Shipping Traffic

Trends in commodity imports and exports at major ports

Ports provide an interface between ocean and land-based transport. They play an important role in the economic development of the country, with commodities such as coal, iron ore and fertilisers being imported and exported primarily through the shipping segment. The Covid-19 pandemic broke out at a time when the Indian maritime sector was already witnessing low activity levels due to poor domestic performance and disruptions in international trade. Despite being allowed to operate during the lockdown, the sector faced several setbacks. It is now on the path to recovery, but is expected to remain under stress, at least during the current fiscal.

Indian Infrastructure takes a look at the trends in traffic and the capacity of commodities handled by the ports sector…

Coal

Between 2015-16 and 2020-21, the total coal traffic at major ports increased at a compound annual growth rate (CAGR) of 0.96 per cent. In terms of year-on-year growth, the coal traffic at major ports witnessed a negative growth, both in 2015-16 and 2016-17, primarily due to an increase in the domestic coal production by Coal India Limited. The growth numbers turned positive in the subsequent years and then declined in 2019-20 and 2020-21 due to the outbreak of the Covid-19. In 2020-21, 78.02 mt of thermal coal traffic was handled at major ports, registering a year-on-year decline of 15.44 per cent while coking coal traffic declined by 5.55 per cent to stand at 54.06 mt.

During 2020-21, Paradip port occupied the highest share of 31 per cent and 24 per cent in thermal and coking coal traffic, respectively, and New Mangalore port witnessed the lowest share of 3.81 per cent and 0.77 per cent in thermal and coking coal traffic respectively. During 2020-21, coal traffic accounted for a share of 19.64 per cent in the total traffic handled at major ports. There was a rapid decline in coal traffic during April-July 2020 as compared to the corresponding period in the previous year, due to the Covid-19-induced lockdown. From September 2020 onwards, there has been a recovery in coal traffic handled at ports.

Iron ore

During the period 2015-16 to 2020-21, the total iron ore handled by major ports has increased from 15.35 mt to 71.03 mt, registering a CAGR of 35.85 per cent. During 2020-21, iron ore traffic accounted for a share of 10.56 per cent in the total traffic handled at major ports. Port-wise, Paradip port is the largest iron ore handling port in the country. The port handled 28.56 mt of coal during 2020-21, as compared to 22.95 mt during 2019-20, registering an increase of 24.44 per cent.

In terms of year-on-year growth, the iron ore handling capacity at major ports was 71.03 mt in 2020-21, 29.12 per cent higher than that in the corresponding period in 2019-20 (55.01 mt). While Kolkata, Visakhapatnam, Mormugao, Mumbai and Paradip ports registered a positive growth, V.O. Chidambaranar (VOC), New Mangalore and Deendayal ports registered a negative growth. The traffic during March-April 2020 was impacted due to the Covid-19-induced lockdown. However, there has been a recovery in iron ore traffic from May 2020 onwards. The traffic figures reached and surpassed pre-Covid levels during June 2020-March 2021.

POL

Between 2015-16 and 2019-20, the total petroleum, oil and lubricants (POL) traffic at major ports increased at a CAGR of 1.03 per cent to reach 206.75 mt in 2020-21. During 2020-21, POL traffic accounted for a share of 30.74 per cent in the total traffic handled at major ports. In terms of year-on-year growth, POL traffic at major ports witnessed a strong positive growth from 2015-16 to 2019-20. However, the share of POL traffic at major ports decreased by 30.14 mt (12.82 per cent) in 2020-21. This is because imports account for the bulk of the total POL cargo handled at major Indian ports, which was largely impacted due to the pandemic.

Deendayal port is the largest POL handling port in the country. The port handled 53.26 mt of POL during 2020-21, as compared to 63.07 mt during 2019-20, registering a decline of 15.57 per cent. The port accounted for 25.75 per cent of the total POL capacity at major ports. All major ports registered a negative growth. POL traffic handled at ports is yet to reach the pre-Covid levels, except in September 2020 when the POL traffic handled was at par with the quantity handled in September 2019.

Containers

Between 2015-16 and 2020-21, the total container traffic at major ports increased at a CAGR of 3.23 per cent. In terms of year-on-year growth, the container traffic at Indian ports witnessed a positive growth from 2015-16 till 2019-20 in both major and non-major ports, and declined in 2020-21, wherein a major crisis of containers was witnessed in the initial months of the Covid-19-induced lockdown. During 2020-21, container traffic accounted for a share of 21.37 per cent in the total traffic handled at major ports.

In 2020-21, 9.61 million twenty-foot equivalent units (TEUs) of container traffic was handled at major ports as compared to 9.98 million TEUs handled in 2019-20, registering a decline of 3.75 per cent. Port-wise, the JNPT is the largest container handling port in the country, accounting for a major share of 48.66 per cent in 2020-21. The port handled 4.68 million TEUs during 2020-21, as compared to 5.03 million TEUs during 2019-20, a decline of 7 per cent. In terms of year-on-year growth, Ennore, Deendayal and Paradip ports registered a high positive growth of 53 per cent, 15 per cent and 33 per cent respectively. Meanwhile, Kolkata, Mumbai and JNPT ports registered a negative growth of 18.26 per cent, 7.41 per cent and 7.04 per cent respectively.

Due to inadequate infrastructure, Indian gateway ports have not been able to attract enough mainline vessels. A significant portion of India’s traffic is transshipped at neighbouring foreign ports such as Colombo and Malaysia. The container traffic at major ports bore the brunt of Covid-19. During March 2020, container traffic was at par with the traffic witnessed during 2019. However, there was a rapid decline in container traffic during April-May 2020 vis-à-vis April-May 2019 due to a decline in imports. After May 2020, the traffic witnessed fluctuations till September 2020. Container traffic reached pre-Covid levels, and even surpassed it, during October 2020-March 2021. Disruptions caused by the Covid-19 pandemic continued to impact cargo movement, causing a significant pile-up at ports.

Fertilisers

Fertiliser traffic at major ports increased at a CAGR of 2.46 per cent between 2015-16 and 2020-21. While traffic at major ports remained almost consistent during 2015-16 to 2019-20 (with a marginal dip in 2016-17), it witnessed an increase of 2.03 mt (12.73 per cent) in 2020-21. During 2020-21, 17.95 mt of fertiliser traffic was handled at major ports. In the same period, fertiliser traffic accounted for a share of 2.67 per cent in the total traffic handled at major ports. Port-wise, Deendayal and Paradip ports are the largest fertiliser ports in the country. The two ports together handled 10.48 mt of traffic during 2020-21, accounting for a share of 58 per cent.

In terms of year-on-year growth, while Chennai, VOC, Paradip, Mormugao and New Mangalore ports registered a high positive growth, Mumbai, Ennore, Kolkata and Haldia ports registered a negative growth. As far as capacity utilisation is concerned, the utilisation levels decreased significantly from 2015-16 (from being overutilised) to 2020-21 (to being under-utilised). Fertiliser traffic at major ports was also impacted due to the pandemic, and it has exhibited a mixed trend during the period. The traffic declined during the months of March, May, June, August, November and December 2020-21, as compared to the corresponding months in 2019-20. On the contrary, traffic increased during the months of April, July, September, October and January 2020-21 vis-à-vis the corresponding months in 2019-20.

In sum

The nationwide lockdown to stem the spread of Covid-19 was announced in March 2020. The ports sector was allowed to operate, athough on a skeletal basis. The overall commodity traffic handled during March 2020 was severely impacted due to the lockdown. While most of the commodities ramped up and traffic started witnessing recovery to reach pre-Covid-19 levels, they are expected to register a complete recovery in 2021-22.

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