Ritesh S Ramakrishnan, Joint Managing Director, Transworld Group, on what lies ahead for India and it’s maritime sector in a post-Covid world and on its recent strategic partnership with Unifeeder and D P World.
Q: How Transworld Group is ensuring coastal and feeder movements during Covid-19?
A: It has been a tough year for everyone in the shipping industry.
However, I would like to highlight that Indian coastal shipping had its own prominence in the last six months. As a coastal operator ourselves, we witnessed an increased movement on our coastal vessels for cargo especially agri products like wheat, maize, etc. There was a lot of cargo diverted to coastal from road, not only for our traditional sectors of Gujarat to South and East India, but also in terms of return cargo from South and East India back to North West India.
In the aftermath of Covid 19, while foreign ships were skipping Indian ports, Indian ship operators were functioning, serving the coastal trade in its best possible way. And that is why, we can see a renewed, reignited interest from many industries, to utilize more and more coastal shipping in the future. As Transworld, we had a clear strategy to focus on our strengths in coastal shipping.As a result, we had to rejig some services as well as reduce ports of calls, to ensure efficiency and reduced operational costs. However, our volumes in coastal are back to at least 80 % of pre-Covid levels, and we expect it to improve further, especially in October due to unlocking in many parts of India.
As feeder operators we connect to four hubs – Dubai, India, Colombo and Singapore. Globally, there has been a major downsizing in terms of services offered by shipping lines and so the cascading effect was obviously felt by feeder operators. There has been an impact on the transhipment volumes in India and other places as well. But I think we have bottomed out and volumes are beginning to increase from June. As a ship owner, in different parts we operate, it did hurt as charter hires were down, but as a feeder operator we were very flexible in our cost and were able to upsize and downsize wherever required. We could offer cost-effective services to our customers, be it NVOCCs, MLOs, etc. There were volume related challenges as transhipment itself had volume reduction, but overall we were able to manage it.
Q: What is the strategy to achieve the future goals of Transworld?
A: One thing that really helped us was digitisation, an approach we initiated in our organization way back in 2018, which really assisted us in sailing through these rough seas of the pandemic. Every one of our 1,000+ staff could work anywhere, 24X7 on their laptop and continue to service the customer in the best possible way.
From day one, we had zero downturn; customers had all the required information as we were working like any normal day. Our digital initiatives such as online freight portal, shipment tracking on mobile as well as portal, online Bill of Lading (BL), accepting online payments, updating shipments status on WhatsApp, digital signatures in BL invoices, online quotes with real-time update of tariffs, have eliminated manual intervention and introduced far advanced operational efficiencies. Combining Oracle back-end and our own technology and expertise, we have been able to implement the best practices. We are trying to be as vocal as possible and this has allowed us to empower our employees to deliver heightened service satisfaction even during the crisis.
But as Transworld, we believe that there is a huge opportunity that lies ahead, and we need to be closer to our customers, as well as be that differentiator that will bind the customers with us.
For Transworld, it is now important to consider what customers will expect from their LSPs going ahead, it has called for internal introspection to change our old ways, adopt digitization as well as adapt to it, eliminate things that are not necessary and put the business in the right direction.
Q: The present and future of coastal shipping in India, what are the opportunities you see and challenges you face?
A: I believe, post COVID 19, coastal shipping would have better prospects.
In the COVID-19 situation, coastal shipping proved to be a good alternative to road, which had suddenly become paralysed. As a coastal operator ourselves, we witnessed an increased movement on our coastal vessels for cargo especially agri products other than the traditional cargo like tiles and industrial and construction materials that we are regularly carrying. There was a lot of cargo diverted to coastal from road, not only for our traditional sectors of Gujarat to South and East India, but also in terms of return cargo from South and East India back to North West India.
In the aftermath of Covid-19, we as Indian ship operators were functioning, serving the coastal trade in its best possible way. And that is why, we can see a renewed, reignited interest from many industries, to utilize more and more coastal shipping in the future.
Thus, post COVID-19, coastal shipping can have better prospects. There are certain interventions required that could help accelerate this shift.
Inland waterways and coastal shipping today has very low 9% share as compared to 65% by road and 26% by rail. Now, if we compare to China, where the share of waterways is around 30% and in Europe, the share is around 25%, this is something far behind. However, the Government has its focus on improving this share from current 9% to 20% in the future, say 5-7 years period. But my view is this may take at least 10 years.
Q: What should be done for the development of logistics & supply chain on the National Waterways and Coastal Shipping?
A: Much work lies ahead. Awareness of the importance of coastal shipping needs to be promoted. As in any new project there would be general inertia to switch from the traditional mode to coastal shipping. Potential areas of growth, volume of cargo for coastal shipping need to be identified.
As far as possible, integrate coastal and inland water transport wherever possible and promote Road-Rail-Sea-Rail-Road route. Incentives for commodity-wise, full laden container movement will attract shift.
For exploiting coastal opportunities, the different ministries also need to work in tandem. Ministry of Shipping, Road and Rail recently should come together and work on promoting multimodal transportation.
Also, promote Indian shipowners and support them, who have invested a lot in the ships, in the Indian flag and Indian seafarers and the economy. Support with Priority berthing, incentives etc.
Q: What are the practical and operational issues in seamless multimodal logistics movement?
A: For achieving seamless multimodal logistics movement, Government is doing its best efforts through various reforms. However, the regulatory provisions need to be backed up by the development of infrastructure and other support systems, including trained manpower. In fact, in none of the countries where multimodal transport has developed well and where multimodal transport has evolved to give best logistics solutions, there isn’t any specific law for multimodal transportation of goods. Multi-modalism is therefore more about infrastructure where advantages of each mode, facilitated by multi-modal connectivity are used to the best and the entire transportation chain is both synchronized and optimized.
Also, as far as possible integrate coastal and inland water transport wherever possible and promote Road-Rail-Sea-Rail-Road route. Many say coastal shipping does involve multiple handling. But I want to clarify, in a true multimodal transport, there is no option to multiple handling. What needs to be done is to bring in efficiencies and reduce costs.
The different ministries also need to work in tandem. Ministry of Shipping, Road and Rail have to come together and work on promoting multimodal transportation.
Q: Expansion of cargo profile for saving cost and time, your message to cargo owners?
A: Coastal shipping can have a bright future in India but only with the support of cargo owners, from various industries. Its one of the safest, environment friendly as well as cheapest mode of transportation.
Gujarat – A role model. Gujarat effectively uses its ports for coastal shipping and can be a role model for other states. In spite of the fact that most ports in Gujarat have vast tidal ranges, it has used its coast for both captive and commercial coastal movement. The success of Morbi (the ceramic town in Gujarat) could in part be attributed to the movement of these heavy cargo through an efficient mechanism in coastal waters. Ceramics as a cargo is heavy and fragile. Transporting them by road across the country would not only be expensive but also susceptible to damages through knocks and jerks during road transit.
Today, we are moving around 0.5 million TEUS annually between Gujarat and other South and East India ports.
Also, return shipments is what makes coastal shipping profitable. We would like more active support from South Indian States to promote industrialisation and support us in return cargo.
Q: Government’s supportive measures for coastal cargo: how beneficial are these to the industry?
A: The Government has its focus on supporting coastal shipping. Sagarmala has been one of the biggest infrastructure projects under progress, which will benefit overall shipping and logistics fraternity of India. Certain specific cargo wise incentives have been introduced, certain relaxations in customs duty, on VRC, etc. for the benefit of coastal shipping in India.
Q: What are the operational efficiencies and monetary benefits you offer for shippers through modal shift?
A: By optimizing the potential of the Eastern and Western coastline and ports, we provide energy efficient and “environment friendly” and cost effective logistics solutions as carbon dioxide emissions from coastal shipping are minimal compared to roads and rail. We pioneered the business of coastal container service by commencing operations in 2005 and are the largest domestic coastal logistics solutions provider in India.
Our coastal service offers the most effective mode of transport for goods, covering all major ports in India, supported by our able and dependable network offices in these regions.
With the benefits of our end to end multimodal logistics solutions, Cost of transporting goods from north to south India and vice versa can be reduced by about 20-30% with a combination of road-rail and sea. In terms of operational efficiencies, coastal shipping is a safe mode of transportation of cargo, as we are able to avoid multiple handling of cargo as we use containers for multimodal transportation with door to door delivery, also through digitisation, you can have real time updates of your shipment through our live tracking system.
Q: What are your contributions for making coastal transshipment viable in India?
A: We, as Transworld and through our coastal shipping arm, Shreyas Shipping and Logistics, was the pioneer in the beginning of this century both in the domestic carriage as well as coastal transhipment. It was only recently that more attention was given to this sector. In the last couple of years, the coastal movement had considerably increased. Last year, we moved 10 million tons of cargo in containers through coastal movement.
In the coastal transhipment side too, in the last two years alone, we have moved almost 1 million TEUs between Indian ports which had mostly been on the east coast side.
Most of the coastal movement of domestic cargo happened in the west coast of India. The challenge was to move the cargo to the east coast of India. Moving containers from Gujarat to Kolkata by road was 2,300 kms as compared to the coastal route which was almost double that distance. To leverage the economies of scale, large vessels were needed to be used. But these large vessels could not call Kolkata port owing to draft restrictions. Therefore, perforce transhipments had to be done at Visakhapatnam on to smaller vessels for on-carriage to Haldia, even though the cargo was destined for Kolkata. Since domestic cargo tended to be heavy “they would deadweight the vessel with just 150 containers.” which increased the logistic costs.
The main problem in India was that there was no movement in the reverse leg. From north to south the vessels go full, however in the reverse direction they came empty. Though there was enough volume of cargoes going from west to east coast, there was nothing moving in the reverse direction. That was the reason why in the reverse journey we moved our vessels to Jebel Ali, with exim cargo for better utilization of the vessel.
Q: What is the strategy behind the deal with D P World?
A: Transworld Group recently announced about the strategic partnership with DP World and its subsidiary Unifeeder Group, with an aim to strengthen its position as a leading shipping and logistics conglomerate.
DP World and Transworld group have always enjoyed a fruitful partnership over the years and we are excited of this strategic partnership as we build out our vision to become a global supply chain solutions provider. The aim is to boost regional trade solutions connecting a wide range of ports in the Middle East, Indian subcontinent and Far East.
This deal further strengthens our position in the global market, especially the fast-growing Indian sub-continent and Asian markets. Our strength lies in our strong customer relationships, local expertise and network across the Indian sub-continent, which have allowed us to deliver an efficient product to the market. This partnership, will provide Transworld, DP World and Unifeeder, a robust platform and we aim to jointly deliver a more complete range of solutions to our customers.
We are excited to be part of the DP World family and look forward to building on our continued legacy as a globally renowned independent shipping and logistics conglomerate. We will continue to build on our strategic vision to connect directly with end-customers and beneficial cargo owners by delivering end-to-end solutions that remove inefficiencies in the supply chain and accelerate trade growth to deliver value for our stakeholders.
Q: What is your outlook for the container industry in India and in the region?
A: I have always been an optimistic person and I believe we have seen the bottom and now we are starting to see positive signs in all our trading lanes including India.
It is realistic to say that apart from COVID-19 related things, the trade will follow its pattern. We may see the volumes will be at pre-Covid 19 levels by this festive season, at the end of the year.
We believe that in the next decade in the post-COVID 19 era, what we are going to witness in the Indian maritime sector, would be no less than a revolution. For achieving international competitiveness for Indian maritime sector, the groundwork is being done now as COVID 19 has forced us to divert from our traditional way of working and adopt new strategies including embracing digitization. India stands a good chance to be able to leverage the evolving trend if it makes strong efforts to expand its export basket and reduce domestic logistics and procedural costs.
What will happen tomorrow is present today in its seed. The events will unfold themselves and we would reach where we belong. However, as the seed needs to be watered, nurtured, and grown with protection to make it eventually a tree – we all have to work in our respective capacities to make sure that what we do today contributes towards making Indian maritime sector internationally competitive, tomorrow. This is the vision that the National Logistics Policy has. Government is doing its best, now we have to come together and make it a success.