Con : Consumption of fuel per every 1000 Kms
Price : Price of fuel per liter
Max Load : Maximum tons of loadable cargo
Con/1000 : Fuel Consumption per Metric Ton for every 1000 Kms
Cost/1000 : Fuel Cost per Metric Ton for every 1000 Kms
** A typical ship of 12000 dwt is compared to rail & road. In case of very light cargo, CBM can be approximated to a Metric Ton for loadability purpose. In case of a mix of weights, the cost could be further leveraged down, more in case of a ship. The figures are approximate to justify the points made. The subsidized diesel price in India is actually slightly higher than the world market price ( About Rs 23), because the subsidy is calculated on the duty-paid-landed price.
India has 139 minor ports, 11 major ports and a coastline of 7600 Kms. So why our Coastal Shipping is is so malnourished? Is this a way of maintaining the scarcity power of the Railways ? From the above, you can infer that road is no match to railways. Railways are virtually without competition in India. Little wonder that the railway tariffs (Rs1400/ to Rs177/ as per class of commodity) are so excruciatingly high for carriage of cargo against a fuel cost of about Rs110/ per ton for every 1000 Kms. I will elaborate the reasons in brief & then describe the resulting green wealth, if we leverage this rarely used resource. In addition this can put additional pressure on railways to increase its efficiency by adopting newer technology & management practices.
High cost of ship owning in India, high cost of ship manning, high cost of ship maintenance, Seafarers Union, high labour costs in ports due to complex layers of Unions, high port costs for ships, greasing costs to Customs, & complex documentations & red tapes are the major cost boosters. Other problems, like warehousing, connectivity, and taxations etc are minor in nature and can be corrected as the process starts building up.
I will discuss on the high cost of ship owning in India first, as this is the biggest cost booster. If we compare the price of a ship, a goods train, & a truck in terms of loadabilities, it would appear that a ship is most expensive when this shipping market is at its peak. However, in a recessed market like today the price of a second hand vessel could be as low as half of a road truck in terms of loadability : (Price of Ship ÷ DWT or Price of Truck ÷ Maximum Load). Therefore, this is the right time to buy a lot of old ships for using on our coasts. Why can't we do that? Because, even for our coastal ship, we need to have almost the same fanatical IMO regulations & standards to be applied blindly by our DG Shipping & IRS. Therefore, you may need to renew steel plates, pipes, or equipments – those have practically little relevance to our restricted coastal trade. Sometimes, if you happen to buy an old ship and bring into India for domestication, your ship may land up in a Dry-dock for months before the MMD or IRS shall let it pass, not to mention the palm-greasing involved in addition in different forms. The western standards, meant for a developed & wealthy west, has colonized the minds of our bureaucracy to the extent that we cannot look beyond IMO & STCW Conventions. IMO & STCW conventions cost dear to the poor little Indian. We need to have our own sets of liberal regulations governing ship's flagging, class & its personnel certification. I shall continue on them on my next, in line with my views on the creation of a SEZ of shipping to counter this huge basic problem.
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