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Container volumes handled at major ports improve during Dec 2017

Container volumes (TEU) at major ports grew by 14 per cent YoY for the month of December 2017 and 7 per cent YoY for Year that had ended last month for JNPT

JNPT continued its growth momentum with 10 per cent YoY volume growth in Decí17 and of 6 per cent YoY for the first half of January 2018, respectively aided by portís improving operating efficiency leading to faster ship turnaround time and lower dwell time.

The port continues to focus on increasing DPD volumes (~36 per cent in Decí17 against the target of 40 per cent over-the-road imports by Marí18) despite unresolved issue of pricing parity amongst terminal operators. However, port infrastructure limitations has led to increase in DPD containers delivered via CFS (61 per cent) of total DPD volumes in Decí17 vs 15 per cent in Febí17) resulting in higher volumes for JNPT CFS operators like (Allcargo Logistics, Gateway Distriparks and Navkar Corporation).

Container Volumes at the Chennai port for the month came in at ~1.3 lakh TEUs, 19 per cent Year on Year growth, on a low base (Cyclone Vardha impacted port operations in Decí16). The competition near the port is expected to further intensify with Adaniís new Container Terminal at Kamarajar port, Ennore (Phase I with capacity of 0.8mn TEU commenced operations this month). The terminal will have an overall capacity of 1.4mn TEU thereby increasing south ports(Chennai, Kattupalli, Krishnapatnam and Ennore) over all container handling capacity to ~5.4mn TEUs within a stretch of 200 KM coastline. Sadly hardly fifty per cent of their capacity is used due to lack of railway infrastructure from North India.

Visakhapatnam Port reported 21 per cent Year on Year growth for the month driven by increase in Nepal bound containers while Cochin port reported volume growth of 10 per cent YoY on the back of increasing port efficiency. Kolkata and Haldia portsv reported flat growth in throughput for the month.

Shipping spot rates for FEU fell 24 per cent from Aug-Decí17 as rates correct on demand-supply mismatch. However, first week of Janí18 reported 16 per cent MoM increase before Chinese New Year as we expect container-shipping freight rates to increase driven by continued demand strength even as a supply glut continues to mar a stronger rate recovery.

Rail Freight:

EXIM container volume grew ~13 per cent Year on Year  to 3.7 Million tonnes in Decí17 while lead distance declined 5 per cent YoY to 820 KMS. The drop in lead distance was on account of shift of hinterland volumes from JNPT to Mundra and Pipava ports in Gujarat. This means that industrial centers in north and Central India are shifting dispatch of cargo from JNPT to the Ports in Gujarat.

JNPT is working to more than 100 per cent capacity and the shipping ministry will soon be commissioning a major container terminal in the port. But the ports in the East coast from Visakhapatnam to Chennai, especially state owned ones are working hardly 50 per cent of their capacity since the railways especially CONCOR have denied connectivity infrastructure to the East coast ports from Industrial Centers in North and Central India. There is no dedicated freight planned to link North with South and with the result freight have to share the passenger railway lines.

Domestic container volumes witnessed ~18 per cent YoY growth at 1.0mn tons in Decí17. The average lead distance remained flat at 1,349 KMS.

Road freight:

Freight rates declined ~3.0-4.0 per cent on a month to month basis in December 2017. This comes on the heels of a ~4 per cent m-o-m increase in freight rates in November 2017. Industry sources indicate that the only sectors that showed strength in demand for freight movement by road were steel and cement, while most other pockets including agri and SME demand were weak.

Roundtrip rental (for 25.2 ton GVW) from Delhi to Mumbai was Rs 81,000 as at Jan 01, 2018 as against. Rs. 83,400 as at Dec 01, 2017 (down 3 per cent m-o-m) and Delhi to Chennai was Rs. 115,000 as against. Rs. 119,800 (down 4 per cent m-o-m).


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