NOT ALL AT SEA
Ports and container shipping are matters that are being carefully looked into in terms of infrastructure building and automation
India’s coastline is a natural attraction for sea trade. Moreover, it’s cheaper than roads. Luckily for us, one Minister has been given the portfolio of road transport and shipping. This makes his task onerous, but it’s a solace that one department can give us the lowdown on what is happening in either of the sectors. Even 70 years after Independence, India is still building her infrastructure. Though we make tall claims, we are yet to build roads in several parts of urban India to make travel smooth. So is it with our ports and shipping. Considering the humongous amount of trade that happens across countries, ports and shipping constitute an important economic activity. For long, India has always relied on ports and shipping for trade. Though much trade happens on our seas, it is strange that the country has not been able to build her infrastructure that could be rated as world-class, despite the increasing throughput of goods and passengers year-on-year.
Ports and shipping help connect the hinterland to the cities and offer much in the way of employment. Moreover, other ways it helps the economy is in the increasing number of equipment
required at ports. Schemes like Bharatmala, Sagarmala play an important role in improving efficiency and connecting the cities to the hinterland. The announcement of the schemes has seen
an overall higher levels of activity across regions, equipment makers and road port building contractors. Going by statistics available with The Maritime Standard, the eight major ports in India have recorded a healthy growth rate of 3.27% during the six month period April to September, 2017. Combined, these ports – Kolkata, Paradip, Chennai, Cochin, New Mangalore, Mumbai, JNPT and Kandla – handled 383 million tonnes of cargo, compared with 371 million tonnes handled during the corresponding period of previous year.
As per the data from the shipping ministry, it is estimated that around 95% of India’s trade by volume and 70% value is done through maritime transport. At present there are 13 major ports, 200 notified minor and intermediate ports in the country. Among the numerous ports in India, Cochin Port has continued to outdo other ports in terms of cargo handling. In the first nine months of the current financial year, April 2017-January 2018, Cochin handled 24.21 million tonnes of cargo, up 18.36% compared with the corresponding period of 2016-17. Container traffic at the port grew by 12.25% in this period. During the first half of the financial year, Kandla Port handled the highest volume of traffic, at 63.13 million tonnes, giving it a 16.49% market share, followed by Paradip with 55.78 million tonnes, JNPT with 37.90 million tonnes, Mumbai with 36.72 million tonnes, and Visakhapatnam with 35.74 million tonnes. Together, these five ports handled around 60% of major port traffic in India.
The DP World operated ICTT container terminal in Cochin also handled its highest ever monthly container throughput, 51, 211 teu, in January 2018, surpassing the previous highest figure of 51,019 teu achieved in October last year. Highlights included a 30% increase in trans-shipment traffic, and a 64% growth in containerized garment exports.
KEY DEMAND DRIVERS
While all the above sounds good, there is still much work remaining to be done at the ports itself, and connectivity building. According to Anil Yendluri, CEO, Krishnapatnam Port, “In order
to attract more investments into the port business, there is a need to develop a port eco-system that includes ports, roads, rails, good city amenities, recreational activities, etc. Despite the lack of port eco-system, there has been a considerable amount of investments in the region.” Apart from rail, road and port infrastructure, there should be social infrastructure in the region. This is critical in attracting more investors. “The objective of the government to develop social infrastructure is quite different from the objective of corporates,” Yendluri adds.
The interest of investors in a region also matter. Krishnapatnam Port is lucky to have gained the interest of investors. Currently, the Port is being built in three phases. After the completion of the first phase, Krishnapatnam Port is currently in its second phase of development. The total investments planned for the port is approximately $3 billion; of which $1.1 billion has already been executed.
TO ATTRACT MORE INVESTMENTS, WE MUST DEVELOP AN ECO-SYSTEM THAT INCLUDES ROADS, RAILS, ETC- ANIL YENDLURI
Adani Ennore Container Terminal, part of the Adani Ports and Special Economic Zone Limited (APSEZ), India’s largest port developer, announced that the Adani Ennore Container Terminal at Kamarajar Port has commenced operations with berthing of the vessel ‘MV SSL Kochi’. Capt. Jeyaraj, business unit head, Adani Ennore Container Terminal, stated, “The port has facilities such as state-of-the-art infrastructure, modern handling equipment, on-dock rail siding and RFID enabled gate operations to add value to EXIM trade and enhance overall operational efficiencies. In the near future, we also intend to augment present capacity of the facility from 0.8 mn TEUs to 1.2 mn TEUs.”
Recently, Sultan Ahmed Bin Sulayem, group chairman and CEO, DP World, met senior executives from India’s Tata Group to explore opportunities for cooperation, knowledge sharing and best practice. Discussions covered logistics and supply chain operations, innovative customer care and creating high quality, sustainable services. The company has extensive business interests in India, including six container terminals, Inland Container Depots (ICD), warehouses and container rail freight services, supporting over 30% of the country’s container trade. It recently acquired a 90% stake in Continental Warehousing Corporation, an Indian logistics firm. Earlier this January, NIIF, India’s first sovereign wealth fund and DP World announced the creation of an investment platform Hindustan Infralog to invest up to $3 billion in ports, terminals, transportation and logistics businesses in India. The Continental acquisition will be the first investment of the platform.
INITIATIVES BY THE GOVERNMENT HAS INCREASED THE DEMAND FOR REACH STACKERS, RTGS, ECH, STS – SANJAY SAXENA
Bullish on the infrastructure growth in India, Sany has stepped in to new business avenues such as ports, mining, housing and industrial infrastructure, wind power, etc. In port equipment, Sany has signed a contract with with JNPT for design, manufacture and supply of 15 electrically operated rubber tyred gantry cranes (E-RTGCs), marking a new beginning in port equipment segment. “The government should take steps to improve connectivity from major exporting hubs to ICDs by road,” says Sanjay Saxena, BU head and VP, heavy equipment division, Sany India. “We see an increasing demand owing to market drivers, mainly arising from increasing trade activities that is resulting in higher container traffic and bulk material handling. It is these two growth parameters that will attract investment in the form of capacity addition in existing port and CFS facilities, as well as creation of new facilities. The recent initiatives by the government has helped increase the demand for port equipment like reach stackers, RTGs, ECH, STS, etc, which is poised to grow in the coming years. We are looking forward to a good growth in the range of 18-20% on y-o-y basis,” he adds.
Pinaki Niyogy, VP & chief technology officer, TIL Limited, says, “We have strong tie-ups with European and American technology partners. This is helping us offer a range of products in mobile cranes, reach stackers, container handlers, etc. All these are manufactured at our Kolkata and Kharagpur plants.” Rising demand for efficient container handling equipment at ports and air-cargo centres owing to increasing volume of good being transported internationally is a major factor boosting growth of the global market.
OUR TIE-UPS WITH GLOBAL PARTNERS IS HELPING US OFFER MOBILE CRANES, REACH STACKERS, CONTAINER HANDLERS- PINAKI NIYOGY
Also, technological advancements in container handling equipment and increasing adoption of automation in equipment are other major factors anticipated to propel growth of the target market over the forecast period. There is also expected to be a rise in automated container handling equipment, while increased stringency in emission regulations shall drive the demand for electric and hybrid equipment. Alternatively, the high capital costs of container handling equipment and lack of synchronization among different equipment may hinder the growth of the market. It is estimated that equipment in the 41-70 tons segment will grow at the highest rate and record the fastest growth in the market during the forecast period.