Indian Journal of Fertilisers 16 (9) T. Kallingal and Hitendra Pratap Singh

AbstractReceived : 05/08/2020 Accepted : 13/08/2020

george@iffco.in

T. Kallingal and Hitendra Pratap SinghIndian Farmers Fertiliser Cooperative Limited, New Delhi

Future Outlook for Indian Coastal Shipping andInland Waterways

Indian Journal of Fertilisers 16 (9) : 886-897, September 2020

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The Indian logistics sector, relies heavily on road and rail modes for transportation of goods, whereas the moreefficient, eco-friendly modes of coastal and inland waterways still remain grossly underutilised. Despite thetremendous potential of transportation through water ( both coastal and river) the initiatives by Government ofIndia and other agencies for promotion / popularisation, are yet to culminate into tangible results, especially infertilizer movement. The Industry is looking for requisite infrastructure, road connectivity and a conducive policyenvironment, to wade through the numerous challenges linked to switching from the conventional ‘tried and tested’modes to this comparatively underutilised mode. Need of the hour, is to incentivize, support and extend a bit of‘hand-holding’, to the fertilizer fraternity for commencing coastal /inland waterways movement, till this mode getsstabilised.

Key words: Coastal shipping, inland waterways, logistics cost, container movement, transportation, fertilizer

1.0 Introduction

Coastal shipping and Inland waterways in India, has

a very significant role to play in the country’seconomy, with the extremely high potential it wieldsfrom the 7,517 km long coastline and the Inlandwaterways network stretching to around 14,500 km.The Water transportation has a definite edge overothers, in terms of possessing the highest carryingcapacity and being the best suited for long distancecarriage of bulky goods. India has the largestmerchant shipping fleet among developingcountries and ranks 17th worldwide. Coastal andinland water transport is among the cheapest modesof transport in India, as it takes advantage of thenatural track and does not require huge capitalinvestment in construction and maintenance exceptin the case of canals. World over, many countriesdepend heavily on coastal and inland watertransport, especially for movement of large andbulky cargo, it being cheaper, reliable and lesspolluting compared to other modes, such as road orrail.

The supremacy of maritime and river navigation hascharacterised the transport of goods in India forcenturies. Megasthenes, the ancient Greek historian,in his book ‘Indica’ provides a detailed account ofsailing in Indian rivers to Pataliputra along Yamuna

and Ganga rivers; Ganga with its 17 tributaries andthe Indus with its 13 tributaries were navigable andbeen used extensively for transportation. Glancingthrough the pages of ancient World history, onewould observe that for a long time, India stood outpredominantly as the heart of commercial activities.India had colonies in Cambodia, Java, Sumatra, Borneoand in a few Far East countries. The transport andcommunication with these trade centres were mainlythrough waterways. Until about a hundred years ago,the Ganga river, too, was a busy waterway.Through the ages, rivers have served as effectivewaterways, carrying people and goods over longdistances.

Coastal shipping refers to movement of goods alongthe coast or from one coast to the other withincountry or within hinterland connected neighbourcountries. It is also referred to as short-sea shipping,marine highway and coasting trade, whereas Inlandwaterways is a network in the form of rivers, canals,backwaters and creeks that can be used fortransportation along with other modes, say roadand rail. Forms of water transport are given inFigure 1.

India is yet to fully develop these cheaper andgreener modes of transportation. A lion share ofgoods still travel by the congested road and rail

Figure 1. Forms of water transport

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networks, decelerating the movement of cargo,adding to uncertainties, and increasing the costs oftrade. Logistics cost in India is one of the highestamong major countries. India is ranked 44 out of 160countries in the ‘Logistics Performance Index 2018(LPI)’. In India, the logistics cost as a percentage ofGDP stands at 13%, as against 8% in Germany andChina, 9% in Japan, 9.5% in USA, and 10% in EuropeanUnion (EU). Globally, coastal and inlandtransportation is the most favoured mode followedby rail and roads. Despite the massive potential ofthe coastal mode, transportation of goods in India isheavily in favour of road, accounting for nearly 57%of the cargo moved, followed by rail at 30% and theremaining by the coastal shipping, inlandwaterways and oil & gas pipeline (Figure 2).

2.0 Coastal Shipping & Inland Waterways - ‘GrowthEngine’ Worldwide

It is well-known that the shipping has always beenregarded as an important transport sector of nationalactivities in all maritime countries, and it is wellsuited for transportation of bulk cargoes at low cost.Coastal shipping and inland waterways, assupplementary modes of transport are not only aneconomic necessity but also a valuable asset in timesof exigencies.

Water-based transportation of domestic freight,

comprising of both coastal shipping and inland

waterways, is approximately nine times higher inChina, six times higher in the EU, five times higher inJapan and twice as high in the USA compared to India(Table 1).

In Europe and other parts of the world, cities built onthe banks or at the mouth of rivers historicallywitnessed growth and development.

For instance, in Europe having more than 37,000 kmof waterways connect hundreds of cities and majorindustrial hubs; 13 countries have an interconnectedwaterway network. The Danube-Main-Rhine routeis one of the most important waterways in the World,besides others, like the Mississippi-Great Lakes-

Figure 2. Mode-wise per cent share in transportation

Table 1. Countries’ coastal length and domestic cargo share

Country Coastal line (km) % share of domestic Cargo

India 7,517 7

USA 19,924 14

China 14,500 20

Brazil 7,491 23

Japan 29,751 42

EU 68,000 43

Saint Lawrence Rivers in the US, the Amazon inSouth America, the Nile in Egypt and the YangtzeRiver in China. The Danube, being the second longestriver in Europe, with a catchment area covering one-tenth of the continent, is an important part of theTrans-European Networks. The EuropeanCommission aims to promote and strengthen thecompetitive position of inland waterways in thetransport system and to facilitate its integration intothe intermodal logistics chain. As by 2050, the coastal(short sea) shipping has a strong role in reaching theEU transport goal of reducing the green-house gasesemission by 60% and to achieve a shift of 30% roadmovement over 300 km to other modes, by the year2030. Under the ‘Paris Agreement on Climate Change’India has pledged a 33-35% reduction in the‘emission intensity’ of its GDP by 2030, compared tothe 2005 levels. India’s climate pledge outlines itsintention to promote transport through coastalshipping and Inland waterways, for its fuelefficiency and cost effectiveness. A report by MorganStanley in 2016 states that growth in Indian coastalshipping, at the expense of road movement, couldreduce costs by $2.5 billion by 2025.

3.0 Coastal Shipping in India

Shipping is an important indicator of both forcommodity and services trade of any country.In recent years, coastal shipping in the country hasbeen increasingly recognized as a sustainable andefficient mode of transport, capable of effectivelysupplementing the already overstressed road and railnetwork. For the ‘medium to long distance’ freight

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economic zone, the country has gained a territory of

around 100,000 sq. km of water surface for productive

purposes. Despite being eco-friendly and its abundant

potential, the Indian coastal shipping has remained

largely un-tapped. The fuel consumption in coastal

movement per tonne-kilometre is just about 15% ofthat by road and 54% of that by rail.

The Indian coastal shipping has grown to nearly 120million metric tonnes (MMT) in 2018-2019 as against83 MMT in 2014-15 (Figure 4) and an additionalpotential of 130 million MT per annum by 2025 hasbeen identified under the ‘Sagarmala Programme’promoted by GOI through Ministry of Shipping.Coastal movement by sea has grown in India at aCAGR of 10% during the period of 2015-18, thoughstill the coastal shipping accounts for only 7% of theoverall domestic cargo movement, which is not at allcomparable with those of the developed countries.Vessels play vital role in transportation of materialthrough coastal mode. The country has 1,429 vesselsregistered under the Merchant Shipping Act, of whichover 900 vessels are operating at coastal routes.

for coastal shipping is ideal for transportation ofcontainers, project cargoes, over dimensional cargoes,RORO cargoes, dry bulk cargoes viz. food grains,fertilizers, steel, coal, salt, limestone & minerals andliquid bulk cargoes including POL products. Apartfrom reducing traffic congestion, it can lowercasualties due to accidents, which are routine in roadtransport. It has been established that coastal

shipping is the most economical, environment friendly

mode with least emissions of GHGs, lesser carbon foot

print & noise pollution and is a safer method of

transportation for domestic cargo.

India’s potential lies in its 7,517 km long coastline

bordering 9 (nine) states i.e. Gujarat, Maharashtra,

Goa, Karnataka, Kerala, Tamil Nadu, Andhra Pradesh,

Odisha & West Bengal and 4 (four) union territories

viz. Daman & Diu, Puducherry, Andaman & Nicobar

Island and Lakshadweep Islands (Figure 3). Indian

coastal line is studded with 13 major ports (12 ports

governed by Government of India (GOI) & Kamarajar

port i.e. Ennore under the Companies Act and about

200 non-major ports. With 200 miles of exclusive

Figure 3. Coastal states of India

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4.0 Inland Waterways

Inland water transport refers to the transportfacilities available in the navigable waters, canals andbackwaters. It is the cheapest mode for certain kind oftraffic provided the points of origin and destinationare located on water bank. River and canal transportplayed an important role in the transport system ofthe country during early years but with thedevelopment of rail and road transport, this channelsuffered the set back. India has approximately 14,500km of navigable waterways which comprise of rivers,canals, backwaters, creeks, etc. with significantgrowth potential, as a mode of transportation. InlandWaterways Authority of India (IWAI), an authorityunder Ministry of Shipping, was established in 1986to develop and regulate the inland waterways forshipping and navigation.

Considering the benefits and importance of inlandwaterways, to ramp up the modal share, the GOI haddeclared 106 new National Waterways under theNational Waterways Act, 2016 taking the totalnumber to 111. However, a spectacular growth in thismode is yet to be witnessed. The first five NationalWaterways are depicted in Figure 5. In India, justaround 0.5% of goods are currently being transportedthrough inland waterways, compared to 7% inEurope, 8 % in the US and 8.7 % in China. Nevertheless,it is heartening to note that, thanks to the efforts ofIWAI, a 2% growth in traffic was achieved during 2019-20, raising the total movement through NationalWaterways to 73.64 million MT. Another positivedevelopment was that 3 more waterways – NW 16(Barak river), NW 44 (Ichhamati river) and NW 94(Sone river) became operational during 2019-20,making the total navigable waterways to 16.

In India, Iron ore, coal and coke, steel, limestone andfly ash are the major commodities transported onNational Waterways constituting around 90 % of thetotal cargo. The balance 10% comprises constructionmaterial and other commodities such as fertilizers,food grain and project cargo (Figure 6). The details ofthe National Waterways which are in operation isgiven here.

4.1 National Waterway-1: India’s most importantNational Waterway is Allahabad (Prayagraj) – Haldiastretch of the Ganges–Bhagirathi–Hooghly riversystem having a length of 1620 km with an estimatedcargo movement of 9.11 million MT. Additionally, NW-1 functions as a link to Bangladesh, Myanmar,Thailand, Nepal and other East and Southeast Asiancountries.

4.2 National Waterway-2: It is the 891 km stretch ofriver Brahmaputra between Bangladesh border nearDhubri and Sadiya. NW-2 has a vital role as mode oftransportation for the state of Assam (in the NorthEast India), with an estimated cargo movement of 2million MT per annum.

Bhutan-Bangladesh trade via NW 2 has also beentaking place through this waterway. Bhutan has beenexporting significant quantity of stone aggregatesthrough the land route for construction projects inBangladesh. Stone exporters have identified inlandwaterways as an alternate mode of transportation.

4.3 National Waterway-3: Kozhikode - Kollam stretch ofthe West coast canal, Champakara canal and

Udyogmandal canal having a length of 205 km with

an estimated cargo movement of 1.0 million MT.

4.4 National Waterway-4: It Consists of Kakinada-

Puducherry stretch of canals and the Kaluvelly Tank,

Nashik-Bhadrachalam-Rajahmundry stretch of river

Godavari and Galagali-Wazirabad-Vijayawada

stretch of river Krishna.

4.5 National Waterway-5: It comprises of Talcher-

Dhamra stretch of Brahmani-KharsuaTantighai-

Pandua Nala-Dudhei Nala-Kani Dhamra-river

system, Geonkhali-Charbatia stretch of East coast

canal, Charbatia-Dhamra stretch of Matai river and

Mahanadi delta rivers.

4.6 Maharashtra Waterways: Maharashtra has 4operational NWs which are NW-10 (Amba river),

NW-83 (Rajpuri creek), NW-85 (Revdanda creek/

Kundalika river) and NW-91 (Shastri river/Jaigad fort

creek). Maharashtra Waterways constituted

approximately 33% of the total traffic handled on all

National Waterways in the country in 2019-20.

Figure 4. Cargo quantity moved through coastal routes in million MT

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protocol routes of the other country. Six ‘Ports of Call’have been declared in each country under the PIWT&T.Approximately 3.50 million MT of traffic was movedthrough the IBP route in 2019-20. Traffic on the IBProute predominantly consists of fly ash (about 96.56%of total cargo) movement from Kolkata/Haldia todestinations based in Bangladesh, basically drivenby the raw material requirement for the cement plantslocated in the region. Indo – Bangladesh protocol mapis as per Figure 7.

5.0 Benefits of Coastal Shipping and Inland Waterways

It is well acknowledged that coastal shipping andInland waterways offer significant benefits over roadand rail transport, and the same are discussed.

Lower expenses: According to the World Bank, which isfinancing the National Waterways Project, the freightto be incurred in transportation of one tonne ofmaterial though waterways is economical comparedto railway and highways (Figure 8).

As per the report submitted by RITES on ‘IntegratedNational Waterways Transportation Grid’, one litreof fuel moves 24 tonnes-km on road, 95 tonnes-km on

4.7 Goa Waterways: Goa has 2 operational NationalWaterways (NW-68 Mandovi river and NW-111Zuari river).

4.8 Gujarat Waterways: Gujarat has also 2 operationalNational Waterways i.e. NW-73 (Narmada river) andNW-100 (Tapi river). The Gujarat waterwaysconstituted 42% of the total traffic on all NationalWaterways in 2019 - 20.

4.9 The Indo-Bangladesh Protocol Route : Under theprotocol on Inland Water Transit and Trade (PIWT&T)signed between India and Bangladesh, inland vesselsof one country can transit through the specified

Figure 5. ‘First five’ National Waterways

Figure 6. Traffic on National Waterways

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rail and 215 tonnes-km on inland water transport.

Suitable for ODCs and bulk goods: Maritime transport isvery effective for carrying over-dimensional cargoand bulk goods like coal, cement, fertilizers,chemicals, hazardous cargoes, POL, roll-on-roll off. Itrequires minimum land acquisition and lowinfrastructure costs. River vessel carrying ODC isshown in Figure 9.

Fuel efficient and eco-friendly: Carbon dioxide emissionby coastal shipping is roughly half of that by railtransport and about 1/

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th by road transport.

Lower traffic congestion and lesser fatalities: Modal shift tocoastal shipping helps reduce traffic on the alreadycongested roads. Road and rail movements accountfor considerable number of human and livestockcasualties; in the year 2017, there had been anestimated death of 17 people every hour in roadaccidents throughout India.

Generating business and employment: As an alternate modeof transportation, it can generate a huge employment.According to World Bank Economic Analysis, about1.5 lakh direct and indirect employment opportunitieswill be created by interventions under the ‘Jal MargVikas Project in Uttar Pradesh, Bihar, Jharkhand andWest Bengal.

Waterways have the potential to revolutionise thetransport sector and it has been receiving significantattention in recent times. Waterways transport cancontribute at least 2% to the Country’s GDP

6.0 Efforts to Promote Coastal shipping and Inland Waterways

November 12, 2018 was a historic day for the Indianlogistics sector, when MV Rabindranath Tagorevessel with 16 TEUs (20 ft) containers on-boardsailed on inland waterways and reached at Varanasi,the country’s first multi-modal terminal on the riverGanga. This initiative became the country’s firstcontainer movement, post- independence on inlandvessel. Several initiatives and policy decisionsaimed at promoting domestic movement of cargoutilizing Inland waterways and coastal shipping,have been taken to reduce logistics cost.

6.1 Structural Line-up

Jal Marg Vikas Project (JMVP): For capacity augmentationof navigation and to enable commercial navigation ofvessels with capacity of 1500-2000 MT on NW1, JMVPwas approved in January 2017 which includeddevelopment of fairway, Multi-model terminal(MMT) at Varanasi (Figure 10), Haldia and Sahibganj,hi-tech river information system, river navigation

Figure 7. Indo - Bangladesh protocol route map

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ports on vessel andcargo related charges on coastalmovement. For Ro-Ro car carriers, eligible discountis upto 80%.

Waterways usage charges: Such charges on all thenational waterways have been waived off w.e.f.July 2020 for Inland cargo vessels and cruise vessels.

Priority berthing: The policy for coastal vessels has beennotified to reduce their turnaround time.

GST reduced on bunker fuel: It has been reduced from18% to 5% to help the country’s fuel sellers competewith other lower-tax ports in Asia.

Centre for Inland And Coastal Maritime Technology: It hasbeen setup at IIT Kharagpur to serve as the technologyarm of the Ministry of Shipping to provide research,testing and experimentation facility to IWAI, CSL andmajor ports.

Introducing the Major Ports Authorities Bill 2020: Thisbill has been introduced to replace the MajorPort Trust Act, 1963 for providing moreautonomy to the ports. Respective Boards ofmajor ports are now to be allowed to fix tariffs /SORs for services provided and use of port assets.

Coastal Economic Zones: Under the SagarmalaProgramme, comprising of a group of coastal districtsor districts with a strong linkage to ports in the regionare also envisaged to tap the synergy with the plannedindustrial corridor projects.

7.0 Fertilizer despatches through Maritime Transportation - An Industry Outlook

The highly complex nature of the fertilizermovement in India, could well be gauged from thefact that the 55 million MT fertilizers (includingimports) need to reach the farming fields in the 739districts under the 28 states, 8 union territories atthe right time, at right price, in right measure as perthe local requirements.

The fertilizer consumption not being evenlydistributed round the year, majority of themovement to the field happens during 8 months’period i.e. May - December, which poses a challengeto the industry. The inadequacy of transportationinfrastructure remains a limiting factor in smooth

system, digital global positioning system, nightnavigation facilities, construction of navigational lockat Farakka. The project is expected to be completed by2023.

Sagarmala Project: An initiative by GOI to enhancethe performance of logistics sector in India. Theprogramme envisages unlocking the potential ofwaterways and the coastline. The port-leddevelopment under the project is given in Table 2.

The programme aims to reduce the logistics costs bydoubling the share of domestic waterways in themodal mix from the current 7%.

Roll-on and Roll-off (Ro-Ro) Waterways Projects: Topromote ferry services where road connectivity hasbeen a challenge, operation of Ro-Ro ships designedto carry wheeled cargo, such as cars, trucks, semi-trailer trucks, trailers and rail-road cars driven onand off the ship on their wheels or using a platformvehicle, has been commenced on various waterwayssuch as between Ghogha and Dahej in Gulf ofCambay and on NW -2 between Dhubri andHatsingmari.

6.2 Policy Initiatives

Cabotage Relaxation: It has been granted to foreign flagvessels on coastal cargoes for commodities ofagriculture, fisheries, horticulture, animal produce,etc. subject to the condition that fertilizers shouldconstitute 50% of the coastal cargo taken on-board atthe beginning of the coastal leg. It has helped reducecoastal shipping rates. Indian seaports likeKrishnapatnam and Visakhapatnam are attracting ashare of cargo which was previously transhipped atSingapore or Colombo.

Discount of minimum 40%: It is being offered by major

Figure 8. Transportation expenses by three modes

Figure 9. River vessel carrying ODC Figure 10. Varanasi MMT developed under JMVP

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distribution of fertilizers, having direct impact onagriculture production. Year after year, 55 MillionMT fertilizers need to move out of the 50 fertilizerplants (located in 15 states) and the 21 ports (situatedin 8 states) travelling the length and breadth of thecountry to the 2.27 lakhs sale points (retailers andvillage level cooperative societies), through theavailable transportation channels. With no significantaddition in existing rail / road capacities, the railwaysperennially facing shortage of rolling stock, it isimperative that new avenues are to be explored. It isin this context, fertilizer movement through coastaland inland waterways route assumes highersignificance. Presently, around 85% movement offinished fertilizer is by rail while rest is by road, withCoastal shipping and inland waterways accountingfor less than 0.5%. A conservative estimate of thepotential for movement of fertilizers throughwaterways by the years 2025 would be 3.5 millionMT (Figure 11).

8.0 Concerns for Coastal Shipping and Inland Waterways

There are many challenges in movement ofcommodities inclusive of fertilizers through coastalshipping and inland waterways (Figure 12).

♦ There is lack of dedicated infrastructure at portsand jetties viz. space for stuffing or de-stuffing, berthsfor coastal ships, inadequate draft, no nightnavigation, below-par handling facilities at theloading and unloading points, have all plagued thegrowth of coastal and inland waterways traffic.

♦ Connectivity between the hinterland and minorports or river jetties is poor compared to major ports.

♦ High operational costs due to high duties and taxeson bunker fuel and high manning scale of coastalvessels render the coastal shipping as non-competitivevis-à-vis road and rail transportation.

♦ Low sulphur regulation imposed by InternationalMaritime Organization (IMO) effective from 1st January

2020 has made it mandatory for vessels to reducesulphur emission by 85% (permissible sulphurcontent in fuel fixed as 0.5% from earlier level of 3.5%)thereby escalating the operating cost.

♦ Time bound supply of goods through this modedue to high transit time remains a challenge, apartfrom the longer ‘working capital cycle’ and theassociated financial implications due to multipleuncertainties involved. Higher transit time also raisesconcerns on cargo quality, with high risk of moistureabsorption in case of fertilizers being highlyhygroscopic in nature.

♦ ‘’No return traffic’’ has proved to be a bottle-neckin operation of coastal /river vessels affecting theoperational costs.

♦ Absence of uniform tariff has been anotherchallenge. The coastal vessel operators chargedifferent rates for same origin-destination pairs fromthe customers depending on the availability of ships.Often, the rates offered are ‘opportunistic’. On thelonger run, this may not be a healthy situation for theoperators as well as the customers.

♦ Ceiling of freight re-imbursement by Departmentof Fertilizers under the coastal multimodal movementas rail freight upto the ‘nearest rake point to the finaldestination’ is an impediment, whereas the need ofthe hour is to incentivize switching from conventionalmode to coastal mode. Railways’ recent decision towaive ‘busy season surcharge’ made it tougher forcoastal movement, rendering many viabledestinations in the earlier regime now ‘un-viable’.

♦ Excessive siltation in the channels, drasticallyreducing draft availability, poses a big challenge tooperation of higher capacity vessels/barges throughwaterways, especially in NW-1.

♦ Night navigation through the National waterwaysis yet to be established, resulting in unduly long transittime and the associated challenges in movement ofcargoes like fertilizers.

Table 2. Port - led development under Sagarmala project

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♦ Lack of infrastructure tools and tackles forunloading, access for labourers for unloading the bags,storage facilities at the jetty locations, roadconnectivity to the jetties, etc. all remain as majorchallenges.

9.0 The Silver Lining

While the coastal and inland waterways mode maynot be cheaper for all the destinations compared tothe conventional modes, till the volumes growsignificantly, the thrust for ramping up maritimetransport to a larger scale is driven by the followingdefinite advantages that would accrue on the longerrun.

♦ In the current scenario of over stressed rail androad infrastructure, the coastal shipping and inlandwaterways could be a plausible solution to reducethe burden on the network.

♦ These modes can contribute significantly to fasterevacuation and enhanced production in the unitslocated along the coast, especially when the othermodes are already under stress.

♦ Evolution of these modes would promoteinfrastructure development along the coastal line andthe river banks, triggering multi-dimensional growthin various sectors.

♦ Once reasonably developed, these modes have thepotential to reduce the logistics cost and lighten thefreight subsidy burden on fertilizers and othercommodities under PDS.

♦ Coastal and inland waterways modes have adistinct advantage of delivering smaller parcels toremote locations along the coast line or water bankshaving limited or even NIL road access; smallerparcels mean with same quantity it can effectively

cover larger area – Compare this to rakes with parcelsizes of 2,600 MT - 3,900 MT delivered at one location.

♦ The lower cost of transporting bulk commodities,will benefit the entire chain of industries availing thesemodes, especially the India’s manufacturing sectoralready struggling under high logistics costs, and thebenefits accrued could be redeployed in ways andmeans to help fuel economic growth.

♦ Recently, a GOI designated Task Force had estimateda 3.50 million MT potential for movement of fertilizersby the year 2025 through the coastal and inlandwaterways to various states. These modes are alsoexpected to lower the annual fertilizer logistics costat the national level by Rs. 70 -105 crore.

10.0 Transportation of Fertilizer through WaterChannels : IFFCO’s Experience

10.1 Coastal Shipping

IFFCO has been undertaking containerized, coastalmovement of bagged fertilizers from its Kandla &Paradeep plants since the year 2007, the volumes havegrown since then, 2018-19 recording the highestmovement at 3.04 lakh MT (Table 3) partially triggeredby the acute rake shortages during the year.

Table 3. IFFCO’s fertilizer movement through coastal route

Year 2017-18 2018-19 2019-20

Quantity (MT) 137,719 304,463 129,184

The supplies from Paradeep were to destinations in

Tamil Nadu and Kerala, through Katupalli, Tuticorin

and Cochin ports. The supplies made from Kandla

had been to Kerala, Tamil Nadu, Karnataka and West

Bengal through Cochin, Tuticorin, Mangalore and

Haldia ports. In 2017-18, one parcel of 12,000 MT

Figure 11. Fertilizer and Water Transport

Figure 12. Challenges facing by water transport

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was despatched in break-bulk ship to Mangalore and

Tuticorin ports; despatch being in 50 kg bags stuffed

into 2 tonne jumbo bags, handled through hooks at

the sending and receiving ports (Figure 13).

Despatches through break bulk shipments could not

be pursued further due to viability issues, cargo

damages, handling losses, etc. On the contrary, the

quality of supplies in containers was highly

appreciated by the farmers/ dealers/ sales personnel,

as factory fresh, blemish less, untouched bags reach

them, with ‘NO’ hook holes and ‘NIL’ losses as

shown in Figure 14. Containerised supplies not only

helped IFFCO to tide over the crisis of shortage of

rakes during previous years, it also gave extreme

flexibility on the parcel sizes shipped; even one

single TEU ( 25 MT to 28 MT) could be delivered to a

location, which was a definite advantage. Based on

the experience gained over the years, IFFCO still

continues its efforts to widen the domain ofcontainerized supplies from its coastal plants.

10.2 Inland Waterways

During the year 2013 -14, IFFCO had participated in atrial run with the support of Department of Fertilizersand Inland Waterways Authority of India (IWAI), for

movement of urea from IFFCO Phulpur plant to West

Bengal through NW-1, the first attempt though not

very successful, was a learning experience in terms

of the challenges associated with inland water

movement through NW-1.

In November, 2018, IFFCO had again taken part in

another trial run on NW-1 using multi-modal

transportation ( i .e . road-waterways-road), formovement of ‘bagged urea in containers’ from itsPhulpur plant to destinations in West Bengal. Eightcontainers of 20 ft (TEUs) stuffed with urea atPhulpur, transported by road to newly constructedVaranasi Multi-modal Terminal at NW-1, laterloaded on to river vessel MV Rabindranath Tagore(Figure 15) which sailed through NW-1 to Haldia

jetty, off-loaded, and delivered the urea at

consuming points by road in West Bengal. This time,

IFFCO did not face any operational issues and the

trial was considered a success.

While there is tremendous potential in the multi-

modal movement of fertilizers using the inland

waterways, there is much work to be done in this

field, before it can develop as a self-sustainable mode

for transportation of fertilizers. Government of

India through the Ministry of Shipping and other

Departments have initiated various concrete

measures, projects, policy interventions, etc. for

furthering the freight movement through inland

waterways. The efforts initiated are certainly

laudable and IFFCO would be keen to be associated

in these endeavours for expanding the operationsthrough coastal/inland waterways to still higherlevels.

11.0 Future Outlook: The Sky is Pink

The consumption of fertilizers is bound to increase, tokeep pace with the ever growing demand forproduction of food grains to feed the 1.38 billionmultitude which is expected to grow exponentially to1.52 billion by 2030. It is imperative that thedistribution of fertilizers also need to growcorrespondingly. The human race is facing thechallenge of conserving the fossil fuel resources, whichis otherwise fast depleting. Over used roads,congested rail traffic, shortage of wagons, rising fuelcosts, ever increasing transportation costs, etc. haveall been the order of the day. The solution probablylies in promoting the coastal and inland waterwaysmovement. These modes, though in the present form,have not been able to make the cut into cargo logisticsin general and fertilizer movement in particular. Theshort, medium and long term plans for encouragingcoastal shipping and inland waterways are illustratedin Figure 16. A slew of measures need to be initiatedfor addressing the concerns of the Industry and topromote/encourage shifting from the conventionalrail–road mode to coastal and inland river movement:

♦ Incentivization and promotion of the energyefficient, eco-friendly and less polluting modes,

Figure 13. Loading of IFFCO fertilizer in break bulk ship at Kandla

Indian Journal of Fertilisers 16 (9) T. Kallingal and Hitendra Pratap Singh

rather than restricting the freight re-imbursement, is vital.

♦ Freight re-imbursement process should be madesimpler and electronic bill settlement facilities bedeveloped, for the fertilizer industry.

♦ Disparity in GST rates on various modes (i.e. rail,road & sea movement @ 5%, multimodal @12%and inland waterways – NIL) needs to be removedto create a level playing field.

♦ Ensure requisite draft in the National Waterways,round the year by both capital and maintenancedredging. Current scenario of either ‘No Water’or ‘Too much Water’ in the rivers depending onthe season has to get transformed to `consistantlyuniform draft in the channel’ throughout the year,irrespective of the season.

♦ Policy initiatives for ensuring enhancedavailability of river sea vessels / barges, whichpresently is a limiting factor.

♦ Develop more number of mechanized, river-side

terminals with unloading facilities capable ofhandling jumbo bags and containers. Unloadingof smaller quantities, at multiple points, withinshort distances would mean lesser secondary leadof surface transport.

♦ High transit time is a major deterrent to growthon this mode. The simple solution lies indeveloping infrastructure for night navigation onNWs.

♦ Priority/dedicated berthing arrangement isrequired for inland/coastal vessels, unloadinginfrastructure and road connectivity to landingpoints, etc.

♦ Containerized movement of fertilizers throughcoastal/inland waterways can be 15-20% cheaperthan bagged and jumbo bag based waterwaysmovement. Automated (pumping) bulk loadingin containers can reduce turnaround time andmanual handling costs.

♦ Coastal ship operators should also create a

Figure 14. Full cycle of multimodal containerized movement of fertilizer upto the retail points

Figure 15. River Vessel MV RN Tagore carrying IFFCO cargo to Haldia through NW-1

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September 2020 Future Outlook for Indian Coastal Shipping and Inland Waterways

congenial environment by ensuring regularvoyages for the fertilizer industry to rely on thismode, for un-interrupted despatches of fertilizers.

♦ Efforts should be made by the stakeholders toidentify such opportunities, where cargomovement through waterways could be initiatedforthwith, with least effort and little investments.IFFCO Paradeep could be a classic example of thissort. Dredging of a small stretch, in NW-64/NW-5 near the IFFCO Pradeep waterfront in Mahanadiriver, can immediately result in about 1.50 lakhMT annual fertilizer traffic through NW-1, to thestates of West Bengal, Jharkhand, Bihar and UttarPradesh. Barges carrying fertilizers from IFFCOParadeep can also pick urea sourced from itsPhulpur plant as ‘return-cargo’ for the samestates.

♦ Linking NW-1 to NW-2 and NW-6 using IBP routethrough Bangladesh to form a National Grid inthe Eastern Region of the country. NW-5(extending up to Paradeep, Bay of Bengal) can bejoined in the National Waterway grid throughbackwaters of Hooghly and tidal canal. Theconjoined National Waterways Grid (excludingIBP Route) can serve 11 states i.e. Uttar Pradesh,Bihar, Jharkhand, West Bengal, Assam, Meghalaya,Arunachal Pradesh, Tripura, Mizoram, Manipurand Odisha.

12.0 Conclusion

The acceptability of Coastal shipping and inlandwaterways modes depend mainly on commercialviability, especially in the present atmosphere of stiffcompetition. Situation warrants that Coastal shippingand inland waterways movement are effectivelyintegrated with the surface transport modes and asynergy is developed between all modes and thatwould call for a concerted effort by all stakeholders in

their respective domains, to achieve highest possibleefficiency and efficacy in Indian logistics sector. Thereis abundant un-tapped potential and theopportunities are plenty for grabbing, but it wouldtake some grit and an open mind-set for adopting tothis mode. Nevertheless, as the saying goes“Opportunities are like sunrises. If you wait too long,you miss them.”

References

Annebonia, Lavanya Ravikanth and Ravi Kumar, K.S. 2016. Benefits of coastal shipping: scope for seachange in domestic freight transportation in India.Working Paper 147/2016.

Annual Report. 2019-20. Ministry of Shipping,Government of India, New Delhi.

Annual Report on National Waterways Traffic. 2019-20. Inland Waterways Authority of India, New Delhi.

Department of Fertilizers. Draft note on rationalizationof fertilizer logistics. Government of India, New Delhi.

Fertiliser Annual Report. 2018-19. Department ofFertilizers, Government of India, New Delhi.

Fertiliser Statistics. 2018-19. The Fertiliser Associationof India, New Delhi.

Inland Waterways Authority of India (IWAI). ShortBrief on Indo Bangladesh Protocol Route.

Pillai, Asha and Paul Jose. 2015. Critical examination ofthe season for the under utilisation of coastal shipping in India,AMET International Journal of Management.

Sagarmala-Post-November. 2019-Edition-Viewpoint.

https://www.faidelhi.org/

http://sagarmala.gov.in/

http://shipmin.gov.in/

https://lpi.worldbank.org/international/global

Figure 16. Future plans for coastal shipping/ inland waterways

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