The Jawaharlal Nehru Port Trust (JNPT) is the largest container handling major port in the country. Of the total traffic handled at the port, 90 per cent accounts for container traffic. It handles about 13,000 import and export containers each on a daily basis and the export-import (exim) mix stands at 48:52. At a recent conference organised by India Infrastructure, Unmesh Sharad Wagh, deputy chairman, JNPT, discussed the impact of Covid-19 on cargo operations, issues faced, steps taken to deal with them, cargo projections and future expansion plans. Excerpts…
The Covid fallout and initiatives taken
The outbreak of Covid-19 impacted port operations in multiple ways – shortage in the workforce for carrying out port activities, congestion at terminals, issues in ensuring hinterland connectivity, etc. One of the key challenges faced by the port trust during the initial months of the lockdown was with respect to hinterland connectivity. The export traffic handled at the port slowed down due to the stoppage of internal movement. Only goods in the pipeline were handled during the initial phase. Further, due to zero movement of goods between container freight stations (CFSs) and the hinterland, the capacity at the CFSs was filled to the maximum.
With the hinterland traffic movement coming to a complete standstill, the port trust’s key focus was to prevent the port from choking. JNPT, in coordination with the customs authorities, increased the capacity at the 134 CFSs around the port area from 120,000 twenty-foot equivalent units (TEUs) to 130,000 TEUs. The port authority also decided to create a capacity of handling 75,000 TEUs in its premises, so as to cater to at least 10 days’ traffic.
In order to achieve this, one of the key steps taken by the port authority involved operationalising the dysfunctional CFSs with the help of the customs authorities. The operationalisation of additional CFSs created extra capacity for cargo handling. In addition, JNPT created a capacity of 30,000 TEUs at the central parking plaza in its premises. It also planned to block certain roads near the port area so that containers could be stored on the road itself, if the need arose. Further, along with the customs authorities and Container Corporation of India Limited, JNPT designated certain places as the port’s extended gates. The Mulund and Vapi CFSs were among the three CFSs declared as extended gates for the port. Hence, the traffic throughput, which was meant to be handled at the port itself, was directed to these extended port gates, thus creating additional capacity. The port trust approached the local government authorities and transport authorities to commence traffic movement towards the hinterland. The decision was intended to ensure continuity in the movement of containers at CFSs.
Instead of focusing only on its own port, the JNPT authorities went a step ahead and asked exporters to bring their export containers to its terminals in case of congestion at neighbouring ports. Reliance Industries, for example, sent its export containers to JNPT due to congestion issues at Hazira port.
Besides creating additional capacity at the port, another challenge faced by the port trust was with regard to ensuring continuity in port operations. The port trust got in touch with all the stakeholders involved in port operations, including CFS/inland container depot operators, customs house agents, police officials and nearby villagers to develop an all-inclusive approach. JNPT developed a control room to issue passes for smooth movement of people and containers. It also developed an e-platform to facilitate smooth and hassle-free issuance of e-passes. Other initiatives taken by the port trust include sanitising the nearby villages, converting its training facility into a Covid care centre, and giving insurance to the port workers (as well as contractual workers).
Light at the end of the tunnel
In light of the various initiatives taken, JNPT has been able to considerably reduce the extent of cargo contraction at the port. Further, the port trust expects to register positive growth rates during the remaining months of the current fiscal year (2020-21) so as to cover for the loss in traffic handling during the earlier months. Overall, JNPT is expected to register a decline of 15-19 per cent in the overall cargo handled at the port during 2020-21, as compared to 2019-20, a loss of around 5 million TEUs of container traffic.
JNPT has been at the forefront of implementing initiatives for ease of doing business (EoDB) initiatives and has taken a number of steps to improve its EoDB ranking. First, it has spent about $400 million for improving port-road connectivity, thus effectively reducing dwell time at the port. Second, a new centralised parking plaza has been commissioned for container tractor trailers with customs facilitation. The plaza has been built exclusively to integrate the parking of tractor trailers carrying factory-stuffed export containers at one location instead of the multiple locations earlier. Finally, the port-based multi-product special economic zone (SEZ) at JNPT has been operationalised. More than 400 hectares of land is available for sale in the SEZ area, of which DP World has taken around 40 acres for setting up its free trade warehousing zone. These initiatives are expected to increase captive cargo handling at the port.
JNPT is aiming to further increase the share of container traffic handled through direct port delivery (DPD). This is expected to improve the port’s operational efficiency, decrease the time taken for cargo handling and reduce the cost for exim cargo. Meanwhile, the port trust is also planning to increase the share of direct port entry in cargo handling through its centralised parking plaza.
Despite being well connected and efficient as compared to Mundra port, JNPT tends to lose cargo from the Delhi NCR to it due to Mundra’s distance advantage. The port trust expects to reduce the extent of cargo loss after the commissioning of the western dedicated freight corridor. Further, the port trust is expected to start the trial run of double-stack dwarf containers by the end of 2020. The double-stack containers will result in cost savings to the tune of Rs 10,000-Rs 15,000 for a distance of 330 km or more.
JNPT is leaving no stone unturned to make up for the losses caused by the pandemic. With regard to project implementation, it has completed 98 per cent of the construction work on the upcoming coastal berth, which is expected to be operationalised by January 2021. Meanwhile, the port is expected to commission five container scanners soon.
With regard to capital expenditure, JNPT will be spending funds to the tune of Rs 11.15 billion during 2020-21 and Rs 21.97 billion during 2021-22. The projected capex for 2021-22 will be spent on the port-based SEZ, the upcoming berth for handling liquid cargo and dry ports in Jalna, Wardha and Nashik. Besides, JNPT will also contribute to the development of the thirteenth major port at Vadhavan in Maharashtra’s Palghar district. The union cabinet gave in-principle approval for setting up the port in February 2020. The port is estimated to entail an investment of Rs 655.45 billion. A special purpose vehicle will be incorporated with JNPT as the lead partner with equity participation equal to or more than 50 per cent to implement the project.
Going forward, while the port is expected to witness a decline in cargo handling during 2020-21 and 2021-22 as well, it is expected to witness a 10-12 per cent growth rate in the subsequent years.