In the past few years, Indian ports have witnessed improvements across the board. Infrastructure creation has picked up pace. Road connectivity to major ports has improved. The use of technology has increased. The size of vessels calling at ports has increased. Modernisation, mechanisation and digitalisation of operations have accelerated.
Private ports are evolving and setting new standards of technology use and productivity. Further, they are also providing a good alternative to major ports with regard to cargo handling.
One of the major advantages for shipping lines calling at non-major ports is with respect to tariff charges. The tariff rates at non-major ports are not regulated by the Tariff Authority for Major Ports (TAMP) and, hence, there is some scope for negotiations. However, there is still a long way to go. There are a number of issues plaguing sector growth. For instance, container trains get last priority with regard to the use of rail sidings, with preference being given to passenger trains, freight trains, etc. The dedicated freight corridor is still two years away. Some ports do not have night berthing facilities. Significant container traffic volumes from Indian ports are transshipped at Colombo port.
Vessel-related charges are far higher at Indian ports as compared to their global counterparts. A reduction in such charges has the potential of providing an impetus to shipping lines to bring in bigger vessels.
Today, berth productivity at Indian ports, is between 120 and 150 moves per hour at best. For the world’s top 10-15 ports, this figure stands at more than 200 moves per hour. Unless India has the required infrastructure and productivity levels, it cannot match the productivity and tariffs of foreign ports.
The concept of ports moving to the landlord model is a good one but has to be based on the principle of what the industry and users can afford. Any abrupt change is likely to affect the economy of operations.
What India needs to work upon is better connectivity and better equipment. The existing terminals need to have equipment that can handle larger vessels. Today, Colombo can handle vessels of 18,000-19,000 twenty-foot equivalent units that India cannot. Further, there is a need to have deeper channels, wider turning circles, facilities to accommodate these vessels, as well as equipment that can serve these vessels. Only after India has these in place can it match world standards in terms of volumes and productivity.
The Tariff Guidelines, 2019, for major ports is a significant step towards addressing the long-debated issue of tariff fixation at these ports. The new guidelines allow terminals to escalate charges as per the wholesale price index (2-3 per cent annually). While the revised guidelines are applicable to the new terminals, TAMP is trying to migrate the older terminals to the new regime as well.
For port users, economy of operations is the need of the hour. This can be achieved with faster turnaround of vessels, bigger vessels, ability of vessels to come to shore, etc. Currently, liquid cargo accounts for the largest share of traffic at Indian ports. Growth in the oil sector will continue even though there are a number of alternative sources of energy such as solar and biofuels. However, to match the rise in volumes, infrastructure has to grow and align with the growth.
Going forward, some changes are required. India needs to look at port development in a holistic manner, ensure capacity utilisation levels of 65-70 per cent, bring all ports on the same platform with regard to technology use, provide deeper draught of ports, reduce transit times, provide real-time information to shipping lines and users, make riverine ports more navigable, promote skill development and provide training, besides learning from global counterparts.
Based on a panel discussion among Shantanu Bhadkamkar, President, Association of Multimodal Transport Operators of India; Captain Dhananjay Javadekar, Senior Vice President, Operations, All India, Mediterranean Shipping Company Agency (India); Dharmesh Singh, Chief General Manager, Infrastructure Development, Indian Oil Corporation, at a recent India Infrastructure conference