For the first time in India, auto original equipment manufacturers (OEMs) such as Hyundai Motor India, Ford India, Renault, Nissan and Toyota, have come together to test shipping to transport cars within the country.
For the first time in India, auto original equipment manufacturers (OEMs) such as Hyundai Motor India, Ford India, Renault, Nissan and Toyota, have come together to test shipping to transport cars within the country. All these companies, jointly roped in by a third party, logistics service provider Sical Logistics, on Saturday shipped more than 1,600 cars to Cochin port in Kerala, which will then go to Kandla port and then to the NCR region (by road carriers), using Ennore Port (near Chennai) as a transhipment hub. This was the first trial transhipment. The shipping option was mooted by the shipping ministry, industry sources told FE.
This decision aims to make the most of the festive season, especially with both Dussehra and Diwali falling in October. A golden period for auto companies, this is the time when they generate maximum sales Hyundai India had tested the waters, so to speak, on its own in January this year, shipping 800 cars to Pipavav port in Gujarat. However, with other players coming in, bigger vessels become available. This gives a thumbs-up to the government’s green movement initiative, using coastal shipping as an alternate mode of transhipment of vehicles, sources said.
When contacted, Anand V, senior general manager, outbound logistics at Hyundai Motor India, told FE: “It is a first-of-its-kind and major initiative by auto OEMs in India to see how we can take advantage of coastal shipping as proposed by the Union shipping ministry. Though the concessions/incentives offered by the ministry are yet to trickle down, we have decided to test the waters to see how this will benefit us on a long-term basis.” He added that though coastal shipping takes a little more time as compared with road transportation, they have planned well in advance to ensure that the shipment reaches in time to meet the expected festive demand.
To a specific question on the cost advantage, Anand said: “Though we expect to benefit, the quantum of benefit, however, will only be ascertained as and when the Union government passes the complete concessions/incentives to third-party logistics players and ports to pass it on to us. We expect a benefit of at least a minimum of R500 per car per transhipment to a maximum of R1,500 per car per shipment when everything is in place.”