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East Coast Ports do well in handling container volumes in April this year

The state owned ports in the East Coast for a change have done well in handling of Container Volumes last month compared to their counterparts in the West coast according to a survey conducted by a Logistics Journal. In the case of Kattupalli port near Chennai the growth in container volume was 42 per cent while Krishnapatnam port in South Andhra Pradesh grew by 89 per cent during this period

The container volumes in terms of Teus at major ports grew by seven per cent during April 2018 compared to the corresponding period the previous year (April 2017.)

The VOC Port Tuticorin near the landís end led the table among the major ports by registering nineteen per cent growth in April this year compared to the corresponding month in 2017, The other ports which did well in container handling included Visakhapatnam14 per cent, Kolkata 10 per cent and Cochin Nine per cent.

JNPT near Mumbai which has been leader in container handling for the past several years reported 4 per cent YoY volume growth in Aprí18. The port had introduced key measures to improve operating efficiency leading to faster ship and container turnaround time.

The port continues to focus on increasing DPD volumes (~39% in Aprí18 vs target of 70 percent of over-the-road imports) despite unresolved issue of pricing parity amongst terminal operators. JNPT also witnessed truck strikes in first week of Mayí18 due to selection of four logistics firms to provide cost efficient transportation solutions for faster evacuation of DPD containers.

Furthermore, port infrastructure limitations in JNPT has led to increase in DPD containers delivered via CFS (estimated ~60 per cent of total DPD volumes in Aprí18 vs 15 per cent in Febí17) resulting in higher volumes for JNPT CFS operators like (Allcargo, Gateway Distriparks and Navkar Corporation). Analysts expect scaling up of recently commissioned PSA terminal (2.4mn TEU capacity) to drive port volume growth at the west coast port.

Chennai port reported 2 per cent YoY decline at ~128k TEUs in Aprí18. The competition from nearby ports is expected to further intensify as increasing ship calls at Katupalli and Kípatnam ports led to healthy volume growth of 42 per cent and 89 per cent YoY, respectively, in FY18. Furthermore, south ports capacity (Chennai, Kattupalli, Krishnapatnam and Ennore) increased to 5.4mn TEUs within a stretch of 200 KM coastline post commissioning of Ennore port.

Tuticorin port reported 19 per cent YoY growth for the month while Cochin port reported volume growth of 9 per cent YoY on the back of increasing port efficiency. Kolkata & Haldia and Vizag port reported 10 per cent and 14 per cent YoY volume growth respectively, for the month led by higher Nepal bound containers.

Global shipping spot rates for FEU (constituting key global trade routes) remained subdued on account of trade uncertainties. However, spot shipping rates for FEU jumped 22 per cent sequentially in first week of May led by general hikes by some carriers from May 1.

 Amid changing trade policies, container imports to the U.S. is expected to maintain steady growth as top items weren't included in the proposed list of tariffs on Chinese products. 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 YoY to 3.7mn tons in Aprí18 while lead distance remained flat YoY at 800 KMS. EXIM lead distance decline was arrested for the first time in over two years and it is expected to hover over similar levels over the medium term.

Domestic container volumes witnessed ~4 per cent YoY decline at 0.9mn tonnes in Aprí18. The average lead distance remained flat at 1,210 KMS.

 

Road freight:

Freight rates declined ~5 per cent in Aprí18 over Marí18. This comes on the heels of a ~4 per cent m-o-m increase in freight rates in Marí18. Industry sources indicate truck overloading relaxation coupled with lower agri produce movement across the country as key reasons for declining freight rates. April has traditionally witnessed m-o-m decline in freight demand due to higher movement of goods in March (fiscal year end). The weakness could have been further accentuated due to rollout of e-waybill from Aprilí18.

Roundtrip rental (for 25.2 ton GVW) from Delhi to Mumbai was Rs 87,200 as at May 01, 2018 vs. Rs. 91,800 as at Apr 01, 2018 (down 5 per cent) and Delhi to Chennai was Rs. 122,100 vs. Rs. 129,200 (down 5.5 per cent).

 

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