Shipping cars via coastal route not viable: Industry

Experts call for a multi-model cargo movement policy that must compensate manufacturer for the costs incurred

Having facilitated shipment of  Hyundai cars for the domestic market for the first time through the coastal route, the Chennai port is trying to popularise this and is in talks with other original equipment manufacturers (OEMs) like Nissan and Ford to move their vehicles from south India  to western India using this mode.

However, experts say if the government wants to popularise coastal transport for domestic market and boost acceptability among car manufactures, it should come out with a multi-model cargo movement policy that compensates manufacturers for costs incurred in availing first-mile and last-mile connectivity for automobiles.

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The government proposed a scheme in 2014 to provide monetary incentives but nothing concrete has come of it. According to sources in the transport ministry, the proposed policy of transportation of vehicles through roll-on-roll-off (RoRo) vessels would be eligible for incentives of Rs 3,000 per car.

Recently, Chennai port transported 800 cars of Hyundai to Pipavav port in Gujarat meant for the company’s distributors in that state and Maharashtra. The cars were loaded on to the IDM Symex, a RoRo vessel. Hyundai used trailers to move vehicles to Chennai port and from Pipavav port to dealers’ destinations.

To encourage OEMs to use the service, the port has announced a flat wharfage rate of Rs 500 per small car and Rs 2,000 for big cars. Also, the wharfage for RoRo vessels has been reduced by 40 per cent.

Speaking to Business Standard, a transporter said, “Shipment of cars through the coastal route meant for domestic market is not viable currently. It is beyond doubt that this will reduce carbon footprint and congestion on roads. But the model should be viable. The cost is more as secondary transport is involved. Only if the government provides incentives will this be successful.”

GASPING FOR INCENTIVE

• Chennai port is in talks with OEMs like Nissan and Ford to move their vehicles from south India  to western India using coastal route
• Experts say if the govt wants to popularise coastal transport for domestic market, it should come out with a multi-model cargo movement policy
• The government proposed a scheme in 2014 to provide monetary incentives but nothing concrete has come of it
• According to sources, the proposed policy of transportation of vehicles through roll-on-roll-off (RoRo) vessels would be eligible for incentives of Rs 3,000 per car
• To encourage OEMs to use the service, the port has announced a flat wharfage rate of Rs 500 per small car and Rs 2,000 for big cars
• Wharfage for RoRo vessels has been reduced by 40 per cent
• Currently, a trailer with a capacity of carrying 10 cars charges about Rs 1 lakh-Rs 1.25 lakh for transporting cars from Chennai to Gujarat
• Port officials say shipping cars would reduce congestion on roads and pollution
• They further added that with incentives, shipping would cost lesser compared to road transport

He said the Chennai port started this mode two years ago, but it was a big flop.

Currently, a trailer with a capacity of carrying 10 cars charges about Rs 1 lakh-Rs 1.25 lakh for transporting cars from Chennai to Gujarat. However, the transportation cost through shipping could not be accessed.

According to officials, around 5,000-7,000 cars are transported through trailers to Gujarat and Maharashtra every month from the Chennai units of Hyundai, Ford and Nissan.

Hyundai had earlier used the Chennai port for exporting cars. This was the first time it transported cargo through the sea for the domestic market.

Port officials said the time taken for manufacturers to move vehicles from production centres near Chennai to Gujarat through trailers and ships was more or less the same. But shipping would reduce congestion on roads and pollution. Port officials further added that with incentives, shipping would cost lesser compared to road transport.

Last year, to promote coastal shipping and inland waterways, the Central government relaxed cabotage for special vessels such as RoRo, Hybrid RoRo, RoRo cum Passenger (Ro-Pax), Pure Car Carriers, Pure Car and Truck Carriers, LNG vessels and Over-Dimensional cargo or Project Cargo Carriers for a period of five years.

With this relaxation, vessel operators will be allowed to bring foreign flagged vessels of this category to ply on coastal routes. Such special vessels are in short supply in the country.