How do you see the container growth momentum into 2025?
It’s a matter of how the Indian government works with the US, Europe and others and is able to manage various requirements. Tariffs or no tariffs, there will be growth.
There won’t be much change with Africa, but with Europe and the US, there will be. US growth is inevitable. Does MSC have any specific plans for the Indian subcontinent?
If we see that there is trade growth, we will put additional services in or maybe enhance the capacity of the services.
You are an anchor and customer at Vizhinjam. What are your plans?
We will use it as a safety net from Colombo. We will continue to bring ships to Vizhinjam. We have already done nearly 200,000 TEUs. In the long run we can see Vizhinjam shaping up as a transshipment terminal. The road and rail connectivity for domestic movement may take some time to develop.
Major container lines have devised new strategies to serve customers. How is the strategy working for MSC?
There will be two types of strategy; one will be a strategy to bring in more and more direct services, port-to-port services. Because it is cheaper and it does not create congestion. Transshipments create congestion and delays for the customers. So, where there is cargo, there will be more and more direct services. Where there is limited cargo, there will be a hub and spoke model.
Port congestion is still making headlines. How long would this continue?
If the terminals do not have space to handle it, one has to look at other terminals. After the extension of the PSA berth, Nava Sheva will be chockablock; there is no other option other than Vadhavan. The same is the case with Mundra; they are trying to develop something on the south side of the terminals. But by the time the development takes place, we are looking into 2026. So congestion could continue till the capacities come up.
Will shipping lines return to the Suez Canal anytime soon?
No, because the Houthi problem is not going to get over soon. So, the route through the Cape of Good Hope would continue through the whole of 2025. Because the Red Sea issue is only getting worse.
There may be a ceasefire, but that ceasefire will not stop the Houthis. The Houthis and Somalis are not part of the ceasefire.
How do you see the realignment of alliances?
Well, alliances mean more partnerships and less space. Since MSC is out of the alliance with Maersk Line, we have more flexibility to enhance capacity immediately.
With severe overcapacity, will we see blank sailings or cancelled services?
Not really. Because of the Red Sea crisis, shipping lines are able to handle overcapacity. Secondly, in compliance with the environmental rules, a lot of the ships that are currently in the fleets will have to be scrapped. They are not economically viable to convert them to comply with the rules.
So, the capacity that is in order will get adjusted. What is it that you are looking forward to in 2025?
Government policy to be more flexible and government to not start inverse regulation, which curtails foreign flags in any manner. That will only be harmful to Indian trade. Just because the freight rates have risen doesn’t mean that you curtail foreign flag.
This would hurt exports and imports. Indian flag tonnage will come slowly and steadily.
