Logistics - musings

India Logistics News

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I saw two items of news in the newspapers which interested me and prompted me to comment

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Item 1

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The standing committee of parliament on Railways pulled up the Railway Management on continued losses in spite of budgetary support

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My comments on this item is ase below

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Railways is a public utility service as far as passengers. are concerned ?

Numerically the maximum number of passengers who travel by the Railways are of economically weaker section of the society . In addition Railways connect remotest parts of the country irrespective of passenger loads . Therefore it is incumbent to support passenger services with?some cross subsidization as asocial welfare measure and this is practiced by all countries

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But however a few decades back though passenger services were loss making still Railways making surplus meeting their obligations of depreciation and dividends to Central Government Railways lost the plot when they decided to focus on productivity in only operating unit trains ( full rakes) and leave out wagon loads in spite of?an excellent infrastructure in goods sheds?in thousands of stations , marshalling yards in key hubs and a system of running shuttle trains between important junctions .The parcel trains were abandoned and even those which ran had no schedule

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The increased rail capacity in terms of doubling , gauge conversion and electrification went mostly to serve populist passenger segment . Though the absolute freight loading went up year after year market share of rail transport in total national cargo movement went down drastically as enterprising and convenient road transport occupied the bulk of the space vacated by rail especially of general cargo transport which yielded a higher revenue.. The emphasis still seems to be on the passenger side with so many Vande Bharat Expresses being rolled out

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It is time that Railways increasev focus on ?freight for the sake of nation and its own progress – the major steps suggested would be

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A)?Operation of scheduled parcel trains between major hubs – the trains must run on schedule whether full or not initially to establish the credibility .They could collaborate with partners who are large parcel transporters , e – commerce delivery companies etc The freight rates should be marginally less than road rates

B)?Railways should start wagon loads from all potential wayside stations and also connecting them to the hubs with shuttle trains

C)??Expedite completion of?dedicated freight corridors ( which is under construction for more than a decade) – start more dedicated corridors

D)??Offer full rake loads to large FMCG/Whitegoods and other general cargo which are moved in large quantities but rates have to be competitive as compared to raod on a door to door basis

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Item no 2

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Greater Nicobar Container Terminal

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This project has been in the news often – the latest is that the project would be developed ion PPP mode and infra developers like L&T , Afcons and JSW Infra are interested . Though environmental clearance was given NGT has ordered a review and hence proceedings are on a hold . But it can be safely presumed that clearance form NGT would come sometime soon.

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Governments of India have been obsessed with the fact that very large container ships operating in the far east- Europe (called the major sealane of the world ) are bypassing India because of the loss of time by the reasons of diversion well as non availability suitable draft in Indian ports, iThere is s the presumption thatlarge quantity of ?Indian cargo by containers are being transshipped to connect these mainline ships through third country ports like Colombo , Singapore Dubai etc

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So the major logic of creating a Greater Nicobar Terminal is to create a port to enable mainline ships to call at this port,as this port will be only few nautical miles away ?from international main sealine and also will have adequate draft .Indian containers transshipped could use this terminal

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My argument against this port is neither political nor environmental but sheer commercial – political parties may brand ?this is as another vanity project – environmentalists may say 5 million trees have to be felled in a pristine rain forest – the compensatory plantation proposed in Haryana and MP is a pipe dream

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My argument is that this terminal will not attract enough cargoes to attract ?number of main line ship calls to make the port operations ?profitable for decades. The answers to questions below will justify my views

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A)?Are adequate numbers of containers getting transshipped from India?

B)??Can this port attract containers from third countries who now transship their containers through Colombo/Singapore?etc. ( like Thailand/Malaysia /Viet Nam /Cambodia/Indonesia etc. )?

C)??Is economy of feeding into Greater Nicobar terminal isjustibiable?

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The big west coast ports of JNPT/Pipava/Mundhra are attracting so much cargoes that big lines are operating direct sailings in very goods frequency to?Europe and USA . Similarly China has so much trade with India both east coast and west coast ports are covered by direct sailings ?to both north and south China ports??Hinterland covered by west coast port covers bulk of cargo generating and terminating geography (In addition to the natural?adjoining territories )in view of rail connectivity , availability of direct sailings , competitive freight rates .Even merchants ?from ?eastern UP/Telangana and Northern Karnataka prefer shipments from west coat ports .

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This leaves number of containersrs ?getting transshipped to those mainly from east coast ports and vgets restricted to ery leass quantity as compared to overall movement to & from India.

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The distance between East Coast ports like Kolkata/Haldia , Vizag and Chennai to Nicobar is more than 1700 kms- whereas the sailing time to Colombo from Chennai and Tuticorin is in hours The cost of transshipment via Greater?Nicobar?will?be high in addition to time taken

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I also do not see ASEAN countries shifting their transshipment hub from Singapore or Tanjung Pelpas to Greater Nicobar

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In my opinion I do not see Greater Nicobar making economic sense ever .My suggestion would be to make Vizhinam fit for receiving big vessels and also ensuring enough traffic to attract main line vessels even if there is a diversion . On the other hand high traffic also can make the direct vessel now turning around from JNPT to extend to Vizhinam and turning around from there

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?The project calls for greater discussions amongst experts – the feasibility report especially traffic projections must be made transparent