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Hiccups to smooth sailing

Compared to global indices, Indian ports and shipping infrastructure suffer from woeful inadequacies that must be immediately addressed

Hiccups to smooth sailing

With global trade from India now surging towards $1 trillion (exports and imports), ports and shipping too have been growing rapidly in the country through the last decade or so. But, port development has been vastly inadequate and none of the Indian ports figures in the top 20 in the world.

Indian ports have been short on performance parameters against international ports, observed a recent Parliamentary Standing Committee report, which was critical of the low productivity of ports, high vessel turnaround time and low draft preventing large cape class vessels from operating through the country's ports. These are issues that need to be addressed through massive investment to ensure that Indian ports become world-class.

The irony is that most ports operate much below capacity and, yet, there is traffic congestion in every port, which is rather difficult to explain. One reason could be the infrastructure bottlenecks like road and rail connectivity, delay in customs and security clearances. There are also tariff related uncertainties due to a multiplicity of regimes.

According to Trinamool Congress leader, Derek O'Brien, who is chairman of Parliamentary Standing Committee on transport, tourism and culture, low productivity and high vessel turnaround time at Indian ports are due to a low level of mechanisation and insufficient draft. Skewed handling capacity for different types of cargo and infrastructure constraints in hinterland connectivity too have contributed to inefficiency. The committee submitted its report to Parliament during the just-concluded winter session.

Benchmarking Indian ports against Chinese and US ports shows that India lags behind significantly in port infrastructure. Seven of the top ten ports in the world today are Chinese, while no Indian port figures in the top 20. Most Indian ports do not have the draft to handle cape size vessels. The average size of a container vessel calling at Indian ports is around 5,000 TEUs – while in China, it is around 12,000 TEUs. Large cape size vessels carry up to 15,000 TEUs. At JNPT, India's biggest container port, draft by volume is 14 m while a cape size vessel requires an 18 m draft. Around 25 per cent of India's container cargo is transshipped at Colombo or Singapore due to our lack of infrastructure to handle large cape size container ships. The average turnaround time at Indian ports is much higher at 4.5 days as compared to just one day in Chinese ports and just a few hours in Singapore.

The parliamentary committee, therefore, strongly recommended that India develop cape handling capability at its key ports as the global shipping industry is fast moving towards cape size vessels. Considering the strategic location of India's major ports and their importance to trade, there is now an opportunity to improve their performance to meet global benchmarks. India should not miss out on this opportunity, the committee felt.

Though the average turnaround time in Indian ports still needed substantial improvement, the committee observed that there has been significant improvement in the past one-and-a-half decades across all major ports. The average turnaround time for major ports improved from 8.10 days in 1990-91 to 3.63 days in 2005-06. It slipped to 5.29 days by 2011-12 but declined to 3.43 days by 2016-17. The turnaround time varied between 1.9 days at Cochin port and 4.99 days at Paradip. Chennai, JNPT, Ennore and Mangalore ports apart from Cochin had less than 2.7 days turnaround time.

Implementation of the RFID system will eliminate manual checking at port gates, thereby minimising congestion. This will facilitate real-time tracking in the movement of vehicles, personnel and materials. This will also reduce congestion alongside containing the cost of operations at ports. JNPT, Cochin, Ennore and Mormugoa have already made the system operational and other ports are in the process of implementing the RFID system.

Three transhipment container ports at Colalchel in Tamil Nadu, Vizhinjam near Thiruvananthapuram and another at Vallarpadam near Cochin are being set up within the radius of about 130 nautical miles. Vizhinjam is endowed with a natural seawater depth of 20 m and hence can attract the largest container vessels from around the world. These large ports are being set up to cut dependence on neighbouring hub ports for transhipment like Colombo, Singapore, Salalah and Jebel Ali in Dubai, Tanjung Pelepas and Port Klang in Malaysia.

The committee, however, felt that three ports coming up within a distance of 130 nautical miles need to be developed and strategised so that all three receive sufficient cargo to ensure profitable operations. There is a need to increase containerisation, but this must be accompanied by increasing the capacity of terminals from 14 million at present to 30-40 million. JNPT has not undertaken any capacity addition project in the last six or seven years.

Total containerised cargo volume for the whole of India's major ports was estimated at close to 8.5 million TEUs. India had just two ports which handled cargo beyond 100 million tonnes – Kandla and Mundra. Indian ports record a higher rate of empty containers being shipped out. This reflects three main factors that characterise the Indian shipping industry – high volume of unprocessed exports, which do not require containerisation; low volume of manufacture exports; and a heavy dependence on manufactured imports. This reflects a fundamental trade imbalance.

Recent changes in the policy have helped to develop cruise tourism. Now, five major ports – Mumbai, Mormugao, New Mangalore, Cochin and Chennai – have taken steps to develop ultra-modern cruise terminals. The committee, however, felt that taxation policies in this regard must be formulated in a manner to facilitate cruise tourism in the country. Charging cruise ships on the basis of their tonnage rather than on the number of passengers was a dampener. This needed to be changed. All city-based ports should have cruise terminals to attract foreign licences and promote cruise tourism.

(The views expressed are strictly personal)

K R Sudhaman

K R Sudhaman

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