India’s Shipping Industry : Another Odyssey!

Sea has been one of the prime modes of transport communications among countries, since ages. Exporting and importing goods in large volumes have been made easy and efficiently manageable through sea, opening larger commercial propositions and better economic conditions for the countries. India has a total length of coastline is 7,516.6 km, including the mainland, Lakshadweep Islands and Andaman & Nicobar Islands, with 13 major ports and 184 non-major ports. This long stretch of coastline links the country with Europe, Middle East, S.E. Asia, Africa, Australia, et al. shipping has played a major role in the transport sector of Indian economy. Approximately, 90% of the country’s trade volume is moved by sea.

On the move:
India has the largest merchant shipping fleet among the developing countries and holds 17th amongst the countries with largest cargo fleet with 7.74 million GT. As on 31 July 2004 India had a total of 659 ships with 7.74 million GT and 12.84 million DWT. India’s shipping fleet during the same period consisted of 211 overseas vessels with 6.60 million GRT and 11.39 million DWT and 441 coastal vessels with 0.80 million GRT and 0.86 million DWT. With the advent of inevitable globalization and world turning a virtual global village, India’s shipping industry can look forward to bigger opportunities.

Tasting the Time:
With greater global commerce happening with India focus, cargo traffic on Indian ports has seen consistent growth with greater revenue and better business for shipping industry. The fist quarter ended June 2006 has witnessed a 6.38% increase in cargo traffic at the major domestic ports, compared to the previous corresponding quarter. The country’s 13 major ports handled 106.61 million tones of cargo during April-June 2006 against 100.22 million tones during June 2005 quarter. However, sources say, it fell short of the Shipping Ministry’s target 115.21 million tones fixed for the June 2006 quarter. During the same period the container traffic grew by 13.09% to 12.91 lac TEUs (twenty feet equivalent units) compared to 11.97 lac TEUs in the corresponding quarter of the previous year. Shipping experts are hopeful that in the coming ten years Indian ports would start handling 20 million TEUs of containers. This could be possible if the industry addressed issues such as faster implementation of port projects, faster evacuation of goods from ports, maintenance of port infrastructure and equipment and container security in the hinterland.

Need to gear up:
Opportunities are many but the apprehensions remain as to whether Indian shipping industry is ready to adapt and move for the change. Experts are optimistic of the whole scenario, but emphasize upon the fact that Indian shipping industry needs to realize the demand of the time, and try becoming globally complaint and go for better, efficient, faster and low cost hinterland connectivity from the ports. This will help higher traffic on ports. Data reveals that India has expensive connectivity, while the charge per Kilometer in India is around 7.9 cents, the same distance costs 5.5 cents in France, 3.7 cents in Japan, 2.6 cents in China and 2 cents in Canada. It is also found out that in comparison to the charges of Indian ports, Singapore charges almost 50% lower, Colombo almost 55-60% lower and Dubai almost 65-70% lower. These costs are higher because the cost of capital dredging is charged to customers in India, where as on international platform only operational dredging costs are charged to customers. This often discourages most of the international ship owners against opting for Indian ports.