Coastal Cargo Movement of Raw Cotton to Increase by 266 per cent

The coastal cargo movement of raw cotton from Gujarat to Tamil Nadu in containers is expected to increase by 266 % in 2014-15. It would increase from 1200 containers in 2013-14 to 4400 containers in 2014-15. Earlier, the Ministry of Shipping facilitated the meeting of stakeholders, South Indian Mills Association (SIMA) and the Indian National Ship-owners Association (INSA) which resulted in INSA offering freight rates which would reduce the cost of transportation up to 30%. The INSA members would also receive additional cargo support in coastal shipping.

SIMA had requested Ministry of Shipping that foreign flag vessels should be allowed to transport raw cotton from the west coast of India to the southern coast as it was hoped that they would charge lower freight rates compared to Indian shipping lines. It is estimated that around one million tonnes of cotton moving from Gujarat/ Maharashtra to mills in Tamil Nadu would be carried by road. Director General (Shipping) had held consultations with SIMA and INSA with a view to increase transportation of raw cotton by coastal shipping. The Indian flag vessels owners had conveyed that they could make approximately 7,500 Forty Feet containers (TEUs) available per month, which was sufficient to carry raw cotton.

The foreign shipping lines did not show much enthusiasm in quoting freight. Subsequently some companies did quote rates, but these were higher than that of Indian companies. Subsequently, INSA offered attractive freight rates and assured adequate deployment of vessels to cater to the demands of SIMA as cotton shifted from road to coastal shipping.

This modal shift is beneficial to both SIMA and INSA. Textile industry will benefit from lower transport costs and Indian shipping industry will benefit from greater business opportunities, while the country will benefit by way of reduced fuel consumption and green economy.

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