India's public ports regain market share on efficiency

      01/05/2019

India’s major public ports appear to have halted the diversion of cargo to privately operated minor ports equipped with modern infrastructure and unregulated/flexible tariffs — a result that authorities essentially attribute to renewed stakeholder efforts to increase efficiency rates.

Major ports’ cargo share in the past three fiscal years (2015 to 2018) has remained steady at 57 percent, after sliding to 55 percent in fiscal 2014-2015 from 57 percent in the prior year, according to the government’s 2018 port review presentation.

The government stated that a significant 55 percent increase in handling capacity at major ports — powered by efficiency improvements, tighter productivity norms, and infrastructure upgrades — has brought about that reversal. As a result, total major ports’ capacity has increased to 1.4 billion metric tons (1.5 billion tons), from 965 million metric tons in fiscal 2015-2016.

Outlining the productivity improvements at major ports, the report said average vessel turnaround times have decreased to 64 hours in fiscal 2017-2018, from 82 hours in 2016-2017, and from 87 hours in 2015-2016. For container ship calls, average turn times have decreased to 40 hours, from 43 hours and 45 hours, respectively.

Further, average output per ship berth day — which authorities say is a better performance indicator — has steadily increased and hit 15,333 tons in 2017-2018, up from 14,576 tons in 2016-2017 and 13,155 tons in 2015-2016.

“Efforts have been made to reduce TAT [turnaround times] in pilot movement, mooring and berthing, reduction of non-working time and e-clearance [via paperless solutions] of cargo,” the report stated.

With that all-around efficiency push, authorities believe they will be able to decrease the average turn time for vessels to 54 hours and to 31 hours for container ships in fiscal 2019-2020. Further, average output per ship berth-day is expected to reach 17,100 tons next year.

Still, Indian ports need to work harder to catch up with some international competitors, as container ships calling at Shanghai (China), Jebel Ali (United Arab Emirates), and Rotterdam (the Netherlands) take less than a day to turn around. At Antwerp (Belgium), Colombo (Sri Lanka), and Singapore, turn times range from one day to one-and-a-half days — a level that Indian ports currently aim to reach, the presentation stated.

In addition, authorities intend to substantially reduce container dwell times at Jawaharlal Nehru Port Trust (JNPT) — targeting 28 hours in 2019-2020 for imports, down from 50.8 hours in 2017-2018; and 68 hours for exports, down from 83.7 hours, respectively. JNPT handles more than half of container freight moving via major ports.

The report also highlighted the progress Indian ports have made regarding coastal cargo movement and transshipment handling, following the May 21 cabotage law relaxation.

Amid rapidly changing supply chain dynamics, technology has become another key buzzword in India’s freight industry. The Dec. 11 rollout of a new/advanced port community system (PCS) — designed to connect all players in the supply chain ecosystem under a single window module — is the latest effort on that front.

The emerging market economy has 12 publicly owned ports and about 200 minor ports dotting its 4,600 miles of coastline. Notwithstanding the aforementioned steady cargo share for major ports, an analysis of total tonnage points to a higher growth rate for minor ports Fiscal 2017-2018 volume figures were as follows: major ports at 679 million metric tons — a 5 percent gain from 648 million metric tons in 2016-2017, and minor ports at 529 million metric tons — a 9 percent increase from 485 million metric tons, year over year.

Much of that growth for minor ports is generated by Adani Ports-owned cargo terminals at Mundra, Hazira, Dahej, Kandla, Dhamra, Mormugao, Visakhapatnam, Kattupalli, and Ennore — which together reportedly account for nearly 25 percent of the country's total port capacity. Further, the group's ongoing large-scale expansions via strategic partnerships with CMA CGM and Mediterranean Shipping Co. will increase Mundra's container-handling capacity to 6.6 million TEU annually — a major reason why authorities want JNPT to focus more on productivity and other pro-trade measures.