How sea shipping has many inherent advantages over other forms of logistics

The global logistics industry accounts for a massive share of carbon emissions. To put it, an perspective estimated 7% of global carbon emissions result from logistics operations and freight. Notably, the carbon footprint activities need to be lowered by at least 20% to achieve the Paris Accord goal of attaining net-zero emissions between 2050-2100. Companies are adopting green logistics, an emerging phenomenon worldwide, to accomplish this. Businesses are actively engaging in eco-friendly initiatives to reduce their carbon footprint to aid climate control.

The logistics sector has become technologically driven and organized. From the increased usage of alternative fuels like LNG, CNG, etc., to the adoption of Electric Vehicles, conscious  logistics players are actively working to reduce carbon  emissions. But there’s so much more that can be done One of the things is to switch to maritime logistics. Why? Because it will prove to be more cost-effective and environmentally sustainable. However, with the growing need to be conscious about the environment, the maritime industry needs to evolve too.

Currently, the port industry accounts for less than 10% of Indian cargo movement. It has many untapped opportunities that companies are gradually becoming aware of. Thanks to the government’s multiple initiatives, the development of the  sector has accelerated.

Why is coastal shipping more better?

India is blessed with one of the longest coastlines of about 7517 km. With the strategic coastline, the scope of increasing the trade volume is much higher than expected. Therefore, several big companies are indulging in multimodal logistics with coastal  shipping as a big part of the transit. The reasons are manifold.

Economical & efficient

Using maritime logistics is one of the most cost-effective ways of shipping goods, especially for long distances. In fact, sea freight  costs four to six times lesser than air transport, and 1/3rd the cost of Road Logistics

Currently, over 50% of freight movement in India is by road poor road management imposes additional costs to the logistics providers, thus causing inconvenience to everyone in the supply chain. However, with coastal logistics, not only will the costs be reduced, it will also cut down the delivery time.

The government launched The Sagarmala Program in 2017 to reduce the costs and time of the EXIM cargos. Intending to double the usage of the port industry by 2025, the government is planning to invest $123 billion across 415 projects under the program, including port modernization and new port development. This will significantly reduce  export time. India has 12 major and over 200 non-major ports and a vast waterways network. Out of the 200, 44 are already operational, with others gaining the cargo share gradually. To put it into perspective, the traffic at non-major ports accounted for 45% of the cargo load in FY2020.

Simultaneously, the Ministry of Ports, Shipping, and Waterways also plans to operationalize 23 domestic waterways by 2030, which has proved cost-effective. The reduction in GST from 18% to 5% for foreign-going and coastal vessels adds to the advantages of maritime logistics.

 Ideal for moving heavy cargo

Another major advantage of sea shipping is the ability to move oversized/bulky cargo,. Such cargo could include heavy equipment, machinery etc that are unsuitable for air freight or even road transport. 

 Environmentally-friendly

If compared to other forms of transport, CL (Coastal Logistics) has the least amount of carbon emissions. International shipping accounts for 2.2% of global greenhouse gas emissions. And these already-low emissions continue to drop further with technological advancements.

LNG, termed as the future fuel, is also gaining popularity as a marine fuel. And why not? LNG is a clean fuel with 95% methane and small amounts of other components. Studies have shown that it reduces carbon emissions by 25-30% compared to other heavy oil-powered vessels.

The Indian government is also constantly working towards a cleaner future. The proposed Merchant Shipping Bill that will follow the International Maritime Organization protocols aims to prevent air pollution from the ships operating at sea.

 Safety

The shipping industry is continuously becoming more digitized, thus mitigating the risk of cargo loss/damage. The vessels are also designed to carry hazardous materials and dangerous cargo that are well-sealed before transit. Once packed and sealed, the containers provide great protection to the cargos against several physical barriers like atmospheric conditions, fire, or temperature fluctuations, which might not be possible with other forms of transportation.

India envisions a bright future for Maritime Logistics

There is no doubt that the Indian government is speeding up the gas infrastructure in the country, and the use of alternative fuel will bring us closer to a greener future. They are also furthering their agenda to build a robust infrastructure for the maritime industry.  The Ministry of Ports, Shipping & Waterways has recently prepared a blueprint – Maritime India Vision 2030 – to accelerate the growth of the country’s maritime sector in the next decade. The objective is to propel India to the forefront of the Global Maritime Sector. The advantages of CL (Coastal Logistics) combined with the multiple efforts by the government make the maritime industry well-oiled and one of the most efficient ways of transporting goods. The logistics sector must also consciously monitor its moves to aid climate control and help create a better ecosystem. As of now, India is the 16th largest maritime country globally, with tons of potential at hand, and the industry must tap this opportunity.

The article was written by Asish Agarwal

Source: Times of India

Tags: Alternative Fuels, CNG, LNG, Logistics, Shipping