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Container trade takes to coastal sea route, lowers logistics costs

Container trade takes to coastal sea route, lowers logistics costs
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First Published: Fri, Mar 06 2009. 01 02 AM IST

New beginning:A file photo of the Jawaharlal Nehru Port near Mumbai. Ashesh Shah / Mint
New beginning:A file photo of the Jawaharlal Nehru Port near Mumbai. Ashesh Shah / Mint
Updated: Fri, Mar 06 2009. 01 02 AM IST
Bangalore: In an innovative move to trim haulage costs and hasten delivery, cargo owners using the Jawaharlal Nehru Port near Mumbai are reaching goods to Maharashtra and Gujarat by using barges for part of the way.
New beginning:A file photo of the Jawaharlal Nehru Port near Mumbai. Ashesh Shah / Mint
Exporters and importers are now shipping containers between India’s busiest container port at Nhava Sheva and Dharamtar, a small port about 25.9km away, in barges, which takes some three hours. Hauling cargo to a warehouse in, say Panvel or Bhiwandi, 20km to 60km by road, can take anywhere between three and eight hours, depending on traffic and entry restrictions.
It is the first time this is being tried in India; coastal shipping is fairly common elsewhere, including in Europe and China.
“Transportation by sea is faster, cheaper and safer. Plus, waterside operations makes the cargo free from the congestion bottlenecks on the land side,” said Nrupal Patil, director, Dharamtar Infrastructure Ltd, a joint venture company of United Shippers Ltd and PNP Maritime Services Pvt. Ltd that owns and operates Dharamtar Port.
The first such export shipment of 42 twenty-feet equivalent units (TEUs), executed late last year by CMA CGM SA, the world’s third biggest container ship operator, marked the beginning of container operations at Dharamtar. TEU is an industry measure of container cargo.
“Hinterland logistics costs are more important than ocean costs in the overall transportation chain,” said Luc Arnouts, chief commercial officer, Antwerp Port, Europe’s second biggest. Half of the containers arriving at Antwerp can be moved by barge to the hinterland.
“Given that logistics forms 13% of the overall gross domestic product in India compared to half of that in the Western economies, the local industry has long figured out that effective and innovative logistics and supply chain management concepts can result in significant savings directly or indirectly,” said Vishal Sharma, founder and managing director, Tuscan Ventures Pvt. Ltd, a logistics-focused investment company.
Until recently, Dharamtar Port, located on the right bank of the Amba river, about 2km from National Highway 17 connecting Mumbai to Goa, was mainly handling some 2.5 million tonnes of bulk cargo in a year. The port has now developed container handling facilities, but will continue to focus on barges, as they have proved to be fast and efficient.
Dharamtar can only handle barges as it is only 4m deep. There are currently two barges in operation, with a total capacity of 130 TEUs.
“Most major container shipping lines accept and deliver cargo at Dharamtar Port now,” said Sameer Varma, also of Tuscan Ventures. Several cargo movers are now using this route including tiles maker Nitco Ltd, and pipe and valve manufacturer Indian Seamless Metal Tubes Ltd.
Dharamtar has three jetties, of which one is dedicated to container operations. The port is suited to handling commodities because it has in-house automatic bagging plants and also railway tracks, which is expected to be operational later this year, enabling it to handle containers originating from and bound for northern India.
The port has 240,000 sq. ft of warehousing space that can be quickly scaled up to 2 million sq. ft.
The port is also in a customs-notified area. As a result, containers being imported and cleared at Dharamtar can be emptied and released without paying levies for 30 days.
“Port location advantage and quick container movement have reduced the overall logistics cost at Dharamtar,” said Varma.
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First Published: Fri, Mar 06 2009. 01 02 AM IST