India’s growing coastal freight demand looks like the next target for foreign container lines amid the trade diversification in Asia.
CMA CGM and Maersk are actively considering venturing into coastal shipping operations between Indian ports, according to industry and government sources.
“It’s a trailblazing investment opportunity for foreign lines to ramp up their presence in India,” one industry observer said.
That coastal trade, thanks to cabotage regulation around so-called protectionist policies, remains restricted to India-flagged tonnage, even though New Delhi in 2018 removed the barrier for containerised freight meant for transhipment, thus enabling foreign-flagged liner operators to aggregate volumes at their direct ports of call.
Now, coastal entry is potentially easier and quicker for CMA CGM after the French carrier last week announced it would reflag the originally Malta-registered CMA CGM Vitoria, one of four ships it has deployed on its BIGEX service between India, the Middle East, and the Red Sea, a four-string operation, with weekly calls at India’s Nhava Sheva and Mundra ports.
“In addition to its first local flag registration, the group will register three more vessels in the coming months, underscoring CMA CGM’s commitment to India and its ambition to further develop its presence in the country,” the carrier said.
“CMA CGM also becomes the first foreign shipping line to register a containerised vessel in the International Financial Services Centre, GIFT (Gujarat International Finance Tec) City, in India,” it noted.
Next in that line-up is expected to be the CMA CGM Manaus, also Malta-flagged, followed, reportedly, by CMA CGM India and CMA CGM Mediterranea.
“The recent visit of India’s prime minister [Narendra Modi] to CMA CGM’s headquarters in Marseille underscores the group’s commitment to further expanding its presence in India across shipping, intermodal transport, logistics, and terminal operations,” said the operator. “In particular, CMA CGM has recently opened a crew management office in Mumbai for its fleet.”
The interest in coastal services emerges as the Indian government strives hard for greater modal shift from trucking to greener inland waterways and its vast river network. But that effort hasn’t yielded market growth to the desired government targets, due to infrastructure and reliability shortcomings.
Sources, however, believe the involvement of global ocean carriers could make the Indian coastal market even more vibrant and growth-oriented.
At the same time, the intensifying geopolitical conflict between India and Pakistan has dealt some shocks for regional trade, after each government banned cargo from the other flowing through their respective ports.
As a result, mainline ocean services serving both India and Pakistan are now being realigned to offer alternatives, disrupting normal supply chains.
The ripple effects have also spilled into air freight verticals due to airspace restrictions. Additionally, Indian airports close to the border region, as many as 27, have been told to stop operations until 10 May as part of security alert measures.
Any disruption-linked cost impact ultimately finds its way to cargo owners on their freight bills.
