Coastal Shipping sailing in troubled waters

Aug 22, 2013, 5:15AM EST
Faced with several impediments and lack of support from the government coastal shipping continues to languish in setbacks

Enough praises have been sung about the great advantages of coastal shipping especially because water transportation provides tremendous carrying capacity while consuming far less energy compared to other modes of transport such as truck, rail or air. It is just what the countries needs to help shore up their economy. However, compared to other countries India seriously lags behind in exploiting the extensive resources which exist in abundance.

Though India enjoys an extensive coastline of over 7,500 km, with 12 major ports (owned by the federal government) and over 187 state-owned ports and only 7 per cent of the domestic cargo gets transported through coastal shipping. Compare this to 15% cargo being carried by water transport in the US and 43% in EU countries. 80% of India’s coastal cargo comprises of petroleum, oil and lubricants, thermal coal and crude and the remaining being food grains, cement, containerized cargo and finished products. The number of ships involved in this trade is around 700 vessels totally comprising of around 1 million gross registered tonnage (GRT).

It is not all hunky dory for coastal shipping as operators have to put up with several challenges most of them could have been resolved long back but for the lack of political will that has left this sector in shambles. The operators’ biggest grouse is that ports do not want to provide dedicate berths and hence vessels carrying coastal cargo are sometime made to wait for days to be allowed to berth. There is need for reduction in procedural delays, custom duties, levies and other taxes. Importantly if coastal cargo is given preferential treatment by ports it will ensure quicker turnaround of vessels. Moreover there is a need for reduction in duties on bunkers, manning scales and enhancement of ship building capacity.

Availing of the ‘Maritime India 2013’ platform of Global Intelligence, S. K. Shahi, Chairman and Managing Director of SKS Logistics Ltd., points out that not having dedicated berths is just one of the issues. He says that some private ports do not give berths unless the coastal operator is willing to pay twice the scheduled rate. He says that in order to separate domestic cargo from the international one, which attracts customs duty and other charges, major ports should provide a dedicated jetty of say 200 meters in length along with a connecting warehouse. Thus the cargo will then not have to go through the customs.

He complained about the exorbitant charges of the Indian Register of Shipping (IRS) which coastal operators could not afford. Surveyors of IRS according to him invariably insist on having several improvements being carried out even though they were out of place. Accordingly the association of the coastal operators had recommended to the Government of India the setting up an Indian Coastal Shipping Registry different from IRS and which would have a separate set of surveyors.   

Coastal operators are also victims of double taxation. Mr. Shahi points out that when foreign vessels come into say Jawaharlal Nehru Port they have to pay service tax only once but coastal vessels have to pay twice. So is the case with wharfage charges. As ports have surplus land he desires that some of this land be given for setting up repair workshops especially for coastal vessels.

Capt S. P. Rao, Chairman of SVS Group contends that coastal shipping could move forward if given an infrastructure status. He advocated the idea of having a regulatory body as this will go a long way in keeping in check the unreasonable charges levied by the ports especially the private ones. Indian coastal vessels calling at ports in Sri Lanka should be included as part of the coastal trade with respect to custom’s law in India.  

Time and again it has been pointed out that coastal trade has been losing out to other modes because it has not been given a level playing field in line with other sectors including road transport and foreign going ships. A long pending demand of the coastal operators has been the need to enhance the draft at the Sethu Samudram Channel to 3.5 meters to enable movement of large volume of cargo from East coast to the West coast and vice versa.


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