With 3% cargo traffic growth, ports prepare to meet FY18 target volumes

Mumbai Port turns agile, Paradip takes to innovation

The cargo traffic growth of 3.64 per cent during April-December has prompted country's major ports to either redefine their business strategies or iron out glitches within business operations in order to become strong revenue generators and not just remain plain volume contributors.

According to the data put out by Indian Port Association (IPA), the country's 12 major ports handled 499 million tonne cargo during the nine months compared to 481 million in the corresponding period last year. While major ports, such as Paradip and Cochin, continued to remain strong volume contributors, port entities like Mumbai Port and Mormugao were in the negative territory. 

“We being a city-based port, are redefining our business strategy to incorporate even the city and tourism projects along with clean cargo share of Ro-Ro (Roll-on and Roll-off) apart from pure industrial cargo,” deputy chairman Yashodhan Wanage told Business Standard. “While we will continue to have liquid, coastal and project cargoes like steel and cement (needed for the infrastructure of Mumbai city), we are betting big on Cruise tourism and also high-realisation Ro-Ro service of cars to improve our earnings,” he added.

The port has a cargo volume target of 63 million tonne for the current financial year and until December the port has garnered nearly 50 million tonne. “Ro-Ro service of cars is a high value business and not volume. We have already grown 25 per cent on year-on-year basis in this segment. Going ahead we plan to increase this share,” he added. 

The Mumbai port is also restructuring its offshore container terminal and will be deepening its draught to 14 mteres from 10.5 meters at present in order to handle containers coming from JNPT for city's cargo consumption.

“We are also giving out our non-core business area of dry-docking to Cochin Shipyard which will earn us Rs 15 crore revenue per annum and save employee cost as the shipyard will be taking over the staff in that facility,” said Wanage.

Just as the Mumbai Port is turning agile to cater to the city's needs keeping revenue growth in mind, east coast-based Paradip port is making efforts to improve business operations in order to maintain the already high cargo volume growth.

“We have shifted to automation of entry-exit points from manual earlier and this has improved our turnaround time drastically,” SK Mishra, traffic manager at Paradip Port said.

“Passage of trucks has more than doubled to 700 daily from about 300 trucks earlier,” he added.

Paradip is a bulk cargo port, which handles mainly thermal coal used by power plants on the east coast. According to Emkay Global report, coal volume growth at Paradip port in December was up 71 per cent on year-on-year basis.

The Jawaharlal Nehru Port on the other hand, due to its increased traction in Direct-Port-Delivery service is managing to clock higher volumes. According to the JNPT website, the share of DPD volume handled in December 2017 has gone up to 36 per cent from 27 per cent in February of the same year.

“JNPT continues to adopt trade friendly measures to further increase trade from the port in an efficient and economical way. The rise in DPD share too indicates that JNPT is well placed to achieve the target of 40 per cent as directed by the government and the Ministry of Shipping," Neeraj Bansal, deputy chairman said. 

In the period under review, container traffic at the major ports was up 7.5 per cent to 6.8 million TEU with JNPT contributing six per cent growth on year-on-year basis, Cochin at 11 per cent and Chennai at 4 per cent were major drivers. 

However, not all major ports have managed to tide over the situation and infact are subjected to the vagaries of trade patterns.

“Last year, rail rakes were idling but this year we are short of rail rakes which is creating an evacuation problem for us at the port amid increased imported coking coal volume,” said PL Haranadh, deputy chairman of Vishakhapatnam Port. “The requirement is of 16-17 rakes per day but we are getting only 10 rakes daily,” he added.

Increased imports of coking coal by Bhillai steel plant of Steel Authority of India has unusually pushed up bulk cargo volume of the port. “Bhillai will be importing another 1.5 million tonne of coking coal in the final quarter of this year as there is a strong revival in domestic steel production. Evacuation, which has already become a problem, will have to be tackled strongly. We are looking to get more rakes to lift the cargo,”  Haranadh said.

Alongside, Kamarajar Port (erstwhile Ennore Port) which has witnessed 1.72 percent drop in cargo growth in Apr-Dec when compared to same period last year, is hoping to close the year on a postive note.

“Demand for imported coal has dropped since the requirement of wind energy has picked up. Also, some amount of coal is moving via Tuticorin instead of Kamarajar which has also lowered our volumes,” said A Karuppiah, traffic chief manager of Kamarajar Port. “We are hoping to end the year with atleast 5 per cent higher cargo volume than previous as some new cargo in the container and breakbulk segment is likely to be handled at the port this year,” he added.

With just the final quarter remaining for all major ports to meet their cargo volume targets for the financial year, it will be interesting to see how the 12 major ports garner higher cargo share amid sticky logistical issues and unpredictable trade pattern.