Commodity Analysis: Trends in liquid, dry and container cargo segments

Trends in liquid, dry and container cargo segments

Bulk and container cargo traffic has been steadily increasing at Indian ports. In order to meet the increasing traffic volumes, several capacity augmentation projects are being undertaken at a number of ports. The launch of the Sagarmala programme has provided further impetus to port development, modernisation and capacity creation.

A look at the commodity-wise trends in traffic and the future outlook for these commodities…

Liquid bulk

Liquid traffic at Indian ports comprises petroleum, oil and lubricants (POL), high speed diesel, edible oil, liquid fertilisers, naphtha, etc. POL accounted for the maximum share of approximately 35 per cent in total traffic handled at Indian ports during 2016-17. It accounted for about 32.75 per cent of the total traffic handled at major ports and about 38.31 per cent at non-major ports during the period. Among the 12 major ports, Kandla handled the maximum POL traffic of 47.83 million tonnes (mt) during 2016-17. In 2017-18, the trend remained the same, with Kandla port handling 49.84 mt which constituted 23.26 per cent of POL traffic.

Coastal POL traffic has shown a mixed trend, declining between 2012-13 and 2014-15, significantly increasing during 2015-16 and declining again during 2016-17. Overall, POL traffic has been increasing since 2015-16 at an average year-on-year growth rate of 5.61 per cent. It is expected to grow even further in the coming years due to increased government focus and initiatives taken by the port authorities.

Dry bulk

The total dry bulk cargo, comprising coal, iron ore (including iron pellets) and fertilisers (raw and finished]) handled at Indian ports was approximately 353.83 mt in 2016-17, compared to 273.68 mt in 2012-13, registering a compound annual growth rate (CAGR) of 6.63 per cent.

The level of mechanisation at Indian ports is limited at present and most of the commodities are handled by conventional means. Over 58 per cent of the total dry bulk cargo at major ports is handled by non-mechanised means that involve multiple types of handling unlike mechanical handling. However, the level of mechanisation has been increasing somewhat since 2013-14. During 2016-17, the average pre-berthing time (on port account) for mechanical loading/unloading of dry bulk cargo was 2.98 hours, compared to 13 hours for conventional loading/unloading.


Of the total dry bulk traffic, coal accounted for the maximum share of 71 per cent. Between 2012-13 and 2016-17, the total coal traffic at Indian ports increased at a CAGR of 6.2 per cent. This increase was led by the major ports, which witnessed a CAGR of 7.9 per cent compared to 4.7 per cent for non-major ports during the period under consideration. In terms of year-on-year growth, coal traffic witnessed a negative growth in both 2015-16 and 2016-17, primarily due to an increase in domestic coal production by Coal India Limited. A rise in domestic production of coal in 2016 led to a reduction in the demand for thermal coal imports by power utilities.  A similar trend was witnessed in 2017 as well. However, according to industry experts, coal imports will continue despite government efforts to step up production to bridge the demand-supply gap. A coast-wise analysis of coal traffic shows that ports on the east coast handle a larger share (57.95 per cent in 2016-17). This is because most of the coal-producing states (Jharkhand, Odisha and Chhattisgarh) are located in the eastern part of the country.

During 2017-218, Paradip port handled the maxium traffic of 42.36 mt, followed by Kamrajar (23.17 mt).

Iron ore

Between 2012-13 and 2016-17, total iron ore traffic at Indian ports increased at a CAGR of 11.19 per cent. It increased at a CAGR of 10.56 per cent at major ports and at 11.98 per cent at non-major ports. Moreover, the share of iron ore in the traffic handled at major ports increased from 2.53 per cent in 2015-16 to 6.56 per cent in 2016-17. Mining restrictions in states such as Karnataka, Goa and Odisha as well as other policy measures such as high export duty kept iron ore volumes low in the first half of 2016-17. However, with the lifting of bans and a further relaxation in the export duty on low-grade iron ore, aided by a rise in prices, iron ore exports picked up in the second half. During 2017-18, iron ore traffic accounted for 7.15 per cent of the traffic handled at major ports.

Until 2011-12, the west coast accounted for a larger share of iron ore traffic with Mormugao handling over 50 per cent of the total iron ore traffic. A similar trend was witnessed during 2012-13. However, the iron ore traffic handled on the west coast started to decline after the ban on iron ore mining in Goa in October 2012. A noteworthy trend that was observed during 2016-17, was the 177.23 per cent increase in the coastal movement of iron ore from 2015-16. The main reason behind the significant increase was the resumption of operations by the Kudremukh Iron Ore Company.


The fertiliser and raw material traffic accounted for a 2.32 per cent share of total traffic handled at Indian ports. It witnessed a downward trend during 2011-12 and 2013-14, and subsequently grew by 18 per cent in 2014-15. However, the increasing trend has reversed since 2015-16. One of the reasons for this is that Indian companies have started cutting imports of finished products in light of the falling global raw material prices.

Ports on the east coast account for the majority share in the total fertiliser traffic handled at major ports. Paradip port (4.06 mt) on the east coast and Kandla port (3.66 mt) on the west coast account for the bulk of total traffic. Overall, the import of urea, which is widely used in the agricultural sector as a fertiliser, declined at a CAGR of 9.15 per cent between 2012-13 and 2016-17.

Among the major ports, Paradip is the biggest fertiliser handling port. It handled 29 per cent of the fertiliser traffic at major ports during 2016-17. In 2017-18 too, the trend continued with Paradip port handling the maximum traffic of 4.45 mt. Among the maritime states, Gujarat takes the lead with approximately 7 mt (57 per cent) of fertiliser traffic handled during 2016-17.

Container cargo

In 2016-17, container capacity at major Indian ports stood at 183.31 mt. During the same period, container traffic was 13.09 million twenty-foot equivalent units (TEUs), indicating a growth of 7.53 per cent over the previous year. The 12 major ports cumulatively handled 8.45 million TEUs in 2016-17, compared to the 8.2 million TEUs in 2014-15.

In 2016-17, container traffic accounted for approximately 16 per cent of the total cargo traffic at Indian ports – 19 per cent at major and 12 per cent at non-major ports. As compared to the major ports, non-major ports have seen higher growth rates due to adequate container handling capacity, improved road and rail connectivity, better draught levels, and modern equipment and technology for faster cargo evacuation. The share of non-major ports in total container traffic increased from 19.85 per cent in 2012-13 to 35.45 per cent in 2016-17.

A coast-wise analysis shows that container volumes are concentrated in the north-western and southern regions, as a result of which the west coast handles over 70 per cent of container traffic. Overall, the Jawaharlal Nehru Port Trust is the biggest container handling port in the country, followed by the Mundra and Chennai ports. The three ports accounted for approximately 74 per cent of total container traffic in the country in 2016-17. In 2017-18 too, among major ports, JNPT handled the maximum traffic of 57.87 mt.

However, in view of the increased focus of the government, ports on the east coast have started handling significant amount ofcontainer traffic as well.

Krishnapatnam port, which started container handling three to four years ago, is now handling a significant amount of container traffic.

There is a high dependence on roads for the movement of container traffic despite the fact that this mode is saturated and has a high operational cost. Weak hinterland connectivity between production centres and gateway ports often leads to higher costs and delays on account of sub optimal mode choices. Cheaper and more efficient modes like coastal and inland waterways suffer due to inadequate infrastructure.

The way forward

According to Ministry of Shipping estimates, dry bulk traffic (coal, iron ore, fertiliser and others) is projected to reach 574 mt by 2019-20, and further increase to 955 mt by 2024-25. Of this, coal will account for the majority of the total dry bulk traffic (70 per cent) by 2019-20. Liquid cargo volumes at Indian ports can potentially grow to 460 mt in the base case scenario (GDP 7.5-8 per cent) by 2025, while container traffic is expected to reach 19.1 million TEUs by 2019-20, and 30.4 million TEUs by 2024-25.

Going forward, the challenge will be to address issues such as lack of dedicated berths, supportive infrastructure and adequate connectivity to handle the increasing traffic volumes.