Coastal container feeder service to be launched between Chennai and Puducherry

A first of its kind in the country, a short sea container feeder service on the coast between the ports of Chennai and Puducherry will be launched on Monday. The 12-hour ferry service, operated by Chennai-based Global Logistics, aims to help traders avoid the congested road traffic and receive delivery of crates via Direct Port Delivery (DPD) and Direct Port Entry (DPE), instead of using storage areas such as Container Freight Stations (CFS) and Inland Container Depots (ICD).

The Port of Chennai Authority (CPA) and the Port of Puducherry signed a memorandum of understanding in 2017 to divert cargo to the latter and share revenue. Sunil Paliwal, Chairman of CPA, will highlight operations offered by Global Logistics from DP World Container Terminal in the port of Chennai on Monday morning.

The overall freight cost could be reduced by 25 percent by transporting by sea versus road (160 km), an industry representative said.

The service will support trade in the Puducherry hinterland as containers with DPD and DPE clearance can be moved easily as no customs clearance is required at the Port of Puducherry, said S. Narasimhan, Managing Director, Sattva ICD at Puducherry. The Puducherry government should make sure the city doesn’t become overburdened, he added.

AV Vijayakumar, Managing Director and CEO, Paramount Shipping Service Pvt Ltd says it is an innovative business model concept, but it will take time for the industry to shift from its existing comfort zone of picking up the box at their doorstep and is delivered.

Unless cost efficiencies are established this might not be a lucrative model and feeders will drop off cases at ports and there is a final link to the importer/exporter at additional cost and time. Overall, this will reduce density on the roads, reduce carbon footprint and be more environmentally friendly. DPD/DPE could be a potential business that can be easily targeted if there is an aggressive strategy in place.

Travel time between ports could be half a day. A feeder can make a trip every other day or every 3 days. (taking into account loading/unloading/reloading and sailing time).

So even with a 500-container ship, it could move 5,000 boxes per month – one way – which is a good number to start with. Assuming the cost of road transport is about ₹25,000 – then the feeder should be slightly less or equal or slightly more. Such pricing would only be practical if the shipper could fill the ship, if not completely, at least more than half.

The volume will be reasonable considering the industries in and around Puducherry and how much can be tapped into the feeder plant will take a lot of hard work, he said.

According to Ennarasu Karunesan, Maritime & Ports Expert and IAPH Regional Director for India, the coastal feeder service is a step forward in the ambitious Sagarmala project. This service is expected to benefit the Pondicherry and Cuddalore industrial clusters, where trade can now ‘take off’ and ‘take off’ containers at the Puducherry port, which may become an extension of the Chennai hub-and-spoke container movement.

Two benefits can be expected — cost savings and reductions in greenhouse gas emissions — since water transport has been shown to emit less CO2 than road transport and also relieve congestion on the road, he said.