As India's port management stakeholders prepare ambitious plans to build on the significant efficiency progress achieved in 2018 — aided by digitization and other ease-of-doing-business measures, through the new year —renewed strike threats from unionized dockworkers can spoil the improving, more conducive business environment.
Dockworkers across major public ports will join a two-day nationwide general industrial action that a consortium of 10 leading trade unions plan to hold on Jan. 8-9. It is to protest government economic reforms and privatization policies and is a combined/coordinated protest that may become even more painful than usual standalone port labor stoppages.
The strike notice — coming on the heels of an averted threat in May, following several rounds of negotiations — highlights a 12-point charter of demands. As in past job actions and threats, dockworkers’ concerns have their roots in wage raises and better fringe benefits, but at the center of the latest confrontation is seemingly new government legislation — titled the “Major Port Authorities Bill, 2016.” This reform program is meant to transform all state-owned ports into independent companies with greater operational and financial autonomy — a change that workers fear will eventually lead to port privatization.
There is currently no indication if any talks are in the works to try to avert the imminent protest.
Major government ports together represent the majority of India's ocean trade, but that share has steadily dwindled with the emergence of new modern, privately operated minor ports. Recent total volume figures collected by JOC.com provide context to that changing trend. Major ports handled 679 million tonnes (748 million tons) in fiscal year 2017-2018, up 5 percent from 648 million tons in 2016-2017, and minor ports handled 529 million tonnes, up 9 percent from 485 million tonnes, respectively. That 4 percent differential in growth rates is significant, and ongoing government efforts under the mammoth Sagar Mala program are essentially intended to address this concern.
With intense government pressure, Jawaharlal Nehru Port Trust (JNPT) — the largest public container handler — has refocused on productivity improvements to thwart the challenges posed by its closest non-government rival Mundra port, Adani Group’s flagship facility about 300 nautical miles farther up the west coast. That counter program appears to have gained some ground, as JNPT registered relatively more sustained growth during July-September. The JNPT monthly volume totals were 429,145 TEU in July, 417,360 TEU in August, and 431,018 TEU in September. The Mundra figures were 383,091 TEU, 371,988 TEU, and 360,295 TEU, respectively. Adani Group officials were unavailable for comment.
Further, widespread government reforms have lately been a cause of some uneasiness among other port-based logistics verticals — a crisis that industry analysts argue will pose an existential threat to those engaged in the operation of container freight stations (CFSs) in the long run. Those concerns primarily stem from the government’s accelerated push for direct port delivery (DPD) and direct port entry (DPE) services — a fast-track program that enables shippers to gate in/out cargo without wheeling through an off-site storage yard.
With slackening demand for storage/customs services, as a result of those reforms, many CFSs at JNPT have had to redeploy or lay off workers — an action that prompted a two-week shutdown at APM Terminals’ main depot in the public harbor during September-October.
Amid aforementioned rapidly evolving supply chain dynamics — along with the enormity of the operational challenges tied to mega-ship calls — efficiency enhancements are continual pressure for terminals, at JNPT and elsewhere, which are already battling excess regional capacity and prolonged weak demand. Hence, stable industrial relations are more critical than ever for sustained market share as the emerging market economy develops and expands.