Growth slows at Mundra port amid expansion

Growth slows at Mundra port amid expansion

Mundra will soon have a total annual capacity of nearly 7 million TEU. Photo credit: Shutterstock

A much slower-than-usual pace of growth in the first half at Mundra Port may be an indication that demand is not picking up in sync with the capacity growth at India’s biggest non-government gateway despite its vigorous shipper outreach efforts.

Mundra’s traffic increased 4 percent from April to September compared with a year earlier, according to new data released by port owner Adani Ports and Special Economic Zone (APSEZ).

APSEZ’s cargo terminals across India together handled 87 million metric tons (96 million tons) of freight in the first half, edging up 2.3 percent from 85 million metric tons in the same period last year, with container throughput climbing 19 percent year-over-year. The company did not provide first-half container volume data, cumulatively or individually for Mundra.

Those improvements are in contrast to the12 percent year-over-year increase in total tonnage and a 28 percent jump in container-handling in 2016 via APSEZ terminals over the same period in 2015, according to a port data analysis.

Mundra represents as much as 90 percent of APSEZ’s container business, and growth is slowing just months after a 1.3 million-TEU terminal joint venture with CMA CGM began operations in April. Work is now nearing completion on the expansion of a facility operated with MSC to double capacity to 3.1 million TEU per year and bring Mundra’s total capacity to 6.6 million TEU annually.

However, the slower growth comes as Mundra’s public rival JNPT has recorded a similar slowdown in the past few months after a strong start to the fiscal year following monetary and tax reforms that disrupted supply chains as economic growth slowed.

APSEZ’s smaller port locations reported relatively higher first-half growth, with Hazira increasing tonnage by 10 percent and Kattupalli, a competitor to the Chennai port, jacking up volumes by 28 percent.

“While west coast continues to register double-digit growth in containers, east coast, specifically Dhamra, has huge potential to grow exponentially,” APSEZ CEO Karan Adani said in a statement. “We would continue to increase our footprint in (the) logistics space and further improve our port to hinterland connectivity.”

The company has set up a series of trade outreach programs at various northern hinterland locations in the past months to pick up additional cargo for Mundra and Hazira, but the latest numbers do not reflect major gains from those efforts.

With ample capacity on the west coast, the group has lately been working to build up its presence on the country’s southeastern region, taking over Kattupalli in November 2015 and commissioning a new terminal at the Ennore port earlier this year. In addition, work on its much-awaited container transshipment project at Vizhinjam, about 10 miles southwest of Trivandrum in India’s southern state of Kerala, is progressing on schedule to begin operations in December 2019 following the end of prolonged protests and blockades staged by project-affected people over resettlement and compensation demands.

APSEZ’s network includes cargo facilities at the ports of Tuna-Tekra (Kandla), Dahej, Dhamra, Mormugao, and Visakhapatnam.