May 2021

The hiatus in global trade caused by the pandemic offers a breathing space for the ports and shipping sector. A recovery will be dependent on the revival of domestic industrial activity as well as activity in the global economy. Changes in the global supply chain pattern are bound to impact the cargo profile as well.

In the meantime, modernisation programmes such as Sagarmala should continue to increase capacity and improve efficiencies across the port sector. Even so, project implementation is likely to be delayed by at least six months to a year, and disruptions in supply chains and lack of labour during the second wave may mean even longer delays.

However, there is an enormous amount that can be done despite all the difficulties. The digitalisation of processes and smarter mechanisation can generate higher efficiencies alongside increases in physical capacity delivered via the creation of road-rail networks for better port-hinterland connectivity and greater cargo-processing capacity within ports.

Sagarmala offers large opportunities to the private sector. In total, the Sagarmala initiative will entail roughly Rs 5 trillion worth of work spread across 514 projects. Of these, 149 are already completed and another 249 projects, worth close to Rs 3 trillion, are at various stages of planning, DPR or tendering.

The pace of digitalisation, in particular, may actually have been enhanced by the exigencies of the pandemic. There have been multiple developments in this regard. In October 2020, The Indian Ports Association (IPA) was integrated with the International Port Community Systems Association (IPCSA) through the PCS1x platform. The 12 major ports have fully implemented PCS1x, with over 16,000 users. Private ports such as Mundra, Pipavav, Hazira, Kattupalli and Dahej are also adopting PCS1x along with container freight stations and inland depots.

In addition, software platforms such as the logistics data bank (LDB) system are helping provide real-time information on cargo. An enterprise business system (EBS) has been installed at Mumbai, Chennai, Deendayal, Paradip and Kolkata. In addition, the adoption of RFID tagging has led to faster tracking of cargo and other moveable assets. Faster customs clearances are also obtainable now due to digitalisation. Further simplification and automation of such processes are possible.

While delays are unavoidable due to the pandemic, there is also no doubt that Sagarmala presents a huge long-term opportunity. In addition to the pandemic, projects continue to suffer from procedural delays in obtaining environmental and other statutory clearances, and hiccups in land acquisition. These are perennial problems that policymakers need to solve, for the sake of accelerating capacities across every sector.

GET ACCESS TO OUR ARTICLES

Enter your email address