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Container Update - January 2021 J. M. Baxi & Company

MONTHLY REPORT

JANUARY 2021

CONTAINER


Disclaimer:The information contained in this market update is drawn from wide range of newspapers, business and trade magazines, government, company and

industry association websites. While all possible care is taken to verify the correctness and authenticity of information contained in this compilation,

no claim to independent authorship of articles is implied or intended. Readers are expected to make their own independent evaluation and verification

of information for their use. While all information contained in this report are believed to be correct, the editors of this compilation or J. M. Baxi & Co.

do not guarantee the quotes or other data and the same is provided only in good faith.

Table Of Content

India terminals of PSA Int’l handle record container volumes in December

D P World-run Chennai Container Terminal wins first rate hike in 12 years

Adani Ports gets green nod for ₹12,256-cr, Phase 3 expansion of Krishnapatnam Port

Container shortage hits export shipment schedules

Cargo container manufacturing hub planned at Bhavnagar

04

05

07

09

10

KEY HIGHLIGHTS

PORT ANALYSIS


PORT ANALYSIS

TERMINAL Dec-20 NOV-20

Adani CMA Mundra Terminal (ACMTPL) 105175 100849

Adani Ennore Container Terminal (AECTPL) 27562 25364

Adani Hazira Container Terminal(AHCT) 59593 50758

Adani International Container Terminal (AICTPL) 281467 225715

Adani Kattupalli Port Private Limited (AKPPL) 60066 38870

Adani Mundra Container Terminal (AMCT) 92436 65378

APM Terminal Mumbai (APMT) (GTI) 153824 150444

Bharat Mumbai Container Terminal(BMCTPL) 96572 64802

Chennai Container Terminal (CCTL) 58240 44674

Chennai International Terminals Pvt Ltd (CITPL) 87244 71149

Dakshin Bharat Gateway Terminal (DBGT) 42883 40003

Haldia 13911 9031

International Container Transshipment Terminal, Kochi (ICTT) 65894 66078

JNPT 54265 53966

KAKINADA CONTAINER TERMINAL 1202 1184

KANDLA 48809 45954

KOLKATA 47541 43604

NCT - Krishnapatnam 35599 22112

Mumbai International Cargo Terminal(MICT) 107874 90674

Nhava Sheva International Container Terminal (NSICT) 62572 60255

Nhava Sheva India Gateway Terminal (NSIGT) 92687 84270

PIPAVAV 65639 65023

Tuticorin Container Terminal(TCT) 21564 19127

Visakha Container Terminal Pvt. Ltd. (VCTPL) 37624 36327

Paradip 1306 1259

Container Throughput (in Teus)


PSA-run Bharat Mumbai Container Terminals (BMCT) at Jawaharlal Nehru Port Trust (JNPT) handled its highest-ever monthly throughput of 94,728 TEUs in December. Chennai International Terminals Pvt Ltd, its facility at Chennai Port Trust, handled 93,514 TEUs in December, PSA said in a statement. PSA’s terminals at SPM Port Trust in Kolkata and at VO Chidambaranar Port Trust in Tamil Nadu handled 47,541 TEUs and 21,564 TEUs respectively in December. “All PSA India terminals operated uninterrupted throughout 2020, handling every scheduled vessel call and many more unscheduled ones, thanks to the unstinting efforts of our staff, contractors and stakeholders working steadfastly and safely alongside each other,” said Mike Formoso, Managing Director, PSA India. On January 3, BMCT added a new weekly service to its list with the docking of ‘MV Wan Hai 507’ as part of the joint Wan Hai Lines / Interasia Lines CI2 / ICI service. “PSA Mumbai is equipped with the latest technology to offer customers fast turnaround of their vessels and is also well-connected by major highways and rail networks to key markets in Maharashtra, Gujarat, and the National Capital Region of India,” a spokesman for Wan Hai Lines said. By further strengthening its current service scope among India and Far East corridors, PSA Mumbai will enhance Wan Hai Lines’ market coverage to better serve customers’ needs, he said. CI2 service is jointly operated with Interasia Lines (IAL) by using six vessels with nominal capacity of 4,250 TEU ―four deployed by Wan Hai Lines and two by IAL. “With this new service call from Wan Hai and Interasia Lines, 2021 is off to a strong start and we will also see new products and developments for PSA India, including enhancements of the ODEX digital online payment solution earlier launched in September 2020,” Formoso added.

Source: The Hindu Business Line

INDIA TERMINALSOF PSA INT’L HANDLE RECORD CONTAINER VOLUMES IN DECEMBER

Singapore’s PSA International Pte Ltd said its three container terminals in India handled record volumes of 257,347 twenty-foot equivalent units (TEUs) in December as trade re-bounded after the impact of the pandemic.


D P WORLD-RUN CHENNAI CONTAINER TERMINAL WINS FIRST RATE HIKE IN 12 YEARSD P World-run Chennai Container Terminal Pvt Ltd (CCTPL) has won a paltry 1.13 per cent hike in rates, its first in 12 years, from the rate regulator for major ports. The terminal has also won backing from the regulator to introduce a new category of rates for laden containers loaded/ discharged on/from long haul vessels to attract more long–haul vessels to CCTPL and increase origin/destination volumes. The rates for long–haul vessels will be set at a 5% discount to the normal containers. Vessels originating/ destined from/ to any ports in America/ Europe/ Africa or beyond Singapore/ Malaysia will be classified as long-haul vessels. CCTPL is contractually mandated to ensure that at least 30 per cent of the total annual traffic handled at the facility will be non-transhipment traffic to develop Chennai as a hub port by attracting mainline vessels to call. Non-transhipment traffic refers to containers not transhipped in the neighbouring ports of Colombo, Singapore, Port Klang, Dubai and Salalah. Chennai Port Trust can terminate the contract if the terminal operator fails to achieve the 30 per cent non-transhipment traffic level for three consecutive years. To facilitate and encourage coastal trade, free days for storage of coastal containers have been increased to 10 days for export and import coastal containers, from seven and three days respectively. Free days for direct port delivery containers have been increased from the three days to 5 days. Free days for all transshipment containers have been revised from the 30 days to 20 days. CCTPL started operations in Chennai Port on a 30-year contract in November 2001.

High Court stayIn May 2011, the Tariff Authority for Major Ports (TAMP) cut rates at the terminal by 35 per cent when CCTPL asked for a raise. The Madras High Court stayed the rate cut on a petition brought by CCTL and allowed the

Gets nod for special rates for boxes shipped on long haul vessels


operator to continue collecting the current rates. The petition is yet to be decided. The new rates were approved by TAMP and notified in the gazette on 23 December 2020, based on the government’s guidelines in March 2019 for the older build, operate and transfer (BOT) operators such as CCTL. The new rates have been set without considering the adjustment of past period surplus relating to the period of litigation. “Therefore, whenever the High Court of Madras passes order disposing of the writ petition paving the way for the treatment of surplus/deficit or a decision from the ministry is received on the treatment of surplus/deficit arising over and above the admissible costs and permissible return during the period of litigation, whichever is earlier, as stipulated in the Tariff Guidelines 2019, the tariff of CCTPL approved now would be subject to review then, so as to capture the impact of the surplus that has accrued to CCTPL during the period of litigation,” TAMP said.



On completion of expansion, the Port will have overall capacity to handle 250 mt of non-container cargo.

ADANI PORTS GETS GREEN NOD FOR 12,256-CR, PHASE 3 EXPANSION OF KRISHNAPATNAM PORTThe Adani Group-owned Krishnapatnam Port Co Ltd (KPCL) has received backing from a key government agency tasked with recommending environmental and coastal regulation zone (CRZ) clearance for the third and final phase expansion of the port, with an investment of ₹12,256 crore. The expert appraisal committee (EAC) attached to the ministry of environment, forest and climate change recommended environmental and CRZ clearance to the third phase expansion during a meeting held on December 14. The port with a depth of 18.5 metres, located in Nellore district of Andhra Pradesh, currently has capacity to handle 64 million tonnes (mt) of cargo and 2 million twenty-foot equivalent units (TEUs) of containers. On October 5, Adani Ports and Special Economic Zone Limited (APSEZ) completed the acquisition of a 75 per cent stake in Krishnapatnam Port Company from the CVR Group for an enterprise value of ₹12,000 crore. Krishnapatnam is India’s second largest private port and APSEZ plans to convert it into a “Mundra” on the eastern coast and help achieve the target of building 500 mt of cargo handling capacity by 2025. Mundra, located in Gujarat, is the flagship port of APSEZ and India’s biggest commercial port. The third-phase development of Krishnapatnam port involves constructing twenty berths and three Single Buoy Moorings (SBMs) to create capacity for handling an additional 154 million tonnes (mt) of dry and liquid bulk cargo plus 2.2 million TEUs of containers. When the third phase is completed, the port will have an overall capacity to handle 250 mt of non-container cargo and 5.5 million TEUs of containers. With adequate land available, APSEZ said the capacity of Krishnapatnam can be ramped up further.


Consultant Pulled UpDuring the meeting, the EAC pulled up environment impact assessment (EIA) consultant Cholamandalam MS Risk Services Limited over what it called a “serious lapse”. The validity of the environment and CRZ clearance (EC) order for the Phase 2 development of the port expired on November 12, 2019. KPCL, according to EAC, is yet to complete the project activities approved vide EC order for the Phase 2 development. However, in the EIA report it was mentioned that Krishnapatnam port has completed Phase 1 and 2 developments. The EAC also noticed that the project involves diversion of 418 hectares of forest land for development of Phase 3, though in the application it was mentioned that no forest land is involved. The EAC considered this as a “serious lapse on the part of consultant”, as the incorrect statement provided in the EIA report “may create confusion and leads to violation of EIA Notification 2006”. Based on the above ambiguity, a show cause notice was issued to the Chennai-based EIA consultant Cholamandalam MS Risk Services Limited. “After apology made by the EIA consultant, a warning letter was sent to the concerned EIA consulting agency stating that in case of further inadequacy in addressing the factual information in future projects, legal action will be initiated,” according to the minutes of the December 14 EAC meeting



Textile exports, which have been on the revival path following the Covid-19 pandemic, has received a severe setback due to shortage of containers, which in turn is largely due to shrinking export-import trade. Manoj Patodia, Chairman, The Cotton Textiles Export Promotion Council, said the situation is becoming very serious as exporters are finding it difficult to adhere to shipment schedules which is a matter of serious concern. One of the reasons being attributed for the shortage is the low volume of imports, especially from China. Further, exporters face shortage of containers not only at the Gateway Ports but also at the Inland Container Depots. After the initial six months of lockdown, Patodia pointed out that exports of textiles and clothing started picking up sharply. Many exporters are holding export orders for shipments till March 31, 2021. However, delay in shipments are leading to cancellation of orders in many cases. And if the issue is not resolved on priority basis, textile and clothing exporters may lose 20 per cent business. “It takes over two weeks for the exporters to get the containers for shipment of export cargos, which is resulting in delays and non-fulfilment of terms and conditions as agreed with the overseas buyers,” said Patodia. He urged the government to step in and engage in a dialogue with the shipping lines and their Associations on an urgent basis to make available adequate containers; Else, exports would be adversely affected, he said.


CONTAINER SHORTAGE HITS EXPORT SHIPMENT SCHEDULES

Taking over 2 weeks for exporters to get containers for export cargos’


Panel formed to study feasibility; pilot project rolled out

CARGO CONTAINER MANUFACTURING HUB PLANNED AT BHAVNAGARIndia is moving into the business of manufacturing cargo containers, a segment dominated by China, as part of the Atmanirbhar Bharat initiative. The Ministry of Ports, Shipping and Waterways has formed a committee to examine the feasibility of making containers at Bhavnagar in Gujarat and developing it into a manufacturing hub for the steel boxes that have become the global standard for shipping a variety of goods across ships, rail and road. As a first step in this direction, freight forwarder Pushpak Logistics has rolled out a pilot project by placing orders for a few containers with manufacturers in Bhavnagar. According to an official briefed on the development, the demand for shipping containers has been driven by increased manufacturing and exports. “Indian coastal shipping adds about 10,000 twenty-foot equivalent units (TEUs) of new containers annually, while India’s largest container rail operator — Container Corporation of India — may require 2,000- 2,500 TEUs of new containers every year,” the official said. “Almost all the shipping containers used today are imported from China. By the time they reach Indian shores, they cost us around 40 per cent more, which includes ocean freight, Customs duty, other taxes, custom house agent charges and sundry expenses,” the official added.

India’s Container NeedsChina makes about 90 per cent of the global shipping containers. CIMC is the largest container manufacturer with a market share of 40 per cent. Other players include Singamas, COSCO and CXIC. Currently, India sources its entire container needs from China at prices ranging from ₹2,39,760-4,54,545 depending on the size of the container. India’s external trade grew to $838.46 billion in FY20 and the increasing trade is translating into higher demand for containerisation due to their efficiencies. The country will require approximately 60,000 new containers between 2021 and 2026, an annual addition of about 10,000 TEUs per year The global


container fleet is handled by container leasing companies and shipping lines, with the latter holding a 49 per cent share. Triton is the world’s largest container leasing company with a market share of some 14 per cent, owning over six million TEUs. “India should start manufacturing marine containers within the country,” said Sunil Vaswani, Executive Director, Container Shipping Lines Association (India), a lobby group for global container carriers, referring to the ongoing shortage of containers for exports from India. “This would assist in the security of supply chain for exports,” he added.

Source: The Hindu business Line


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