Container movement to/from South India is on the upswing, thanks to the emerging economy’s robust GDP growth — estimated at 8.2 percent in the April-to-June quarter, a new JOC.com market analysis shows, with Krishnapatnam port — a privately operated, alternative minor gateway — continuing to lead transshipment freight handling in the region.
The study found that South India container trade in the first eight months of 2018 totaled 2.94 million TEU — an impressive 10 percent increase from the 2.67 million TEU from the same period in 2017.
Of that, transshipment freight represented 164,892 TEU, with Krishnapatnam handling 125,348 TEU, or 75 percent of the total South India transshipment trade during the eight-month period.
In contrast, transshipment volume at DP World’s Vallarpadam Terminal in the Cochin port — which is essentially designed to counter the growing dominance of Sri Lanka’s Colombo port for Indian cargo — was 16,395 TEU during January-August, statistics show.
Market share by port
By market share, the Chennai port — India’s largest east coast public harbor — suffered a 2 percent drop, to 37 percent from 39 percent during January-August 2017. However, despite that transshipment surge, Krishnapatnam’s overall share of the South Indian trade remained flat, at 11 percent.
On the other hand, the Kattupalli port — an Adani Group-owned facility located 16 miles north of Chennai — has steadily increased its market share, with its January-August share rising to 13 percent, from 10 percent a year ago.
Other ports in the region registered little change in their respective market shares, except for Visakhapatnam, where that number improved to 10 percent, from 9 percent during January-August 2017.
Further, the analysis suggests — and industry leaders generally agree — that the intensifying fight between Krishnapatnam and Kattupalli for market share will further cut into volume moving through Chennai terminals.
Besides benefiting from shippers’ concerns over Chennai’s long-running productivity issues, due to truck congestion and yard equipment shortages, a deregulated pricing regime offers these minor, private operators a distinct competitive edge over their public peers, whose service rates are governed by the Tariff Authority for Major Ports.
Krishnapatnam in expansive upgrade program
As that market supremacy battle heats up, Krishnapatnam has embarked on an all-round, expansive upgrade program to boost its operating capabilities and productivity rates. In recent months those measures have included new yard crane deployments; speedier customs examination methods via advanced X-ray machines and a “drive-through-container-scanning” service; and an electronic, self-sealing program for factory-stuffed export shipments.
In addition, Krishnapatnam is expected to draw more volume on the back of India’s new liberalized cabotage rules, under which foreign-flag ship operators can transport laden export-import containers for transshipment and empty containers for repositioning between domestic ports without any specific permission or license from local authorities.