Shipping

Shipping

This article deals with ‘Shipping– UPSC.’ This is part of our series on ‘Economics’ which is an important pillar of the GS-3 syllabus. For more articles, you can click here.


Introduction

  • Shipping is the world’s most efficient means of transportation.  
  • In India, the sector works under the Ministry of Shipping.  
  • In Schedule 6 of the Indian Constitution, Port development in India is a concurrent subject. Hence
    • Major ports are regulated by the central government  
    • Non-major ports are regulated by state governments 


Statistics

Coastline 7500km (including Andaman & Nicobar, Lakshadweep)
Major Ports There are 12 Major Ports in India (6 West + 6 East)
These ports handle around 60% of traffic
Minor Ports There are more than 180 minor ports in India.
These handle 40% of traffic.
But presently, with the entry of private players (like Adani Group), these are witnessing tremendous growth.
Ship-Breaking Industry India is ranked number one in shipbreaking. (Alang in Gujarat is the biggest in the world)
Shipyards Cochin Shipyard Limited is the largest shipyard in India. 
Ships As of September 2019, India has a fleet of 1,419 ships (one of the largest among developing countries)

Note: Indian International Trade by volume and value carried by ships

Shipping

Ports of India

According to India Yearbook & Sagarmala Concept Paper, India has 12 Major Ports.

Major Ports of India

Major ports on the West Coast

1. Mumbai (Maharashtra)

  • It is situated in Maharashtra and is one of India’s most important major ports.

2. Jawahar Nehru Port, Nhava Shewa (Maharashtra)

  • It was commissioned in 1989 to ease pressure on Mumbai port.

3. Kandla (Gujarat)

  • Kandla is a tidal port which was developed in the 1950s because Karachi port was lost due to partition.
  • It was the first Exclusive Economic Zone (EEZ) in India and Asia.

4. Mormugao (Goa)

  • Mormugao is a tidal port situated at Zuvari estuary
  • It is important for iron-ore export.

5. New Mangalore (Karnataka)

  • It is a deep water all-weather port. 
  • It was operationalized in 1975.

6. Cochin/Kochi (Kerala)

  • It is situated on Willingdon Island.

Major ports on the East Coast

7. Haldia | Kolkata (West Bengal)

  • It is the only major RIVERINE port in India.
  • Haldia port is the oldest major port of India.  
  • It has twin dock systems viz., Kolkata Dock System (KDS) on the eastern bank and Haldia Dock Complex (HDC) on the western bank of river Hooghly. 
  • Port needs constant dredging to keep depth.

8. Vishakhapatnam (Andhra Pradesh)

  • Vishakhapatnam port is situated in Andhra Pradesh.

9. Paradeep (Odisha)

  • It is situated on a manmade lagoon. 
  • JL Nehru laid its foundation in 1962 at a point where Mahanadi meet the Bay of Bengal 

10. Tuticorin (Tamil Nadu)

  • It is a major port situated in Tamil Nadu.

11. Chennai (Tamil Nadu)

  • Port of Chennai is an all-weather port situated in Chennai.

12. Ennore (Tamil Nadu)

  • It is a private major port made under the companies Act

(Newly proposed) Enayam Port (Tamil Nadu)

  • The proposal to establish Enayam port was accepted in 2016.
  • Currently, around 78% of the marine traffic from ports of India is trans-shipped to Colombo, Singapore and Klang (Malaysia), as most of the Indian ports don’t have a draught (depth of water needed for a ship to float) to match global cargo handling. Enayam will solve this problem. The Enayam port has a natural deep draught of about 20 meters which makes it feasible for the largest vessels in the world. 
  • But this port is very close to Vizhinjam (Transhipment) Port of Adani’s in Kerala. 

Private Ports by Adani Group & others

  • In recent years, there has been an attempt to increase the country’s port capacity, but the real successes have been in the private sector, mainly by the Adani Group.
    • Sikka & Mundra port of Adani Group in Gujarat has overtaken Kandla to become the country’s largest. 
    • Dhamra (in Odisha) of Adani Group has become as big as Haldia. 
    • Adani will become the champ of the country’s port business once he builds the deep-water port at Vizhinjam in Kerala, designed to take some of the transhipment traffic away from Colombo.
  • Meanwhile, Krishnapatnam port on the southern Andhra coast is being developed by local entrepreneurs, and claims to handle as much traffic as the long-established Chennai.

Side Topic: Dry Ports

  • They are inland terminals, directly connected to a seaport by rail or road, which provide similar services as that of a seaport, such as handling, temporary storage, inspection and customs clearance for international freight etc. 
  • They are beneficial as they reduce the seaports’ capacity constraints and, simultaneously, develop the hinterland.
Shipping

Problems of Indian shipping

Colombo can handle more container traffic than all of India’s ports put together — with  75% of that being transhipment of containers from India because India’s ports are too shallow to accommodate big container vessels.

Problems related to Ports

  • India doesn’t have world-class portsThird-generation ships can’t enter Indian harbours & as a result, goods are offloaded in Sri Lanka & sent to India via smaller ships. 
  • Port charges are high as compared to other developing nations.
  • Port congestion
  • Poor mechanization and manual handling of critical processes. E.g. in Paradip port.

Governance Issues

  • dual institutional structure has led to the development of Major and Minor ports as individual projects.
  • Ports in India are operating on the “Trust Model”, where the government is the owner and operator of the port. 
  • Procedural bottlenecks as there is a lot of paperwork to load -unload cargo.
  • Poor performance of Government ports: It takes up to four times as long to fill or unload a cargo ship at Jawaharlal Nehru Port than at a private rival due to lower mechanization and unskilled labour.

Lack of Evacuation from Ports

  • There is inadequate road & rail connectivity to ports.

Fleet = Ageing + Low number

  • Ageing fleet: There is an urgent need to replace our ageing ships with new ones.
  • Indian ships account for a tiny part of the country’s trade, i.e. about 15%, compared to the international norm of 40%.  

No Shipyards

  • India has no civilian shipyards to compare with the world’s best. The two or three private ones that look to build commercial vessels are deep in debt and short of orders; most Indian ship-owners prefer to look to foreign yards because of better quality and assurance on delivery schedules. 

Low Penetration of Inland and Coastal Shipping

  • Coastal and inland shipping hasn’t developed in India due to limited facilities, higher costs and policy constraints.

In short, India’s maritime business needs a booster shot.


What govt is doing to boost Maritime Sector

The government is taking various steps to boost the Indian Maritime Sector, which includes

  • Sagarmala Project
  • Maritime India Summit
  • National Waterways Bill
  • Enayam Deep Sea Transhipment Port
  • Trade Facilitation Agreement (TFA)
  • Major Port Authorities Bill

Projects regarding Shipping Ministry

1. Sagarmala Project

Sagarmala is an initiative for port-led development whereby India’s coastline will become the gateway to India’s prosperity.

Key Components

Sagarmala Project
  • Port Modernisation: It aims to transform existing ports into world-class ports by modernization of port infrastructure and existing systems & developing 6 to 8 new world-class ports 
  • Efficient Evacuation Systems / Port Connectivity: Develop efficient rail, road and inland waterway networks connecting ports to the hinterland.  
  • Coastal Economic Development: Encourage coastal economic activity in coastal regions by:
    • Development of Coastal Economic Zones (CEZ), port-based SEZs etc. 14 CEZs are to be made under Sagarmala.
    • Promotion of coastal tourism.
  • Coastal Community Development: This will be achieved via
    • Skill Development 
    • Uplifting fishermen and other local communities
    • Island development

Sagarmala could boost India’s merchandise exports to $110 billion by 2025 and create an estimated 1 crore new jobs. 


2. Sethu Samudaram 

  • The project aims to create a shipping canal connecting Palk Bay and the Gulf of Mannar. 
  • It will reduce time and fuel consumption. 
  • But it has been struck because of opposition on account of religious sentiments about Ram Setu and the threat it poses to marine biodiversity.
Sethu Samudaram

Major Port Authorities (MPA) Act, 2020

  • It has replaced the Major Port Trust Act of 1963.  
  • The composition of the Board of Authority has been simplified, and it will now comprise 11-13 members instead of the earlier 17-19 members. 
  • Each port will have a separate Board of Major Port Authority members from the State Government, Railways Ministry, Defence Ministry, Customs Department etc.
  • Model of Ports
    • Under the earlier Act: Ports used to operate on the “Trust Model”, where the government is the owner and operator of the port.
    • Under MPA Act: Ports operate on the ‘Landlord-Tenant Model’ where Major Port Authority will be the owner and regulator. 
  • Earlier, Ports’ user fees were decided by National Tariff Authority for Major Ports. In the MPA, the Board of Major Port Authority will set up Committees to determine their user fees. 
  • The Board of Port Authority has been given full powers to enter into contracts, plan and develop except in national interest, security and emergency arising from inaction.

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