Minor ports do Major business !!

Adani's Mundra port - minor ports do major business!

Minor ports in India are aggressively eating into the market share of their government-owned major ports, as shippers and ocean carriers frustrated with growing delays at some of the leading public port complexes, including Jawaharlal Nehru Port Trust & Chennai Port Trust look for alternative port options.  Non Major ports known as minor ports‘ cargo volumes are growing at 3 times the cargo throughput of Major ports. Customers are now utilising minor ports to avoid congestion and other issues.

The numbers speak for themselves!!

JOC stats show that Minor ports handled 226.7 million tons of cargo in the first fiscal half of 2014-2015, up 11.1 percent from 204 million tons in the same period in 2013. 

That compares with just a 4 percent year-over-year growth in total traffic at the 12 major ports in the same six-month period from April through September, with overall tonnage growing from 277.2 million tons to 288.5 million tons.

The collected data shows minor terminals, which are either privately-operated or operated by state agencies, increased their share of the country’s total seaborne trade to 44.63 percent in fiscal year 2014-15, from 43 percent in the previous year. Cargo volumes reached 468.47 million tons, up from 417.12 million tons. That translates into a 12.3 percent year-over-year growth in volumes for so-called “non-major” ports.

“Non-major ports have been more successful in attracting higher private investment, because they are perceived to be more business-oriented, customer-friendly, cheaper and in general, more efficient,” the Planning Commission under India's Ministry of Finance said in a recent policy paper, titled “Ports and Shipping.”  “This has been largely due to lower levels of regulatory and financial controls compared to major ports.”

Minor ports in India are GROWING !

As a result, the overall market share of major public ports declined from 57.11 percent in 2013-14 to 55.37 percent in 2014-15.  Year-over-year, major port trusts recorded a mere 4.65 percent increase in total tonnage, annual statistics released by the Indian Ports Association show.

India has 12 publicly-owned major ports, equally spread over the west and east coasts, and nearly 200 minor ports located along its 4,600 miles of coastline.

The Minor ports which are doing major business

The growth in quantum of cargo handled at non-major ports has been primarily driven by growth in non-major ports in Gujarat (Mundra Pipavav) and Andhra Pradesh (Krishnapatnam)

Mundra :

The latest data shows minor ports in the western state of Gujarat, where Adani Ports and Special Economic Zone operates its flagship Mundra Port, led minor port growth in market share.  In 2014-15, Gujarat accounted for about 72 percent of overall cargo volumes routed via minor ports, followed by the southern state of Andhra Pradesh, at roughly 16 percent.

MUNDRA PORT

Mundra’s cargo volumes were up 10 percent last fiscal year, with some of that growth owed to congestion at JNPT, also known as Nhava Sheva.  Quick turn times on the back of modern infrastructure and dedicated hinterland connectivity as well as a variety of ocean carrier options have made Mundra an attractive port for shippers.                                                                                                                                  

Krishnapatnam:

Krishnapatnam, about 112 miles north of Chennai, is the fastest-growing minor facility on the east coast.  Total cargo tonnage there jumped 67 percent year-over-year in fiscal 2014-15, according to traffic figures compiled by JOC.com.  In a short span of seven years, the port has been seeing double-digit progress year-on-year.  Since inception, it has handled record-breaking cargo volumes and last year, the port achieved 41 million metric tons, which was the highest and is the fastest growth recorded by any port in India.

KRISHNAPATNAM PORT 

“The port has potential to become the hub port on the east coast and a transshipment hub not only for domestic cargo but also for international transshipment of containers.  Its deep draft and state-of-the-art, modern marine and handling equipment, proactive management and professional manpower will encourage the growth rate.”

The private operator, riding high on strong cargo gains, last week received a further boost with the launch of a weekly rail service by Container Corporation of India linking Krishnapatnam to Bangalore, a key inland container depot in the country’s southern region.  “This weekly rail service provides the fastest transit time from the Bangalore ICD to the closest gateway port, and has given an impetus to importers and exporters in the region,” the Krishnapatnam port authority said.

JNPT ‘s initiatives to stay ahead of competition!

Amid ongoing infrastructure bottlenecks, JNPT is working on a number of projects to retain and build on its current business.  Foremost among those is the port’s fourth container terminal, which is designed to double the largest container handler’s throughput capacity from about 4.2 million 20-foot-equivalent units to 9 million.

Deep sea satellite ports will help JNPT to stay ahead of its competition !

To stay ahead of expected trade growth and to ease increasing pressure on JNPT, the government of India recently approved construction on a new, deep-sea satellite port in Dahanu, about 80 nautical miles from Nhava Sheva, with public and private investments.

The future outlook: 

Minor ports are set to increase their volumes further. Traffic projections by the Ministry of Shipping, minor ports are expected to handle 1.2 billion tons of cargo by 2019-20, with overall capacity going up from the current 800 million tons to 1.67 billion tons.