Getting set for the mega container traffic growth

Mr. S.S. Hussain, Chairman, Jawaharlal Nehru Port Trust (JNPT) flagged off the 3rd Southern Asia Ports, Logistics and Shipping 2008 India conference and exhibition at Hotel Leela Kempinski on September 23 and 24, 2008. It brought together a much larger number of participants and exhibitors than the earlier events. Organised by Transport Events the occasion served as a purposeful forum to present the up-to-date global container transportation scenario and its impact on shipping and trade.

In his keynote address Mr. Hussain contended that the port sector has been identified as the prime catalyst to accelerate the process of industrialization, international trade and economic progress. Port development and economic development are mutually related. On the one hand economic development necessitates port development as a part of infrastructure development and on the other, port development itself facilitates import-export and attracts industries to its hinterland, which, in turn, create forward and backward linkages with the rest of the economy.
The growth of containerisation in India which is seeing a strong surge at a compounded annual growth rate (CAGR) of 17 per cent - more than double the world average – was likely to see a throughput projected at 21 million TEUs by 2015.
In order to sustain future container freight demands to keep up with the economic growth the port sector is faced with various challenges particularly regarding container infrastructure development. However, there exists an oasis of hope in the person of K. Suresh, chairman, Chennai Port Trust, who has plans to transform Chennai port into a major container hub as it has the country’s longest keel length of 2 km; lies in the trade route; enjoys a 17 mtrs draft in the approach channel which can accommodate vessels of over 150,000 DWT; and has already invested heavily in developing road connectivity between the port and the national highway.
Sabyasachi Hajara, chairman and managing director of Shipping Corporation of India, showed the light at the end of the tunnel concerning container growth. He pointed out that the container shipping sizes were exploding and container traffic would grow at an incredible pace. He felt that there was nothing to deter future growth as the fundamentals are strong. JNPT and Chennai today jointly handle 77% of India’s container traffic. As far as connectivity was concerned, India has the second largest road network of 3.83 million km (behind USA but ahead of China). Besides, the railway network is the 4th largest in the world at 63,465 km which is behind that of the USA which is currently having a network covering 2,26,612 km.
As in other countries, he desired that there should be just one ministry for controlling container trade in India in place of the present six to seven ministries. “More participation by Indian shipping lines in container trade would help to bring down the freight cost thus making exports cheaper,” he contended.
According to Hemant Joshi, md of CRISIL Risk & Infrastructure Solutions Ltd., “Projects often suffer setbacks because of improper planning and non-availability of sufficient land. Proper feasibility is not undertaken. Evaluation parameters should be anchored in realities.”
On the finance side, Vishal Sharma of Tuscan Ventures gave an insight into the ‘Private equity in shipping, transportation and logistics in India’. He explained that there was not enough money within the companies for capex growth and debts are becoming more expensive. “There will be more and more private equity investing in this sector. The good news is that both financial investors and strategic investors are investing.”
“Currently, investments were skewed towards developing ports and roads transportation is a preferred mode for domestic goods,” observed Poul V. Jensen, managing director of TransCare Logistics India Pvt. Ltd. “Decision makers in the Indian logistics industry have to look at the supply chain holistically and not in isolation. Hinterlands connections (road / rail) need to be ramped up at the same rate as the Indian ports that are developing. Logistics infrastructure investments (ICDs, FTWZs, etc) must be planned for strategic locations and targeted for common usage and the government needs to revisit its tax policies and outdated laws.”
On a different note Tony Chiu, International sales director, Asia Vision, Hong Kong advocated the use of Vecon OCR solutions as these provide automatic recognition of container ID numbers, chassis numbers and ISO codes of various sizes of containers with world-class accuracy. “They facilitate and enhance effective port and terminal management at the gate, yard, quay as well as operations of quay crane and spreader in the loading and unloading zones,” he said.
In order to factor in a competitive advantage in port and terminal operations Colin P. Fordham, managing director, Thomas Miller South East Asia, Singapore, considered training, re-designing and improved operational procedures to take care of the human error element which constitute 72% of the causes for accidents.
In his presentation on ‘Building a Competitive Advantage in Port & Terminal Operations’, Philip Littlejohn, managing director - Gujarat Pipavav Port Limited cautioned that time was running out. He advised that innovation and technologically advanced terminals be allowed to improve capacity and also create safer, more secure, and environmentally friendly terminals. “We are all in business, but the environment is everyone’s business, and this should be a focus area. Terminal safety is not a luxury, it is a responsibility. Rail and Road capacity needs to be enhanced in order to provide adequate support to the growing volumes being handled by ports and te minals.”

Presenting a case study Arvind Bhatnagar, CEO of GTI said it is the superior technology and a structured facility that helped to make Gateway Terminals India (GTI) a leading and efficient terminal. The feature that has helped the terminal to acquire a win-win situation was logical segregation pre-advise of local empty containers at central gate; error free and paperless data exchange through web access; integration of terminal; operating system & ERP modules – Navis & IFS Capacity augmentation through expansion; & stretching targets high to world class training & development, etc.
From the deliberations at the conference it was established that India is well set to meet the challenges of a mega container traffic growth. The private players in the field are all set to seize the opportunities of the growing boom. The industry is well on its way to witness a welcome transformation.