5.3.3 Long land leads at either or both ends (>150 km)
Such O-D pairs that are separated by a long distance but have port location advantage at only
one end were considered to observe the impact of high percentage of land movement in the
overall sea + land transportation
The O-D pairs examined are:
Talcher - Kottayam via Paradip and Kochi ports
Tughlakabad - Bangalore via Kandla and Kochi / NM ports
Tughlakabad - Chennai via Kandla
Bangalore - Trivandrum via New Mangalore and Vizhinjam ports
Jamshedpur - Bangalore via Kolkata and Chennai ports
Mangalore - Udaipur via Kandla port
Bajva (IOC) - Bangalore via Magdalla and Kochi Ports
5.3.4 Sea transport over short sea distances (<1000km)
Such O-D pairs that are located at or near port location but inter-modal transport between
them involve short distances by sea were chosen to examine economic viability
The O-D pairs examined are:
Jamnagar - Mumbai via Sikka port
Tuticorin - Kollam
Visakhapatnam Steel Plant - Chennai via Vizag Port
5.3.5 Sea transport over long sea distances (>1000 km)
With the North- South-East-West corridors and the Golden Quadrilateral coming up on the
road network linking the four major metro cities with linkage to Ports, whether taking the sea
route is a viable option or not becomes a point to ponder especially since three of the four
metros are port cities separated by long sea distances as well. The capital and the land locked
metro Delhi has the biggest container freight station located at Tughlakabad that generates
heavy traffic to & fro hence these O-D pairs plus some other O-D pairs with long sea voyages
were considered for analysis.
The O-D pairs examined are:
Mumbai - Kolkata
Mumbai - Chennai
Tughlakabad - Chennai via Kandla port
Talcher - Kottayam via Paradip & Kochi ports
Tuticorin - Chennai
Bangalore - Trivandrum via New Mangalore and Vizhinjam ports
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5.4 SENSITIVE PARAMETERS
5.4.1 Vessel size
The tariffs / expenses at ports have two components. One is cargo related and the other vessel
related. The vessel related charges are Pilotage, Port Dues and Berth Hire. These charges are
usually levied on the Gross Tonnage of the vessel (GT). While pilotage is payable for every
entry, port dues paid are valid for a period of time. Berth hire is computed on the GRT and
charged for every hour of stay at berth and hence is sensitive to more than one cost
component.
Besides the charges at port, the vessel size also has a bearing on the bunker costs. While
vessels of 3,000 GRT or more (that ply on the overseas trade routes) use separate fuels for the
main engines (for propulsion) and auxiliary engines (for power, water etc) viz., FO and MDO
respectively, the smaller vessels of less than 3,000 GRT normally use HFHSD for all bunker
requirements. The fuel consumption rate and the speed of the vessel directly determine the
bunkers consumed on the sea voyage and the cost of the same.
5.4.2 Distance / Steaming time
The steaming time in navigating from one port to another is dependent on the speed of the
vessel and the distance to be traversed. The distance therefore has a direct bearing on the fuel
cost at sea. The other cost component sensitive to the distance / steaming time is the charter
hire which is payable per day.
5.4.3 Stay at port
The stay at port has two components i.e., the pre-berthing waiting period and the turn around
time at the port (on berthing). While pre-berthing delays would add to the standing cost
(unproductive use of the vessel) and the bunkers consumed towards auxiliary requirements of
the vessel.
Time spent at berths has a bearing on the berth hire also in addition to the above cost
components.
5.4.4 Variation in fuel costs
The bunker costs are not only sensitive to the consumption but also on the rates fixed for
coastal vessels and the fluctuations in the rates.
5.4.5 Parcel size
The size of the parcel has a direct bearing on the economics and is the primary factor that
drives the sea trade. The handling costs, the standing cost and fuel costs are all sensitive to
the parcel size. Parcel size determines the unit cost of transportation. (Per bag or per TEU or
per T).
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A reading of the above would reveal that the economics of a voyage is sensitive to
commodity, parcel size, distance, loading / unloading, pre-berthing time and vessel
specifications.
5.5 FINDINGS
5.5.1 Viability Analysis
The case studies that were considered for analysis to satisfy different scenarios have been
categorized based on the land distance and sea distance involved in the land + sea mode of
transport and presented below. For purposes of convenience, the land distance has been
divided into four categories viz., <50 km, 50-150 km, 150-500 km and >500 km. Likewise
the sea distance has been categorized as <500 km, 500-1000 km, 1000-2000 km and >2000
km.
a) Total land lead <50km and Sea distance <500km
It is observed that compared to transportation by road, the transportation by sea between such
O-D pairs is a financially viable option irrespective of a parcel size of only 3600 T of general
cargo carried in containers.
b) Total land lead <50km and Sea distance 500-1000km
Under this category, movement of different items of Iron & Steel viz., sponge iron, pig iron
and HR & CR steel sheets & coils by multi-modal transport (rail+sea) was analyzed vis-à-vis
rail movement from Vishakapatnam Steel Plant to Tondiarpet. In the case of steel sheets &
coils it was found to be viable but movement of sponge iron & pig iron by the multi modal
option was found to be unviable compared to carriage by rail. This can be attributed to the
fact that these items are governed by different rail tariff rates.
c) Total land lead <50km and Sea distance 1000-2000km
Commodities analyzed were rice (in 100kg bags) diverted from rail and general cargo in
containers diverted from road, the parcel sizes being 6,000 T and 3,600T respectively. In both
the cases the shift to land + sea transport from the land modes was a viable option. In the case
of rice (food grains) in bags, inter-modal transportation with parcel sizes less than 6,000 T
was found to be unviable due to the low rail tariff rates for this commodity.
d) Total land lead 50-150km and Sea distance 500-1000km
Under this category, it was found that land + sea transport of general cargo in containers
(3,600T) diverted from road is a viable option compared to the cost of transportation by road.
e) Total land lead 50-150km and Sea distance 1000-2000km
Movement of bagged cement (50 kg) in parcel sizes of over 8000 T from Gujarat to Kerala
by land + sea mode was found to be viable compared to transportation by rail mode. But
movement of cement in 50kg bags from origins in Andhra Pradesh/Tamilandu to destinations
in Kerala by land + sea mode was found to be unviable due to the fact that the direct land
distance between the origins and destinations was found to be much less than the distance by
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land + sea mode. Another reason is the fact that cement is a low value commodity that cannot
bear high transportation costs.
f) Total land lead 50-150km and Sea distance >2000km
Under this category movement of food grains in 100 kg bags (parcel size 6,000 T) diverted
from rail and general cargo in containers (parcel size 3,600 T) diverted from road were
analyzed. While the former was found to be unviable, the latter was found viable. The reason
for the non-viability of the former is the low freight rates charged by the railways for this
essential commodity.
g) Total land lead 150-500km and Sea distance 1000-2000km
Under this category diversion of containerized general cargo from road was analyzed for two
different sets of O-D pairs. While the land + sea transportation between Mangalore to
Udaipur was found to be viable compared to road transportation costs, land + sea
transportation between Bangalore to Thiruvananthapuram was found to be unviable. This can
be attributed to the fact that the direct road distance between Bangalore and
Thiruvananthapuram is only 753 km compared to the land + sea distance of 1757 km between
them. In the case of Mangalore and Udaipur the distance by land mode and by land + sea
mode is almost the same (1686 and 1789 km respectively)
h) Total land lead 150-500km and Sea distance >2000km
Under this category transportation of coal from Talcher to Kottayam by land + sea mode was
compared to transportation by rail. The diversion was found to be a viable option.
i) Total land lead >500km and Sea distance 1000-2000km
Under this category transportation of POL (parcel size of 28,000 T) from Bajva to Bangalore
and general cargo in containers (parcel size of 6,300 T) from Tughlakabad to Whitefield by
land + sea mode was compared to transportation by rail. While the diversion of POL was
found to be viable, the diversion of containers was found unviable due to very competitive
rates offered by railways. This is borne out from the fact that transportation of containers by
land + sea mode was found viable compared to road transportation costs between the above
O-D pair. Interestingly, diversion of a lesser parcel size of 3,600 T of general cargo in
containers from road to land + sea mode was found unviable between Jamshedpur and
Bangalore presumably because of the parcel size.
j) Total land lead >500km and Sea distance >2000km
Under this category, movement of food grains in 100 kg bags (parcel size 16000 T) diverted
from rail was analyzed. It was found to be unviable. The reason for the non-viability can be
attributed to the low freight rates charged by the railways for this essential commodity.
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5.5.2 Summary of viability analysis
The above findings are summarized and presented here below in the form of matrices for
convenience.
