Inland water transport in India: A case of LPG transportation

Abstract

With an extensive network of inland waterways stretching to a total navigable length of 14,500 km in forms of the rivers, canals, and backwaters, this mode of transportation has expected high growth potential. Inland waterways are an economical, environmentally friendly and less fuel consuming mode of transportation with higher loading capacities compared to the existing modes of road and rail. However, there are multiple issues which need to be addressed before a full-fledged multiple modal logistic network involving inland waterways is established. These issues involve reliability issues with the natural flow of rivers and varying seasonal depth, infrastructure issues due to additional loading, unloading, and navigation requirements. These issues are being catered to by the IWAI, a central authority established to monitor and develop IWT. Multiple investment projects are underway, including river training, dredging, terminal, and ports building, which is expected to take proper shape in the next ten years. On the flip side, major concerns for any company using IWT are higher travel time, which results in high in-transit inventory both in the form of goods being transported and the carrying vessel. This will incur additional capital expenditure. IWT’s cost-effectiveness is realised when the source and destination are in the vicinity of the waterway else first and last-mile costs are a cause of concern. Lastly, return load, which is a concern for any mode of transportation, is further escalated in the case of IWT with limitation on nature of goods to be transported back and their return route. In this report, we look at the economic feasibility of transportation of LPG through inland waterways. LPG which evaporates easily is a safe product to transport via waterways with no possible water contamination even in case of leakage or spillage. Considering the constraints mentioned previously, NW1 (Ganga-Bhagirathi-Hooghly) has been taken as a sample case, and economic feasibility is being looked as compared to existing modes of transportation, which are road, rail, and pipeline. An excel model (Exhibit-9) is developed for the analysis which considered the distances from each touch points to help with the cost of different models like optimisation of existing bottling plant network, the inclusion of inland waterways for the first leg i.e., refinery to bottling plant and shifting of bottling plant near the docks.