India has opened a new inland waterway container service that authorities tout 'as a first' and believe will prove to be a cost-effective, alternative logistics remedy for road-rail inadequacies plaguing the emerging market economy.
Developed for Rs. 5,369 crore (about $810 million), and aided by World Bank technical and financial support, the intracoastal waterway route links Haldia, near Kolkata, to Varanasi, Uttar Pradesh state — a 1,390-kilometer (864-mile) stretch via the Ganges River.
To inaugurate the waterway, the MV RN Tagore, with 16 containers from food and beverage producer PepsiCo (India), departed from Haldia Oct. 30 and is expected to reach Varanasi on Nov. 12, India’s Ministry of Shipping said in a statement.
“Container cargo transport [via inland waterways] comes with several inherent advantages. Even as it reduces the handling cost, allows easier modal shift, reduces pilferages and damage, it also enables cargo owners to reduce their carbon footprints,” the statement said.
Advantages compared to road transport
To pinpoint those advantages, the ministry also said the shipper would have otherwise used as many as 16 trucks to handle that freight by road and that the establishment of an alternative, river transport will help reduce highway congestion and increase supply chain efficiency.
The maiden inland waterway container service complements a shipment of vehicle units from Varanasi to Haldia in August 2016. The route is capable of handling commercial vessels with capacities up to 2,000 deadweight tons.
The Varanasi river point is one of three multimodal terminals the government has built under the National Waterways Bill 2015 program. The other two are in Haldia and Sahebganj in Jharkhand state.
As India’s freight volume grows at a healthy pace and road-to-rail freight conversion efforts continue to struggle, despite various incentives, the government has shown a renewed interest in coastal shipping connectivity, using feeders and barges. The cabotage rule change, implemented May 21 to allow foreign-flag carriers to handle intra-India cargo, is also helping that program.
At Jawaharlal Nehru Port Trust (JNPT), which represents the majority of India’s container trade, new concessionaire PSA International has taken a lead regarding alternative transport solutions. Prior to its Bharat Mumbai Container Terminals' opening in February, PSA introduced a container-on-barge service between JNPT and Dharamtar port and a fortnightly coastal service from domestic short-sea ship operator Shreyas Shipping and Logistics, which started with the Oct. 17 call there.
Those measures are expected to support ongoing efforts by transport-related authorities and other stakeholders to double India’s share of coastal shipping trade from 6 percent to 12 percent by 2025, as part of a larger program to decrease logistics costs substantially.