Shipping, logistics industry raring to go after a quick recovery

The Ministry of Shipping announced plans to develop a National Logistics Portal (Marine) with end-to-end logistics solutions to help exporters, importers and service providers

Visakhapatnam: AFTER facing a big setback and opening up of the economy within a short span of enforcing lockdown, the shipping and logistics sector in the country expects to bounce back with the hope of vigorous policy initiatives in the Union Budget for giving a big push to Sagarmala, Bharatmala and UDAN programmes.

Stakeholders in the field whom Bizz Buzz contacted said they were hopeful of steps for rationalisation of taxes and expediting of customs clearances, digital transformation and end-to-end solutions in addition to big infrastructure projects like free trade zones. These steps would give a fillip to supply chain management and construction of more warehouses and container freight stations.

AV Monish Row, former trustee of Visakhapatnam Port Trust, said the Indian Government plans to develop 10 coastal economic regions as part of initiative to revive the country's Sagarmala and private investment is the way forward for the maritime industry.

He said in November, 2020, JSW Infrastructure completed the acquisition of Chettinad Group's port business for Rs. 1,000 crore (US$ 135.50 million). In October 2020, Adani Ports and Special Economic Zone Limited (APSEZ) completed the acquisition of Krishnapatnam Port Company Ltd. (KPCL) for an enterprise value of Rs 12,000 crore.

Row, managing partner of AVBGPR & Co (first shipping company of VPT), said the government must deregulate this sector from the perspective of business competition but must press for other global challenges like flags of convenience ( FOCs) ships being discouraged. FOCs have serious repercussions for marine crew and officers as well as maintenance of ships.

"The online documentation is still complex and bug ridden. Programs like ICEGATE, the national portal for filing customs documents need a complete overhaul and need to be made customer friendly. Frequent changes in various rules and addition of more regulatory burden is a drag on the efficiency of this sector," he stated.

"The Ministry of Shipping announced plans to develop a National Logistics Portal (Marine) with end-to-end logistics solutions to help exporters, importers and service providers and many such announcements have been made but as usual, on the ground implementation will be key. With a change in the US Government, we can expect to see a pick-up in world trade, restart of commodity transport like iron ore, and overall, the near term future looks bright," he opined.

G Sambasiva Rao, vice-president of National Association of Container Freight Stations (NACFS), said they were expecting the logistics sector to be given industry status. The cost of land, plan approval charges and property tax will be at par with the industry sector once industry status is accorded.

Any incentives by State and Central Governments will be applicable at par with industry; he said adding cost of power will be at par with industry benefiting the logistics sector a lot.

Rao, Managing Director of Sravan Shipping Services said the government must encourage container manufacturing facilities in India by developing exclusive Special Economic Zones (SEZs) both in East Coast and West Coast. All taxes on basic raw materials to be waived and also all taxes must be exempted to encourage Exim trade. "Our share in the world market is nothing in container manufacturing. Recently because of foreign container lines there was an increase in freight rates giving a big blow to India's Exim trade."

He sought GST and income tax holiday for the logistics sector for 10 years and developed port infrastructure like dedicated roads, parking areas and covered sheds to avoid pollution levels. Visakhapatnam Port Employees' Union additional general secretary BV Ratnam said going by the plight of pensioners, there should be relaxation in income tax slabs and some sort of regulation on implementation of labour laws for about 200 minor ports. "We also want that there should be a level-playing field between minor ports under State jurisdiction and major ports controlled by the Centre," he said.