Demonetisation: Coastal shipping has become economically viable now, says Hyundai

All Hyundai cars will be transported to Kandla Port in Gujarat from Chennai. From Kandla they will be sent through trucks

As coastal shipping has now become economically viable, automajor Hyundai has decided to increase its monthly shipment through this mode on a monthly basis. Moreover, the company also said that demonetisation has led to less supply of trucks and the coastal shipping is a blessing in disguise to meet the orders.

On Monday, Hyundai will send about 2,500 units of cars to its northern markets including Gujarat, Mumbai, NCR, Haryana and Uttar Pradesh. All these cars will be transported to Kandla Port in Gujarat from Ennore Port, near Chennai. From Kandla it will be sent through trucks.

Along with Hyundai cars, Ford is also sending 132 cars and Renault Nissan is sending 399 cars.

With the Government's decision to give discounts on wharfage and other benefits, coastal shipping today is economically viable, said V Anand, senior general manager - sales and logistics, Hyundai Motor India Ltd (HMIL).

He added, the cost saving or net effect would be around Rs 2,500 a car as the OEM is getting 80 per cent discount in vessel related charges and on wharfages (which are provided at a wharf for the loading, unloading, or storage of goods).

The other key to sustainability for coastal shipping is return assured cargoes for the coastal vessel operator. Today, Tata and Honda are two automakers are sending cargoes from North to South, while a large two-wheeler marker is planning to try soon. Besides, automobile the return cargoes currently includes ceramic tails, pipes and others.

Anand added, coastal shipping also helps to address some risks. The recent one being demonetisation.

He said fleet availability is the major challenge as the fleet operators are facing liquidity crisis.

The coastal shipping service provider Sical has now taken up trucks on lease to address this challenge in the first mile and last mile connectivity as they have got into lease agreement with fleet operators.

On way forward, Anand said, Hyundai is planning to increase the number of vehicles moved through coastal shipping to around 5,000-6000 a month from around 2,000-2,500 currently.

This will be the fourth time Hyundai sending its cars through coastal shipping. It started as pilot in February 2016 with 800 cars from Chennai to Pipavav port, then followed by second shipment of 622 cars in September and another 1428 in October.

He added, today few problems are dedicated space in the ports. Each car would require around 15 sq.meter to store, second challenge is fleet availability in first and last mile.

If the Government gives a small incentive to the customers, who are buying cars which are coming through coastal shipping it will increase the demand and in turn it will increase the traffic movement, feels Anand.