India needs to be a Marine container manufacturer nation with an objective target of 1 million containers on an urgent basis.
Containers are ultimately to be certified up to ISO standards and should fit the requirements of maritime certifications.
It is a complex activity in delivery of any maritime equipment or service. Each of them must meet product standard, safety standard and service standards. The ability to withstand certain conditions requires to be met.
The frame and body of the container are made of special steel. The floor of the container is made of wood or bamboo. The weight, which is called as tare of a container, is around 2160 kilos.
If India were to become a container manufacturer nation, then it would be a lessor nation. India should begin forthwith on being a lessor nation with imported containers or containers made from imported steel.
India must do this both competitively, cost-effectively and with a nationalistic perspective, as both manufacture and all road regulations, rules, and laws, international and national, should be converged at one location which will handle the entire project must be classified as a national priority.
A nodal agency, like the Projects and Equipment Corporation of the Ministry of Commerce or a consultant like RITES, who will have a multi-disciplinary approach, a consultant like TCS, which will provide the digital support, the Exim Bank of India to finance as a backup; participating finance companies to do the working capital finance as well as act as Special Purpose Vehicles – all need to be in partnership for servicing the stakeholders.
The Government of India, Ministry of Commerce, Ministry of Shipping and Ministry of Industrial Development should envisage that this requires to be of international standards in all aspects.
The cost of Finance to the lessor should be moderate at less than 3 per annum for the working life of the container, which can be three years or five years. Containers need to be refurbished, recycled, scrapped and all this activity is basic. India is a labour surplus nation and hence all aspects of container activity, like the reuse of containers will have better prospects in India than anywhere else in the world.
The Logistics moving in containers has advantages that will accrue. Used containers have great potential to be given to farmers to store their nutrients or their products respectively, which means ultimately 100,000 or 500,000 used containers can get into the villages rather than building separate concrete and other store houses. These are also movable.
Small enterprises and medium enterprises can use these containers for temporary storage rather than build warehouses. All of this requires a coordinated activity between all the national and state trade organisations and local associations to accept containers as a way of life, and make service providers and stakeholders involved in this process. Containers can be refrigerated.
Container leasing activities should be headquartered in Special Economic Zones, given it will be worthwhile to make a Special Economic Zone by government order just for having this ecology right across at least 20 Special Economic Zones in India.
The Indian Railways and Organisation CONCOR, who are already experienced in handling empty and filled containers have the required expertise in house. India can adapt to container manufacture easily.
Therefore, the foreign trade policy must have special mention of both containers and container vessels and supporting shipping requirements like ocean going barges can be employed for domestic container movement, but the containers will always be of ISO standards. Therefore, the customs regulations and GST regulations and all of this will get compatible to this activity.
An objective target of 1 million containers would mean that the positioning of these containers starts in India and ends in India. Globally, this activity is carried on in specialised areas and India needs to have this specialisation.
The cost of a container is determinable and is not a large amount compared to other projects. India has classified several industries as infrastructure industries for the sake of infrastructure lending. Infrastructure lending if it comes to higher than world costs will render long-term issues for Indian lessors.
Container owning or releasing is an integrated activity that even the major shipping lines can be invited to own containers in India to be positioned in India. They will go by their own standards and hence their requirements are to be understood that some of them may have the position for 5 to 10 years and some of them may not have it for 10 years, but they would be willing to look at it as considering India as a growing and important market.
Indians abroad would have to be enthused in this activity as profitable that all the entrepreneurs take this as a return-based activity and not out of pure consideration for investment in India. Container leasing is not risky. It does not have high returns, but it is so basic that the Government of India, State Governments and the necessary agencies like Railways, National Highways and all take part in this activity by providing the facilities for container yards.
National Highways and Railways can work together to have container yards in every 100 kilometres where Railways and National Highways converge. An example is a container yard in Balli, Goa, where the distance to the National Highway is only one kilometre or less than that, to a Railway siding.
Container yards repeated every 100 kilometres would mean that the Railways can bring in 80 containers at a time and offload it at the yard while the trucks will take them to their nearest destination. This requires convergence of digital, human and requirement elements that requires a national approach for ease of doing business, but more important to bring down the near-term and long-term costs.
Container positioning out of India will ultimately have an impact in Indian and global movement of all kinds of merchandise enabling India’s share in global trade to move up.
1) Total containers – 1 million
2) Description (20-foot equivalent) – 2280 kg tare
3) Total manufacture and assembly involved – 2.3 million tonnes
4) Special steels required – COR-TEN Steel
5) Operations requirements – Free zone – Manufacture in SEZ -Leasing from SEZ
6) Life of Container – 20 years
7) Cost of capital – 20%
8) Operations requirements to export and import – Favourable custom regulations
9) Leasing operation in India – Optional but likely to be favourable
10) Cost per container when Exchange Rate is USD 1 = Rs 73 – Rs 292,000 (4000 USD)
11) Total investment involved – Rs. 29,200 crores
Acknowledgement: Webinar organised by Maritime Gateway on June 3rd 2021
