Ispat Industries is one amongst the largest cargo movers by ships in the Mumbai region, bringing 150-180 ships annually. It is followed  by  other players  like  Tata Power, RCF,  MESB,  PNP,  Bhatia Coal,  Agarwal Coal, Rock Phosphorus, MOP,  MAP, etc.

Ispat has a  steel plant  at Dolvi in Raigad district, with a capacity of 3.3 million  metric tonnes of hot rolled steel  coils  per  annum,  for  which  approximately 7-8 million  metric tonnes of cargo, comprising  iron ore,  iron ore fines,  pellets,  dolomite, lime stone, coal, coke, scrap, DRI, and HBI in bulk, are brought in for  manufacturing steel.

Ispat's Dolvi plant has a captive jetty at Dharamtar, where  barges are used to discharge cargo  which is then moved to  the plant and storage yard. Ispat moves about 100 coastal ships of approximately 50,000 DWT every year. There are other players in the coastal shipping arena such as companies like Essar, Jindal, Vikram Ispat, Welspun and Ashapura. However, government priorities for moving coastal cargo are still to take shape.

Problems in coastal movement
For  taking  a  coastal  ship,  first of all, permission from the Indian National Shipowners Association (INSA) is to be  obtained, for which  every charterer has to give an enquiry to INSA, which will then see whether  any Indian Ship can  perform  the   given  cargo operation; if  not, it gives NOC to the charterer for chartering foreign  ships. Due to non-availability of Indian ships for coastal business, Indian coastal cargo moving charterers have to hire foreign vessels.

For chartering a foreign  ship, after getting the NOC from  INSA, one has to apply to the directorate general of shipping for approval by paying a fee to the government. Indian shipowners  being scarce, invariably only  foreign ships  are  chartered, but their owners are reluctant to do coastal  business in India. 

While finalising the charter rates of  foreign  ships,  it is seen that foreign ship owners seek premium for  performing  coastal business and many a time they do not adhere to the stipulated  Baltic Exchange  Route  Index.

The Indian charterer has, thus, to shell out approximately 20% more on charter hire than the Baltic index rates. Our shipping ministry and other related government organisations should help coastal charterers to have their voice heard at the London Baltic Exchange to create a separate Supramax, Handymax, Handysize and Panamax Route Index for Indian coastal business which will form a determining factor for the ultimate Supramax Index of the world to determine the dry cargo index. 

Recently, the Baltic index  has  created a trial Australia- Indonesia-India  Index, called  the S8 Supramax. Similarly, the Indian authorities are further requested by charterers to urge the Baltic Exchange to create Route S9 for Indian coastal shipping. 

The other factors affecting coastal movement are the high cost of bunkers within India -- approximately 35% to 40% more than the standard global bunker price. The high bunker duty makes the cost of cargo movement by coastal vessels very high. The concerned authorities should consider giving concessions to coastal vessels on bunker because the charterers moving the cargo through the sea route are protecting the environment within the country help to reduce air and noise pollution and road congestion as they take away the cargo by water and not by road. The movement of 500,000 MT/month through the coastal sea route saves 20,000 truck movements within the country each month, ie, 666 trucks from moving in a day. 

If, keeping in view the environmental factor, bunker duty is exempted, there would be great benefits accruing to all concerned. Unlike international steel players, who move huge iron ore parcels in Capesize vessels, Indian iron ore importers are not able to do so with the inadequate infrastructure available at the ports to handle such large vessels and lack of adequate port and hinterland connectivity. This drives import  costs up further, and the comparative advantage of Indian  steel manufacturing companies, compared with that of their competing international steel manufacturers, turns negative, leading  to  high  prices  of  steel  within  the  country and  a non-competitive atmosphere of Indian steel exports. All this, in turn, impacts the national economy and the country's balance of payments.

To sum up, the government need to give more thrust to Indian shipping industry, in particular for coastal movements of cargo and infrastructural development. Indian charterers and ship owners should be given concessions on the various aspects as discussed.