Indian Economy News

Increased containerisation demand lifts volumes

Container cargo up 17% in December, volume share a fifth of total traffic

New Delhi: With demand for containerisation on the rise, share of container cargo to the total traffic handled by major ports has been the highest in December.

According to the Indian Port Association (IPA) data, container cargo contribution to the total traffic handled grew 19.5 per cent in December from 18.7 per cent in October, which was also much higher from 17.5 per cent in December 2016.

Container traffic by tonnage grew 17.4 per cent year-on-year (Y-o-Y) at Indian ports in December 2017. For the April-December 2017 period, container traffic grew 7.6 per cent Y-oY. “In order to bring down multiple handling charges for a cargo, consumers are increasingly preferring containerisation of their goods and this has led to increased container volumes at ports in the last few months,” Praveen Somani, director (strategy and new business development), Inland World Logistics told Business Standard. “Containerisation of cargo is also ensuring the much-needed safety and security of the packaged commodity,” he said.

Kolkata-based Inland World Logistics is a logistics and supply chain company into shipping, warehousing and express distribution.

While Jawaharlal Nehru Port Trust (JNPT), Chennai, and VO Chidambaranar (Tuticorin) ports have been witnessing a gradual increase in their container cargo segment since October, Kandla entered the list in the past few months, witha some shipping companies starting container operations.

“Shipping Corporation of India (SCI) and Shreyas Shipping are calling Kandla’s container terminal since the last few months for coastal shipping cargo,” informed MS Balani, traffic manager at Kandla Port. “Our aim is to gradually build container volumes as the terminal has low utilisation and hence we will not be charging SCI until March 2018.”

Kandla port has privatised its container terminal to JM Baxi group, which has been aggressively marketing the facility to improve occupancy.

Kandla’s container terminal faces stiff competition from neighbouring Mundra Port, located 60 km from the port.

“We are not focussing on earning from Kandla’s container terminal at present as our fixed cost is high and we need to look at having the facility better utilised than anything else,” said Balani, explaining the port’s decision not to charge the state-owned SCI. However, the port is charging Shreyas Shipping and other export/import cargo vessels with a sizeable rebate. Meanwhile, JNPT and Chennai Port continue to top container cargo contribution as the direct-port-delivery (DPD) scheme gains traction at these ports.

“Not only DPD (direct port delivery), but continuous improvement in JNPT’s ecosystem is also making this cargo growth possible. Every area of port performance, such as import-export dwell time, de-congestion, clearances and gross berth productivity, is showing marked improvement,” said Neeraj Bansal, deputy chairman of JNPT, the country’s largest container port.

According to the JNPT website, share of DPD volume handled in December 2017 has gone up to 36 per cent from 27 per cent in February the same year.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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