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Krishnapatnam port adopts two pronged strategy including price discounts to counter competition

With throughput of Containers among ports in the East Coast continuing to move in a narrow range of around 4 million TEUS,the Krishnapatnam port has adopted a multi pronged strategy to attract containers and reach a port utilization of 45 per cent during the current year.

A spokesman of the port said the Krishnapatnam saw a capacity utilization of 21 per cent during the financial year 2016-17. The port is aiming to hit five lakh TEUs this year as against 2.55 lakh TEUS achieved last year.

In an effort to attract containers, which is otherwise going to neighboring ports, aggressive marketing efforts have been unleashed to ensure that cargo from Andhra Pradesh, Telangana and Northern and Eastern parts of Karnataka have an advantage on distance if they switch over to Krishnapatnam port. A campaign will be on to bring this to the attention of cargo owners from the region.

The port is also offering a price at a sizeable discount to others in the region as part of its strategy. The idea is to offer a price point which will compel cargo owners to consider using the port. The port's offer of discounts would help the customer to bring down the logistics cost by thirty per cent according to their assessment.

The port is also attempting to rope in large shipping lines besides looking for new types of cargo. The port's current cargo profile includes cement, cotton yarn and shrimps besides coal.

Among the ports in the East coast, Chennai port has remained the leader with two private terminals. But capacity utilisation has come down to nearly 45 per cent during the last few years due to various factors including problems in evacuation, global economic slow-down besides competition from ports like Krishnapatnam and Katupalli situated close to Chennai port and therefore sharing the same hinterland.

Adanis have commissioned a Container Terminal at Ennore recently which will intensify competition further this year. Ennore port is situated hardly 15 kilometers from Chennai port.

The evacuation problems in Chennai Port have been addressed both on long and short term basis. Yet the congestion of tractor trailers continues on some days in a month. On the price front Chennai port has the disadvantage of its tariff being dictated by the Tariff Authority for Major ports TAMP and hence is devoid of functional autonomy, unlike the private ports.

With more private ports coming up in the region, it is time that state owned ports become vocal about securing autonomy in fixing prices. Shipping minister Nitin Gadkari has been proclaiming that the TAMP regime for major ports will go for the past three years. But the regime continues putting obstacles to port administrationís powers to fix the tariff according to prevailing market conditions.

 


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