean freight due to the standard operating procedure (SOP) cargo’s dependence on cold chain. Dr to operationalise the Agreement ports for Bangladesh cargo will Reddy’s is one of the largest pharma on Coastal Shipping, which will derive benefits by way of enhanced manufacturing companies in India pave the way to promote coastal throughput as a result of Indo- with two-third of its revenue coming shipping and enhance bilateral trade Bangladesh coastal trade. from exports. between by bringing down the cost of Speaking on the potential of sea At present as ships pass through transportation of EXIM cargo. trade between Nepal and India, Rajan transshipment hubs such as Colombo The present connectivity through Sharma, President, Nepal Freight or Singapore, the lead time increases. sea route with Bangladesh is through Forwarders Association, said, “At Increase in lead time is loss for a ports of Colombo and Singapore. present, Kolkata is the only port company. The east coast needs to The long sea route adds significantly catering to Nepal. We are looking have some arrangements to increase to the transportation costs of EXIM closely at other east coast ports, efficiency and reduce lead time. trade. There is no significant cargo mainly the Visakhapatnam Port.” Talking on similar lines, Rawat movement between sea ports of “We need to work collaboratively of Jindal Steel & Power spoke about Bangladesh and India as it is not to solve all the prevailing issues both how the ports in India are lacking in profitable for the big vessels to operate the countries have starting from labour infrastructure in handling raw material between these sea ports. Under to logistics,” he said. “We are looking and bulk cargo. Giving an instance, such circumstances, there is a need forward to solve these issues of the he said, the major raw material for the for smaller ships to provide direct land-locked countries, to make it a steel industry is coking coal. Most of connectivity between the eastern sea win-win situation.” the ports in the country are lacking ports of India, Chittagong and other N Krishna Kumar, Vice President in proper storage facilities for bulk ports in Bangladesh. This, besides (South India), MSC Agency (India) cargo, and most of the coal yards improving the connectivity would also Private Limited, said, “Though in the country do not have concrete provide competitive freight rates for India saw a dip in growth in the last flooring or pucca surface, which leads coastal vessels that ply between ports 13 months in exports, India fared to damage of coal or other bulk cargo of the two nations. better when compared alongside the when it rains. Speaking on the subject, Capt BRIC (Brazil, India, Russia & China), In addition to it, high logistics cost SM Shah Alam, AFNI, Executive countries. India grew at 7.5 per cent, is also a major concern in the country. Director, Karim Group said, “In while growth at Russia shrank by 3.8 In contrary to developed countries Dhaka, more than 70 per cent of per cent and Brazil shrank by 6.7 per where the logistics costs is pegged at industry is within 100 km away from cent.” Speaking about India’s trade around 7-8 per cent, it is around 12 per the inland port. Instead of sending relations, he said, “The demand- cent of the GDP in India, among the cargo to transshipment hubs such supply gap and geo political scenario highest in the world. “The logistics as Singapore and Colombo, we can will play a major role in boosting the costs for the steel industry is probably directly cargo to east coast.” Indian bilateral trade between countries,” he the highest at 20 per cent,” Rawat of ports serving as transshipment said. JSW said.

mar ch 2016 / maritime gateway 45 summit report

or the success of any port or to panelists of the business session challenges faced by the Indian port container terminal, efficient “Infrastructure, Connectivity and sector and what could be the need of Fcargo evacuation is key Cargo Evacuation” on the second the hour in order to bring efficiency in addition to having adequate day of East Coast Business Maritime in cargo handling and to widen infrastructure and excellent Summit (ECMBS), which was hinterland reach. connectivity. Any port lacking in organised at Visakhapatnam. Speaking on the challenges faced any one of these three aspects will Focused on drawing the industry’s by the industry, Joy Saxena, Group witness a drop in productivity and face attention and inviting opinions President & Whole Time Director, several challenges and will continue from industry stalwarts, the session Jindal ITF Limited, said, “The to lose out in the long run, according discussed in length about several industry faces challenges in terms of night navigation, fog, improper dredging, no proper marks and other technical challenges. On top of it, not much water available in rivers Improve between the months of December and February which makes it difficult for coastal shipping.” Speaking on similar lines, P infrastructure, Krishnan, Advisor, FFFAI & Trustee Chennai Port Trust, said, people handling certain specialised cargo are not properly trained, especially for speed up cargo the coal cargo. Also, clearing cargo at some ports takes three to four days. He also said, “With the introduction of 24/7 custom operations, once the evacuation practice of monopoly ceases, then it Panelists stressed on the need for development of is advantage for the trade. In future, the good business is on the cards.” necessary infrastructure, skilled manpower, cargo With the shifting of cargo from one evacuation and last-mile connectivity across the port to another, the major benefit lies east coast that accrues to the cargo owners is in

F rom L to R - Mr K Ramachandra Rao, Chief Engineer, Paradip Port Trust, Capt Ramnath Vaidyanathan, Director & Project Lead, Adani Ennore Container Terminal Pvt Ltd, Mr P S Krishnan, Advisor, FFFAI & Trustee, Chennai Port Trust, Mr Joy Saxena, Group President & Whole Time Director, Jindal ITF Ltd, Capt Swaminathan Rajagopalan, Commercial Director, CMA CGM Global (India) Pvt Ltd, Capt Sriram Ravi Chander, Executive Director, Krishnapatnam Port Company Ltd, Cdr Prashant Kumar Srivastava, Chief of Hydrographic, Inland Waterways Authority of India

46 maritime gateway / march 2016 negotiation of rates. All the non-major customer service desk and provides ports on east coast are only about 7-8 comprehensive information system. years old. Operational cost has not T raditionally, We are focusing on areas such as to reduced, he said. add efficiencies, ease of doing business Even Cdr Prashant Kumar container etc.” Srivastava, Chief of Hydrography, terminals He further said, in addition to Inland Waterways Authority of the existing 6,800 acre land the port India, spoke about how the inland needed to go has, it has developed a land-bank of waterways sector is also facing to hinterland, 13,000 acre to develop it as industrial challenges including insufficient zone or clusters for cold storages, funding and other challenges in the while today it is vice-versa. pulses, timber etc. It also has marine development of waterways. Currently Business is no longer going to capacity to berth large ships on the just two of the five planned waterways block. Infrastructure-wise, the port for immediate development are hinterland, now hinterland is is well connected with 16-18 lanes operational. coming to the port for better road connectivity. He said, the state However, the government of India of Andhra Pradesh has a lot of is trying to boost coastal shipping infrastructure. potential in the backdrop of a lot of and build waterways for better connectivity is being developed. The transportation, he added. As per the state government is also developing National Waterways Bill, 2015, the Capt. Ramnath Vaidyanathan entire coastal road with a four-lane government is planning 106 new Director & Project Lead road. “We are also setting a joint waterways, adding to the existing five Adani Ennore Container Terminal Pvt Limited venture with the Andhra Pradesh waterways and taking the total number state government to enhance rail to 111, he said. The declaration of connectivity to the port and the these national waterways would region,” he added. enable IWAI to develop feasible Sharing the perspective of another stretches for shipping and navigation. container terminal operator, Capt. The Bill proposes conversion of has shipped cars manufactured in Ramnath Vaidyanathan, Director 15 rivers in West Bengal, 14 each Gurgaon and Manesar, near Delhi, & Project Lead, Adani Ennore in Assam and Maharashtra, 11 in to Kolkata via inland waterways, on Container Terminal Pvt Limited, Karnataka, 12 in Uttar Pradesh, a pilot basis in October last year. It said, traditionally, container terminals nine in Tamil Nadu and six each brought cars by road to Varanasi and needed to go to hinterland, while in Bihar and Goa and five each in from there cargo travelled by river to today it is vice-versa. “Business is Gujarat, Meghalaya, Odisha and Kolkata. River transport facilities will no longer going to hinterland, now Telangana, among others. The right provide more cost and time efficient hinterland is coming to the port for over the use of water, river bed and the than road transport. better infrastructure,” he said, adding appurtenant land will remain with the Even Saxena of Jindal said, “We that hinterland is becoming smaller state government. are requesting the government for and smaller towards the port which Giving an instance of how dedicated anchorage, availability of they are sharing. If you are looking at waterways can boost the trade pilots, ease of Custom procedures hinterlands coming to your port, you and reduce dependence on road etc.” He further said business only need national highways. For any port, and other mode of transportation, depends upon turnaround time. While they need road infrastructure. Same is Srivastava said, “In a first, auto-major the total requirement is 30 million the case with railway. Maruti Suzuki has done a trial run tonnes, we can meet only 10 million Container terminals are also near Varanasi to transport its cars tonnes with the current infrastructure. expected to facilitate value-added through waterways.” The company We require more support from the services, he said. “Today location or government. cargo hinterland does not matter. The Panelists also case in point is DRL – DRL having stressed on the need base in Vizag moving all its cargo to for development of JNPT,” he added. necessary infrastructure While talking about its prospects and last-mile in India, Capt. Swaminathan connectivity across the Rajagopalan, Commercial Director, east coast. CMA CGM Global (India) Private Capt Sriram Ravi Limited, said, the company sees huge Chander, Executive prospects on the east coast. With a Director, KPCL, market share of 11 per cent in India, spoke about how it lags presence on the eastern part efficiency is the best of India and would focus on the east service a port can offer coast. “We will be making investments to its customers. “The India and will be adding one more port operates a 24/7 terminal on west coast.”

mar ch 2016 / maritime gateway 47 perspective East Coast Maritime resurgence Complex customs procedures and ambiguity on rules at ports need to be done away with and decisions announced by the government should see the light of day, if ease of doing business is to be implemented in its true sense

by Veeresh Malik

a huge giant waiting to swallow commercial entities in this day and age of better communications is not so well known. As transshipment cargo moves from one port to the other, it often falls afoul of the multiple different ways of interpreting the same rules at different ports. A legit shipment at one port runs into all sorts of problems in the neighbouring port. We knew this decades ago but modern communications make it easier for it to be “caught”. And policy decisions taken in Delhi take months to filter down to the ports. If they do at all. Reductions in taxes on bunkers and ease of doing business for coastal shipping, the backbone of any maritime country, are examples of decisions announced almost a year ago but not implemented. Homilies about how it is the role of the ruler to collect taxes from subjects by “authorities” and government departments born and still izag used to be my “home port” attend. Speaker after speaker launches living in a colonial era do not justify about 35-40 years ago, and then into how difficult it has become to do the huge amounts of paperwork that Vagain about 25 years ago when I business in Indian Ports, with multiple is still needed for movement of cargo worked ashore for some time. For the authorities from Customs and Central in and out of our ports, even if it is typical “man on the street in Vizag” Excise to Central Government Ports domestic – most of which has to be that I met, the competition in terms of to State and local all pitching in to signed and attested by a variety of strategic and commercial importance generate tonnes of paperwork. An people for that reason only. Bringing aspired for is no less than that of example given is of how two arms in National Security as a reason for Mumbai’s on the West Coast. “We of the same “service”, Customs hampering the movement, especially work harder”, they tell me, “We are and Central Excise, require huge of exports, does not really have any people of steel” (Vizag is also known duplication of documentation for meat in it when vast portions of as steel town and ore town). essentially the same activities. our coastline and land borders are So it is kind of an opposite Likewise, the reality that different wide open to all. Ports in India and experience that I have at the “Ease of ports interpret the same rules allied services therein appear to exist Doing Business at Ports” CEO Round- differently for “historical reasons,” for only one reason – and that is to table at the East Coast Maritime has been known to us seafarers for hamper the free flow of commerce. Business Summit that I have come to decades now. That it has become “Make in India” will have no

48 maritime gateway / march 2016 meaning if what was called “fear have not even started talking about factor” amongst our shipping the “returns” which then have to be fraternity of the existing inertia levels filed. One easy task – ensuring that One easy task – ensuring that which block trade are not addressed. Customs (Customs and other allied The fact that the CISF, feared by matters) and Central Excise (central Customs (Customs and other commercial cargo entities, which excise, service tax and other excise allied matters) and Central guards ports in India, is known as matters) can work towards common a very humane and pro-active force documentation and full 24×7 online Excise (central excise, service by people using the Delhi Metro, is transactions monetary as well as tax and other excise matters) considered one of the major reasons documentation, which automatically by many on why cargo does not move generates their “returns”, will solve can work towards common in Indian ports, is a dichotomy that most of the issues that people in sea- documentation and full 24×7 needs to be looked into. Sea ports are cargo face in Indian ports. a “wet” posting, Delhi Metro is not. Thing is, who will coordinate online transactions monetary As always, the solutions lie in the various deeply entrenched silos, as well as documentation, what is known as “follow the money”, including, to be frank, the very people which is also easily done. who perpetuate these methods of which automatically generates Shipping people already have making sea cargo movements difficult? their “returns”, will solve most charts drawn up on what expenses are As the preparations for next week’s involved for what kind of movement international fleet review continued of the issues that people in in which port. There is the legit part outside (to put things in perspective, sea-cargo face in Indian ports. and then there is the cash part. If the the flypast is about three or four times legit part of expenses for each sea- as big as the one for Republic Day’s in port, every small little expense paid Delhi, while the size and scale of sea to any authority government central, and land operations with air support are state, local or private is documented on a scale bigger than land war games ports”, the tariffs would be way way and procedure for payments made in the desert), the East Coast Maritime lower than what they are set at, and online 24×7 for all of them, then Business Summit in Vishakapatnam the resulting competition would documentation generated for free moved into its second day. bring the private ports in line too. flow of cargo will also be automated. Aside – some very interesting Unfortunately, the tariffs are not What’s left then is random audits aspects of trade through seaports as coming down, legacy inefficiencies in real time, full audits post facto, it impacts the land-locked Nepal and and outright cheating and corruption and maybe a few cases which form coastal trade between Bangladesh and keep on adding to the expense side of the exception – and these, as per India emerged which place the larger running these government operated experiences in other countries, seldom issue of where Kolkata stands now ports, and so the costs stay high. cross 1 per cent by value of cargo in East Coast of India sea trade into Tenants of prime real estate in and being moved. perspective. What was India’s busiest around major ports, for example, are Typical movement of cargo – even and most important port system, up on rents set hundreds of years ago, if it is bulk and government cargo the Hooghly and then on to the rest of even though the actual occupants have – through any seaport, especially the world, is now not considered an changed many times since and happen government seaports – is being influence on matters maritime both to be collecting or paying market rents strangled by these idiotic repetitive naval and mercantile even in India is amongst themselves. Just trying to fix and therefore time and cost increasing about as simple as it gets. this one head under “incomes” would activities. Fear of taking on the In the midst of much moaning bring most of the major ports back on many entities keeps people quiet. and groaning on how freight and the way to their accounts being in the But somebody has to speak up and commodity rates were going down black. demand from the present government globally, an interesting question to Likewise. cleaning up the huge that the simple task of bringing in a which no really credible answers were amount of paperwork that most major standard accounting system wherein forthcoming from government as well ports require of users would inspire all official cost heads (government as private ports comes up – why in the the other authorities involved to keep and private) are captured and made face of port costs going down all over pace and reduce inefficiencies as well payable online without human the world especially where economics as the extremely vast amount of local interface, will solve 99 per cent of the of scale kick in, are port costs going and hereditary practices in different problems that sea commerce meets. up relentlessly in India? ports all professing to follow the Shipping interests have no issue One simple answer is that the same rules, which leave vast room for in paying that which is justifiably tariffs set for the “major ports”, differences in interpretation. demanded. Just make it easier to means older ports administered by If there is one additional factor actually pay all these multiple legit the Central Government, are set over corruption, inefficient and charges at one location, online, and abnormally high for a variety of absent infrastructure that makes the let nature handle the rest. Today, very reasons. If there was clarity and movement of export and import as often, just making the legit payments transparency in the way fiduciary well as coastal and domestic cargo involves huge legwork – and we issues were handled in these “major by sea uncompetitive then it has to

mar ch 2016 / maritime gateway 49 perspective

be the reality of why port costs to well all over the world. If they were efficient in the first users are probably the highest in the place, they wouldn’t need such high 4 As farm to fork and factory & world. Government ports have a tariff overheads, is the real answer. shop floor to frequent shopper mechanism which works broadly This is in line with a simple gets shorter in range and distance, on cost plus which in turn hides the truth – till about 30 years ago, every commerce becomes more efficient. almost criminal wastage that goes on private company in every port in India with major port resources. Private 5 There are efficient new ports was controlled out of Calcutta or ports are thus shielded by these levels in India springing up literally Bombay only. I was with the biggest and make merry. Like with privatised overnight and taking business from container shipping company in India airports, users are stuck between their older neighbours. in the late 80s and just trying to move monopolies, and willy-nilly end up containers by rail over Madras instead paying whatever is demanded. 6 More and more major ports are of Bombay needed permissions and If seaports were handling passenger being headed by people from coordination from the Bombay office. trade, the demand for a clean-up would Indian Railways who know the Which said Bombay office, obviously, have fixed matters a long time ago – subject of fast evacuation of cargo strongly resisted this change in trade sadly, passenger trade by sea is almost very well. patterns because it impacted their local dead in India. So it is going to be 7 The collateral benefits of sea- incomes both wet and dry. cargo mostly, and to some extent other ports becoming intermodal Now, decision makers are needed user groups – fishing, oil exploration transshipment hubs for India are at smaller “minor” ports, which often and support services. All have their best seen in Singapore, Dubai and do way more business than legacy existing inertia levels which prevent Colombo. “major” ports, and increasingly the change for the better, except some local “head office” in the major port is improvements in some cases. Now, look closely at how many simply not involved anymore. Not But there is hope. new sea-ports have come up in the last involved, therefore, also means no Make in India is going to go great decade or so in India, as compared more “wet” incomes. In all sectors, guns, if field reports are to be believed, to how many sea-ports have actually government as well as private. as manufacturers benefit from other functioned since Independence. Most Another moan and groan, efficiencies moving into the system in of these new sea-ports, incidentally, especially from large corporates already some states, with Andhra Pradesh as allow deeper draught and therefore deep in the CDR and NPA game who an example of how things are done much bigger ships which in turn are reluctant to get into competition correctly lately. But if real benefits of means lower costs. And then check out with newer nimble competition, is to make in India are to be realised, then the YOY increase in revenue, turnover blame bad infrastructure for everything. export India and Indian manufacturers and most of all, cargo throughput. Agreed, our infrastructure could be must, and for that sea-ports need to So why are the usual suspects way better, but look at the way things become more efficient and operated talking about a downturn? One reason have improved? Where have they transparently. could be that these new ports are not improved, my friends in the media ask Typical export documentation located right in the heart of town, in me, and point to how trucks and trains takes four days per shipment before the old traditional sea-ports, which is get stranded in and around the older the goods reach the port, and atleast viewed as a lack of control and loss of seaports located near bigger towns. Go three mandays once they are in the wet revenue by many people. So one out a wee bit, I tell them, and look at port. That’s seven days too many common refrain from friends in the sea-ports which have emerged away for something which in almost all shipping industry that I hear is – so from the big cities and see how rail as the cases should have been over in many new ports now in India like bus- well as road connectivity is way way minutes. stops, we have to open multiple new better and just keeps getting better? For all those who are still worried offices everywhere. People who have no idea of how about the economy, especially as seen from armchairs in Delhi and Mumbai, may I suggest that they try to join the dots here too, along the seacoasts of India, especially the East Coast? 1 The current price of crude oil in dollars is almost the same as the average price of crude oil over the last 30 to 50 years. 2 Container and dry bulk shipping are not doing well, over-capacity tipping point meets reduction in cargo tipping point. 3 Tankers, fishing fleets, coastal ships and efficient ports are doing

50 maritime gateway / march 2016 the existing vested interests in legacy export or import shipment has one ports made it difficult to even build core document that flows through all roads and revive railway lines to new “ Make in India” will have no departments seamlessly, with minimal satellite ports in their own region will human intervention along the way not comprehend. Go back to why the meaning if what was called except for physical examination where Border Roads Organisation had to be “fear factor” amongst our required. All payments required called in to make roads and railway to be made, whether to private or connections to what was then called shipping fraternity of the government account, are effected into Nhava Sheva Port and Jawaharlal existing inertia levels which centralised accounting systems, from Nehru Port. Go back to why Customs where the relevant sums are segregated clearances for new ports were done block trade are not addressed. and sent onwards as required. from Customs offices far away in the Change has to come from legacy ports. All that and more is now, somewhere, and to start with, if only finally, history. that is perceived to be so unhelpful Sea Customs and Central Excise What we have, now, is sea-ports in towards economic growth of India? could simplify and work as one team India functioning at efficiency levels One reason could be that its requiring one set of documents and at par with the best in the world. perception of “national interest” demand one consolidated payment, And that, especially with the newly is skewed by its history in pre- that too 24×7 and online, things would resurgent East Coast, is getting many Independence India (the history of improve a lot as the others would then entities who thought this business was Customs in India from around 1870 fall in line too. locked in with them, very nervous. includes a north-south “Indian Customs What’s common between the Veeresh Malik was a shipping professional for Line,” also known as the “Great Hedge three decades and now blogs for Times of India. investigations against Walmart in of India”), when it collected taxes to be India, the Tianjin explosions in He can be reached at: sent to the colonial powers that be. [email protected] China and the La Linea scandal Customs at sea-ports in India in Guatemala? In all three cases, are and have been what they are, corruption in Customs, for sums as which was discussed openly at the Statement about ownership and other particulars small as five dollars to millions of ECMBS – there are local variations about Maritime Gateway required to be dollars, per transaction. As a global in the way they interpret the same published under Rule 8 of the Registration of traveller, first as a seafarer and then rules, especially in the older ports, Newspapers (Central) Rule 1956. by air variously, with knowledge and because of legacy reasons, some of Form IV experience in the cargo industry, I which have to do with local customs am, like many, acutely aware of how that have evolved for no other visible (See Rule 8) Customs globally are able to make or reason than to place barriers in the Place of publication : Hyderabad break a country’s economic growth. way of smooth movement of trade Periodicity of publication : Monthly Printer’s Name : R. Ramprasad In the course of a presentation towards collecting traditional “dues” at the recently concluded East Coast Whether Citizen of India? : Yes by descendants of the rent-seeker Address : #407, 5th Floor, Pavani Plaza, Maritime Business Seminar, held economies of our colonial era. The Khairtabad, Hyderabad- 500 004. Telangana in Vishakapatnam ahead of the concept of “National Interest”, of Publisher’s Name : R. Ramprasad International Fleet Review to be course, is then subservient to the local Whether Citizen of India? : Yes attended by the President and Prime demands and traditional practices. Address : #407, 5th Floor, Pavani Plaza, Minister, speaker after speaker as well But it is now the duplication Khairtabad, Hyderabad- 500 004. Telangana. as the results of a survey of people of paperwork because the Central Editor’s Name : R. Ramprasad in the maritime business held that Excise department is also involved Whether Citizen of India? : Yes dealing with Customs and Central in Service Tax issues which cannot Address : #407, 5th Floor, Pavani Plaza, Excise was the single highest problem be understood. However, the two Khairtabad, Hyderabad- 500 004. Telangana. Names and addresses of individuals who own they faced in trying to do business departments, Customs and Central through sea-ports. Having been in the magazine and partners or shareholders Excise, have not been able to provide holding more than one per cent of the total almost all aspects of sea-trade from a common single-window service for capital: working on ships to working at inland clearing Customs and Service Tax terminals and all points in between, I Chinta Sasidhar issues. Plot No 550A/1, Road No. 92, Jubilee Hills, can only agree, and matters are only It starts from there and the other Phase – III, Hyderabad - 500 034 worse now than they were before. departments involved, at any given “”There are few public agencies Chinta Sridhar port that means between 25 to 35 H.No.9-29-24/A, Balaji Nagar, Siripuram, in which the classic pre-conditions other entities. Even something like the Visakhapatnam- 530 003 for institutional corruption are CISF, known as a particularly people so conveniently presented as in a I, R. Ramprasad hereby declare tha t the friendly force by millions of Delhi particulars given above are true to the best of Customs administration.” (J.W. Metro users, becomes a huge barrier my knowledge and belief. Shaver, former Secretary General of to the free flow of trade in sea-ports Date: 26 February 2016 the World Customs Organization). with its separate set of documentation How did we, in independent India, required. (Sd/-) R. Ramprasad then, get blessed with a department In most sea-ports globally, an Publisher

mar ch 2016 / maritime gateway 51 east coast ports

brighter days ahead

after bifurcation is welcoming new Ports on eastern coast have always played second investments in all sectors along the fiddle to those on the western coast, partly due coastal and interior districts of the state. And Tamil Nadu that has been to the country’s policy on trading partners and at the forefront of industrialisation has lack of industrialisation. But, this may be about to opened up new avenues for glass and textile manufacturers. change as investors pledge billions of dollars to The union government’s Act East set up industries in southern states policy will give an added fillip to the transformation of the eastern coast MG Bureau gateways, experts say. “Undoubtedly, it’s a fact that wo of the most business-friendly is confident of the planned cement India’s growth story vis-a-vis the east states of Andhra Pradesh and plants by JSW, Dalmia Cements coast with the eastern part of the globe Tamil Nadu which are blessed and Emami will come up this year. is likely to be much more robust than T with the western part of the globe with long stretches of sea on the Odisha too, will soon become the eastern coast have shown impressive steel manufacturing hub in the east simply because most of the western growth in the last decade and are set coast with Tata Steel and JSW Steel economies have been saturated,” for an encore. Rapid industrialisation setting up massive manufacturing says S Hajara, who ran state-owned is underway in all states. West Bengal plants in the state. Andhra Pradesh, Shipping Corporation of India Ltd

52 maritime gateway / march 2016 as its Chairman and Managing global manufacturing supply chain,” create demand for both in-bound and Director between September 2005 and Andhra Pradesh Chief Minister N outbound logistics through the port December 2012. Chandrababu Naidu said at the networks. “India was always trading most CII Partnership Summit held in the Special investment regions like with the western countries, with coastal city of Visakhapatnam in the Petroleum and Petrochemical middle-east, Europe, the US etc. January this year. Investment Regions (PCPIR), such So, naturally there is an advantage Andhra Pradesh, Naidu said, lags as the ones near the Kakinada- for ports located on India’s western behind manufacturing contribution Srikakulam region will create coast,” says Anil Yendluri, Director to GDP. The state government demand for commodity-specific & CEO, Krishnapatnam Port Co has identified several initiatives to port infrastructure. Further, other Ltd. But, if you look at the last 10- rejuvenate the manufacturing sector industrial corridors like Chennai- 15 years, India’s trade with Asian in the state, including investments in Bangalore Industrial Corridor (CBIC) partners is rising and rising. Today, it National Manufacturing Investment and Bangalore-Mumbai Economic has gone to the extent of almost 70 per Zones (NIMZs), aligned with the Corridor (BMEC) will create cargo cent of India’s trade,” he said. National Manufacturing Policy opportunities in the secondary “When you look at intra-Asian (NMP). “This is expected to create hinterland. trade, India-China trade is doubling, a large demand for shipping and These developments will create India-Vietnam trade is improving, logistics of raw materials and large cargo traffic opportunities for India-Japan trade is improving, manufactured goods through the ports in the peninsular region as India-Australia trade is improving, coastline,” he added. large scale investment will have a India-South East Asian nation trade Andhra Pradesh received favourable impact on maritime trade is improving and even part of African investment proposals worth `6.21 lakh enabling ports, container freight trade is improving. So, when it comes crores during the Partnership Summit. stations and inland container depots to Africa or Far East or South East While, Tamil Nadu received to be channelling the growth of trade. nations, there is more relevance and investment proposals of `2.42 lakh With private and public enterprises justification to have ports on the east crore at the Global Investor Meet setting up ancillary infrastructure coast. Otherwise, let’s say, if some held in Chennai in September last units such as warehouses and, multi cargo was moving from Malaysia to year. Of this, `1.04 lakh crore are in modal logistics parks, movement of Hyderabad, it was going all the way the manufacturing sector and the rest trade within the region is going to get to Mumbai and then coming down to in power, handlooms, agriculture, a boost. Hyderabad. Everything which goes fisheries, medium and small India’s container traffic will grow around India means another six days of enterprises and solar energy. at 6.5 percent rate under “business-as- sea voyage and that much extra freight. Yet another cargo multiplier is usual” scenario and reach 21.5 million So, the relevance of eastern coast ports the planned Vizag Chennai Industrial teu by 2025, according to a shipping has improved,” Yendluri noted. Corridor (VCIC), which is a part of ministry-mandated study. Including In 1991, India initiated a ‘Look the East Coast Economic Corridor the impact of programs like “Make in East’ policy which sought to (ECEC), India’s first coastal corridor, India” and development of industrial establish closer ties with East Asian aligned to the Golden Quadrilateral corridors, the estimated container economies as a means to realise its and is envisaged to play a key role traffic can grow to 24-25 million teu. aspirations of becoming a global in India’s ‘Look East’ policy. The On top of this, additional growth of economic superpower. The erstwhile proposed Corridor shall also form around 3-5 million teu will accrue “Look East” policy has now been an important part of the union from improved competitiveness of redeveloped as the “Act East” policy government’s plan for providing hinterland industries due to lower cost with a greater focus on developing impetus to economic development in and time to exports and another 4-6 projects that can improve India’s the region. million teu from port-based export- engagement with the East and South VCIC is expected to have an oriented manufacturing clusters for East Asian economies. influence area spread across Andhra industries like electronics, apparel “The state’s coastline is naturally Pradesh and Tamil Nadu which have and footwear, automotive and auto suited for tighter integration with significant share of contribution to components. East Asian and South-East Asian national GDP and total manufacturing Andhra Pradesh alone is looking economies in terms of participating output of the country. 11 districts to capture 15 per cent of India’s in global manufacturing supply in AP (Srikakulam, Vizianagaram, container traffic by 2019 (2-3 million chains, which have hitherto largely Visakhapatnam, East Godavari, teu) and 25 per cent by 2025 (5-6 bypassed the subcontinent, and the West Godavari, Krishna, Guntur, million teu) from the current traffic ports of the coastline are expected Prakasam, Nellore, Kadapa and (2014-15) of 0.3 m TEUs which is less to play an important part in this Chittoor) fall in the influence zone. than 0.3 per cent of the total traffic at process. The state government seeks These districts represent almost 80 all India level. to leverage its locational advantage per cent of the state’s area and are “There is a lot to forward to in the and pursue a port-led economic expected to become home to various east coast ... as the east coast becomes development strategy that could industrial nodes providing a renewed a natural gateway for the eastern also result in the state emerging as thrust to domestic and export-oriented bound trade, the logistics costs will the node integrating India into the manufacturing. This will in turn, come down,” Hajara explained.

mar ch 2016 / maritime gateway 53 networking at summit

P Orts efficiency

Direct Port Delivery: Less dwell time In line with the ease of doing business campaign of the central government, JNPT has extended the direct port delivery (DPD) facility to all ACP clients irrespective of their import volume MG Bureau

trial basis for a period of six months. Continuance beyond six months will be subject to operational convenience. With this, a long pending demand of the trade bodies will be met. Under this facility, the import laden containers will be delivered to the consignees (in this case ACP clients) directly while reducing the burden of logistics cost. As per existing norms, DPD container has to be picked up by the ACP clients within 72 hours of its landing. Otherwise, the same will be moved to JNP-CFS presently operated by Speedy Multi-modes Ltd after 72 hours to avoid piling-up of containers, if any, leading to multiple shifting/ congestion. To facilitate the same, the port is making adequate arrangements A nil Diggikar, Chairman, JNPT and Neeraj Bansal, Deputy Chairman, JNPT announcing Direct Port Delivery facility to all ACP Clients. in terms of yard and equipment for extending DPD to maximum ACP n the year 2007 through the JNPT liberalised the minimum clients. A separate Trade Notice is Accredited Client Programme volume of containers be imported by already issued in the shipping dailies I(ACP), the Risk Management System ACP clients to 300 teu on an average for the benefit of the trade. (RMS) was implemented in major ports per month covering all three terminals There is a general impression that which envisages assured facilitation to of JN Port as a part of the policy to import laden containers are dwelling in the clients meeting specified criteria in extend the benefit of DPD facility to the port terminals for a longer period. terms of duty, volume of imports and more number of ACP clients. This is not the case. While, the laden clean compliance record. The proposed Presently 10-14 agencies are import boxes bound to local CFSs are arrangement enabled importers with availing DPD facility at JNPCT which delivered within one to one-and-a-half ACP Status to receive Direct Port are fulfilling the criteria of importing days on an average after landing as Delivery (DPD) of their containerised not less than 300 teu on an average per against a free period of three days from imports without routing them through month covering all three terminals as port terminals, the laden containers CFSs. a bench mark. As understood, CBEC are delivered from CFSs to end users To facilitate DPD, keeping in has issued accreditation to 357 ACP after an average dwelling period of view various constraints like yard, clients so far. 9-10 days subsequent to completion of additional equipment, manpower Now, under ease of doing business, requisite formalities involving Agencies and unfruitful/multiple shifting, a in line with the directives of the like Shipping Lines, CHAs, Customs, bench mark of 50 teu per voyage to Ministry of Shipping, Anil Diggikar, Consignees & CFS Operators be imported by the agency was fixed Chairman, JNPT informed that a (excluding Port Terminals). The import as the eligibility criteria for availing decision has been taken to dispense laden containers are delivered to end DPD facility. However, over a period with minimum volume criteria and users directly from Port Terminals in of time, with improvements in the extend DPD facility to all ACP clients case of Agencies availing DPD facility operating system, in order to reduce from JNPCT with immediate effect with a dwell period is one-and-a-half the transaction cost per container, irrespective of their import volume on days only on an average.

56 maritime gateway / march 2016 q3 results

R esults are a mixed bag for firms

Adani Ports and SEZ posts 25 per cent increase in Gateway Distriparks reports 43 per net profit cent fall in Q3 net earnings For the October to December quarter, net profits of Adani Ports & Gateway Distriparks Ltd recorded a 43 per cent SEZ rose 25 per cent on higher revenue, other income and a fall in fall in its net earnings during the third fiscal finance cost. Net profit for the period rose to `638.10 crore from quarter. Net income was `30.9 crore (about `511.97 crore a year earlier. Revenue for the quarter rose 11 per cent to $4.5 million) during October to December, `1717.86 crore. Other income rose 15 per cent to `177.89 crore while compared with `54.3 crore for the same period finance cost fell 24 per cent to `263.71 crore. in 2014. Total income from operations was down 2.2 per cent y-o-y to `268 crore. Hanjin Shipping returns to the black in 2015 The CFS division suffered a big hit as revenue fell 12 per cent from October to December 2014 Hanjin Shipping has reported a to `78.2 crore. The intermodal rail segment net profit of $6 million for its 2015 bucked the trend, with operating income financial year, as against the loss of increasing 2.4 per cent y-o-y to `190 crore. The $396 million posted in 2014. The company’s operating profit was down 45 per annual revenue, however, fell by cent to `29.18 crore from `52.6 crore for the 15.3 per cent year-on-year to $6.86 corresponding period in 2014. billion due to lower freight rates. Dry bulk division of the shipping Allcargo reports 6 per cent decrease company continued to record in Q3 FY16 revenues an operating loss of $93 million in 2015 compared to the bigger operating loss of $154 million in 2014, but earnings in its container Allcargo recorded and other divisions helped the company snatch a profit. total revenue from operations at `1,339.2 crore for DP World reports flat 2015 volume growth the quarter ended DP World reported a 3 per cent December 31, increase in handled shipping 2015, as compared containers in 2015. It handled 61.7 to `1,431.7 crore million teus, compared to 59.8 for the corresponding previous period, a decrease million teus in 2014. Ports in Europe, of 6 per cent. 81 per cent of the revenues are the Middle East and Africa, including from the global MTO business. The gross profit Jebel Ali handled 25.9 million teu for the quarter was `467.9 crore, as against last year, which was a 4.1 per cent `442.4 crore for the corresponding previous improvement on the 24.9 million teu period, year on year growth of 6per cent. handled in 2014. The Asia Pacific For the nine months in FY16, total revenue and India Subcontinent region handled 28.2 million teu, a 1.6 per cent from operations was at `4,286.0 crore, as against increase on the 27.8 million teu handled a year earlier. The largest `4,215.7 crore for the corresponding previous YoY percentage growth was seen in the Americas and Australia period, an increase of 2 per cent. The gross market recording a 5.3 per cent increase to 7.4 million teu, up from 7 Profit for the nine months ended December 31, million. Jebeli Ali continues to be the operator’s busiest port, handling 2015 was `1,392.8 crore, as against `1,271.7 15.6 million Teu in 2015. The Asia Pacific and Indian Subcontinent crore for the corresponding previous period, year region contracted by 1.4 per cent to 6.8 million teu. on year growth of 10 per cent.

Maersk profit plunges as oil, container units suffer Shreyas Shipping net profits fall 88 per cent in Q3 A.P. Moeller-Maersk A/S reported an 84 per cent plunge in 2015 profit after its oil unit was hit by lower energy prices and its container Shreyas Shipping & Logistics net profit fell division got squeezed between sluggish trade growth and overcapacity. 88 per cent to `2.77 crore YoY and EBITDA Net income was $791 million last year compared with $5.02 billion margins dipped 17.4 percentage points to 6.4 in 2014. Maersk shares dropped as much as 9.4 percent, the most per cent. Consolidated total income from since March 31, 2015. The company predicts 2016’s underlying profit operations was `141.14 crore and net profit was will be “significantly below” last year’s $3.1 billion. The Maersk Line `2.77 crore for the quarter ended Dec '15. For unit’s profit will also be “significantly below” 2015’s level, which was the quarter ended Dec 2014 the consolidated $1.3 billion. total income from operations was `139.83 crore.

58 maritime gateway / march 2016 investment “I nvest KarnaTAKA 2016” Summit

announced `11,500 crore investment in the power sector, JSW committed `35,000 crore in Karnataka over next 3-4 years, Robert Bosch announced Big ticket `1,000 crore of investment in 2016, while Infosys announced its fourth development centre at Hubli and Anil announcements Dhirubhai Ambani Group would set up Dhirubhai Ambani Centre for Technology and Innovation in After a series of investment summits by several aerospace in Bengaluru. states Karnataka investment summit also gets Apart from the private sector investments, both the state and promises of huge investment central governments have announced several key investments across sectors. by Itishree Samal The Union Ministry of Roadways announced `1 lakh crore for road development in the state over next two years – an investment of `60,000 crore before December this year to add 4,000 km of national highways while the additional `40,000 crore will be invested in 2017. It also announced an additional `200 crore for port development. On the other hand, Union Minister of Chemicals and Fertilizers Ananth Kumar announced an investment of `500 crore to set up a 1.3-million tonne urea plant in the state. The state has been a hub for aviation, aerospace and defence, information technology, pharma and biotechnology and the electronic industries, this apart it has proved its mettle in other sectors as well such as agriculture and food processing, t a time when the country is projects and signing MoUs, in manufacturing, power, infrastructure making waves worldwide with addition to a total `1,75,633 crore and tourism. Athe “Make in India” campaign worth of projects that were already Inaugurating the Summit on and successfully attracting investments approved over the past year, which February 3, Union Minister for from all corners, states are leaving no combined, would generate nearly Finance, Corporate Affairs and stones unturned to reap the benefits 700,000 jobs. Information and Broadcasting Arun from the prevailing climate of business The energy sector – mainly the Jaitley said, the state has potential opportunity and economic growth renewable energy sector particularly to grow at least 2-3 per cent ahead potential in the country. waste energy, solar energy and of India's GDP, given its natural Gearing up to attract big-ticket wind projects – received the highest advantage, first-grade human resource investments to the state, Karnataka investment valued at over 1 lakh and the natural technology inclination has successfully organised a three-day crore, steel sector gathered about of entrepreneurs. “R&D centres long global investors’ meet “Invest `38,000 crore investment leading to worldwide coming into the state, I Karnataka” last month in Bengaluru. job creation for 6,000 people, while think we can exploit all these potential The event, with impressive lineup the chemicals sector saw investments and really convert Karnataka into a of corporate heads, industrialists, of about `24,000 crore with an destination of investment of economic international dignitaries, politicians employment potential for 5,000 activity of growth,” he said adding along with over 300 exhibitors and people. that “there needs to be a focus on more than 5,000 participants, saw Big-ticket projects building more manufacturing setups in around MoUs of 147 projects signed Among the key investments and the country.” with total investments of around `1.33 projects announced at the global Talking on similar lines, Chief lakh crore across several sectors. investors’ meet, Aditya Birla Group Minister Siddaramaiah said, In the last two years, the state announced to invest an additional “Karnataka is a 120-billion economy has gathered over `3 lakh crore `2,000 crore in telecom, apparel, and aims to become a 700-billion investments by approving 1,201 and retail businesses, Adani Group economy by 2035. If the country

60 maritime gateway / march 2016 aspires to grow at 9 per cent, let us aspire for Karnataka to grow at 10 per cent.” The state Industrial Policy Proposed Investment We are investment leaders in for 2014-19 also aims for an annual Projects at “Invest steel, agriculture, technical, growth rate of 12 per cent and eyes Karnataka 2016” Summit to attract investment of `5 lakh crore, medical, and manufacturing. providing employment to 15 lakh • Adani Green Energy Limited - people in the next five years. `18,500 crore With the Invest Karnataka In order to ensure the proposed • JSW Steel Limited - `12, 396 crore initiative, there is now investment projects materialised on time and covert into “actual • Geitso Green Energy Pvt Ltd - going to be a stronger focus investments”, the state has appointed `10,000 crore on manufacturing and an official to follow up on projects • essel Infra Project - `7,200 crore worth above `200 crore. Moreover, agricultural industry. The state • Fox Petroleum Limited - `7,000 crore the state aims to have all projects will be the key destination for approved by high-power committees • Shriram Properties Limited - `5,920 and single-window committees before crore investments. May 15. RV Deshpande, State Minister for Large and Medium Industries and Tourism, said, "The state government opportunities, echoed most of the has come out with industry-friendly investors. Everyone from Infosys’s promoting cities like Hubli-Dharwad, policies and streamlined processes for Narayana Murthy to Wipro’s Azim Mysore, Udupi, Belgaum, Mangalore faster clearance of projects,” adding Premji spoke about the existing and Davangere as potential investment that “We are investment leaders in infrastructure woes of the city. destinations, lack of good roads and steel, agriculture, technical, medical, Crippling traffic was another point connectivity has hampered the state’s startups, and manufacturing. With of worry among the investors and effort to promote Tier II and III the Invest Karnataka initiative, there politicians, who highlighted lack cities as cheaper and more lucrative is now going to be a stronger focus of basic infrastructure hampering alternative to Bengaluru as well. There on manufacturing and agricultural the growth of the country’s fastest have been few takers due to poor industry. With the amazing response, growing city. connectivity either by road or air. the state will be the key destination in Slow moving traffic and the ever State bags `9,700 cr investment India for investments.” increasing number of vehicle users proposals at ‘Make in India’ Week The state government will also in the city have brought down the After the success of ‘Invest set up a public-private partnership average speed during peak hours to Karnataka 2016’ where the state company called Karnataka Invest just 10 km per hour. Unscientific road attracted investments of around `1.33 where industrialists will advise the planning and poor road quality add to lakh crore, the state has yet again government and will function as the problems. received investment proposals worth an ambassador to attract global If the state accelerates investments `9,700 crore at the recently concluded investments. in infrastructure, it can be the fastest “Make in India Week”, organised in Infrastructure bottleneck growing state in the country. Chief Mumbai. Despite being one of the most Minister Siddaramaiah announced The proposed investments attractive investment destinations with that the state is working closely with include, French major Tar Kovacs its human resources, innovation and the centre to improve infrastructure Systems Group’s proposal to invest deep roots in science, infrastructure and reduce traffic congestion in `2,284 crore to setup an ocean- in the state especially in the city Bengaluru. based renewable energy project, of Bengaluru needs a huge work Though the state has been US-based McCormick Ingredients’s before any further industrial, R&D investment of `150 crore to set up a food processing unit, garment export company Global Mode & Accessories Pvt Ltd’s proposal of `25 crore investment to set up a manufacturing unit with an employment potential of 2,000 persons, solar cell manufacturing company First Solar’s proposal of `6,000 crore investment, Pert Telecom’s plan of `1,250 crore investment to set up manufacturing base for a range of smart products and solutions in the areas of street lighting, IT security, surveillance and GPS, among others.

mar ch 2016 / maritime gateway 61 WEIGHING CONTAINERS

consolidation with more mergers/ alliances happening; will this cause more confusion in the process used in Ensuring safety reporting VGM? Inna Kuznetsova: The process of reporting is rather clear. The shipper of record, stated on the bill of lading, has the legal responsibility to provide at sea the VGM to the carrier. As always, in a case of mergers, adherence to Reporting the verified gross mass, or VGM common standards provides for easy of containers is essential to ensure proper integration. This is true for general electronic transactions in booking and equipment is used for loading them and also shipping instructions. We had several to balance the load on a ship. While a lot of clients merging last year and each time we were able to help them quickly discussion is going on in the maritime community integrate their booking processes as to the reporting issues, INTTRA has come because they used the INTTRA platform – the industry standard. The forward to bring together the shippers and same would be true for providing liners to arrive at a consensus while also offering VGM. Developing and implementing standard ways to send the information technical solutions for the same across the shipping industry will provide a basis for easy integration in a case of a merger. The shipping line or the port is not responsible to cross check the weight of containers reported by the shipper. Does this not defeat the very reason for introducing VGM reporting? Inna Kuznetsova: The essence of the new law is in providing the information in the first place. Today the shippers are not required to send the weight of each container; instead they only state the total cargo weight on the shipping instructions form. While there is always a possibility of human error, the mere requirement to provide such a detail makes a big difference. Furthermore, the VGM is submitted with a certified signature, so a clear documented trail will help in a case of an insurance event. Through the eVGM initiative you are in constant discussion with the shipping lines and freight forwarders. Could you share with us the challenges/ issues they have put forward relating to VGM reporting and how are these being solved? In the current market conditions, hinges upon the clarity of how much Inna Kuznetsova: One of the considering the slump in trade and each container weighs. While SOLAS examples of such issues is the timing excess capacity with the shipping VGM may add monetary costs to the of VGM provision. Today shippers lines, what is the significance of shipping process, it will allow for cost provide two forms to carriers: the reporting VGM? savings by avoiding damage to cargo. booking request and the shipping Inna Kuznetsova: VGM reporting Not to mention, that when it comes instructions. The first comes very early is important to ensure safety of cargo to safety of ship crew members and in the process, often ten days or more and people’s lives in terminals and at terminal workers, we should not base before the actual day of shipping. At sea. Using the right equipment during the decisions on economic conditions this point the shippers do not know loading and properly balancing ships only. the tare mass of the actual container is an essential part of safety – and it The industry is moving towards or the full weight of dunnage and

62 maritime gateway / march 2016 Inna Kuznetsova, President and Chief Operating Officer, INTTRA. Jim Whalen, President Asia, INTTRA cargo. The shipping instructions often difference. come right before the sailing and in While the shipper is responsible exceptional cases even after the cut-off While SOLAS VGM may add for reporting VGM, who will have date, too late for the carriers to create ownership of the data when it comes the stowage plans. Therefore there is monetary costs to the shipping to sharing with third party? a need for the third form, sent at least process, it will allow for cost Jim Whalen: In INTTRA’s service 3 days before the ship arrives ashore, we allow shippers maximum flexibility providing the VGM. Another example savings by avoiding damage in deciding how they want to create relates to the handling of LCL and to cargo. Not to mention, that and share the data. For example, responsibilities of the consolidator. it may be generated by the stuffing One other issue is third parties when it comes to safety of ship facility or the weighing station, but performing the weighing process – crew members and terminal the shipper is still the owner and may should they be sending the details to specify flow directly to carriers or to the freight forwarder or whether they workers, we should not base the shipper first. can be authorized to provide them the decisions on economic With the reporting of VGM, over directly to the carriers on behalf of the time a lot of data will be compiled. forwarder We started by facilitating conditions only. Can it be used further to drive the discussion between carriers and valuable business insights for the shippers to create common standards benefit of the business community? in addressing such areas and have case of third-party usage. The legal Jim Whalen: At INTTRA achieved a higher level of clarity. responsibility for providing VGM we firmly believe that data-driven Then we launched a new IT service resides with shippers. Therefore, the decisions help to increase value. For providing the shippers with maximum shipper may simply authorize the example, in 2015 we launched a new flexibility to execute on multiple stuffing facility to provide VGM on family of products for shippers and scenarios and minimize the disruption their behalf or, alternatively, receive freight forwarders called Decision to the current process. For example, the electronic message from them, sign Support Dashboards, which utilized in terms of timing, we provide the off and retransmit to the carrier. When data from booking requests to help possibilities to submit VGM through the VGM is provided digitally, neither generate more reliable transportation the special message or with the choice will slow down the process – plans. With time it may be possible shipping instructions, but consolidate the shipper has the most flexibility to to use VGM data to look for various the information for the carrier and select the preferred option. patterns and improve planning, from time-stamp it to account for any Is VGM reporting alone sufficient assets utilization to load optimization. corrections and avoid errors. to solve the stability problems of Hopefully, this data will also help to In India, stuffing/de-stuffing ships? What more needs to be done prevent incidents earlier by spotting of containers happens both at ports on part of the shipping line? the unusual weights, identifying and ICD/CFS. How should be the Jim Whalen: What we hear from facilities exceeding risk limits or reporting of VGM in this scenario? the shipping lines professionals, the developing general rules promoting Jim Whalen: This is a typical VGM reporting would make a big safety.

mar ch 2016 / maritime gateway 63 LOGISTICS

Green logistics can help a company improve its Wheels distribution efficiency, reduce distribution cost, and increase service differentiation of change by Ritu Gupta

he last decade has seen a manufacturers which can achieve gain from green logistics, but how tremendous increase in public positive environmental improvements does one do what is good for the Tand government concern by reducing energy consumption and environment and business. According for the environment, and there decreasing packaging in distribution to the TCS paper, there the four areas has been an excessive amount of activities gain business benefits wherein a successful green logistics pressure on major firms to reduce through better distribution efficiency implementation can have a positive the environmental footprint of their and improved compliance processes, impact on the overall supply chain operations, especially those pertaining says a White paper on green logistics of an organization. These areas are: to logistics. Transportation of goods by the Tata Consultancy Services network optimisation, packaging particularly has a negative impact (TCS). "They experience 1-19 reduction, sustainable procurement on the local air quality, generates per cent improvement in product and warehouse layout optimisation. noise pollution, and is a key cause of differentiation, distribution expenses Network Optimisation: Network global warming. It is said that goods and risk mitigation strategies. optimisation is the most fundamental transportation accounts for around Alongside, over 80 per cent of type of modelling that can be done eight per cent of energy-related such companies, and logistics and to optimise the hierarchy and inter- carbon dioxide emissions worldwide. transportation service providers related transportation flows that The inclusions of warehousing and have improved significantly in terms can bring considerable cost and freight management add another of better distribution efficiency, carbon reduction in the supply chain three per cent to this total. Making reduced distribution cost, and processes of a consumer packaged logistics sustainable, therefore, is increased service differentiation," goods company. Research shows that crucial. Despite recent improvements, says Prabhu Palanivelu, a functional restructuring the network can give there still exists potential to cut the consultant with the Consumer an 11 per cent cost and a 10 per cent environmental costs of logistics by a Products Practice in TCS, who is one carbon emission reduction. Some of significant margin. of the authors of the paper. They the key steps in network optimization Making logistics green does have also witnessed a 20-50 per cent through the green logistics route not only help the environment, but improvement in customer retention include: also improves the bottom-line of and compliance processes, says the Lowering the distance travelled by a company. The consumer goods TCS paper. Indeed, there is a lot to a product in the supply chain.

64 maritime gateway / march 2016 Increasing local sourcing might There should be improvements increase the costs of raw materials, focused on the energy performance but this could be more than balanced of the amenities, such as external High by reducing the distance travelled, building fabrics that lower air leakage Network Optimization Sustainable which in turn, would lessen carbon and loss of energy, and improved Procurement footprint and shipping costs. It will skylights that enhance natural lighting Warehouse Layout also trim down contact to supply chain and lower consumption of electrical Optimization risks together with unpredictable fuel power. Companies should also start Packaging Reduction prices, long and erratic lead times, and using renewable energy systems, Impact currency exchange risks. such as roof-mounted solar panels, Product Redesign Using superior vehicle technology heat-absorbent solar walls, and solar and design can also perk up fuel thermal hot water systems. Third- efficiency and reduce the total costs. party engineering consultants can even Limiting considerations including be brought on-board to check and Low facilities, inventory, manufacturing examine the costs and paybacks of the Low Ease of Implementation High conversion, and so on to develop a variety of features that are planned to strategy that considers ecological be included. factors apart from costs Sustainable Procurement: The Packaging Reduction: Packaging approach for 'green' procurement is a momentous cost to the supply should include organisation, people, chain, accounting for up to 12 process and technology. It should this, mobility solutions that can enable percent of the charge of many typical be treated as a vehicle that provides dynamic scheduling of transportation consumer goods. and also creates an value, achieves better economics, tasks and real-time tracking are ultimate opening for companies to enhances the brand image and benefits required. Mobility solutions are move towards a greener supply chain. the environment. Through various those that work as a platform for Sustainable packaging programmes sustainable initiatives, procurement collaboration of documents as well can make a considerable involvement organisations can realise incremental as providing a robust internal and to carbon reduction across the supply savings up to 12 per cent of the external mailing system. chain. Strategies such as packaging cost. These initiatives can include Indeed, IT can go a long way in elimination, light-weighting and the energy, supply, operations and achieving the end result of logistics selection of alternative resources logistics. The principle of sustainable becoming environment friendly. help consumer goods companies 'green' procurement is based on the But implementing green logistics to have an overall cost reduction. outlook that companies can derive has never been easy. Some of the Green packaging includes methods benefits from the areas of economics, challenges that organisations could of conceptualising products that environment, and society. face are lack of information about takes into account conservation of Apart from the use of these factors, the best practices of green supply the environment. It also considers the use of information technology (IT) chain, and they might be left with a product's impact on the surroundings can also play a vital role in green limited view because of this. There at all stages of its life cycle. For logistics. IT has always played a is also a lack of tools to optimise the example, implementing green substantial role in most of the new supply chain with environmental packaging techniques enables us to use initiatives adopted by organizations. management."Many organisations recyclable or biodegradable material IT can play a critical role in still have the impression that most of for packaging. Green packaging holds optimising transportation routes and the sustainability initiatives lead to enormous promise through material ensuring that goods are delivered in higher cost. This view comes in most quantity reduction, but what has to be a manner which is energy efficient as instances from a lack of information kept in mind is that it is more difficult well as cost-effective. Transportation on best practices, including, for to recycle thin or light packaging (thin managers can mitigate the effects of example, the long-term benefits plastic film) than heavy packaging unexpected events by automating resulting from improved distribution (glass). Packaging now represents 23 the transportation planning process. efficiencies, and compliance processes. per cent of the waste weight and 37 Some organisations have developed However, companies that have moved per cent of waste volume. business modelling software based on to advanced logistics modelling Warehouse Layout Optimisation: the SCOR (Supply Chain Operations and product lifecycle management Warehousing forms an important part Reference) framework (documented are now seeing a result orientation in the consumer goods industry and is by the Supply Chain Council) to that others might want to study a key to the logistics space. A surplus enable efficient planning of supply more carefully and possibly look to of techniques and technologies are chain functions. IT can also enable emulate," says Madhur Dhawan, the available today to drastically reduce reduction in resource usage while second author of the paper. He hopes the impact of their buildings on the business processes are executed by that their findings will motivate many environment. Following are a few streamlining business processes. companies to go for green logistics, if examples: construction materials, Automation for permitting end-to-end not for the environment then at least day-lighting, lighting systems and paperless processes can play a major for their financial windfalls that it can high-reflectance roof membranes. role in reducing waste. To achieve lead to.

mar ch 2016 / maritime gateway 65 bilateral trade

P ort of Antwerp reaffirms commitment to India Diamonds are not just a girl’s best friend, but also an important trade link between India and Belgium. Gems and jewellery account for major export volumes from India. Of late, there is also an on-going cooperation in maritimetrade India and the Antwerp Port Authority of Belgium

of interaction with a large numbers of players. In 2015 for the first time in its history the port of Antwerp passed the 200 million tonnes mark for the volume of freight handled. Another million-tonne record was broken in the container handling sector, with a volume of more than 9.7 million TEU in comparison with 2014, 7.5 per cent more containers were handled”. Peel further stressed on the fact that visit of the Secretary of State for Foreign Trade of Kingdom of Belgium besides other foreign trade delegations in India is much more than a symbolic one and they are here to enhance the bilateral trading ties elgium is the 10th global trading Secretary of State for Foreign Trade, with India and take it to the next level. partner and the 3rd biggest EU Belgium and Former Deputy Prime According to him, its two daughter Btrading partner of India. It is Minister and Minister of Defence. He company in India proved to be very quite interesting to know that 160 was accompanied by Jan Luykx the trustworthy to the Indian Government Belgium companies have established Ambassador of Belgium to India, Karl via - APEC, The Antwerp training themselves here in India and around van den Bossche – Counsel General Center for maritime professionals 80 Indian companies have set up of Belgium in Mumbai, Bart Degroof and Port of Antwerp International, business in Belgium. Belgium acts as – Counsel General of Belgium in the International Consulting and the perfect access point for India to Chennai, Jurgen Maerschand, Trade investment subsidiary. He anticipated trade with European countries due Commissioner of Flanders Investment a further closer collaboration with to its vast transportation options and and Trade apart from other Belgium Indian authority with these two proximity to other trading hubs in EU. dignitaries. Raj Khalid, Port of companies. Belgium is the number one country in Antwerp’s Representative in India “A new port complex in Duqm Europe for logistics and distribution. and Saroj Mehta of the representative in Oman is coming up which will Every year the Antwerp Port office accompanied the delegation. help in serving the Indian trade in a Authority visit India as a marquee Almost all the industry stalwarts much better way. The Port Authority of their congenial relation with from Freight Forwarders’, Custom of Antwerp is here for promoting and India and this year too was not an House Brokers’, Ports, DG Shipping, bonding relation between Antwerp unexceptional. The representatives Shipping Lines and Maritime industry and India, to facilitate logistics in from Port of Antwerp present for this attended the event. India, Belgium and Europe at large,” Annual Reception at Mumbai were Samir J Shah thanked the Port of Marc Van Peel added. Marc Van Peel, President, Antwerp Antwerp Authority on behalf of entire To further cement ties between the Port Authority, Kristof Waterschoot, team of FFFAI. two nations, Prime Minister Narendra Managing Director, Port of Antwerp Marc Van Peel said, “This year the Modi is going to visit Brussels at International, Nico Berx, Director, Port of Antwerp Authority has entered the end of March for the first India- Port of Antwerp International along into the sixth year of such Traditional European Union (EU) summit in with other port officials from Antwerp. Annual reception with the Indian Belgium and as a nation we can hope The Special Guest of Honour Maritime Industry. The success of the that India-EU FTA soon becomes a for the evening was Pieter De Crem, Port of Antwerp in India is the result reality.

66 maritime gateway / march 2016 MARCH 2016 / MARITIME GATEWAY 67