LIGHT AT THE END OF THE TUNNEL

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TUNNEL The global industry got some respite in the second half of the year with cargo volumes growing. Logistics players in India are expanding capacity to meet the rise in demand coming from increased economic activity

The global maritime industry was surviving a prolonged dry spell when it welcomed the new year of 2017 with a rather sombre mood, but as the quarters passed by the market dynamics changed and the industry could finally get some sunshine. According to data revealed by Drewry, global box volumes continued to expand in Q3 2017 (July to September) and are projected to attain a growth of 5.5 per cent y-o-y in 2017. India particularly posted stellar performance with major ports posting a growth of 3.24 per cent, together handling 326.4 million tonnes of cargo during the period April to September 2017 as against 316.1 million tonnes handled during the corresponding period of previous year.

On the shipping side the consolidation binge continued with the most noteworthy being the Hamburg sud’s acquisition by Maersk. The deal is set to increase volumes of both Maersk Line and APM Terminals, while empowering the combined entity to control approximately 19 per cent of the world’s container fleet capacity.

 Maersk continued to be in the spotlight for various reasons be it the Petya malware attack that jeopardised operations of APM Terminals or the digitalisation initiative. Maersk further entered into slot exchange and slot purchase agreements with MSC and HMM. Maersk Line and MSC took over a number of charters and operations of vessels currently chartered to HMM. The cyber-attack had cost about $300 million to the shipping line.

Digitalisation

This year saw the industry embrace digitalisation. Maersk Line made transactions completely “paperless.” Not to stay behind, CMA CGM inked seven year partnership with Infosys. The goal is to simplify and transform CMA CGM’s IT applications and improve customer service excellence.

 Coastal shipping

 The first container ship from Kolkata Port arrived at Pangaon Terminal at Keraniganj. On a separate note Shreyas Shipping, a prominent coastal cargo mover expanded operations to include dry bulk. Growing trade First air cargo moved between India and Afghanistan. Hafez Darya Arya Shipping Lines started a new liner shipping connection between Kandla International Container Terminal and the ports of Bandar Abbas in Iran and Umm Qasr in Iraq.

Direct port delivery

 JNPT reported an eight-fold rise in DPD registrations in January 2017, with 483 importers registering as against 60 in December 2016. With this spike, the total DPD registrations have increased to 543.

Terminal capacities

 The International Monetary Fund expects India’s growth to rebound to 7.2 per cent in fiscal year 2018 and further to 7.7 per cent the next year. This economic growth will transform into growing exim activity, for which logistics players are boosting their capacities. Some of the noteworthy infrastructure upgradations in 2017 are listed below:

• Puduchery Port is being revived to handle container traffic. A modern Trestle Jetty is being set up at Silambiamangalam exclusively for Ramco Industries.
• With many automobile makers using Kamarajar Port to ship out vehicles to overseas markets, a second terminal costing `320 crore is being developed.
• APSEZ and CMA CGM are commissioning the Adani CMA Mundra Terminal Pvt Ltd.
• APM Terminals has initiated the process to sell Gujarat Pipavav Ports.

 Liquid cargo

 IMC Ltd will develop a liquid cargo handling jetty and associated facilities at Shalukkhali, Haldia Dock-II. In another development, Mitsui O.S.K. Lines signed an agreement with Swan LNG Pvt Ltd for the long-term operation/ maintenance of a FSRU that will serve as the core receiving facilities in LNG terminal to be developed by Swan Energy in Jafrabad, Gujarat. Essar Ports bagged the contract for an LNG terminal and storage facility at Haldia port. The 1 million-tonne terminal will serve as a daughter facility to sea port-based LNG terminals. Simon India will provide Engineering, Procurement and Construction services for Adani Mundra’s LPG Terminal at Mundra Port in Gujarat.

Dry bulk A consortium led by Kakinada Seaports Ltd will develop and operate a coal handling terminal for 30 years at Paradip Port. In another development, Kamarajar port is developing two new coal berths and the existing iron ore berth is being converted into a coal berth, which will increase its coal handling capacity by 36 million tonnes per annum. A deep water port is being set up by ILFS at Parangipet near Cuddalore for moving coal.

 Logistics

• The Andhra Pradesh government under Sagarmala identified 90 projects entailing investment of `1,30,762 crore. Two industrial corridors corridors and five SEZs will be part of the project.
• DP World will spend part of a planned $1 billion investment in India on new inland logistics centres.
• Maritime clusters will come up in Gujarat and Tamil Nadu under Sagarmala.
• To provide real-time traffic updates government will start highway radio services in 13 states.
• The first logistics park to be set up by the Road Ministry and NHAI will come up at Nagpur. Centre is planning to set up warehousing zones on the outskirts of major cities while the NHAI will set up logistics parks.
• Agility Logistics unveiled its first temperature-controlled Life Sciences Storage facility in Hyderabad.
• Electronic toll tags or FASTags are mandatory for all vehicles contracted by government for moving cargo.
• CONCOR has commenced train service from rail container terminal, Vadodara to Port of Pipavav.
• The Chennai Port Maduravoyal elevated corridor project receives nod from the Shipping Ministry. • The rail connectivity to the upcoming Vizhinjam International Multipurpose Deepwater Seaport will be from Balaramapuram railway station on the Thiruvananthapuram- Kanyakumari railway line. • Concor has acquired the rail infrastructure of KIOCL located at the New Mangalore Port Trust.
• DP World Cochin and Concor flagged off weekly service between Bengaluru and Cochin.
• The new Railways business plan for 2017-18 includes long-term agreements with bulk movers, double stacking of small-size containers, introducing road-railers to hasten container movement at terminals.
• Snowman Logistics constructs a new warehouse at Alapuzha in Kerala with a total capacity of 4,500 pallets.
• Cold storage units are planned in Naya Raipur Adani Logistics Ltd has setup a MMLP at Kila Raipur of Ludhiana district in Punjab. The facility will support double stack train services to gateway port of Mundra and Pipavav.
• Bangalore International Airport opened a dedicated bonded trucking service from Tirupur to Kempegowda International Airport, as part of the KNITWORK CONNECT BLR project.
• Government will re-activate the Border Haat in Arunachal Pradesh to boost the border trade with Myanmar.
• Concor will develop MMLPs at Hyderabad and Surat. MMLPs will also come up at Paradip Port and Chennai Port.
• Patel Integrated Logistics will set up 10 warehouses together measuring over 1 million sqft. The first one will be in Bengaluru, followed by Ahmedabad, Chennai, and Gurgaon. The second phase will see warehouses in Pune, Mumbai and Hyderabad.
• A double railway line will come up between Thiruvananthapuram in Kerala and Kanyakumari in Tamil Nadu.
• The Thar Dry Port is coming up with new ICDs in Jaipur and Vadodara. Three more facilities will come up in central, north and north-west India.
• Balmer Lawrie is developing MMLP in Vizag in partnership with Visakhapatnam Port Trust. It is also developing temperature controlled warehouse at Patalganga near Taloja in Navi Mumbai.

 Regulations

Major governmental policies that caught the headlines were Demonetisation and GST. Demonetisation particularly impacted the road logistics sector, while the shipping sector had a smooth sail as all transactions are through banks. GST on the other hand ensured smooth movement of trucks across state borders.

The new Inland Vessels Bill, 2017 proposes the enrolment of nonmechanically propelled vessels. The Union Cabinet has approved the setting up of Rail Development Authority to determine tariffs, set efficiency and performance standards.

 Ease of doing business

India surged in World Bank’s ease of doing business ranking from 130 to 100th position. The Central Board of Excise and Customs implemented electronic sealing for containers by exporters under self-sealing procedure.

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