HAZIRA, a key industrial area, spans 59 km across the Gulf of Khambhat from Pipavav in Gujarat. However, due to the gulf, the road distance from Hazira to Pipavav gets extended to 494 km. As a result, the Essar Group, which has a captive port in Hazira, trucks about 1,300 TEUs of its containerised cargo on a monthly basis from Hazira to Nhava Sheva, 350 km by road. COMPLICATIONS GALORE In the existing Logistic Service landscape, determined by geographical factors such as the Gulf of Khambhat, Essar Group had no option but to move the cargo by road to Nhava Sheva, since rail facilities are not available in this region. This setup costs approximately `20,000 per TEU to and from Nhava Sheva and has meant a significant loss of business opportunity from a catchment volume of about 2,50,000 TEUs annually that get fragmented over multiple ports in the region and are moved by road.
SOLUTIONS DEVISED To provide an alternative supply chain for this cargo that offers reduced transit time and cost, APM Terminals Pipavav introduced a sea route to Pipavav. As the first step, APM Terminals Pipavav initiated collaboration with Essar Group's Hazira port, which has been designed for its captive cargo. Besides, the port was only equipped to handle bulk cargo. APM Terminals Pipavav explored the possibility of transporting containers though Hazira port with some minor alterations, for instance, sling operations for lifting containers using the existing machinery and yards. Essar Group agreed to accommodate the handling of container cargo at its port in Hazira and also use its barges for transporting containers to Pipavav, where large vessels belonging to international shipping lines berth. Besides, berth windows had to be modified at Pipavav to accommodate the biweekly calls of the barges, which required the co-operation of other regular customers of Pipavav Port.
Apart from the multiple challenges related to customs procedures, bills of lading details, billing, etc. that had to be resolved; one outstanding issue was to get the shipping lines serving South Gujarat customers at Nhava Sheva to agree to come to Pipavav.

This challenge was amplified during the transition phase when the volume had not reached critical levels to warrant a port call at Pipavav. OUTCOME AND IMPACT APM Terminals Pipavav's innovative proposition, achieved with due cooperation from Essar Group, resulted in direct savings of more than `5,000 per TEU for Essar Group apart from saving about a week – including stuffing, transporting, custom clearing and loading the container on to the ship. Not without reason then, the initial monthly volume of 72 TEUs that were moved via the barge service from Hazira to Pipavav is now about to reach the 1,200-TEU mark.
This innovation compliments the government's plan to hasten the adoption of an environment-friendly and cost-efficient method of cargo movement. The change in the region's supply chain has resulted in a win-win situation for both, Essar Group and APM Terminals Pipavav. While the new mode or route made the customer's supply chain more efficient, it also created a new business opportunity for Essar Group in providing coastal shipping services in the future.

Source: Smart Logisitc  (Infomedia18)

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