article on short sea shipping - mib

8/10/2019 Article on Short Sea Shipping - MIB

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SHORT SEA SHIPPING

INTRODUCTION

Short Sea Shipping has been subject to diverse interpretation in diferent contexts. The round tableconerence o European commission in 1992 provided a suitable trendy term !short sea shipping". #oastal

Shipping or Short sea shipping means the movement o people and cargo by sea in bet$een the domesticports o a country.There does not exist any concise de%nition or short sea shipping. &n the $ords o 'ombardo( short seashipping is a commercial waterborne transportation that does not transit on ocean. It is analternative form of commercial transportation that utilizes inland and coastal waterways tomove commercial freight from major domestic ports to its destination).Short Sea Shipping encourages the regional trade and transport. &t acilitates the delivery o cargoesdistributed to regional centers such *ong +ong( ,otterdam( -nt$erp etc. This is very diferent rom deepsea shipping $here the vessels used or it is smaller in sie compared to the deep sea vessels sie rom/00 T to 3000 T. The short sea routes are too small and it visits so many ports than a deep seavessels visit in a year. The major cargo involves grain( ertiliers( coal( steel( containers( lumber( clay(aggregates etc. 4Stapord( 20095Short Sea Shipping is seen as an efective alternative to reduce road congestions and air pollutions all overthe $orld. 4'o$e( 20065.

EMERGENCE OF SHORT SEA SHIPPING

The concept o Short Sea Shipping became signi%cant rom last t$o centuries. -s a result o industrialrevolution( the Shipping industry made undamental gro$th by utiliing larger vessels to carry increasedcargo volumes and developed more %xed schedules. The technological developments improved the saetyo vessels and the cre$s $hich enabled the shipping industry to be an integral part o $orld economy.uring the period rom 1960"s( the advent o automobiles and truc7s led to the development o nationalhigh$ay systems in many countries $hich discouraged the use o Short Sea Shipping. The reduced transittimes and the 8exibility o road transport have replaced the Short Sea Shipping.Today( the extreme use o road transport resulted in road congestions( heavy capital investment orconstruction $or7s( environmental impacts( increased uel costs( $here the experts give the impression obeing $ith Short Sea Shipping as a perect complement or road and rail transport.The European nion made initial steps in the promotion o short sea shipping concept. :onge 4200/5clearly de%nes the E measures or the development o short sea shipping.The E has geographical advantages on short sea shipping $here the e;cient handling o $ater routes $illre8ect the economic development o the region. E is enriched $ith 3ver the lastdecade 60? o the reight transport demand in E $as met by road transport. @ut at this stage it $ill bealmost impossible or road transport to satisy the gro$ing demand. - modal shit rom road to $ater or railis inevitable or meeting the uture demands.The Short Sea Shipping provides various advantages over other modes o transport. >ver the next 1620years the volume o cargo transerred bet$een the major cities are supposed to get doubled in Auantity$here the primary modes o transport 4 road and rail5 $ill afects badly by huge congestions and there byenvironmental degradation. The Short Sea Shipping ofers a better complement or other major modes otransport $ith cost and energy e;cient( saer and environmental riendly movement o cargo.

COST BENEFITS

The cost for development of Short Sea Shipping is low compared to road and rail transport. Port investments and maintenance costsare very low where the road and rail require huge investments on its construction works on road lines, rail networks, tunnels and

bridges. Short Sea Shipping has the comparative advantage in minimizing the overall freight costs in the feasible sea routes.

There are similar studies on the cost benefits of Short Sea Shipping over other modes of transport. The Four orridor ase Studies ofShort Sea Shipping services by !"#"$ in %&&' reveal the cost benefits of Short Sea Shipping over road and rail transport modes.The study was conducted on the ( different trade corridors in )nited States.

Table 1: Cost advantages of Short Sea Shipping in Four Corridors, US

!outes Tru"# !ail Short Sea Shipping

$ulf % North tlanti" &1'(( &1')* &1')+

South tlanti" % North tlanti" &1'(+ &1') &1'))

South -a"ifi" % North -a"ifi"

San .eigo % storia &1'/0 &1')1 &1'1

*


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Oa#land % storia &1'/ &1'+/ &)'0*

Oa#land % San .eigo &1'/* &1') &1'(/

Intra $reat 2a#es &1'/1 N &1'3

Sour"e: 4!., 3))*

+t could be easily identified that the Short Sea Shipping has the cost efficiency in all the four corridors with a perfect margin over road

haulage. The study reveals the potentials for further development of Short Sea Shipping in the four corridors with severalrecommendations for improvement.

EN5I!ON4ENT2 BENEFITS

The Short Sea Shipping proves to be environmental friendly mode of transport. #oad traffic emissions in the form of carbonmonoide, carbon dioide, nitrous dioide etc are harmful to human health, nature and buildings. ritical steps have to be taken tosubstitute the road with other modes of transport and thereby reducing the harmful emissions.-ven though the maritime vessels produces similar forms of pollutants to that of road freight , the quantity level of emission is muchlower where the emissions occurs in different eco systems. The road freight emissions directly affect the land based ecosystem whichwill be harmful to mankind and other living beings around us.The concerns on air pollution and global warming are increasing day by day. The global focus has become the reduction of arbondioide /%0 and !ethane 1(0 which are the ma2or greenhouse gases intensifying the temperature of the atmosphere. Sulphurdioide and 3itrogen oides cause severe problems for nature and living habitat.The report of /rganization of -conomic o4operation and $evelopment /-$0 states that the maritime transport or short sea

shipping form less emissions compared to other ma2or modes transport. /-$, %&&50.Table % shows an eact comparison of emission level of short sea shipping over other modes of transport6

Table 3: E6issions fro6 different transport 6odes

E6issions Tru"# !ail4ariti6e % Short

Sea Shipping

Co )'3 7 3' )')3 7 )'3 )')3 7 )'3

Co3 /) 7 1++ 7 1)3 ('( 7 +1

NO8 )'3 7 +'* )')( 7 1' )'11 7 )'(3

So3 )')+ 7 )' )') 7 )' )')/ 7 )'/1

C9 )'3 7 )' )')3 7 )' )') 7 )')0

N675OC )')3/ )')1 7 )'1 )')1 7 )')3

-41) )'))/ 7 )'3) )')1 7 )')0 )'))3 7 )')

Sour"e: a"ob, 3))

Short sea shipping is seen as environmental friendly mode of transport as the level of emissions are less compared to road and railwith an eception of S/%and 3/, which is vaguely higher. So at this stage, it will be sensible to have a look at a modal shift fromroad freight to short sea shipping of goods.-nergy efficiency is one of the ma2or factors for the maintenance of environmental friendly atmosphere. The increased usage andwastage of fuel which are non 7 renewable resources such as fossil fuels will finally result in total depletion. 8ater transport is foundas most cheapest and energy efficient mode of transport.

22E5ITE CON$ESTION -!OB2E4S

Traffic congestion in ma2or cities and high ways are one of the ma2or concerns on optimal delivery of the goods. +t will result indelays, increased costs and unreliable 2ourney times for both individuals and firms. The potentials of Short Sea Shipping in reducingthe congestions in other modes of transport have to be analyzed.Traffic congestion plays a significant role in increased emissions, fuel consumption, delayed delivery and incurs huge losses. The

effects of congestions are rising day by day as the demand for freight increasing rapidly. +n )S, the estimation states that '&9 oftrucks carry domestic cargo tonnage which is the ma2or reason for highway congestions in the country. +n %&&:, the )S economy had adrain of ;:5 billion resulting from traffic congestions as per the estimation of The Teas Transportation +nstitute


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+ndia has problems with road congestions, increased tolls in highways and recommendations for greening the supply chain. The +nlandwater transport plays a crucial role for the solutions for these concerns. The ma2or ports of


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IN.I: ECONO4IC .E5E2O-4ENT N. T!NS-O!T .E4N.

+ndia has noticed a remarkable development after the economic reforms of *==*. The E#+ report %&&@0 predicts that the countrysB$P growth rate between %&*> and %&>& will eceeds ma2or economies in the world. The country has seen a significant growth ratewhich reached up to a record of =.( 9 in %&&:. The growth rate has diminished in the last couple of years as a part of recession and itis epected to grow in the coming years.The economic developments resulted in the increased physical transactions and the transport demand started to surpass theinfrastructure obtainable. The transport demand increased at a rate of *&9 from %&&( with a carriage of 5&& million tonne km offreight every year. +n +ndia, road is the primary mode of transport for the carriage of cargo which sum ups around '>9 of the whole.The transport demand is rising at higher rate where the road and rail transport is affected by congestions, increased emissions andthere by additional costs.The following figure shows the estimated rise of B$P and there by freight transport demand in a global perspective over the net (decades

Table +: $lobal 4ar#et shifts

3))) 3)1) 3)3) 3)+) 3)) 3)/)

US US US US US China

6' +,/1*,/3

!ain #oads ?m. ''',(>%

Paved #oads 9 (:.@

"ccess to all Season #oads 9 '*

#oad $ensity ?mG*,&&& Sq ?m ***>

!ail Tra"# 2ength >6' *+,+3(

No' of -orts 1

Turnaround time $ays @

irports 13/

+nternational **

Sour"e: ;orld Ban#, 3)1)

!I2;6 in + 6odes of transport

4odeCost of Carriage % t #6 @1))) #6

leadA

!oad !s1'3)

!ail !s')'*)

Short Sea Shipping !s')'3/

Sour"e: TCS, 3))+

-rnst H Ioung %&*&0 states that Bu2arat is +ndias key carbon and cost cutting trade hub by the integration of multi modal tradebetween north and south +ndian states. The oimbatore tetile manufacturers are depending on road freight for the transfer of goods to3ew $elhi.There is an alternative of multi modal transport by utilising Short Sea Shipping in the carriage of these goods. The goods could betransferred to ochin by road transport and then utilise Short Sea Shipping to deliver goods to ?andla in Bu2arat. "gain, through roadhaulage the goods could be delivered to the retailers in 3ew $elhi. +t seems to be a comple process. Eut looking at the cost ratesseems to be interesting part. The oimbatore 7 3ew $elhi road freight transport is estimated to be #s (,((% per tonne where as themulti modal transport involves only #s (,%>' per tonne. This provides a cost advantage of #s *5' per tonne. -rnst H Ioung , %&&*0The time taken in the shipment of the goods is one of the problems faced by the coastal trade. -rnst H Ioung recommends that theremoval long documentation procedures could improve the transit times and thus it forms a sustainable mode of transport.The report of TS and -rnst H Ioung %&*&0 reveals the potential for +ndian Short Sea Shipping with favorable cost advantages. Thecost of carriage in Short Sea Shipping is less than half of the road and rail transport. +nter modal connections with feasible routesoimbatore 4 ochin 7 ?andla 7 3ew $elhi0 of industrial regions will encourage bulk cargo movements through +ndian coastalvessels.

FUE2 EFFICIENC< N. E4ISSIONS

The Short Sea Shipping is economical in terms of fuel consumption and rate of emissions compared to road and rail transport. TheTS report shows that the fuel consumption in Short Sea Shipping forms only *>9 of the consumption level of road and >(9 of railwhich is calculated by ton kilometre. The Short Sea Shipping has the comparative advantage in relation to the amount of emissionswith an eception to S/%.Table ' gives a clear picture of fuel consumption and emission levels of Short Sea Shipping and other modes of transport in +ndia.TS, %&&@0

Table *: Fuel Consu6ption and E6ission levels of Short Sea Shipping and other 6odes of transport in India

>


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E6ission @g6 % t #6A

4ode Fuel "onsu6ption Co3 Co 9" No8 So3 -arti"ula

!oad +1'++) 0'+) )'( )'3+ )'0 )')+ )')0

!ail 0'11 30'++ )'3) )'1) )'( )')+ )')+

Short Sea Shipping '030 1/'/ )')+ )')1 )'+1 )'3 )'))*

Sour"e: TCS, 3))+

The report shows that the Short Sea Shipping has perfect advantages in terms of fuel efficiency and rate of emissions. The / %factorsform the ma2or portion of the emissions where the Short Sea Shipping is far ahead of road with *>.(> gm G t km against =5.@& gm G tkm. This difference reveals the urgency for the development of Short Sea Shipping in the lights of global warming and highly pollutedcities in the country."n analysis of /%emissions in the last decade shows the similar results where the road and rail stands higher than that of watertransport. The table shows the /%emissions from different transport modes in the country during the last decade6

Table : reveals the /%emission from all transport modes in +ndia million tonnes of carbon equivalent0

Table (: Co3e6ission fro6 all transport 6odes in India @6illion tones of "arbon euivalentA

: vessels. The Short Sea Shipping in +ndia is highly fragmentedindustry where the = companies in the coastal trade form '&9 of the total fleet in terms of $8T $ead weight tonnes0. The ma2or

players in cargo movements are Shipping orporation of +ndia Dtd, Seasa Boa Dtd, and Poompuhar Shipping orporation. Theaverage fleet size of the +ndian Short Sea Shipping companies are limited to 5&&&& $8T where as the international shipping fleet isinvolved of average sizes ecess of *&&&&& $8T.$ry cargo vessels form the ma2ority in terms of $8T along with tugs and offshore vessels which are in a large number. The othercategories include passenger vessels and port trusts vessels. The annual report from ministry of shipping, +ndia gives a clear picture ofcoastal vessels in the country. !inistry of shipping, +ndia, %&*&0

Table 0: Coastal trade in India @+1st.e" 3))A

'


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S'No T?pe of 5essel No of 5essel $'T .';'T

)1 .r? Cargo 2iner (3 131031 1(+)1

)3 Tug 313 *1+3 3)*/0

)+ .r? "argo Bul# Carrier 13 3+(33) +*30

) Tan#ers @produ"t "arriersA 1 // **(3+

)/ Tan#ers @"rude oil "arriersA 3 /))0) 033*

)* -assenger "u6 Cargo +) 0313 3(3+3)( -assenger servi"es /) 1*3+ 13/

)0 Eth?lene $as Carriers + 0(3( *//0

) !o = !o 1 /* 1+0*

1) .redgers 3/ 11+(*1 (3*/3

11 Offshore Suppl? 5essels 1)* 11)(+( 130(*

13 Spe"ialiDed vessels for offshore servi"es +( 0(3 /)10+

1+ -ort trusts 4ariti6e Boards + /1 1/()3

Total @vesselsA "oastal trade */( 1(1/ 1)1+()

Sour"e: 4inistr? of shipping, India, 3)1)

The TS Tata onsultancy Services0 research %&&@0 studies the coastal trade pro2ections with the reference to ma2or commoditiesinvolved. The Table6 gives a picture of ma2or commodities in +ndian coastal trade and its epected growth rate until %&**4 *%.

Table : Coastal Cargo 6ove6ents in India

In 6illion tones

Co66odit? 3))17)3 3))*7)( 3)11713

Crude 1*')) 1*')) 1*'))

-O2 13'() 3/')) +3'/)

Coal 1/') 3)')) 3/'))

Irone ore '** '(/ 1+'+)

Iron steel )'30 )'(* 1')

Ce6ent +'1* 0'*/ 1+'))

Sub total /3'() 0)'1* 1))'0

Others )'3* )'/3 1')

Sub total /3'* 0)'*0 1)1'00

Containers 1') 3'*) /'3)

Total /')) 0+'30 1)(')0

Sour"e: aisal, 3))

+t is seen that the cargo quantity may be almost doubled from the period of %&&*4&% to %&**4*%. So there should be more fasterinitiative to deal with this demand in terms of infrastructure and vessel capacity.

ISSUES IN -O!T .E5E2O-4ENT

The developments of SeaG +nland ports are essential to encourage Short Sea Shipping in a country. The efficiency of ports in terms ofberth and terminal facilities, technological cargo handling equipments and fleible hinterland connectivity through primary modestransport are essential to encourage Short Sea Shipping with better transit times.+n +ndia, the ports are lacking efficient infrastructure inputs. !ost of the +ndian ports have outdated berth layouts and terminalfacilities. The storage facilities are not capable to handle the regular flow of cargo. The cargo handling equipments such as mobilecranes, trailers, fork lifting trucks, quay cranes are insufficient to the amount of cargo being handled. +nter modal connectivity of roadand rail transport is limited in the minor ports o the country. "ll these mentioned barriers discourage easy flow of goods backed by

increased transport cost. The poor infrastructure in +ndian ports has resulted in maritime trade loss of around #s *(&& per annum.$redging today, %&*&0The TS research identifies *( minor ports in the country to encourage Short Sea Shipping. +t is also essential to efficient hinterlandconnectivity with road and rail transport with these minor ports. The Short Sea Shipping requires efficient hinder land connectivitywhich will enable the fleible deliveries with improved transit times.The port of Pipavav in Bu2arat was languished because of inefficient connectivity problems. The hinterland connection viaSurendranagar by double stacked container trains with a capacity of *5& T-)s gave improved through put to the port interlinking the

3orth 8est states. Similar forms of hinterland connection have to be implemented in the other minor ports of the country which isessential for an improved multi modal transport. Pipavav, %&*&0Similarly, the road connectivity to the ports has to be improved. Thecountry is looking at the five Phases of 3ational 1ighway $evelopment Programme 31$P0 which is promised to provide betterhinterland connectivity from the ma2or and minor ports in +ndia.

:


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The capacity utilization in ma2or ports are above *&&9 which is not efficient as ports like Singapore and olombo have spare capacityavailable. The low productivity along with frequent breakdown of cargo handling equipments and the inefficient utilization of portresources are the ma2or challenges in +ndian ports Dloyds list, %&&:0. The capacity utilization in ma2or +ndian ports involves hennai*@>90, Aishakapatnam *%590, ?olkata *%( 90, ?andla **=90, and Paradeep *&' 90. !easures have been taken by portauthorities to minimize these problems but they have a long way to go.The efficiency of the terminals and berths in the ports has to be developed for improving the capacity of the ports. "ccording to"lterton *===0, the optimum number of berths required in a port will be at the equilibrium point of cost of berths and cost of shipstime as shown in Fig *6

Fig 1: Opti6al nu6ber of Berths

Sour"e: lterton, 1

These theories could be implemented in the +ndian ports to identify the optimal number of berths required to handle the ship traffic.

)nless the port authorities take a systematic approach there are chances for regular congestions and delayed delivery.The privatization efforts on to the ma2or and minor ports could be a feasible solution for the infrastructure bottlenecks. The eperienceof


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Fig 3: Inland ;atera?s of India @I;IA

Sour"e: Inland ;atera? authorit? of India, 3)1)

"s the road and rail transport are congested and overburdened backed with high capital investments for its further development. "neffective utilization of eisting waterways and measures to eplore the scope for finding new feasible routes could be favorable

solution.The Aallarpadam +nternational Transshipment Terminal A+TT0 in ochin ?erala0 will pave the way for the development of 38 [email protected] ochin port is developing #o 7 #o terminals in Eolgatty and 8ellington +slands in association with +8"+. There is scope for

barging between ma2or trading provinces in the region such as ochin, "lappuzha, ?ottayam, ?ollam and ?annur. +t is estimated thatout of the total volume of *5>&& T-), '&&& containers will be shifted from road to water transport in the initial stages itself. This willreduce the container transport cost by (& 7 >& 9 using the cost effective barge movement of cargo. -conomic times, %&*&0.The country has the scope of integrating the +nland 8ater ways with Short Sea Shipping. The TS report on the development of ShortSea Shipping states that the integration could be initiated at the ports of 1aldia and ochin. The integration is also possible in the

3eendakara and TT Sheds at ?olkata of 384 % if additional infrastructure has been acquired. +n this respect J?aladan !ultimodaltransit transport and pro2ect could be implemented to eplore a new route to north eastern states utilising Short Sea Shipping, +8T androad. +t interlinks ?olkata to !izoram which consists of >@= km of Short Sea Shipping to reach Sitwae !yanmar0, %%( km of +8Tand '% km of road transport to reach the state of !izoram. +8"+, %&&=0

=


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For the integration of +8T and Short Sea Shipping there is a better scope in utilizing the oastal 4 um 7 #iver vessels #0 in thewaterways having increased depth. +n 384*, 1aldia 7 Farakka route is having @ metre water depth for = months in a year. +t is

possible for a carriage of # vessels from %>&& to @&&& tonnes with a minimum of %.> metre draft. +n 38 4 %, the +ndo 7 Eangladeshprotocol route could be used for # vessel voyage during the monsoon season from 9 on their net profits or minimum alternative ta at :.>

9. The )nion Eudget of %&&(G&> initiated tonnage ta where the annual taation will be based on the net registered tonnage. Eut thetonnage ta was not eempted for coastal cargo movements. This has discouraged the Shipping companies to take coastal cargomovements which adversely affected the Short Sea Shipping in the country. )nion Eudget, %&&(0Service ta is another concern. The coastal vessels are sub2ect to double taation. To site an eample, a vessel carrying cargo from!umbai to Boa is liable to pay service ta at !umbai port at the time of loading and payable at Boa port at the time of discharge.+ndia !aritime Summit, %&&50The personal income ta is restrictive for coastal sea fearers in +ndia. "s per the income ta rules, whoever is outside the country for*5@ days or more in a year will be considered as non 7 resident and pay no taes. +t is applicable for the sea fearers in ocean goingvessels as they cross the geographical boundary of the country for sailing. This discourages the officers and seafarers in the coastalships and seems to be reluctant to accept the voyage in Short sea vessels.

2E$IS2TION

*&


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The !erchant Shipping "ct of *=>5 is eists in the country which deals with both coastal vessels and international vessels. This hasresulted in similar standard and norms for both these vessels. The coastal vessels are sub2ect to have inconvenience as its result. "recommendation was made by pinto committee to have separate legislation for Short sea Shipping. " committee has been organized

by *==5 to draft the legislation. Eut the government does not take the initial steps to enact the law in favor of Short Sea Shipping inthe country. The legislation should be enacted in a quick succession to avail the benefits to Short Sea Shipping removing theinefficiencies in the rule.

CONC2USION

" comparative analysis of Short Sea Shipping with other transport modes in +ndian contet was reviewed in relation to cost, energyefficiency, environmental friendliness and congestion problems. The +ndian Short Sea Shipping also showed favorable advantagesover road G rail transport eisting in the country. The analysis of coastal cargo movements in +ndia shows that the utilization of ShortSea Shipping in +ndia is minuscule compared to -) or neighboring countries like hina.+t gives a clear picture of inefficient handling of +ndian ports which not only discourages the Short Sea Shipping but also the wholemaritime trade. The legal and documentary bottlenecks of +ndian Short Sea Shipping have been analyzed and recommendations weremade from reviews of eperts in the industry.

!ECO44EN.TIONS

+t is recommended that the implementation of Short Sea Shipping could be successful only if there emerges longstanding policies andresearches from the Bovernment of +ndia. There should be researches to find feasible routes in the +ndian Short Sea Shipping G +8Twhich have potentials for development in future. There should be further researches on the potential cargoes which could be shifted to

Short Sea Shipping. " detailed study of environmental issues of Short Sea Shipping should also be conducted to analyze its impacts.The number of researches on Short Sea Shipping in +ndia is very limited compared to other countries. The government must focus oninnovative researches to eplore the potentials of Short Sea Shipping in the country.

BIB2IO$!-90,Modal Split 'et(een Rail and Road Modes of )ransport in $ndia*+nline, "vailable from6

http6GGwww.vikalpa.comGpdfGarticlesG%&&>G%&&>N2anN2un*:N@@.pdf, "ccessed on6 *:th 4"ug4&'0.pdf "ccessed on %nd


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M!inistry of Shipping %&&'0, &ational Martitime Development Programme "vailable fromshipping.nic.inGwritereaddataGlinkimagesG3!$P=%=&(>(=''.doc "ccessed on %(th 4*'.MPrakash.E."%&&=0. )he $ndian 8conomy since 0MSamanda.P.?. H !ohanti. ".?. %&&>0. Ports $nfrastructure and 8conomic development6 3ew$elhi6 ?alpaz Publication Pg *&54

*&=,%:&MSekaran.) %&&&0,Research methods for 'usiness ";rd edition!,3ew Iork6 ong )erm Perspectives on $nland )ransport in $ndia6 R$)8S .ournal , *5.%4*5.@,*5.'.MSunder and %%'&@&&.htm "ccessed on %>th VmenuP?65'55%%VpageP?6@(&&(*:@VpiP?6@(&&@:&:VtheSiteP?6>:=>=5,&&.html. "ccessed on *st

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