Thanks to its strategic location and deep draft, Vizhinjam is anticipated to challenge Sri Lanka’s Colombo Port for a share of the region’s transshipment volumes.
An in-depth analysis to assess the potential of Vizhinjam, comparing it to the well-established Colombo Port, reveals interesting insights.
According to the Vizhinjam Port Authority, the port received approval from the shipping ministry in April 2024 to operate as India’s first transshipment port, aligning with the nation’s goal of becoming a global manufacturing hub. India’s major port operator Adani Ports and SEZ (APSEZ) highlights that the port is equipped with advanced automation for quick vessel turnaround and state-of-the-art infrastructure capable of handling Megamax container ships.
In its initial phase, Vizhinjam will have the capacity to handle one million TEUs, with plans to expand to 6.2 million TEUs in future phases. Designed to accommodate large liners carrying 20,000-25,000 containers, Vizhinjam addresses a key gap in India’s port infrastructure.
Colombo Port remains the primary transshipment hub in the Indian Ocean, largely due to its strategic location along the major shipping route connecting the Middle East to East Asia. Several key global ports, such as Chittagong, Yangon, Kolkata, Visakhapatnam, Chennai, Cochin, Mumbai, Karachi and Fujairah, rely on Colombo as a key transshipment point for their cargo movements.
However, concerns about a potential decline in transshipment volumes at Colombo Port, linked to the expansion of Indian ports, can be observed through key performance indicators such as transshipment volumes and the Port Connectivity Index. Data shows that Colombo maintained stable volume inflows, with a slight downturn between 2022 and 2023, but recovered in 2024.
A similar pattern is seen in the Port Connectivity Index, which experienced growth from 2019, followed by stabilization, and then a decline during 2022-2023. These two declines are notably parallel. Since 2024, both transshipment volumes and connectivity have resumed an upward trend.
The Sri Lanka Ports Authority (SLPA) attributes the recent drop in cargo handling to seasonal variations and broader global economic and social factors, emphasizing that this decline is not unique to Colombo but has affected international ports as well.
SLPA advises that fluctuations in transshipment volumes should be viewed within the larger context of global supply and demand dynamics influencing ports worldwide.
Conversely, the authority of Vizhinjam Port believes that it has the potential to become the main transshipment hub in the Indian Ocean. Positioned at a crucial chokepoint, Vizhinjam could connect not only with other major chokepoints such as the Strait of Malacca, Bab el-Mandeb, and the Strait of Hormuz, but also with secondary routes, particularly those emerging from the rapidly growing Southeastern Asia region.
This notion is reinforced by the growing interest from international shipping lines in utilizing the newly opened Vizhinjam Transshipment Terminal, which shipping lines are increasingly considering due to delays caused by cargo congestion and work disruptions at Colombo Port.
While Colombo Port currently holds a significant position in the region, Vizhinjam’s rapid development and strategic advantages could lead to a shift in transshipment dynamics, potentially reducing Colombo’s market share in the future. However, Colombo’s established position and recent recovery trends mean it will remain a strong player in the region. The ultimate outcome will depend on how quickly Vizhinjam can scale its operations and how Colombo will adapt to the emerging competitive pressures.
