Although the pace of Indian port growth has moderated — and fallen a long way short of industry expectations — a new JOC.com analysis of nationwide, combined major-minor port data suggests the country’s containerized trade remains in positive territory, at least for now.
Total Indian containerized movement in October was up 4 percent year over year, boosted by higher contributions from privately operated minor ports, the analysis found.
By number, combined major-minor port throughput stood at 1.44 million TEU in October, compared with 1.39 million TEU a year earlier. Major ports took some losses, with combined monthly volume down 2 percent to 800,000 TEU from 817,000 TEU, whereas minor handlers saw volume increase approximately 9.5 percent to 654,000 TEU from 598,000 TEU.
Whether or not that gives a measure of stability to Indian container growth will become clearer in the coming months. But the analysis provides two vital takeaways — importers and exporters are increasingly shifting cargo to private, minor terminals, and secondly, much of those diversions are flowing to Adani Group’s terminal network across the country.
While Jawaharlal Nehru Port Trust (JNPT), India’s busiest public handler, suffered a 5 percent fall in October throughput year over year, Adani’s flagship Mundra Port, some 300 nautical miles farther up the west coast, saw volume shipped through its five terminals, including a DP World concession, grow 6 percent to 401,829 TEU last month. The star of that growth, however, was DP World Mundra, which handled 85,096 TEU — an impressive 38 percent gain over October 2018, JOC data showed.
Adani now has four terminals under its belt at Mundra — the independently run Adani Mundra Container Terminal (AMCT); the Adani CMA Mundra Terminal (ACMTPL), a joint venture with CMA CGM Group; the Adani International Container Terminal (AICTPL), a partnership with Mediterranean Shipping Company; and the newly commissioned AMCT T2.
On the west coast, the private giant also has container operations at Hazira Port, about 120 nautical miles north of JNPT. The Adani Hazira Container Terminal (AHCT) moved 53,496 TEU in October, up 7 percent from 49,683 TEU a year earlier, according to the data.
Further, APM Terminals’ Pipavav Port managed to stay in growth mode, albeit mild, at 77,776 TEU in October versus 76,325 TEU a year earlier.
Those figures make up a total 533,101 TEU for privately operated minor terminals during the month, which equates to about 55 percent of containerized freight sent in and out of India’s west coast region.
On the east coast, Adani’s Kattupalli Port continues to eat into the markets once served by Chennai Port. Kattupalli’s volume soared 37 percent to 71,841 TEU, from 52,397 TEU during October 2018. In contrast, Chennai took a deep cut last month, down 13 percent year over year, data showed.
The other emerging minor gateway at Krishnapatnam also ended October on a positive note, with volume up 18 percent to 47,609 TEU.
Market share declines for major public ports
The analysis gives rise to another underlying factor — a steady decline in the market share of major public ports where efficiency and unregulated tariffs have been powerful tailwinds for minor gateways. Mundra is leading that march, powered by ample capacity — 6.6 million TEU annually on completion of expansions under way — along with advanced operating capabilities and closer strategic relationships with carriers.
“Automation and use of technology to handle cargo, sweating of enhanced capacity, and better cargo mix will continue to drive margin expansion,” Adani Ports said in a recent statement, in releasing first-half performance results.
That said, with a daunting capacity overhang scenario, the Indian port market remains extremely competitive and requires aggressive marketing efforts and continual productivity enhancements to sustain and grow.
Sensing such challenges, terminals at JNPT have also begun refocusing on productivity and customer-centric offerings. A new North India block train service seems to be the trump card PSA International’s Bharat Mumbai Container Terminals (BMCT) is playing to pick up additional hinterland cargo. PSA India recently held a trade session in Gurugram, near Delhi, to showcase BMCT’s capabilities and highlight the advantages of dedicated, prioritized inland connectivity.
“This new service will provide carriers and cargo owners with faster and more reliable inland transit times, through synchronizing vessel and train arrivals and departures,” Mike Formoso, managing director of PSA India, said in a statement.
Bency Mathew can be contacted at email@example.com.