• 1st March 2019
  • Sameer Mungekar
  • 0

India is the sixth largest economy in the world. It is expected to be among the top three economies in the world within the next decade. The rapidly growing urban population fuels India’s growth. Agriculture and Industry are at the centre of our economic development, as a large percentage of our society depend on it for a living. International trade accounted for 9.92 per cent of our GDP in 2018. Our progress in global business largely depends on the quality of infrastructure we can build.

International trade in Industrial and Agricultural commodities is primarily dependent on Ports as ninety per cent of global trade is dependent on waterways as a means of transport. The development of Ports and Waterways in India will play a crucial role in the development of our economy.

Liquid Cargo accounts for forty per cent of cargo traffic at Indian ports. This number will increase as the demand for Petrol, Diesel and other petroleum products continue to grow. The table below shows the increasing trend in liquid cargo traffic in India between 2007 and 2017. (Chart).)
Liquid Cargo Traffic at major ports in India (2017). Figures are in million tonnes.

FY 2007: 154.3
FY 2008: 168.7
FY 2009: 176.1
FY 2010: 175.1
FY 2011: 179.1
FY 2012: 179.1
FY 2013: 185.9
FY 2014: 187.2
FY 2015: 188.9
FY 2016: 195.9
FY 2017: 212.4

Trade in Liquid Bulk products has grown at a Compounded Annual Growth Rate of 4.67 per cent between March 2003 and March 2017. Liquid Bulk traffic averaged 196.350 million tonnes between 2003 and 2017. The liquid bulk cargo traffic was 240.556 million tonnes in March 2017. The liquid bulk traffic at major Indian ports in 2017 is stated below.

1. Kolkata Dock System: 1.579
2. Haldia Dock System: 11.136
3. Paradip: 29.510
4. Visakhapatnam: 18.522
5. Ennore: 4.167
6. Chennai: 13.602
7. V O Chidambarnar: 1.546
8. Cochin: 16.665
9. New Mangalore: 27.083
10. Marmugao: 1.071
11. Mumbai: 38.842
12. JNPT: 6.781
13. Kandla: 70.052

• All figures in million tonnes.
• 2017 data.

Challenges facing the Liquid Bulk Cargo Industry:

Global economic trends strongly influence worldwide trade and the maritime industry. The global economy is expected to grow at 3.7 per cent in 2019 as per IMF data. The Indian Economy is expected to grow at about 7.8 per cent in 2019. Preliminary forecasts indicate that Indian economy will continue to grow at similar rates over the next decade. India is the fastest growing major economy in the world; hence, opportunities for development of ports and waterways to cater to the rising demand for goods is very high.

The Liquid Bulk Cargo Industry faces the following challenges:

1. Capacity constraints and lack of adequate infrastructure at ports.
2. Draft depth.
3. Dedicated Berths.
4. Tanks and Pipelines.
5. Domestic connectivity.
6. Low penetration of Coastal Shipping and Inland Waterways.
7. Regulatory Challenges.

The capacity utilisation of Indian ports is very high as compared to international standards. This creates supply deficits and delays the onboarding and offloading of cargo. Indian ports lack adequate infrastructure in terms of storage for inbound and outbound cargo. The draft depth of Indian ports is shallow as compared to international ports, which prevents large vessels from accessing our ports. The time required for pumping and offloading liquid cargo is very high as compared to European and South East Asian ports because of technological deficiencies. Dedicated pipelines are not available for different categories of cargo such as crude oil, clean oil, chemicals, gas, etc. Coastal Shipping is sparingly used for domestic transport and the development of inland waterways is non existent. Foreign cargo vessels face delays in accessing Indian ports due to regulatory constraints. These concerns are a bottleneck in the movement of liquid cargo.

The Road Ahead:

The Liquid Cargo Industry should address the above concerns and focus on capacity expansion and infrastructure up-gradation. The railway and roadways connectivity to the ports must improve to facilitate easy sourcing and distribution of cargo. A multimodal network consisting of coastal as well as inland waterways must be developed to enhance the speed of distribution and reduce costs. An Industry body must be developed to highlight industry concerns with the state, and central governments, and create awareness among the society about the problems faced by the industry. Health and Safety standards at ports and along the connecting networks should be in line with international standards. Refineries and petroleum product manufacturers should outsource their logistical requirements and focus on their core business to reduce costs and improve efficiencies.

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