Lankan economic crisis creates opportunities for South Indian ports
Continued disruptions at the port of Colombo due to the simmering economic crisis in Sri Lanka have opened up opportunities for ports in southern India. Over the past two months, the International Container Transshipment Terminal (ICTT) in Kochi, Kamarajar Port Limited (KPL) in Ennore and the VOC Port in Thoothukudi have all seen an increase in their cargo traffic.
The trend is expected to continue for the next couple of months, or until Sri Lanka gets out of the financial mess it sees itself in.
Transshipment container volume has seen a huge jump over the past two months; ICTT handled 13,609 TEUs and 15,324 TEUs respectively in March and April 2022, compared to 8,394 TEUs and 4,415 TEUs last year. In 2021-2022, ICTT recorded the highest ever container traffic of 7.36 lakh TEUs, an increase of 6.65%.
The total cargo handled by ICTT in April this year increased to 9.99 lakh tons from 7.88 lakh in the corresponding period of last year.
The KPL of Ennore, located 18 km from Chennai, has also benefited from the Sri Lankan crisis with the Mediterranean Shipping Company (MSC), the largest shipping company in the world, which moored two of its ships there during the two last months.
As a result, freight traffic increased to 1.65 million tonnes between April 1 and May 20, 2022, compared to 1.13 million tonnes in the same period last year, registering a growth of 46% .
Although shipping companies prefer the port of Colombo – it handles nearly 60% of India’s transhipment cargo – as it is geographically better located on the international shipping route, experts say India should take advantage of the situation. current. Experts suggest that India should try to permanently divert a significant percentage of traffic to its ports.
Since the start of the crisis in Sri Lanka in March, ICTT and Ennore have welcomed two mainline vessels each from MSC.
K Mohandas, former Union Shipping Secretary, said DH that Indian ports should engage with shipping lines and highlight opportunities for rerouting large vessels through them, primarily for transshipment operations.
“We have a good network of ports. We have several advantages as many of our ports like Cochin, Mumbai and Mundra on the western side and Chennai and Ennore on the eastern side are suitable to accommodate large vessels,” he said.
“The port (of Cochin) recorded a 247% increase in transshipment containers compared to (the) corresponding period last year. We continue to receive more and more inquiries, and if the crisis in Sri Lanka continues, more ships may operate from Cochin. The port’s transhipment activity has been increasing since 2020,” said M Beena, Chairman of Cochin Port Trust. DH.
While attributing the steady increase to “aggressive pricing strategies adopted”, Beena also said that work to increase the draft size to 18 meters from 14.5 meters had also started. “It will help us to compete with Colombo Port in the long term as their draft is also the same,” she explained.
Sunil Paliwal, Chairman of Chennai Port and KPL, predicted that more vessels would make ‘ad hoc’ calls at Ennore Port due to yard availability and convenient time slots. “MSC might have preferred Ennore as it already operates a link service between Ennore and Colombo,” Paliwal said.
Since February this year, when the economic crisis began to unravel in Sri Lanka, the VOC port has hosted six ad hoc supply vessels from Colombo and six main vessels from the African sector and beyond. The port handled 11,571 TEUs and 13,426 TEUs of supply vessels and ad hoc main lines.
From April 1 to May 25, 2022, the VOC port handled 55.58 lakh tons (cargo traffic) compared to 53.75 lakh tons during the corresponding period last year. Freight volumes grew by 3.4%.
Experts have said that the early operationalization of Vizhinjam International Transshipment Terminal near Thiruvananthapuram set up by Adani Ports can be a game-changer in favor of India as it is located just ten nautical miles from the waterway of international shipping.
“If the port was operational now, we could have wooed ships to Colombo and it would have worked given its strategic location,” Mohandas said.
Both ICTT and Ennore welcomed more than a dozen motherships in November 2020, when ships were diverted to other ports in Colombo due to congestion after markets opened after the end of the first Covid-19 induced lockdown.
RT Kishore of Zeal Lines Private Limited, which is involved in the export of defense munitions and specialized goods like hazardous chemicals, said all stakeholders, including the government, should devise a strategy to ensure that mother ships berth ‘permanently’ at South Indian ports instead of coming here only during a crisis elsewhere.
He said the ports of Chennai and Ennore handle huge cargo destined for cities such as Hyderabad and Bangalore, and these ports have the capacity to deliver the volumes that shipowners need to operate vessels- mothers.
“If we provide the required volume, ships heading to Africa from Hong Kong will consider coming to Chennai, before going to Colombo, even if they have to take a detour. It’s all business, and volumes matter since companies will have to shell out money for travel and docking at ports,” Kishore said. DH.