Home Infrastructure ARE INDIAN PORTS READY TO Handle High Traffic?



1---JNPT-Port-300-167The World Maritime Day 2017 was celebrated at IMO – International Maritime Organization on the 28th of September 2017. It was marked around the world in a series of events and celebrations, led by IMO from its London headquarters. Seafaring nations, Coastal States and the Shipping Industry staged conferences, seminars and public events under the 2017 theme “Connecting Ships, Ports and People”.

The World Maritime Day theme for 2017 theme was ‘Connecting Ships, Ports and People’. The theme was chosen to provide an opportunity to focus on the many diverse actors involved in the shipping and logistics areas. The maritime sector, which includes shipping, ports and the people that operate them, can and should play a significant role helping Member States to create conditions for increased employment, prosperity and stability ashore through promoting trade by sea; enhancing the port and maritime sector as wealth creators both on land and, through developing a sustainable blue economy, at sea.

At IMO, the traditional diplomatic reception was preceded by a special visit for maritime students and young professionals from the maritime industries. After a tour of the headquarters building, they received presentations on some of the key topics IMO is dealing with, including safety, security and humanitarian issues. This was followed by a discussion on the interaction between IMO Member States, ports, seafarers and ship operators – and how this might be improved.

World Maritime Day is an official United Nations day. Every year, it provides an opportunity to focus attention on the importance of shipping and other maritime activities and to emphasize a particular aspect of IMO’s work. Each World Maritime Day has its own theme

IMO – International Maritime Organization is a specialized agency of the United Nations. India joined IMO in 1959. It is currently the 16th largest maritime country in the world. India has 12 major and 200 notified non-major and intermediate ports, spread across its vast coastline of 7,517 km. 90% of India’s trade by volume and 70% by value moves, through maritime transport. This highlights how important the sector’s contributions are for the growth of the Indian economy. Ports and shipping has become crucial for the economy with increasing global trade linkages. The cargo traffic is expected to increase by 643 million metric tonnes by 2021-22, from 2014-15.

The BIG QUESTION is – Are we ready to handle such high traffic?
India really needs to take important steps for further growth of the sector. A vibrant domestic shipbuilding industry and world-class port facilities can act as effective enablers for maritime services. A well-considered long-term vision sustained by policy enablers would be imperative to capitalize on the growth potential. It will also provide employment opportunities for millions.

Growth in maritime sector also boost business opportunities for ancillary service providers, such as Operations and Maintenance, Pilotage and Harbouring, Container Freight Stations, Inland Container Depots, and Logistics and Marine Assets. The government has been taking many steps to integrate and develop the maritime sector, like the Sagar Mala Project, Inland Waterways Development, Port-led Cluster Development and Coastal Economic Zones. The Shipping Ministry has taken many initiatives—rebate of service tax on coastal shipping has been hiked to 70%, and tax exemptions have been granted on inputs used in shipbuilding and Indian Port Rail Corporation for last-mile port connectivity.

However, there are a many challenges ahead before Indian Ports can really compete with the best ports of the world, in terms of handling heavy traffic effortlessly. If these challenging issues are addressed timely, it can generate immense employment opportunities and simultaneously make this amazing sector one among the growth drivers for the nation.

The average turnaround time—the duration taken to load or unload a vessel—at major Indian ports has seen a gradual decline over the years. But, at 5-6 days, it still remains above the average time taken by some of the top ports globally (48 hours). Further, Indian ports naturally have shallow draft, incapable of handling large vessels requiring draft of 20 metres and above, thereby are unable to handle transshipment cargo. However, with the direct port delivery initiative by JNPT, PPP in port development, and enhanced focus on mechanization and digitization of ports and operations, the sector is heading towards getting ready to serve the global trade in the
next decade.

As part of its strategy to enhance India’s cargo handling capacity and augment port-lead development and provide infrastructural facilities, a major initiative is Sagar Mala has been launched by the Prime Minister. Under Sagar Mala, 415 projects, at an investment of INR 8 trillion have been identified across port modernization and new port development, port connectivity enhancement, port-linked industrialization, and coastal community development for phase-wise implementation, over the two-decade period of 2015 – 2035.

PORT-LED DEVELOPMENT: De­ve­l­o­p­ment of CEZ with port-based industrialization, coastal tourism, logistics parks, warehousing and fisheries development.

PORT INFRASTRUCTURE EN­H­ANCEMENT: Transformation of existing ports into world-class ports by developing deeper drafts, mechanization of existing berths, creation of new capacity and greenfield mega ports and transshipment ports.

EFFICIENT EVACUATION: En­han­cement and increase of rail / road network and inland waterways connected to ports and identification of congested routes. Implementation of projects will be taken up through private sector or PPP route. In the last four years, the government has approved 118 projects involving US$ 7.73 billion, and US$ 2.69 billion has been invested in the last three years in ports and shipping sector. The growth can be accelerated through four key tenets of the SAFE model—Security, Advancement, Facilitation
and Efficiency.

Maritime security is of paramount importance towards achieving a sustainable connection between ships, ports and people. A balanced, well-coordinated and risk-based preventive strategy among various nations is fundamental towards achieving flourishing international maritime trade.

Advancement and upgrade of shipping and ports is imperative for enhancing maritime trade. The starting point could be corporatization of major ports. On the periphery of ports, we should promote port-based industries by encouraging captive jetties to handle third-party cargo, revamp last-mile road and rail connectivity of ports as envisioned in Sagar Mala. Develop 2-3 ports as mega projects—greenfield or brownfield—on East and West coasts, develop Smart Cities, in line with Sagar Mala concept of cluster-based ports. It is important that ship maintenance and repair hubs are set up in major ports and select non-major ports. To manage all of these and port tariff, a National Maritime Regulatory Authority should be set up.

Focused initiatives like last-mile connectivity, port modernization, inland waterways infrastructure, etc, are needed to ensure that maximum trade is undertaken through sea route, thereby, reducing logistics cost and enhancing quick turnaround for all the stakeholders. To facilitate maritime traffic, all departments must work together and policies should be aligned. This one aspect is of utmost importance, if India really wishes to be among the Top 5 maritime countries.

Ships are subject to a wide range of government controls upon arrival and departure, which results in time delays and increase in ocean freight costs in the form of higher mooring costs, higher demurrage and increasing turnaround time at ports. Though these checks and balances are required, a streamlined single-window clearance mechanism and increased cooperation through real-time information exchange between the customs and maritime department through use of electronic medium will speed up the entire value chain and enhance efficiency. Increasing cross-border integration along with major agreements on international trade will lead to rise in India’s seaborne export-import trade and increase cargo traffic significantly.

India’s efforts to bring down cargo dwell times, as part of a larger ease-of-doing-business program, have yet to translate into steady improvements, as dwell times edged up to 3.3 days at most of the major, or public, ports during the first fiscal half after some progress last year. By port, the numbers were as follows:
JNPT – Jawaharlal Nehru Port Trust – from 2.68 days to 2.94 days; Chennai, from 2.59 days to 2.76 days; Tuticorin (V.O. Chidambaranar), from 1.98 days to 2.01 days; Kolkata, from 5.1 days to 5.3 days; and Visakhapatnam, from 3.1 days to 3.6 days.

However, Cochin improved its first-half average dwell time to 5.12 days from 5.6 days previously, reflecting the speed by which DP World Cochin has been able to process vessels, as well as, trucks and trains on the back of advanced operating procedures. Dwell time is the time taken for exports inside terminal gates to be loaded onto a ship and imports onto a truck or train. Containers staying longer in the harbor cause congestion and extra storage charges for shippers. Improving port efficiency and taking cost out of the supply chain have been a key focus of the government.

JNPT loads the majority of India’s containerized freight. The push has been more evident there. However, the new data could be a cause of worry for port leaders and other stakeholders, because they explore more proactive steps to speed cargo flows, including standardizing of carting hours for export cargo across all terminals and reducing free storage time for railed shipments. Additionally, India’s top port is in the process of setting up a common trucker pool for import shipments, moving through its DPD – Direct Port Delivery scheme, which the customs officials argue can save shippers substantially on their logistics costs. JNPT’s DPD volumes are steadily growing, with that traffic during October reaching 42,865 TEU, representing roughly 31% of total laden imports for the month.

Chennai handled 12,242 TEU of DPD shipments during October, out of total imports of 67,081 TEU, against 8,928 TEU and 71,076 TEU, respectively, during October 2016, port statistics show. On the positive side, quayside efficiency at major ports appears to be improving, all thanks to DPD and other measures, especially gate automation, as the first-half overall average ship turnaround time was down to 2.65 days from 2.95 days a year earlier and average output per ship-berth day was up to 14,900 tonnes (16,424 tons) from 14,218 tonnes, during April to September 2016, government statistics show. At JNPT, the statistics were not so encouraging, reporting 2.32 days, from 2.01 days, and 22,331 tonnes, from 22,802 tonnes, respectively. Chennai had some modest improvements on both counts, according to new data. Terminals at JNPT and Chennai together load more than 70% of India’s containerized freight moving, via major ports. Further efficiency gains at these ports are critical, because of the threat from private rivals — largely led by Adani Ports — pose to their market share intensifies.

Adani Hazira Port, an emerging alternative gateway about 120 nautical miles north of JNPT, hit a new monthly traffic high of 51,466 TEU during October, since it was opened in April 2013. JNPT already faces competitive pressure from large-scale capacity building and aggressive shipper outreach efforts by Mundra, Adani Group’s flagship gateway, about 300 nautical miles away on the west coast. However, JNPT leaders remain upbeat about their ability to ward off those challenges. They are embarking on a spate of supply chain improvement schemes, ahead of the opening of its new mega-terminal, being built by PSA International.

The major ports in India have recorded a growth of 3.27% during the period April to September 2017 and together handled 383 Million Tonnes of cargo, as against 371 Million Tonnes handled during the corresponding period of previous year. The Eight Ports i.e. Kolkata, Paradip, Chennai, Cochin, New Mangalore, Mumbai, JNPT and Kandla registered positive growth in traffic, during the period April to October, 2017.

The highest growth was registered by Cochin Port (17.66%), followed by Kolkata [incl. Haldia], New Mangalore, Paradip with growth of about 12%. The Cochin Port growth was mainly due to increase in traffic of POL (24.56%) and Containers (11.12%). In Kolkata Port, overall growth was positive 12.39%. KDS – Kolkata Dock System registered traffic growth of 3.80%. HDC – Haldia Dock Complex registered positive growth of 16.66%. During the period April to September 2017, Kandla Port handled the highest volume of traffic of 63.13 Million tonnes (16.49% share), followed by Paradip with 55.78 Million Tonnes (14.57% share), JNPT with 37.90 Million Tonnes (9.90% share), Mumbai with 36.72 Million Tonnes (9.59% share), and Visakhapatnam with 35.74 Million Tonnes (9.33% share). Together, these five ports handled around 60% of Major Port Traffic. Commodity-wise percentage share of POL were maximum at 34.07%, followed by Container (20.01%), Thermal & Steam Coal (12.81%), Other Misc. Cargo (12.24%), Coking & Other Coal (7.57%), Iron Ore & Pellets (6.61%), Other Liquid (4.30%), Finished Fertilizer (1.29%) and
FRM (1.10%).


Do you know, Colombo can handle more container traffic than all of India’s ports, put together? For a country with a long maritime tradition, this is indeed ‘the’ major concern for our policy makers and the Shipping Ministry. In spite of ambitious goals being announced in 2016, by the government during the National Maritime Summit held in April 2016, in Mumbai – in terms of capacities, investment and jobs, all of which may or may not be realized in near future. The important thing though is that, it has brought into focus a long neglected aspect of the Indian economy – its poor trade infrastructure.

There is no reason why China’s 10th largest port should be 50% bigger than India’s largest. And why all of India’s 12 ports, which are officially classified as “major”, should not be able to carry much more traffic between them than the single port-city of Singapore. Or why Colombo can handle more container traffic than all of India’s ports put together – with something like three-quarters of that being transshipment of containers from India, because India’s ports are too shallow to accommodate big container vessels. For a country with a long maritime tradition, this is a major concern! Indian ships account for a tiny part of the country’s trade of just 15%, as compared to the international norms of 40%.

It has no civilian shipyards to compare with the world’s best. The two or three private ones that look to build commercial vessels are deep in debt and short of orders; most Indian ship-owners prefer to look to foreign yards, because of better quality and assurance on delivery schedules. In short, India’s maritime business needs a booster shot. Part of the problem is India’s skewed pattern of trade: goods imports are 50% bigger than exports, so ships that bring goods to Indian ports often have no return cargo. In the case of some ports, the import-export ratio is as skewed as 90:10. Freight rates are therefore high, on top of which Indian ports – while more efficient than before, in terms of turnaround times – are expensive in terms of tariffs.

Mirroring a complaint from the airline industry, bunker fuel costs are high too. However, the most important reason for the stunted nature of India’s shipping-related businesses is the lack of port-based development, as an industrial strategy. That too has begun to change, as more and more companies plan investments with port linkages in mind – for ease of importing raw materials or components and shipping out finished goods. Whether it is oil refineries or car factories, steel mills or power stations, there is a clear shift to coastal vicinities. The government has done its bit by pushing Sagar Mala for promoting shore-based industrial and related activity. The hinterland too will get more efficient transport links, once the two railway freight corridors are completed by the end of 2019.

The EAC – Expert Appraisal Committee for Infrastructure and CRZ projects of the Union Environment Ministry has deferred the proposed terminal and capacity enhancement of berths operated by the JSW Group’s South West Port Ltd., at the Mormugao port, citing concerns of air pollution raised during a week-long public hearing in early November 2017. In its meeting, the EAC noted that air quality monitoring reports of the Goa State Pollution Control Board indicate that “particulate matter is exceeding the prescribed limits for the present handling capacities” at the port. Noting that the concerns have not been addressed satisfactorily, the committee said it has kept the proposal for “reconsideration for environmental and CRZ clearance”.

Port records accessed by ‘The Indian Express’ showed JSW, Adani and Vedanta have at least a berth each for themselves at Mormugao. They also showed JSW imported 10.11 million tonnes of coal in 2016-17 for its plant in Toranagallu, Karnataka; Adani has an awarded capacity of 5.2 million tonnes for its clients in Goa and Karnataka; and, the coal berth allotted to Vedanta has a capacity of 6.99 million tonnes, to be utilised for its proposed plant in Bellary, Karnataka.

The convention of TPMGSU – Tuticorin Port Mariners’ and General Staff Union, affiliated to AIPDWF – All India Port and Dock Workers’ Federation, held in November resolved to extend full support to a call by 6 federations of port and dock workers, to protect the legitimate rights and privileges of workers. During the two-day working committee meeting organized by TPMGSU, the convention expressed concern over the prevailing anti-labour and anti-port policies of the Indian Ports Management and the Shipping Ministry over sidelining trade unions and national federations, while taking decisions on labour issues.

The decision taken by the government to replace the Indian Major Port Trust Act, 1963 by the Major Port Authorities Bill, 2016 without considering suggestions made by the federations was detrimental to the interest of workers. Even after a lapse of several months, the wage revision committee, constituted by the government this year to revise wage structure of group ‘C’ and ‘D’ employees of major ports, its proceedings had not been completed so far. The VOC Port Trust management was urged to take appropriate action for revision of incentive scheme for traffic employees, procurements of mooring boats and new tug for marine operations, allocation of adequate fund towards pension and medical facilities to pensioners. Thousands of posts were kept vacant in major ports affecting operations and on the other hand, regular nature of jobs had either been outsourced or contracted to the private sector, stated
Mohammed Haneef.


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