In a first of its kind in the country, a short-haul coastal container feeder service will be launched on Monday between Chennai and Puducherryports. To be operated by the Chennai-based Global Logistics, the 12-hour ferry service is expected to help the trade avoid the congested road traffic and take delivery of boxes through Direct Port Delivery (DPD) and Direct Port Entry (DPE) than using storage spaces like Container Freight Stations (CFS) and Inland Container Depots (ICD).
The Chennai Port Authority (CPA) and Puducherry port signed a memorandum of understanding in 2017 for the diversion of cargo to the latter and sharing of revenue. Sunil Paliwal, Chairman, CPA, will flag off the operations offered by Global Logistics from DP World Container Terminal inside the Chennai port on Monday morning.
The overall freight cost could be reduced by 25 per cent by moving through sea as against the road movement (160 km), said an industry official.
The service will help the trade in the hinterland of Puducherry as DPD and DPE-cleared containers can be moved easily since no clearance is required in the Puducherry port, said S Narasimhan, Managing Director, Sattva ICD at Puducherry. The Government of Puducherry should make sure that the city does not become congested, he added.
AV Vijayakumar, Managing Director and CEO, Paramount Shipping Service Pvt Ltd, says that it is an innovative concept of the business model but will take time for the industry to shift its existing comfort zone where the box is picked up and delivered at their doorstep.
Unless cost-effectiveness is established, this could not be a lucrative model, and feeders will drop boxes at ports and there is a last leg connectivity to the importer/exporter at an additional cost and time. Looking at the larger picture, this will reduce density on the roads, fewer carbon footprints, and be more eco-friendly. DPD/DPE could be a potential business, which can be easily grabbed if there is an aggressive strategy.
The sailing time between the ports could be half a day. A feeder can take a trip every alternate day or every 3 days. (Considering loading / discharge / reloading, and sailing time).
Hence, even with a vessel of 500 container capacity, it could do 5,000 boxes a month – one way – which to start with is a good number. Assuming the cost of road transport is about ₹25,000 – then the feeder should be marginally less or equal or marginally more. Such pricing would be viable only if the feeder could fill the vessel if not fully at least more than half.
The volume will be reasonable considering industries in and around Puducherry and how much can be tapped to the feeder facility requires a lot of hard work, he said.
According to Ennarasu Karunesan, Maritime & Ports Expert and IAPH’s Regional Director to India, the coastal feeder service is a step forward towards the ambitious Sagarmala Project. This service is expected to benefit the Pondicherry and Cuddalore Industrial clusters where the trade can now do the ‘unstripping’ and ‘stripping’ of Containers inside the Puducherry port, which can become an extended arm of the Chennai Hub-and-Spoke container movement.
Two advantages can be expected - cost savings and Greenhouse Gas emission reduction - as it is proven that water transportation emits less CO2 than the road and also ease out the congestion on the road, he said..