Short Sea Ro-Ro Shipping A smarter solution to Indias Logistics - - PowerPoint PPT Presentation

Short Sea Ro-Ro Shipping –A smarter solution to India’s Logistics needs

Wallenius Wilhelmsen Logistics

Naresh Kundlas, WWL India 09 - 01- 2015

Agenda

• 1. Increase in Production of Finished Vehicles within

India

• 2. Challenges in Domestic Movement of Cargoes
• 3. Seeing the whole picture and developing solutions

Distribution

• f Finished

Vehicle Logistics in India

Auto production in India is expected to grow with 10% per year and reach 4 million units in 2016

Distribution of finished vehicle logistics in India

4

Source: Society of Indian Auto manufacturers (SIAM) website

Development passenger vehicle production, 2006-2016F Million units

In million units

Actual Production

10% CAGR

1.3 1.5 1.8 1.8 2.4 3 3.1 3.2 3.1 3.3 4 0.5 1 1.5 2 2.5 3 3.5 4 4.5 2005- 06 2006- 07 2007- 08 2008- 09 2009- 10 2010- 11 2011- 12 2012- 13 2013- 14 2014- 15 2015- 16

Passenger Vehicles

Mumbai Chennai Ennore Mundra

Delhi Pune

Kandla Mangalore vishakapattinam Paradip Haldia, Calcutta

Production of commercial vehicles will pick up with investment in Mining and renewal of urban transport

Distribution of finished vehicle logistics in India

Production of commercial vehicles, 2006-2016

Source: Society of Indian Auto manufacturers (SIAM) website Actual Production in million units

The resumption of mining and infrastructure spending should lead to improvement in this segment

0.39 0.52 0.55 0.42 0.57 0.76 0.93 0.83 0.7 0.77 0.83 0.91 0.2 0.4 0.6 0.8 1 1.2 2005- 06 2006- 07 2007- 08 2008- 09 2009- 10 2010- 11 2011- 12 2012- 13 2013- 14 2014- 15 2015- 16 2016- 17

6.72 %

CAGR

9 – 10%

CAGR Expecte d

5

Present Domestic Movement

• f Cargoes

Majority of the Finished vehicles are transported by Road

97% of Finished Vehicles are transported by road on Over length carriers. This creates congestion, High CO2 Emissions and is not sustainable. Dedicated Freight Corridor by Rail- Delhi to Mumbai and Delhi to Kolkata expected only in 2018-19. No Visibility on DFC Delhi to Chennai and West to South. There are Private initiatives to invest in Rail and increase Share However very minimal.

Present Domestic movement of cargoes

Present Domestic movement of Cargoes

8

Effect of Increase of Trips

CO2 emissions increase by 40 % Congestion on Roads Increase Accidents on Roads- Increase Fuel Usage

17% ( 23800) of total Deaths caused by trucks/ trailers.

As per Open Government data platform statistics

9 Seeing the whole picture and developing solutions

Prime Minister Vision

India may be facing a serious trucking capacity shortage

Number of cars transported by road will grow significantly from 2013-14 to 2016-17. Rail will be increasing, but volumes will still be small compared to road.

Finished Vehicle distribution in India 10

+20.92% 2 936 539 2016-17 130 583 2 503 685 3 067 122 2 428 574 2 565 943 2 866 469 120 910 2 745 559 2015-16 2014-15 2 678 943 113 000 75 111 2013-14 Passenger Vehicles Sold By rail By road

(Source: SIAM and WWL predictions and calculations)

19 000 19 000 46% 28 028 2013-14 17 959 19 000 48% 20 075 1 075 9 028 2014-15 2016-17 19 000 2015-16 8 247 26 206

Assume an avg. Reduction in truck capacity of 22%

• Approx. 1041

«truck years» lost in refurbishment

Shortage Available (Estimate)

Seeing the whole picture and developing solutions

Seeing the whole picture and developing solutions

12

Update on promotion of Coastal Shipping

9 cargoes are highlighted for encouraging coastal solutions. Auto mobiles and CV are

• included. We are pushing for Construction

Equipment

• The 25% import duty has been waived till

May 2015. We are pushing for this to go.

• We are seeking a solution that allows the line

to transport T/S and export cargo on same vessel for sustainability.

• Reduce port costs (Wharfage and Vessel

related costs) to encourage coastal shipping

• Factories are away from ports so first mile

and last mile distance / costs are high

• Port connectivity is poor so turnaround time

is high for trailers – this needs to be addressed through connected supply chain

• GST implementation expected in 2016

Cost Comparison

Seeing the whole picture and developing solutions

13

Total Logistics Cost comparison= Vessel cost +Wharfage+ First Mile + Last Mile

Delhi NCR Region

Delhi NCR Region Chennai Nellore Guntur Pondichery Madurai Road 15136 14630 13831 14221 14634 Rail 15136 14630 13831 14221 14634 Coastal 18209 20083 21770 20027 20454

Difference 3073 5453 7939 5806 5820

Chennai Region

Chennai Region Rajkot Baroda Ahmedabad Jaipur Delhi Road 13073 12412 11737 13167 14912 Rail 13073 12412 11737 13167 14912 Coastal 12833 14219 13533 17145 18248

Difference

• 239

1807 1796 3978 3336

Cost comparison – If No return coastal Cargo

Seeing the whole picture and developing solutions

14

Total Logistics Cost comparison= Vessel cost +Wharfage+ First Mile + Last Mile Delhi NCR Region

Delhi NCR Region Chennai Nellore Guntur Pondichery Madurai Road Rail Coastal

Difference Chennai Region

Chennai Region Rajkot Baroda Ahmedabad Jaipur Delhi Road 13073 12412 11737 13167 14912 Rail 13073 12412 11737 13167 14912 Coastal 19628 21014 20328 23940 25043

Difference 6556 8602 8591 10773 10131

Conclusions

Cost Comparison of Rail, Road and Coastal shipping

15

To start a coastal service we need OEM commitments for volume and Government commitment for creating the right eco system to make coastal shipping sustainable We need to give the government our wish list to achieve our objectives Combination of Road / Rail / Coastal will reduce carbon emissions and capacity / cost constraints in the near term.

Thank you