India Should Raise Containerized Cargo Capacity: ASSOCHAM | CORPORATE ETHOS

India Should Raise Containerized Cargo Capacity: ASSOCHAM

By: | December 13, 2017
containerized cargo

Dec 13: India should increase its investment in containerized cargo capacity in major ports as it is a key indicator of a country’s integration with global supply chain for value-added manufactured goods, according to a report by Associated Chambers of Commerce and Industry (ASSOCHAM).

India’s total containerised capacity of 8.75 mn TEUs (Twenty-foot equivalent units) in 12 major ports combined is only a quarter of the capacity of China’s Shanghai port.

Though India’s ports have met in rapidly expanding traffic, handling more than a billion tonne of cargo in 2016-17 and the capacity is expected to increase to 2.5 billion tonnes by 2025, the freight mainly comprises POL (petrol, oil, and lubricant), coal, iron ore and other commodities.

 It is only recently that freight in containers, which are easy to load, unload and can be carried to the hinterland through multi-modal transport, is catching up in India. Besides, it is the containerized traffic which reflects the level of manufacturing and value addition a country has achieved for itself in the global market.

 “Total containerized cargo volume for the whole of India’s major ports is about 8.5 million TEUs, which is less than a quarter of volume handled by the largest container port in China, Shanghai (36.5 million TEUs). China has four ports which handle more than 20 million TEUs, Shanghai, Shenzhen, Ningbo & Zhoushan and Hong Kong China, ” Assocham report said.

 Even on the parameter of overall cargo, both with or without containerization, India has a fragmented capacity at different ports.  In China, there are six cargo ports which can handle over 500 million tonnes cargo per annum and it has another eight ports which handle cargo more than 100 million tonnes up to 500 million tonnes.

 Commenting on the infrastructure in India, Mr DS Rawat, Assocham Secretary General  said, “The port scaling in China is not only ahead of us, but it over-awes even the major countries. Of the world’s top 20 ports, 14 are in China. No Indian port figures in the world’s top 20.”

 “In contrast, India has just two ports which handle beyond 100 MT – Kandla and Mundra. Fragmentation of port capacity in India is demonstrated by the fact that India’s 12 major ports handle cargo far less than Shanghai port. Large productivity gains can be achieved by improving existing ports at a much lower marginal cost,” the study noted.

 The ASSOCHAM report said that use of containers is imperative to promote multi modal transportation. These containers can travel across all modes. “Container is a transport unit as well as a logistics unit. Containers save handling costs when freight must be transferred from one mode to another (example – from ships to trucks or truck to rail); this calls for cost effective models with ready infrastructure.”

 The study also suggested that it would be appropriate to augment capacity of existing ports to create ports with large capacity of 100 million tonnes (MT) rather than creating new ports and spreading resources thinly.

 Noting that for India to remain competitive globally, investment in port capacity is a must, the report stated that industry needs to address how to identify, fund, operate and make targeted infrastructure improvements in key elements of maritime transportation system. “India needs to spend more and better in maritime infrastructure.