Role of ports and logistics infrastructure

Infrastructure and logistics cost is one of the important factore for ports. India lacks in matter of quality of infrastructure and logistics costs,which are the core factor of export competitiveness. The movement of export cargo through inlnad from the manufacturing clusters to the ports is high in logistics cost and time consuming. Logistics inefficiency impacts in direct freight cost and the inventory cost during transit. It is,therefore, important to develop a port-led industrialisation strategy for the sector.

Port led industrilization is 3rd piller of Sagarmala Project in which Infrastructure play important role to face the challanges. Ports play very important role in reducing domestic logistics costs and facilitate EXIM-oriented manufacturing by reducing logistics time and variability.The port-led industrialisation program will be delivered through Coastal Economic Zones (CEZs) and industrial clusters.
The Coastal Economic Zone is an important aspect of the Sagarmala program and will be the main vehicle for kick-starting port-led industrialisation in
India.

Some initiatives are taken by shipping ministry for improving infrastructure of port such as:-
Linkages to ports: Linkage to port is suitable for port-based or port-proximate manufacturing. Linkage of port from one to another will help in hasel free movement of Cargos and also will help in handling shipp traffics.
Expansion of cluster: Currently, a significant part of automotive exports happens from the inland. Expansion of cluster will help in movement through water ways, could reduce transportation costs involved in product exports
and input imports.
Linkage with export markets:The domestic demand for electronics chips in India could be insufficient to keep the fab fully loaded.The cost of not loading a fab for one day could be USD 1to 2 mn. The most feasible business model for India could be for a global player to set up the fab in India to source their global requirement in addition to serving local demands.
Reducing transportation time:Due to perishable nature of most food products make efficient logistics more important to reduce the transportation time for raw materials and finished products. Transit cost is also an important factor in the overall product cost.

Shipping Ministry has shortlisted six industries for port-led manufacturing:

• Labour-intensive sectors: Apparel,leather and footwear, furniture,food processing
• Skill/knowledge intensive sectors:Electronics,automotive.

Date 13-4-2018
Anurag Gupta
(maritime Expert)

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