Bottlenecks in long-haul cargo movement

The recent movement of 189 metric tonnes of over-dimensional cargo for Tata Semiconductor Assembly at Jagiroad town in Assam, via the National Waterway-2 along the Brahmaputra, put the spotlight on the potential of inland waterways in facilitating cost-effective and environment-friendly cargo transportation. Yet, India's push for promoting national waterways, including the NW-2 along the Brahmaputra under the Jalvahak scheme for cargo transportation, failing to gain the desired momentum despite incentives to subsidise expenditures of cargo owners, points towards gaps that remain unaddressed. Infrastructural gaps, fluctuation in water depth and exclusion of short-haul operation from the scheme are some of the key factors that continue to pose challenges in its implementation of the scheme. The central government launched the ambitious scheme in December 2024 for a period of three years with the objective of shifting a significant volume of freight movement from roads and railways to the national waterways - NW-1, NW-2 and NW-16 - but so far only 1.56% of the target has been achieved. The rationale behind launching the scheme, as explained in the scheme document, is that existing reliance on road and rail as the major modes of transporting cargo is leading to congestion of the existing infrastructure. Inland Water Transport can help decongest the transportation network by acting as a supplementary mode of transportation which is eco-friendly, cost-effective and has higher cargo volume carrying capabilities. Road transport accounts for 65%, rail transport accounts for 26%, while IWT accounts for only 1% of freight movement. Financial incentives are provided under the scheme to the extent of 35% of the total actual operating expenditure incurred on waterway journeys for the sustainable modal shift of cargo to IWT from road or rail modes, but the incentive is provided only for the long-haul movements on waterways, i.e., distances greater than 200 km, and first- and last-mile connectivity is excluded from the purview of the incentives. Official data shows that no incentive has been disbursed to date, as none of the registered cargo owners have submitted any claim for cargo movement. Inclusion of short-haul movements could have helped create the momentum for shifting freight from roads and railways to IWT. The scheme documents highlight that the freight cost per tonne-km through IWT mode is ideally low; however, it increases due to fire and last-mile connectivity, as the waterways are located away from most of the industries, and this also increases the number of cargo handling activities (loading/unloading) that further increase the end-to-end cost as compared to road and rail. The scheme envisages exploring the feasibility of construction of terminals on the riverbanks close to production units. Jogighopa Multimodal Logistics Park has triggered hopes for reducing first- and last-mile connectivity costs on NW-1 once this logistics park is fully operational. Another key challenge, which was pointed out during the formulation of the scheme, is that in most of the IWT voyages, the cargo is available only for one leg and the entire return trip, which also adds to per-tonne freight cost. Incentivising short-haul movement using the vessel in its return can help reduce this cost and make the scheme more attractive for cargo owners. Availability of adequate water depth remains the most crucial part of smooth movement of the vessels, and allocation of adequate funds for dredging operations to ensure the required depth round the year is vital for sustainability. If the number of cargo movements along the waterways does not pick up momentum and the natural dredging along the channel does not increase, the gains made in dredging operations are lost due to heavy sedimentation in a mighty river like the Brahmaputra, and it becomes difficult to justify the heavy cost involved in routine dredging operations. Successful pilot movement of bulk and ODCs has sent positive signals about the navigability of the Brahmaputra River, but when it comes to shifting from road and rail to waterways, it is the basic arithmetic of profit and loss for cargo owners, which influences their investment decisions. Besides, the availability of vessels and cargo handling facilities at terminals that meet the minimum standards also plays a crucial role. Even though operational costs become less, longer durations in IWT movement compared to the time taken in freight movement along road and railway networks is another important factor which transporters cannot overlook, especially for a region like Northeast which depends on supplies of essentials from other regions to meet required demand. Nevertheless, the fact that NW-2 can provide strategic connectivity via an alternate route in times of contingencies to bypass the narrow Chicken Neck Corridor at Siliguri itself is a strong reason for the Ministry of Shipping and Waterways to stay focused on Jalvahak scheme implementation. Addressing the critical gaps encountered in the implementation of the scheme on a priority basis is critical to achieving the core objective of decongesting the road and railway network.