Total traffic at Indian ports stood at 1,209 million tonnes (mt) in 2017-18, having grown at a compound annual growth rate (CAGR) of 5.59 per cent between 2013-14 and 2017-18. Of this, dry bulk accounted for 39 per cent, followed by liquid bulk (36 per cent), containers (17 per cent) and other commodities including break bulk (8 per cent).
Commodity-wise, growth has largely been driven by the 3Cs – containers, coal and crude – which comprised 75 per cent of total traffic in 2017-18. At both major and non-major ports, petroleum, oil and lubricants (POL) accounted for the highest share in traffic, followed by coal for non-major ports and containers for the major ports.
Over the past five years (2013-14 to 2017-18), there have been significant changes in the commodity composition at Indian ports. Containers have been reporting strong activity due to increasing trade and POL volume growth also continues on account of rising demand. Meanwhile, iron ore volumes have reported poor growth in recent years.
Going forward, the launch of the Sagarmala programme, the government’s enhanced focus on modernisation and mechanisation of ports and measures to improve port connectivity are expected to drive growth in cargo traffic.
India Infrastructure Research analyses the commodity-wise trends in traffic and the future outlook…
During 2017-18, total container traffic was 15.07 million twenty-foot equivalent units (TEUs), a growth of 15.18 per cent over the previous year. Of the total traffic, the major ports accounted for a share of 60.62 per cent, while the remaining 39.38 per cent was handled by non-major ports. In 2018-19, the 12 major ports cumulatively handled 9.88 million TEUs, a growth of 8.07 per cent over the previous year.
In terms of year-on-year growth, container traffic at both the major and non-major ports has been increasing since 2014-15. However, non-major ports have outperformed the major ports. As container volumes are concentrated in the north-western and southern regions, the west coast handles more than 65 per cent of the container traffic. With respect to the major ports on the west coast, the Jawaharlal Nehru Port Trust (JNPT) handled 82 per cent of the total west coast container traffic in 2017-18. Among non-major ports, Mundra (4.48 million TEUs) and Pipavav (0.7 million TEUs) ports have been handling significant container volumes.
Liquid traffic at Indian ports consists of POL, high speed diesel, edible oil, liquid fertilisers, naphtha, etc. POL accounted for the maximum share of around 34.71 per cent in total traffic handled at the ports during 2017-18. The traffic share of POL at the major and non-major ports stood at 33.37 per cent and 36.43 per cent respectively. Among the major ports, Deendayal port handled the maximum POL traffic (62.2 mt) in 2017-18. In 2018-19, the trend remained the same, with Deendayal port handling 59.31 mt, which constituted 25.52 per cent of POL traffic.
Total dry bulk cargo, comprising coal, iron ore (including iron pellets) and fertilisers (both raw and finished), handled at the major ports was approximately 261.52 mt in 2017-18, as compared to 205.56 mt in 2013-14, registering a CAGR of 6.2 per cent.
The level of mechanisation at Indian ports continues to be low. About 55 per cent of the total dry bulk cargo at the major ports is handled through conventional means. During 2017-18, the average pre-berthing time for mechanical loading/unloading of dry bulk was 5.93 hours, compared to 25.77 hours for conventional loading/unloading. Also, the average pre-berthing time for conventional loading/unloading of dry bulk increased from 13 hours in 2016-17 to 25.77 hours in 2017-18, reflecting a significant drop in efficiency levels.
During 2017-18, the total coal traffic handled at Indian ports was 265.65 mt, having grown at a CAGR of 3.6 per cent between 2013-14 and 2017-18. In terms of year-on-year growth, though coal traffic at the ports witnessed a negative growth in both 2015-16 and 2016-17, primarily due to an increase in domestic coal production by Coal India Limited, the numbers again increased in 2017-18 (6.03 per cent growth in 2017-18 over 2016-17). Further, during 2018-19, the major ports handled 261.52 mt of coal traffic.
The ports on the east coast handle a larger share of coal traffic, constituting about 59.39 per cent of coal traffic in 2017-18. In terms of coal traffic at the major ports, Paradip port has the largest share in traffic handled and accounts for a 45.01 per cent share in total east coast coal traffic at the major ports. It is distantly followed by Kamarajar and V.O. Chidambaranar ports. Among non-major ports, Krishnapatnam port on the east coast is emerging as one of the leading coal handling ports.
Between 2013-14 and 2017-18, the total iron ore traffic at ports increased at a CAGR of 14.65 per cent. For the major and non-major ports, the CAGR stood at 11.86 per cent and 18.43 per cent respectively. However, the share of iron ore in the traffic handled at the major ports fell from 6.56 per cent in 2016-17 to 6.04 per cent in 2017-18. For non-major ports too, the share of iron ore in the total traffic handled registered a slight decline from 6.7 per cent in 2016-17 to 6.59 per cent in 2017-18.
Until 2011-12, the west coast accounted for a large share of iron ore traffic handled at ports, with Mormugao port handling over 50 per cent of the total iron ore traffic. A similar trend was witnessed during 2012-13 as well. However, iron ore traffic on the west coast began to decline after the ban on iron ore mining in Goa in October 2012. Between 2012-13 and 2015-16, there was an overall decline in the total iron ore traffic handled on the west coast. With the relaxation of the ban in April 2014, the share of the west coast began to increase rapidly. During 2017-18, the west coast handled 55.12 per cent of the iron ore traffic at the ports.
Fertiliser and fertiliser raw material (FRM) traffic accounted for a 2.29 per cent share in total traffic handled at the ports in 2017-18. Between 2013-14 and 2017-18, fertiliser and FRM traffic increased at a CAGR of 3.37 per cent.
Fertiliser and FRM cargo handled by the ports witnessed a downward trend between 2011-12 and 2013-14, and subsequently grew by 18 per cent in 2014-15. However, this trend reversed in 2015-16 on account of falling imports of finished products as a result of the drop in global raw material prices. After negative growth in 2016-17, fertiliser and FRM traffic witnessed an increase of 5.65 per cent in 2017-18.
The major ports on the east coast account for the majority share in the total fertiliser and FRM traffic handled. Paradip port handled 45.42 per cent of the total fertiliser and FRM traffic of the major ports on the east coast, while Kandla handled 72.78 per cent of the total traffic of the major ports on the west coast in 2017-18.
The long-term outlook for the port sector is positive, backed by a series of government initiatives and other global developments. In the short term, however, some uncertainties prevail due to the mixed performance of individual commodities and execution of capacity augmentation and connectivity projects.
According to India Infrastructure Research, by 2023-24, traffic at Indian ports is expected to be in the range of 1,700 mt (base case scenario) to 2,398 mt (highly optimistic scenario). The major ports are expected to capture a slightly higher share of total traffic at 58-59 per cent in 2024-25 as compared to 56 per cent in 2017-18, driven by the increasing focus on capacity augmentation, modernisation and ease of doing business.
The container segment is expected to drive growth in the future and is expected to grow by 7-9 per cent. The growth will be backed by improvement in export and import volumes of containerised commodities (such as automotive parts, ancillaries, etc.). The capacity addition in recent years at JNPT, Mundra, Dhamra, Kamarajar and Krishnapatnam ports is expected to help drive this growth.
POL traffic is expected to witness subdued growth at 1-3 per cent This is expected to be the case for most refineries barring a few such as Paradip and Kochi. Further, the recovery in iron ore trade is expected to be gradual. With coastal shipping being far cheaper than transportation by rail, power plants are expected to prefer the coastal route for transporting coal once the loading infrastructure at ports and rail connectivity projects come onstream.
In order to ensure rapid growth in liquid, bulk and container traffic, there is a need to establish adequate evacuation infrastructure and dedicated berths for handling coal and iron ore, enhance storage capacities and bring about an improvement in draught levels.