Waterways

Logistics Management
Shivakumar B031
Sunil Ramavarapu C041
Prashant E008
Aditya Anand E009
Chandrasekar E035
Sudipto Sur E052
Agenda
History & Evolution of sector
Cost comparison with other modes of transport & KPIs used to
measure efficiency
Types of transportation vehicles and differences
(Barges/ships/tankers etc)
Major Indian waterways/ports and connections to Indian/int'l
hubs
Differences between Indian and Int'l waterways
Major players & major industries using waterways in India
Role of Government / Major Initiatives
Growth drivers & Current trends
Leveraging Technology
Future outlook
Introduction
Ports and the shipping industry plays
a crucial role in the development of
an economy by boosting trade and
commerce within and across
countries;
India is blessed with a long coastline
about 7517 km with 13 major ports
across the country and
approximately 70 non-major
operational ports;
Cargo traffic stood at 545.8 MMT in
FY13;
Transportation via waterways is the
cheapest mode from operational
perspective;
Waterways both inland and coastal is
considered to be environment
friendlier than other modes of
transportation




Source: Ministry of Shipping: Aranca Research
India Brand Equity Foundation: Report on Ports in India
Solid
Iron Ore
Coal
Fertilizer
etc
54% -
Share
Liquid
Liquid
Petroleum
Oil
Lubricants
34% -
Share
Container


22% -
Share
Cargo Profile
Coastal Shipping & Inland waterways
(Share arrived at by calculating btkm)
Source: http://iwai.nic.in/
Introduction - Contd
By 2015 schemes to be introduced by government to increase the current
share of coastal and inland waterways transportation to 15%;
Mix of various modes of transport, known as multi-modal transport systems
to boost coastal and IWT btkm;
PPP for development of port infrastructures in India to promote increased
cargo traffic;
India adopting innovative intermodal logistics eg Roll-on Roll-off, LASH,
Sea train etc.
History & Evolution

The landmark inventions in water transportation:

Cornelis Drebbel invented the
first submarine in 1620 AD

First practical steamboat
demonstrated by
Marquis Claude -1783 AD

Steamboat invented 1787 AD

First diesel-powered ship 1912 AD

Hovercraft invented 1956 AD

First nuclear powered ship launched 1958 AD


History & Evolution

Before Container Shipping:

Mankind has been shipping goods for thousands of years, but process has
never been easy.

The loading and unloading of individual goods in barrels, sacks and wooden
crates from land transport to ship and back again on arrival was slow and
cumbersome.

This process, referred to as break-bulk shipping was the only known way to
transport goods via ship

The loading and unloading of the ship was very labor intensive.

There was also high risk of accident, loss and theft.

There were some basic systems in place to make the process more efficient,
such as the use of rope for bundling timber, sacks for carrying coffee beans,
and pallets for stacking and transporting bags or sacks.

History & Evolution

Origins of Container Shipping:

The first shipping container was invented and patented in 1956 by an American
named Malcolm Mc Lean.

Prior to this, cargo was loaded and unloaded in odd sized wooden crates. The
process was very slow and certainly not standardized.

Malcolm then purchased Pan Atlantic Tanker Company, and re-named the new
shipping company Sea-Land Shipping.

He tried for better ways to load and un-load trucks and ships.

His ideas were based on the theory that efficiency could be vastly improved
through a system of "intermodalism", in which the same container, with the same
cargo, can be transported with minimum interruption via different transport
modes during its journey.

After many experiments, his final design is what we know now as the Shipping
Container.


Element Technical Non-technical (Service)
WATERWAY
Nautical indicators
(depth, width, max.
height, ton-miles)
Navigability, Information
Services
VESSELS
Technical features
(mechanical, electric,
electronic)
Liner service, departures
per week, punctuality, IT-
performance
INLAND PORTS
Process performance
in trans-shipment &
storage, bi- & tri-
modality
Opening hours, customer
awareness, flexibility, IT-
performance
KEY PERFORMANCE INDICATORS
CRITICAL SUCCESS FACTORS
COMPARISON AMONG OTHER LOGISTIC MODES
KPMG India, 2012 report says that the share of coastal shipping in the overall
domestic cargo movement is significantly lower than that in road (57 percent)
and rail (30 percent) due to the following reasons:
COMPARISON AMONG OTHER LOGISTIC MODES
Types of
Ships
Classification Criteria Intended
Cargo
Size (DWT) Other
Features
Bulk Carriers: They are broadly defined as ships
carrying dry unpacked goods in big lots.
The major commodities being transported in bulk are coal, iron
ore, food grains, phosphate, steel, cement and fertilizers among
others.
1. Geared Bulk Carrier
2. Gearless Bulk Carriers
3. Combined Carriers
4. Self Dischargers
5. Bulk In, Bags out
6. Open hatch Carriers
1
4
6
Container Carriers: The cargo is packed in
standard-sized containers on site and then transported
via ships
Lift-on lift off
(LoLo) vessels
Roll on Roll off
(RoRo) vessels
Tankers: Products carried by tankers are oil, liquefied petroleum gas
(LPG), liquefied natural gas (LNG), chemicals, fresh water, wine etc.
Oil and oil product tankers - These
are used for bulk transport of oil. The
various petroleum products produced
at refineries, such as, petrol, paraffin,
diesel, lubricating oil etc.,









Chemical tankers - Chemical
tankers are designed considering
the specific requirements of the
type of the chemical to be
transported.










Gas tankers - Gas tankers are used
to transport liquefied chemical
gases in bulk. Types: Fully
Pressurized Gas Carrier, Semi-
Pressurized ships, Liquefied Natural
Gas Carriers









Specialized Carriers
1. Floating, Production,
Storage & Offloading
(FPSO)
2. Offshore Vessels
3. Barges
4. Crane Vessels
5. Passenger Ships
1
3
5
Size
Differentiation
INDIA'S TRANSSHIPMENT HUB PLANS
Major Shortcomings of
Indian Ports:
Inadequate facilities
Distance from international
shipping routes
Draft restrictions
Jawaharlal Nehru Port Trust (JNPT)
and Mundra Port are the only ports
along the west coast that receive
mother vessels of around 4,000 TEUs.
VALLARPADAM INTERNATIONAL CONTAINER TRANSSHIPMENT TERMINAL
ICTT will be constructed on 115 hectares of
land at Vallarpadam
a special economic zone inside Cochin Port
phase I will be developed with 600 metres of
quay designed to handle 1.0 million TEUs
Phase II will add another 300 metres of quay
with a capacity to handle 0.5 million TEU
Phase III will add 900 metres of quay with a
capacity to handle 1.5 million TEUs
terminal will have the facility to berth mainline
vessels and feeders together with the
possibility of exchange of containers
INLAND WATER TRANSPORT IN INDIA
Advantages of Inland Water Transport
An economical means of transportation of coal, minerals and
other bulky dry and liquid raw materials for industries
A highly efficient mode of transport in terms of energy
consumption
Immediate access wherever water exists with no investment
required in line haul capacities
A smaller amount of investment for maintenance
Limitations of inland water transport
This form of transport is slow as compared to other forms of
land transport
Navigable waterways are not perennial in many areas due to
seasonal fluctuations in water levels
Heavy capital investment required in construction maintenance
and dredging operation of canals
REGULATION OF INLAND WATER
TRANSPORTATION:
INLAND WATERWAYS AUTHORITY OF
INDIA
OPPORTUNITY FOR PRIVATE SECTOR
The government has envisaged the private sector to carry
out the following:
Construct and operate terminals and river ports
Provide mechanised handling systems, and maintain
navigational facilities
Provide pilotage facilities
Own and operate vessels for cargo and passenger
movement
India has 4,400 km of recognized inland waterways out of
14,500 km of navigable waterways; 7,551 km of coastline





India vs Global
Country Proportion of waterways in
inland freight
transportation
Netherlands 46%
Bangladesh 32%
Brazil 14%
USA 17%
China 10%
India <1%
Country Proportion of short-
shipping in domestic
cargo
China 43%
European Union 42%
USA 15%
India 7%
Particulars India Global
Turnaround
Time
4.67 days 7-10 hours
Pre berthing
delay (hrs)
55.7 3-5
Average output
per ship berth
day (000 tons)
10.74 45-60
India Singapore USA China UAE
LPI Rank 54 5 9 28 27
Length of inland
waterways (in km)
14,500 >30 41,009 110,000 -
Cost in USD/day 246 161.5 460.5 247 -
Cost in USD/KM 1.3 10.8 5.2 2.5 -
% of shipments
meeting quality
criteria
67 92 87 76 88
Number of
agencies &
Forms
3 & 4 1 & 1 3 & 3 3 & 5 3 & 2
India vs Global
Cargo category and ideal mode of transportation
Major commodities with feasible Waterways
Commodity Key routes
Cement
Mundra Cochin
Cuddapah - Krishnapatnam - Haldia- Burdwan
Cuddapah - Krishnapatnam - Cochin
Fertilisers
Kandla to Mangalore
Haldia to Vizag
Paradip to Chennai
Food grains
Panipat Kandla Mangalore
Panipat Kandla Kochi
Panipat Kandla Chennai
Guntur Vizag - Haldia
Steel
Jamshedpur - Chennai
Rourkela - Chennai
Marble
Udaipur Kochi
Udaipur Chennai
Salt
Gandhidham Kandla Mangalore
Gandhidham Kandla - Kochi
Tuticorin - Haldia
Tuticorin - Paradip
Sugar
Vellore Chennai Paradip Bhubaneswar
Vellore Chennai Haldia Kolkata
Belgaum - Mangalore Kandla - Ahmedabad
Automobiles (# of cars)
Pune - Chennai
Pune Kochi
Gurgaon - Kochi
Tiles
Morbi Mundra - Chennai
Morbi Mundra Mangalore - Bangalore
Major Players in Waterways Logistics
Jindal ITF Infrastructure Transportation Fabrication
Subsidiary of Jindal SAW
GATI has exited shipping line in July, 2014
The Shipping Corporation of India Ltd
May exit loss-making container shipping business
Essar Shipping
Provides logistics and energy-based services
Mercator Limited
Largest private sector player by tonnage
Gujarat Pipavav
Complements shipbuilding with shipping




Government Initiatives
The Planning Commission of India in its 12th Five Year Plan
expects a total investment of Rs 180,626 crore(US$ 30.05
billion) in the ports sector.
The government has allowed FDI of up to 100 per cent under
the automatic route for projects related to the construction
and maintenance of ports and harbors;
A 10-year tax holiday has been given to enterprises engaged
in the business of developing, maintaining and operating ports,
inland waterways and inland ports.
Ganga Rejuvenation for development of transport and tourism
along the river Ganga


Government Initiatives
Through its Maritime Agenda 2010-2020, the Ministry of
Shipping has set a target capacity of over 3,130 MT by
2020,largely through private sector participation.
It aims to encourage private investment in both major and
non-major ports and bring port performance at par with
international standards;
Government will be investing INR2,870 billion in generating
total port capacity of 3,200 MMT and cater to expected cargo
traffic of 2,500 MMT by the end of 2020
Current Trends
Around 95 per cent of India's trade by volume and 70 per cent
by value happens through maritime transport;
During 2013-14, India's major ports handled 555.50 million
tonnes (MT) of cargo as compared to 545.83 MT handled in
2012-13, registering a growth of 1.8 %;
Cargo traffic at non-major ports increased at a CAGR of 13
percent over a CAGR of 2 percent at major ports

Current Trends
Cargo traffic at Indian ports stood at 911.5 MT in FY 12 and is
expected to touch 1,758 MT by FY 17;
Cargo traffic registered an increase of 4.8% as compared to
last year.
Of the major ports, Mormugao Port posted highest growth in
traffic (24.48 %)
Technology Advancements
Increasing Importance of IT Infrastructure

Information technology (IT), especially Internet-based systems, can be used effectively to
streamline and improve supply chain processes, enhance cooperation between carriers
and their customers by enabling instant communications, and eliminate many
burdensome procedures and regulations.
Most developed countries have already implemented a variety of strategies and policies
to develop information infrastructure.
In many countries, port information systems have been transformed into integrated
logistics information systems through interconnected efforts with other logistics-related
information systems.
Example: INTIS at the Port of Rotterdam, ADEMAR+ at the Port of Le Havre, DAKOSY at the
Port of Hamburg, SEAGH at the Port of Antwerp, and FCP80 at the Port of Felixstowe, are
ports with IT systems that facilitate electronic submissions and clearance of shipping
information.
The Indian maritime industry has been giving greater emphasis on IT infrastructure.
Initiatives such as Electronic Data Interface (EDI) are being implemented across various
ports.
The Government has initiated development of PORTNET, which is designed to integrate the
ports with various users such as shipping agents, shipping lines etc, and with each other.
This is expected to streamline information flow and improve process efficiency.
Indian Customs is developing a risk management system to expedite various procedures.


Technology Advancements
Shipping Industry revolutionizes with Big Data

Hong Kong-headquartered CargoSmart is a Software-as-a-Service (SaaS) global shipping and
logistics solutions provider that enables shippers, NVOCCs consignees, logistics service
providers, and ocean carriers to automate and improve their shipment management
processes.
It's often difficult to determine whether it was justifiable when a vessel went off-route.
Multiple factors--weather, seasons, ocean currents, timing--can cause a vessel to change
directions or speed. Moreover, different vessels may respond differently to virtually identical
incidents.
The only way to justify a vessel going off-route is by comparing it with others, like studying
the ripple effect of an incident in the area. Big Data comes to help in this case. The service
gathers data from multiple sources to provide insight and analysis towards vessel-
movement. The sources of data range from publicly available weather conditions to private
vessel schedules and real-time routing data, as well as Automatic Identification System (AIS)
information tracked by different maritime authorities. Vessels can be tracked by the AIS base
stations along the coast lines, or by satellites when they travel out of range of terrestrial
networks.
It can automatically detect three major data subsets of each of the 5,500 vessels, updated
every 15 minutes: (1) actual time departure (ATD) from port, (2) actual time arrival (ATA) to port,
(3) observed difference between the planned route and actual route. This information
represents 80% of the global trade volume," he said, "allowing the system to offer industry
benchmarking information.
It helps in the offering industry benchmarking information and also help in tracking oil
smuggling.
Technology Advancements

Save fuel with Skysail technology called Kite

To achieve savings in freight costs, WFP Shipping has engaged the services of
Beluga GMbH of Bremerhaven, Germany to deliver shipments of food assistance
using wind powered technology. The shipping line has deployed SkySail technology
to offset the demands of the shipboard power units thus reducing fuel
consumption.
The kite, which is tethered to the bow of the ship, uses ocean winds to pull the ship
through the ocean.
Under ideal conditions the use of the SkySails can reduce fuel consumption by 10-
30%.
In a ship of 5000MT-6000MT size, such savings can equate to a fuel savings of
between 1.5 and 4.5 MT per day over a 30-day average transit time.
This dramatically reduces the amount of carbon and related emissions that are
released into the environment thus reducing WFPs carbon footprint.
Future Outlook
Increasing Private Participation: Strong growth potential, favourable investment climate, and
sops provided by state governments will encourage domestic and foreign private players to
enter the Indian ports sector.
Setting up of Port based SEZs: SEZs are being developed in close proximity to several ports,
thereby providing strategic advantage to industries within these zones. Plants being set up
include
1. Coal-based power plants to take advantage of imported coal
2. Steel plants and edible oil refineries.
3. Development of SEZs in Mundra, Krishnapatnam, Rewas and few others is underway
Focus on drafting depth: All the Greenfield ports are being developed at shores with natural
deep drafts and the existing ports are investing on improving their draft depth. Higher draft
depth is required to accommodate large sized vessels. Due to the cost and time advantage
associated with the large sized vehicles, much of the traffic will be shifting to large vessels
from smaller ones, especially in coal transportation.
Specialist Terminal Based Ports: Terminalisation: Focus on terminals that deal with a
particular type of cargo. This is useful for handling specific cargo such as LNG that requires
specific equipment and hence high capital costs. Forming specialist terminals for such cargo
result in optimal use of resources and increased efficiencies. Examples of specialist terminals:
ICTT in Cochin, LNG terminal in Dahej Port


References

KPMG All aboard! Insights into India's maritime community
(2014)

www.deloitte.com/assets/Dcom-India/Local
Assets/Documents/Thoughtware/Intermodal and
Multimodal Logistics.pdf

http://www.livemint.com/Opinion/hkC9ZcvCbqlWbB141LnD
wK/After-years-of-neglect-India-wakes-up-to-coastal-
inland-wa.html

India Brand Equity Foundation

CRISIL Research Report
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