Cost benefit analysis of freight transportation via India's inland waterways: with special reference to National Waterway 3

Abstract

India's transportation infrastructure is critical to its economic development, with road and rail networks traditionally dominating the freight movement landscape. However, rising fuel costs, congestion, environmental concerns, and infrastructure bottlenecks have brought inland water transport (IWT) into sharper focus as a sustainable alternative. This study presents a comprehensive cost-benefit analysis of freight transportation through India’s inland waterways, with reference to National Waterway 3 (NW-3), which runs through the state of Kerala. The research evaluates the operational, financial, and environmental aspects of cargo movement along NW-3, comparing them with road and rail modes of transport. The analysis is grounded in data collected from government reports, port records, and field surveys. Key variables such as cost per tonne - kilometre, transit time, fuel consumption, carbon emissions, and infrastructure usage charges have been assessed to establish the economic and ecological viability of IWT. Findings indicate that inland water transport along NW-3 offers significant cost savings, especially for bulk and low-value cargo, due to lower fuel consumption and reduced handling costs. Additionally, IWT demonstrates a markedly lower carbon footprint, aligning with India’s sustainable development goals. However, the study also highlights challenges, including limited last-mile connectivity, inadequate cargo-handling infrastructure, and seasonal navigability issues. The project concludes that while NW-3 is underutilized, it holds substantial potential as a cost effective and green logistics corridor. Strategic investments in multimodal integration, dredging, and modernization of terminals can unlock its value, encouraging modal shift from road to waterways. The study advocates for policy support, public-private partnerships, and awareness campaigns to drive adoption of IWT in India’s freight ecosystem.