“The Indo-Bangla coastal shipping has enormous growth potential and we are offering a comprehensive logistics solution instead of being a container feeder operator only,” reveals Amlan Basu, Director, AVS Riverline Pvt Ltd
Q Tell us about your services between India and Bangladesh? What is the cargo moving and is the service profitable?
We had started the service around a year and a half back, moving containers between Eastern India and Dhaka. This is first ever connectivity from Kolkata Port to Pangaon Container Terminal.
The cargo used to move between Indian ports to Chittagong whereas the captive business was clustered around Dhaka and not Chittagong. It was mainly connected with road link, through Petrapole/Benapole land border. Then, we could manage to divert a significant volume towards this river sea mode of transport.
Initially we had targeted mainly fabric and cotton related commodity, but thereafter lot of other cargo started moving through our service, like motor spare parts, granites, HDPE / LDPE, Steel Products and many more.
Q What is the time and cost advantage your service offers?
When we started this service lot of people highlighted the cost factor, which was on the higher side as per their opinion. But due to ignominy at land border, along with the delay and detention has forced them to think otherwise and plan a faster route which may not be cheaper, but certainly was much reasonable to compare. We take around 3-4 days to reach Dhaka if we call Pangaon as a first port of call.
Q For coastal shipping operators return cargo is a problem. Are you facing similar challenges?
Yes it is, we are mainly loading empty in the return leg. But concurrently the laden business has also picked up slowly over a period of time. We have given a lucrative incentive to both the shipping lines and Bangladesh exporters to boost up the volume. We are offering a comprehensive logistics solution instead of being a container feeder operator only.
Q Indian government plans to open up coastal shipping to foreign vessels as well. How will this affect the coastal shipping landscape? Do you see this as a challenge?
Not really. This trade lane is completely different, and the fleets used in this sector are quite custom built in terms of Vessel Draft and DWT combination. For other options, mostly due to high capex, the overall voyage economics are unviable for the operators. The other running expenses including manning and bunker cost, is also a source to worry for other vessel owners. Hence the trade lane in my opinion, do not have a direct competition with other coastal ships.
How has been the business at your CFS in Kolkata and Bangladesh last year?
A recent Customs notification requires routing the entire export cargo via CFS in Kolkata, barring a few star exporters. Thereafter most of the traders not recognized as star exporters, were forced to move their cargo via CFS. We are in discussion with private rail operators to connect the North Indian hinterland ICD to Bangladesh, through our service.
Q While the government is promoting coastal shipping to Bangladesh, there is also a BBIN motor vehicle agreement. How do you compare both the modes of logistics for cargo movement?
I am not very positive about BBIN protocol because of various reasons. It must be recognised that even within the BBIN group there is significant heterogeneity in terms of economics and level of economic development. Therefore, the political objectives and policy priorities of these countries might be very different.
Whereas, in coastal route the consignments have become extremely smooth and time saving, due to germane influence from Customs, Revenue authority along with external affairs ministry.
Q What challenges do you face while providing feeder service?
Apart from return cargo, it is congestion at Ports. We do not get priority berthing as promised during signing the SOP. We are also sceptical about Monsoon season, to operate through coastal route which is very risky in those days.