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Breakbulk April 2017

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18 THE JOURNAL OF COMMERCE APRIL 2017 12 percent by developing coastal shipping and inland waterways," Gadkari said. Construction of dedicated freight rail shipments between ma jor por ts and hinterlands is expected to boost rail shipments. The government also is increasing its emphasis on development of last-mile rail projects at major ports. The overriding goal is to reduce logistics costs. India has the world's second-largest road network, spanning some 5.23 mil- lion kilometers (3.25 million miles). The government has set a target to award road works covering 25,000 kilometers on national highways in the current fiscal year, an increase from the 10,000 kilometers of contract awards during the previous year. "The government is very focused on increasing the pace of development with the budget announcements supporting it," said Vishal Sharma, India subcontinent CEO of Damco, Maersk Group's logistics and freight forwarding unit. "Project cargo, which requires exper- tise in handling, has a huge potential in the Indian logistics industry due to growing infrastructural developments in India," said Vineet Agarwal, managing director of Transport Corp. of India. "India, despite being a low-cost country, has higher logistics cost due to various issues and challenges faced by the industry. Apart from being entangled in complex tax structure, the industry is also affected by poor rate of customs efficiency of clearance processes and procedures, thus affecting the international export logistics stratum." Trade facilitation measures under way include creation of an intelligent transportation system in line with that at the ports of Singapore and Rotterdam, establishment of a single window system to ease procedural requirements, and introduction of electronic systems for terminal gate operations. Though high logistics costs remain a major industry concern, Sharma said the impending rollout of a single indirect tax program — the Goods and Services Tax, or GST — would be a game changer for logistics. "The good thing is that as an industry, sh ippi ng a nd log i st ic s pl ayer s a re constantly engaged with the government because the issues we face often find redressal," Sharma said. "In many recent cases, we have seen customs officers extending themselves to assist with the prompt clearance of cargo and help the parties involved, which is a welcome sign." These and other changes are needed if India is to keep pace with project cargo demand that is forecast to rise at a com- pound annual growth rate of 17 percent, to $19 billion, by 2020. While infrastructure and real estate development remains the backbone of India's construction industry, govern - ment initiatives to step up domestic gas production through private investments in underutilized offshore gas fields could create new growth opportunities for heavy-lift carriers. Another driver of project cargo growth is the increasing participation of Indian public and private conglomerates in turnkey projects in the Persian Gulf and African regions. India is investing in the upgrade of Iran's Chabahar port through a special-purpose company set up by Jawaharlal Nehru Port Trust and Kandla Port Trust. Logistics providers have benefited from these and other projects. Mumbai- based Allcargo recently transported 60,000 metric tons of cargo for the construction of a power plant in Bangladesh. Damco recently handled a contract involving a irlif ting of heav y equ ipment from Germany for a refinery project in North India, and is moving breakbulk shipments from India to Ho Chi Minh City in Vietnam. Despite infrastructure challenges, India's strong growth provides a respite for generally soft cargo environment, Damco CEO Klaus Rud Sejling said. "Contrary to the bleakness of global trade," he said, "the future looks promising for India." l BREAKBULK VOLUMES STEP UP GROWTH Volumes at major Indian ports, in millions of metric tons 20.0 22.5 25.0 27.5 30.0 32.5 35.0 2015- 2016 2014- 2015 2013- 2014 2012- 2013 2011- 2012 Source: Indian Ports Association BREAKBULK TRAFFIC RECOVERS AT MAJOR INDIAN PORTS Number of ship calls at major ports in India per fiscal year. 2,000 2,250 2,500 2,750 3,000 2015- 2016 2014- 2015 2013- 2014 2012- 2013 2011- 2012 Source: Indian Ports Association "IN MANY RECENT CASES, WE HAVE SEEN CUSTOMS OFFICERS EXTENDING THEMSELVES TO ASSIST WITH THE PROMPT CLEARANCE OF CARGO AND HELP THE PARTIES INVOLVED, WHICH IS A WELCOME SIGN."

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