With a port-based industries approach, the costs come down and one can compete in the market, says Capt Vivek Kumar Singh, Chief Executive Officer, Shreyas Shipping & Logistics Ltd, in an interaction with Rachita Jha of Elets News Network (ENN)
How the ecosystem of a port city compliments maritime trade?
The pulse of any port city is the port-related industries located very close to the port’s hinterland, such as an SEZ or industrial clusters. With these industrial locations available in the port city vicinity, it makes the logistics costs come down and the import/ export cycle of raw materials or finished goods gets shorter with smaller footprint of road transport that contributes to pollution and also costs escalation. With a port-based industries approach, the costs come down and one can compete in the market.
Further, if we look at countries like Japan or China, the industries are located near the port, so that the cargo goes to end-use industry directly, be it factories or thermal power stations. The reason that our domestic volumes are not increasing by the sea is because of first mile and last mile costs, even though it is known that sea logistics is most cost-effective. We have seen that it is usually one or two industries near the ports that give much of volumes. This potential can go up in an incremental way if we just have more industries coming in these port cities. The major reason for increasing costs of products is the first-mile and last-mile costs, which are huge today.
What would be your suggestions for Maharashtra to gain competitive advantage?
The State already has two major ports — JNPT and Mumbai Port Trust — that have been at advantage over the years when compared to the ports of other states. Moreover, these ports are overcrowded with huge cargo volumes entering Maharashtra. We have not been able to catch the additional volumes that we have today, because our infrastructure is not of that capacity. So, that is where we are at a disadvantage.
The Sagarmala Project is well conceptualised and is on the right track. It will give a push to sea logistics as it is economical, environment-friendly and time-sensitive
At the same time, the reason why India has not become a transshipment hub is because we have an approach of incremental capacity and are always on full load, and there is no scope for transshipment. Thus, we have been unable to make a hub port or transshipment port in India. However, there is a need to make a hub port and it has to be as good as that of Colombo or Singapore ports.
As our ports are already running at full capacity, we have lost cargo volumes. So, we have to build capacity and be more customer-friendly with ease of doing business. Also, the port has to have road and rail connectivity with the adjoining industries. Thus, port and infrastructure should go hand in hand, only then will any state government be able to exploit the full potential of the port.
Please share your views on the Sagarmala Project.
The Sagarmala Programme is well conceptualised and is on the right track. It will give a push to sea logistics, as it is economical, environmentfriendly and time-sensitive. However, if we don’t have connectivity, the advantage of sea is lost to rail. But if the connectivity is plan-integrated with Sagarmala Programme, the ports will develop and start functioning well. Also, when the load from major ports start getting distributed to other ports, the decongestion of inland transport system will work for the maritime economy.