Shipping goods through Kandla can save North and South Indian businesses time, & up to Rs186 per tonne.
Gujarat will be the ideal cost- and carbon-cutting supply-chain point for businesses shipping goods between north and south India. This significant assessment is a part of a report released by Ernst &Young, a multinational business consultancy, and the Confederation of Indian Industry (CII).
The report, ‘Coastal Shipping in India: From Challenges to Opportunities’, observes that manufacturers in Coimbatore (Tamil Nadu) transporting goods, such as textiles, to New Delhi have the option of using road transport for the entire journey. “Alternatively, the manufacturers may transport the goods to Cochin by road, use coastal shipping up to Kandla, and then road transport from Kandla to Delhi,” said partner (tax and regulatory services), Ernst & Young, Samir Kanabar. “This route is economical and emits lesser carbon.”
The Coimbatore-Delhi travel cost through coastal shipping is estimated to be Rs4,256 per tonne, while the cost through road transport is approximately Rs4,442 per tonne. “So the coastal route saves Rs186 per tonne,” Kanabar said.
The downside, however, is that coastal shipping takes longer than the road-transport option. “But this problem can be solved easily,” Kanabar said. “If documentation hurdles are removed for domestic shipments, the travel time can be cut down.”
Moreover, experts say that since road transport is an established system and has an inherent convenience aspect, the extent of savings need to be much higher to effect a shift to shipping-based transport. A shift to the shipping-based transport can also lead to the decongestion of roads, which in turn, can lead to faster turnaround time for other modes. As for the advantages of the coastal route, the report offers an illustrative example. It says that for a large cement player, which needs to transport 3,500 tonnes of cement from Kodinar in Gujarat to Mumbai, the process of transportation by road would require 350 truck trips.
In this instance, the turnaround time is estimated to be seven days for a distance of 700 km. This cargo can be transported more swiftly using a coastal vessel, which will take only around 24 hours to sail 300 km, the report says.
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