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Shipping industry in general is undergoing a damp spell across the globe for some time now and needless to say the global container trade is also not any better. But as it is imperative for the players in the business to go through the dynamic changes in the market and to make sure that they are going to stay here, one could see, different strategies being put in place by the industry at large to cope up with the turmoil the market encounters with. Different business strategies were brought in by the stakeholders in the business in order to stay put. Bigger players started joining hand in hand in order to tackle the hassles. While the bigger players are into mergers and acquisitions, the small players are also making small but concerted efforts to sail through the turbulent times.
The fourth edition of \’Containers India\’ 2016, concluded, deliberating numerous issues in the Indian Container Market. This platform has become a major think tank for the Indian Shipping Industry, especially for the Indian Container Business and the packed hall with not less than 200 participants and 20 odd experts, actively involving in several of the brainstorming sessions were the testimonies for it.
Though the situation at large in the global scenario looked bleak, Indian Container Market and fraternity do not look that pessimistic however a lot of effort would make things further positive, Ramprasad, Editor in Chief of Maritime Gateway and the committed organiser of the event sounded confident and he disseminated same to the audience in his welcome address of the event.
Translating the hope into numbers, Ramprasad informed the august gathering that the Indian container market has witnessed a modest 6.7 per cent growth in handling containerised volume in FY16. Growth of Indian market is on the lower side when we compare it with the global markets like European container trade, which was hovered a growth of around 10 per cent.
“Total combined installed capacity available in FY16 is 21 million teu approximately, where only 12.54 million teu combined throughput, i.e. 62 per cent of installed capacity is being handled by all major and private ports,” told Ramprasad, citing the Gateway Research\’s latest findings.
However, according to him, there is still a large space for the improvement in traffic. Growth in installed capacity and handled traffic are almost in the same range.
The above phenomenon would be a better sign as the market is growing in both the dimensions, but on flip side handled traffic needs to grow more vigorously to fill the vacant space at all facilities across the supply chain of container trade, he added.
In his opening remarks, Chairman, Editorial Advisory Board, Maritime Gateway and the patron of the Indian Shipping fraternity Sabyasachi Hajara painted a perfect picture of the global trade and the container trade in particular with the trade numbers on his fingertips. Though the global trade is going through a challenging and an abysmal phase, India as the fast growing economy, there are hopes, he stressed in his remarks.
Pointing at the alarming situation at the Global Container Trade, Hajara said, “Container fleet capacity has already exceeded the 20 million teu of capacity. In order face the challenges most of the giant container lines and consortiums are trying for the consolidation of their business.”
The paradigm shift in the world GDP growth ratio is alarming. It has been 5 per cent and now it has come down to a bare minimum number of 3 per cent. Though for the next year the global economy is hopeful of making it to 3.5 per cent, it is unlikely to happen that. Generally even when GDP growth is at a lower level, trade growth is supposed to double, but the situation there has gone bad as well.
“In the year 2015 trade growth was lower than the GDP growth and in fact in the container business it was not even 2 per cent. However, this year we are hearing varying figures, some figures say it would grow to 4 per cent but that is also not giving any hope as the fleet capacity which grew 7.5 per cent last year is expected to grow 5 per cent this year. So even in the optimistic scenario, the container trade would grow at 3 per cent and in the pessimistic view barely 1 per cent growth would be there,” said Hajara. However he concluded with the hope that the situation in the country would be better as the industry has the potential to tackle all the challenges it is facing at the moment.
Capt Deepak Tewari, Chairman, CSLA declared the theme of the event as “Moving forward in challenging times.” Delivering his theme address, he said, “We have been moving forward with the challenging times for the last eight years and we thought why don\’t we make it as theme for the event and beat it for the death for the best,” he started off with a light note. Enumerating the global trend in the industry he further said, “Global dip in the trade has created a difficult time for the shipping industry. Growth in the global container trade which saw 2.8 per cent growth in the year 2015 is expected to remain sluggish and maintain almost the same number as the growth percentage.”
Though almost all numbers regarding the global container and shipping trade are diminishing ones, Captain Tewari put forth positive numbers in terms of growth, citing latest WTO findings. “WTO, has predicted that the growth would be 3.7 per cent by the middle of the year 2017 and in the end. If these predictions are to be believed then there is going to be the light at the end of the tunnel,” he said. During 2015, 214 container ships were delivered, increasing the world fleet by 8.5 per cent to about little above 19 million teu this figure has become over 20 million teu as we speak today, he further reminded the audience. However, they are things to hope for the Indian market, as the government is making concerted efforts to boost the trade with new policies and fund allocation, benefitting the trade. He also lauded the efforts of different stakeholders for the smooth implementation of compulsory VGM declaration made easier.
Adarsh Hegde, Joint MD, Allcargo Logistics made a keynote address which touched up on two decades evolution of commerce and how it is making an impact on the supply chain market. He argued that the mammoth infra development set up by China in the late 90s and 2000s made the world economy prosper as the giant dragon was enmassing almost half of world\’s resources. Everybody benefitted from it until the Chinese economy caught up with a crisis. “The self-created wound of the industry what brought all the economy down but India has hopes as everybody, EU, China, Russia etc. are looking at us to bring some normalcy in the trade. That is precisely the point why global investors are making bee lines to invest their money here,” said Adarsh Hegde.
In his keynote address, Deputy Chairman JN Port, Neeraj Bansal, expressed his optimism stating that India has many things to feel happy for in terms of its global positioning in container volume. “The container terminal across the globe showcase a mixed responses of both negative and positive growth in terms of cargo handling. Indian Container Terminals are comparatively better, considering the last 13 month\’s cargo position. JNPT, being the biggest and the busiest container port in the country, could be considered as a benchmark for Indian container ports. It handled as many as 4.49 million teu of container cargo during the last financial year and it would be heartening to know that the government owned container terminal in the port JNPCT alone has showcased a growth of 10 per cent in terms of cargo handling,” said Neeraj Bansal.
After releasing the Indian Container Market 2016 report brought out by Gateway Research and first News Letter brought out by CFSAI, Chief Guest Dr John Joseph, IRS, Chief of Commissioner Zone II Customs, Mumbai, delivered his address. He said as far as our country\’s future is concerned, there is nothing to worry. While many of the continents are facing the financial crisis and a volatile economy, Indian subcontinent, Africa are giving hopes as growing economies. “Customs department is always committed to streamline and make the customs process easier for the business. Many initiatives were made by the customs like direct port delivery etc. The department will always be at the service of the business,” John Joseph reiterated, concluding his speech.
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