Container volumes handled by the 12 ports clocked a growth of 6.46% at 4 million twenty-foot equivalent units, or TEUs (the standard size of a container and a common measure of capacity in the container business), from 3.76 million TEUs a year ago. Photo: Mint
Container volumes handled by the 12 ports clocked a growth of 6.46% at 4 million twenty-foot equivalent units, or TEUs (the standard size of a container and a common measure of capacity in the container business), from 3.76 million TEUs a year ago. Photo: Mint

India’s 12 big ports see first signs of revival in cargo growth

Ports owned by the government loaded 288.48 mt of various cargo, 4.2% more than the 276.85 mt handled in the same period last year

At the half way stage of the current fiscal year that began in April, the 12 ports owned by the Indian government loaded 288.48 million tonnes (mt) of various cargo, 4.2% more than the 276.85 mt handled during the same period last year.

For the whole of last year (2013-14), the cumulative volume growth at the dozen ports—which has a market share of 57%—was a paltry 1.78% at 555.49 mt.

These ports are located at Kolkata, Vizag, Paradip, Chennai, Tuticorin, Ennore, Cochin, New Mangalore, Mumbai, Navi Mumbai, Mormugao and Kandla.

Private ports (essentially those owned by the state governments but given to private firms for development and operation) account for the balance 43% share of India’s sea-borne cargo with a volume of 420.24 mt.

A look at the data compiled by the Indian Ports Association (IPA), a body representing the 12 ports, gives an indication that India’s in-bound and out-bound cargo shipped through these ports is improving, compared with the sluggishness seen in the last three-four years, chiefly a fallout of the global meltdown of 2008.

Driving this volume growth is India’s voracious appetite for thermal coal that is used to fire power stations. Between April and September, thermal coal loadings at the 12 ports jumped 8.54% to 39.59 mt from 36.48 mt a year earlier.

Last year, the 12 ports loaded a combined 71.60 mt of thermal coal, 22% more than the 58.65 mt handled in the previous year.

Coal imports have been increasing sharply year-on-year because of a severe shortage of coal in India despite significant coal reserves.

The Narendra Modi-led government, which assumed power in May, is looking to raise power production to light up every home in India, where an estimated 400 million of the 1.2 billion people live without electricity.

Thermal coal imports is poised to soar further after India’s Supreme Court last month ordered wholesale cancellation of 214 coal blocks awarded to private firms.

The ports located at Paradip. Vizag, Ennore, Tuticorin, New Mangalore and Mormugao are ramping up their coal loading capacities to cater to the rising demand for imports.

Container volumes handled by the 12 ports clocked a growth of 6.46% at 4 million twenty-foot equivalent units, or TEUs (the standard size of a container and a common measure of capacity in the container business), from 3.76 million TEUs a year ago.

In the year to March 2014, the container volumes loaded at the 12 ports shrank 3.1% to 7.46 million TEUs from 7.70 million TEUs a year earlier.

Volume growth in imported raw fertilizers is another redeeming feature of the recovery in cargo volumes at these ports. Raw fertilizer loadings jumped 25.72% to 4.39 mt from 3.49 mt a year earlier.

Petroleum, oil and lubricants (POL) cargo—the largest category of cargo handled by the 12 ports—remained flat at 94.24 mt in the April-September period from the 94.50 mt handled a year earlier. POL loadings touched 187.31 mt in the year to March 2014.

Iron-ore shipments through these ports remained depressed as a court-imposed ban on production and exports in Karnataka and Goa sliced exports by about 90% over the past three years. During April-September, the 12 ports handled a combined 9.14 mt of the steel-making commodity, down from 11.84 mt a year earlier.

Once a hot commodity—iron-ore loadings at the 12 ports touched a peak of 100.33 mt in 2009-10—it has now become insignificant, unless India’s apex court alters the course on production and exports.

Given the growth trajectory, Kandla port located in Gujarat could well become only the second Indian port and the first among the 12 to reach the 100 mt cargo handling mark by the end of the current fiscal. Mundra port run by the Adani Group crossed this mark last year.

While the private ports such as the ones located in Mundra, Pipavav, Gangavaram and Krishnapatnam have benefited from the capacity constraints at the 12 ports and the delay in expanding capacities to wean away cargo, the former also have the added advantage of market-driven pricing and less interference from the bureaucracy.

The 12 ports would be able to perform better if these attributes are granted to them.

P. Manoj looks at trends in the shipping industry.

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