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Container volumes go up by eight per cent in major ports in June

Container volumes (TEU) at major ports grew 8 per cent year on year during June this year. The container colume growth was led by Visakhapatnam 29 per cent, VOC port Tuticorin 20 per cent and Kolkata 15 per cent all year on year.

Leading container port in the country JNPT reported 4 per cent volume growth for the month led by incremental volumes at PSA terminals (34,000K TEU. The port continues to focus on improving productivity by introducing cost efficient transportation solutions for faster evacuation of DPD containers.

The port expects to emphasize on increasing Direct Port Delivery of import volumes as the port has set a target of 80 per cent of imports by road. However, port infrastructure limitation has led to increase in DPD containers delivered through container freight stations resulting in higher volumes for JNPT CFS operators like (Allcargo, Gateway Distriparks and Navkar Corporation). Expectations are that the recently commissioned PSA terminal will scale up to 2.4 million TEUs capacity to drive port volume growth.

Chennai port reported 5 per cent year on year growth at 1, 44,000 TEUs during Jun’18. The competition from nearby ports is expected to further intensify as increasing ship calls at Katupalli and K’patnam 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) has increased to 5.4 Million TEUs within a stretch of 200 KM coastline post commissioning of Ennore port.

Kolkata & Haldia and Vizag port reported 15 per cent and 29 per cent YoY volume growth, respectively for the month led by higher Nepal bound containers. Tuticorin port reported 20 per cent YoY increase in container volumes at 67,000 TEUs.

Global shipping spot rates for FEU (constituting key global trade routes) remained subdued on account of trade uncertainties. Amid changing trade policies, container import to the U.S. is expected to be impacted due to new tariffs imposed. Expect return of pricing power for container liner industry to remain elusive as increasing orders for large container vessels will prolong supply glut.

 

Rail Freight:

EXIM container volume continued its healthy growth momentum as it witnessed 12 per cent YoY to 3.9 Million tons in June’18. However, lead distance declined 5 per cent YoY to 788 KMS for the month.

Domestic container volumes witnessed 13 per cent YoY growth at 1.0 million tons in jun’18. The average lead distance witnessed consecutive decline to 1,248 KM hinting use of rail for shorter distance probably due to steep hike in fuel cost.

 

Road freight:

Freight rates remained flat in Jun’18. This comes on the heels of a ~5-5.5 per cent m-o-m increase in freight rates in May’18. Industry sources indicate higher arrival of agri produce across the country was offset by increase in higher tonnage trucks plying on trunk routes. The freight rates were also supported by truckers strike in Jun’18 protesting against diesel price hikes and third party motor insurance premium.

Roundtrip rental (for 25.2 ton GVW) from Delhi to Mumbai was Rs 92,000 as at July 01, 2018 and Delhi to Chennai was observed at Rs. 128,000, flat m-o-m

 

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