Maruti restarts shipping of cars using the coastal route

In what could be seen as a golden opportunity for players in the coastal shipping space, India’s largest carmaker Maruti Suzuki, has reassumed trial runs to transport its cars through the coastal route.

While, other coastal shipping players could take advantage later, it is likely Adani group, a major player in the port business, may make most of this auto advantage.

Adani’s logistics arm has extended its services to Maruti in this second phase of trial runs.

Sources also state the group’s plans for coastal shipping may include a ro-ro (short for roll on, roll off; it means cargo - in this case, a car, just rolls or drives into the ship at departure point and rolls or drives out of it at the destination) service as well.

Sandeep Mehta, CEO, Mundra Ports and Special Economic Zone Ltd, refused to comment on whether the company plans to start a ro-ro service.

“We did some trial runs on the Gurgaon/Manesar-Mundra-Kochi route to understand the transportation flow and timeliness for the domestic vehicles. The trial runs on the route have again been started few months back with the intent to further study the operations and logistical efficiencies. In this second phase, we have transported a small number of vehicles to Kochi via this route,” said a spokesperson from Maruti.

The company’s cars are being moved by Shreyas Shipping and Shipping Corporation of India (SCI) vessels. Officials from SCI states the loading has started from November onwards.
Shreyas Shipping and Logistics, is believed to have moved around 75 cars on the Mundra-Kochi route in the last fortnight. While, it may be a small start, this could mean potential business for both ports in Gujarat and coastal shippers on the western coast.

Maruti, being the market leader, it has also been able to influence the logistics pattern for automakers in the past.
 
Maruti’s primary reason to take up coastal shipping the very first time has also been rather interesting.

Apparently, Maruti earlier moved all its cars through trucks from the manufacturing facilities in North India to its southern markets. However, this meant empty return load.

This opportunity was then tapped by other automakers in India who set up their manufacturing plants in South India. As they were able to provide the trucking company a return load, they could enjoy attractive rates.

In 2007, Maruti opted for coastal shipping to reach its Southern markets. This mode of transportation seemed almost ideal as it was cost-effective, translated to minimal damage to goods and also helped fight competition.

Shreyas Shipping of the Transworld Group then carried out the movement of cars for the auto company.

Unfortunately, the shipping company had to later discontinue its service as rates did not sound much profitable almost a year later. With, Maruti starting its trial runs once again, it could change dynamics one more time, given it has been a trendsetter.

It would be interesting to see if the other automakers follow suit and transport cars from their Southern manufacturing plants to Northern markets through coastal shipping.

In addition, Gujarat is also emerging as a favourite hub for automakers to set-up plants. Tata Motors already has its nano plant in Sanand, Gujarat. Mehta from Mundra states there have been discussions with automakers to take up space at Mundra SEZ. Maruti already has some space at Mundra, which it has been utilizing for its exports from India.