NAME: - M David Amruth Raj

REG.NO. - T-11058
The inland waterways system in India and the impact on supply chains
Introduction
Water based transport is effective as generally speaking, operating costs of fuel are low
and environmental pollution is lower than for corresponding volumes of movement by
road, rail or air. A major advantage is that the main infrastructure the waterway is often
naturally available, which then has to be trained, maintained and upgraded. Transport
over waterways is especially effective when the source and/or destination are waterfront
locations.
Given Indias coastline of 7,516 km, coastal shipping ought to have been the main mode of
transporting goods across the country. This, along with inland waterways, could have
reduced the logistics cost of Indian companies drastically, had they been harnessed
effectively. The transport costs through road and rail are 1.5 and 1 per tonne per km,
respectively, while the cost through waterways can be bought down to as low as 0.50 per
tonne per km.
This paper attempts to assess the viability of movement of passengers and freight by
inland water transport (IWT) in India. The methodology of the study is given in Appendix 1.
Inland waterways refer to rivers, canals, lakes etc., but there is an overlap of this sector
with coastal shipping where tidal rivers are involved. Legally, there are separate Acts
covering inland waterways, the vessels that can play on them [MOLJ, 1986] and the
setting up of the Inland Waterways Authority of India (IWAI) [MOLJCA, 1985]. Three
waterways in the country have been designated as National Waterways (NW-1, NW-2 and
NW-3).
INDIAN WATERWAYS SYSTEM
India

has

an

extensive

network

of inland

waterways in

the

form

of rivers, canals, backwaters and creeks. The total navigable length is 14,500 km, out of
which about 5200 km of the river and 4000 km of canals can be used by mechanised
crafts. Freight transportation by waterways is highly under-utilised in India compared to
other

large

countries

and

geographic

areas

like

the United

States, China and

the European Union. The total cargo moved (in tonne kilometres) by the inland waterway

was just 0.1% of the total inland traffic in India, compared to the 21% figure for United
States. Cargo transportation in an organised manner is confined to a few waterways
in Goa, West Bengal, Assam, and Kerala. Inland Waterways Authority of India (IWAI) is
the statutory authority in charge of the waterways in India. Its headquarters is located
in Noida, UP. It does the function of building the necessary infrastructure in these
waterways, surveying the economic feasibility of new projects and also administration.
Historically, at least on some geographical sectors, it has been a viable mode of freight
transport. Currently, three major waterways in the country have been designated as
National Waterways: NW-1, the Ganga-Bhagirathi-Hooghly system, from Allahabad to
Haldia, NW-2, the Brahmaputra system in Assam and NW-3, the West Coast canal system
in Kerala. Commercially, the most important sector is the small tidal riverine system in
Goa, comprising the Zuari and Mandovi rivers and the Cumbarjua canal. A number of
possibilities do exist, in terms of in-principle navigable waterways, but the ones that offer
some potential (a mix of feasibility and some traffic possibilities) are the riverine inlets
along the coast, especially the ones near ports and some of the canal systems as part of
larger water resource development projects. A further possibility can conceivably open up
if and when the river interlinking project in the country is found viable. This last possibility
is doubtful, at the moment.
IMPACT ON SUPPLY CHAIN
1. Safety record
There is a very low probability of accidents, and should an accident happen, the costs
of that accident are low in economic and human terms. Barges lead the way in safe
transport, especially for dangerous cargoes, with extremely high standards of
inspection, training and licensing.
2. Environmental cost
All studies carried out to quantify environmental costs ultimately show the same result:
Inland waterway transport is the most environmentally friendly mode of transport.
Shipping more goods on water will help to reduce greenhouse gases and traffic
congestion.

3. Logistics: the right connections

Logistics players, due to the dual effect of a slowing international trade and a weak
domestic monsoon in the last few years, showed a weak revenue growth last fiscal.
Among these, in the last three fiscal years, the revenue growth for companies that
performed basic and commoditised transportation services was close to zero per cent
compared to a near 8 per cent annualised growth rate from integrated transportation
players.
4. Infrastructure cost
The first round of investment planned for Sagarmala Project, coupled with the
investment outlay for inland waterways, is expected to fill the order books of the
engineering, procurement and construction players. Infrastructure developers and
operators, manufacturers of heavy engineering equipment, manufacturers of
construction and mining machineries and other companies offering specialised
dredging operations are expected to benefit.
5. Carrying capacity
Inland vessels offer an enormous carrying capacity per transport unit. One motorized
cargo vessel with a load of 2,000 tons carries as much cargo as 50 railway cars at 40
tons each or 80 trucks at 25 tons each. Combined with comparably low transport
costs, inland vessels show an excellent cost-benefit-ratio.
6.

Intermodal networking
Europes network of inland waterways link ports, towns and cities with centers of
commerce and industry providing clear opportunities for cost-effective solutions in
corporate supply chains. Inland waterways form the backbone of a truly intermodal
network.

7. Ports: safe harbour

The Indian coastline, which currently has over 12 major and nearly 200 non-major
ports, is expected to go through a sea change. Major ports are expected to increase
their capacity, improve maritime infrastructure and streamline rail and road connectivity.
The private terminal operators such as Sical Logistics are expected to benefit from this
drive. competitiveness, inland waterway transport is an obvious choice to play a more
prominent role in logistics chains.
8. Abnormal loads
Due to their size and loading capacity, inland vessels are especially suitable for
transporting goods with unusual sizes and weights. Transformers, turbines, silos,
boilers, aircraft sections, locomotives, helicopters etc. can often only reach their
destination by ship due to limitations in road and rail transport (e.g. low bridges, narrow
roads and roundabouts).

Conclusion
The draft (depth) capacity of terminals for ships to harbour needs to be increased.
Jawaharlal Nehru port trust, one of the biggest ports, has a maximum draft of 14 meters
while cape size vessels require a draft of 16 meters and higher. With nearly 25 per cent of
Indias containerised cargo transhipped from other international ports, the existing
maritime and connecting rail and road infrastructure needs an overhaul.
Developing transportation infrastructure has been the key focus area of the Modi
government. While the thrust was on railways and roads in the first two years, recently, the
Centre rolled out a grand plan to improve inland waterways and coastal shipping. If the
execution of these plans is as efficient as it has been in roads, there could be some brisk
action in listed companies in the water transport sector; with their order-book set to swell in
the coming years.