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Chennai wins ro-ro service under India-Bangladesh shipping pact

Chennai wins ro-ro service under India-Bangladesh shipping pact

The port of Chennai has gained a new roll-on, roll-off (ro-ro) service to Mongla, Bangladesh, as a coastal shipping agreement between India and Bangladesh continues to pay off.

The service, which could save save Indian automakers a great deal on transit times and logistics costs for their exports, will help Chennai offset the tonnage lost from lower container volumes as a result of intense competition on India’s east coast and past issues with truck turn times and port productivity.

“Transport through the sea route will save about 15 to 20 days of travel time. Besides saving time, coastal transport will be more cost effective and environment friendly,” said Indian Shipping and Transport Minister Nitin Gadkari.

The maiden sailing by the MV IDM Doodle had 185 trucks from Ashok Leyland, a leading heavy vehicle manufacturer in the country.

The minister also exhorted all domestic automakers, which have lately made Chennai their manufacturing and exporting hubs, to use coastal shipping services for their Bangladesh-bound vehicle exports rather than over-the-road routings fraught with congestion at border points.

Ashok Leyland currently exports about 12,000 heavy vehicle units to Bangladesh, Sri Lanka, and various countries in Africa, and it is expected that such movements to Bangladesh and Sri Lanka will grow significantly in the coming years. Roughly 500 trucks per month are expected to move by sea.

The coastal shipping agreement, signed in June 2015, removed regulatory and bureaucratic hurdles to maritime trade between the two nations that previously relied on transshipment options at the ports of Colombo, Sri Lanka, and Singapore for the movement of cross-border freight. That cooperation is already proving a boon for Indian east coast ports that have limited hinterland cargo potential compared with their west coast peers.

The deal classifies all freight transported between ports in India and Bangladesh as “coastal traffic” with a 40 percent concession on charges related to cargo and vessels, whereas for movements by ro-ro vessels, such concessions amount to as much as 80 percent at Indian ports. To attract more short-sea ship operators to the sector, the two sides also agreed to allow “river sea” category vessels for coastal operations.   

“Initiatives like this are aimed at providing innovative logistics chain solutions under Sagar Mala. The ultimate objective is to save logistics costs and time of transportation,” the Ministry of Shipping said.

Those efforts are slowly but steadily producing positive results, as the privately-operated Krishnapatnam port has handled several ad-hoc sailings to and from Bangladesh since early last year.

As a result, India’s exports to Bangladesh during fiscal year 2016 to 2017 are said to have reached $6.8 billion, a gain of 13 percent year over year, with two-way trade up 11 percent to $7.5 billion in the same year.

Hoping to accelerate those gains, Indian authorities are also setting up new infrastructure for coastal operations at Jawaharlal Nehru Port Trust and Karwar.

Source :

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