Adding value to an already attractive option
There is a real need to provide those involved in getting cargo to and from Indian ports with a range of value added services.
Many new port developments include plans for facilities such as distriparks, investment in infrastructure to provide better hinterland connectivity and quicker transit routes. Studies also show that each day saved in the custom clearance of cargo saves 0.5% of ad-valorem tariff.
Providing these value added services will attract investment in the Indian ports sector while simultaneously improving efficiency and ultimately increasing capacity.
There is also a need for a reduction in logistics costs in the ports sector. Currently, nearly half of India’s cargo is internationally transhipped. Transhipment-related costs add to the already high internal logistics costs, which are currently around 14% of GDP. When compared with logistics costs of 5%-9% of GDP in many developed nations, India’s costs highlight serious inefficiencies.
Poor road infrastructure, a disorganised trucking network, low containerisation levels (as compared against the global average) and lengthy customs clearance times all contribute to India’s high logistics costs and must be addressed in order to increase efficiency.