New Potential: Developing India as a container transshipment hub

Transshipment hubs are essentially ports with connections to both originating and destination ports.  Containers are handled and briefly held at the transshipment hub before being moved to other smaller ships for the final destination. At present, about 75 per cent of India’s transshipped cargo is handled at ports outside India. Of this, Colombo, Singa­pore and Klang handle more than 85 per cent of the cargo. Of this 85 per cent, Colombo port han­dles more than 45 per cent. In order to improve logistics, lower risks to the nation’s export competitiveness and give India the opportunity to be­come a significant hub for Asia-African and Asia-US/European container traffic trade, it makes sound economic sense to allow the es­tab­lish­ment of a transshipment hub in India.

Upcoming container transshipment projects in india

The Ministry of Ports, Shipping and Waterways, as part of the holistic development of the Great Nicobar Island, is working towards the development of a Mega International Container Trans­ship­ment Port at Galathea Bay of the Great Ni­cobar Island of the Andaman & Nicobar Is­lan­­ds in the Bay of Bengal. Recently, the Minis­try of En­vi­ronment, Forest and Climate Change (MoEFCC) granted Stage I environmental clearance for the project. The proposed facility is expected to cost Rs 410 billion and will be de­veloped in four phases. With a handling capacity of approximately 4 million 20-foot equivalent units (TEUs), Phase I, is expected to be put into service in 2028. Later, this capacity will be enhanced to 16 million TEUs. Phase I of the project is expected to cost around Rs 180 billion and it will involve building breakwaters, dredging, reclamation, berths, storage areas, buildings and utilities, as well as purchasing and installing equipment and developing a port colony with the support of the government. The project focuses on three key drivers, which can result in making it a leading container transshipment port, that is, strategic location in terms of proximity (40 nautical miles) with the international shipping trade route, availability of natural water depth of over 20 metres and carrying capacity of transshipment cargo from all ports in the proximity, including Indian ports. With this, Indian ports can save around $200 million-$220 million transshipment cargo each year. Besides, several other allied businesses, namely, ship chandlery-ship supplies, ship re­pair, crew change facility, logistics value-added services, warehousing and bunkering are being planned at this transshipment port.

The Vizhinjam International Container Trans­ship­ment Terminal in Kerala also holds the pot­ential to become a big transshipment hub. Ada­ni Ports and Special Economic Zone Limited is developing Vizhinjam port as India’s first mega transshipment container terminal. At present, around 75 per cent of the total work on the port has been completed. In addition, about 33 per cent of the dredging is over. After the completion of breakwater works, the remaining dre­d­ging, reclamation of sea and container berth work will be resumed. The project involves the construction of a greenfield, deepwater international container transshipment terminal at Vizhinjam on a de­si­gn-build-finan­ce-operate-transfer ba­sis for a concession period of 40 years. Mean­while, the Expert Appraisal Co­m­mittee of the MoEFCC has returned the proposal for amendment in environmental and coastal regulation zone clearance. The amendment was sought for the development of an underground tunnel of 9.43 km length, at an estimated cost of Rs 10.6 billion, for providing rail connectivity at the port.

The central government has decided to increase the depth of dockyards in Cochin port to facilitate anchoring of huge ships. For this, the centre has announced an investment wor­th Rs 3.8 billion by including the project in the Sagarmala scheme. The proposed project will elevate Kochi port to a transshipment hub, the­reby contributing to the trading sector. The current depth of the dockyard in Kochi port is 14.5 metres, which will be increased to 16 metres in the first phase of the project. Besides, this will help improve the container management ca­pacity of the Vallarpadam terminal from 1 million TEUs to 2 million TEUs.

The way ahead

The establishment of transshipment hubs is one of the key initiatives identified under the Maritime India Vision 2030. This will increase efficiency and throughput, enable the handling of larger ships and develop the strategic importance of Indian ports in the South Asian region. In the coming years, there will be greater requi­rement of containers, pipelines, tanks and gr­een methods for transshipping materials. w