India’s government-run major ports have seen an improvement in some of the key operational efficiency metrics such as turnaround time and berth productivity, coming in the wake of a series of benchmarking exercise initiated at these facilities. The average ship turnaround time — the duration of a vessel’s stay at a port that is calculated from the time of arrival to the time of departure — at India’s 12 major ports has come down from 2.61 days to 2.08 days in the last five years. While a lowering of the turnaround time signifies a sharp improvement in operational efficiency, the figure for Indian ports continues to trail the turnaround time benchmarks at major global ports such as Port Klang, Singapore and Rotterdam, where it’s between one and two days on an average, sometimes even less than a day. In Hong Kong, the average turnaround time, which illustrates the capability of the port to efficiently handle cargo flows at the terminals and measures the difference between time of entrance and time of departure, was less than 10 hours.
India’s 12 major ports are the country’s gateways to domestic and international trade, accounting for close to 55 per cent of sea trade in the country. Among them, the ports handle all major commodities, including dry bulk (coal, iron ore), containers, break bulk, and liquid bulk, and are also characterized by substantial differences in topography, ranging from deep-sea ports to tidal ports and even a riverine port.
Under the supervision of a benchmarking consultant, out of a total of 116 initiatives identified for implementation across the 12 major ports, 70 have already been implemented and the remaining would be implemented by 2019, an official involved in the exercise told The Indian Express. Port efficiency is one of the key determinants of international transport costs.
While improving efficiency is a positive sign, there are two potential dampeners — subdued cargo growth and that the Major Ports in the eastern peninsula are struggling with viability concerns and question marks over their profitability.
Numerous studies have quantified the relation between increased port efficiency on the one hand, and decreased transport costs and improved trade volumes on the other. Officials at the Ministry of Shipping indicated that the operating surplus in Major Ports surged by nearly 20 per cent from Rs3,599 crore in 2014-15 to Rs4,309 crore in 2015-16. The Major Ports are projected to grow at around 15 per cent in 2016-17 with increase in operating surplus.
Lower operational efficiency have traditionally impacted the ports’ ability to efficiently utilise existing infrastructure and caused them to lose significant market share to more efficient ports in the neighbourhood, including Colombo and Singapore. Besides, less-than-optimal operations at ports impact the country’s trade competitiveness.
Currently, nearly 25 per cent of India’s cargo containers (amounting to 3 million twenty foot equivalent units or TEUs) are currently transhipped at ports outside India, mainly at Colombo, Singapore, Port Klang and Jebel Ali. Apart from the problems of operational efficiency, depth restrictions are another major reason why bigger container ships cannot call at India’s ports located close to the international east-west trade route. The Shipping Ministry has taken note of the BK Chaturvedi Committee recommendations, submitted in 2011, which stress on the need to increase draught, or the depth of water needed to float a ship, of major ports to at least 14 metres, and in ports where it is technically feasible and economically viable, to 17 metres so that they can be developed into hub ports. Ports with greater draught attract bigger vessels.
The Shipping Ministry, in its deposition before the Parliamentary standing committee on transport in March, has stated that with the exception of a couple of major ports where it is not technically and financially feasible — Calcutta is one such example where it is not possible to have 14 metres of draft — all port authorities have been told to work to provide 18 metres of draft. “Wherever it is technically and financially feasible, the ports are going for deeper draft, in line with the requirements of larger shipping liners,” an official said.
Several other efficiency parameters need improvement. The average pre-berthing detention time for India’s major ports — the time taken by a ship from its arrival at the anchorage and moving to the reporting station till it arrives at the operational berth (excluding time taken for inward movement) — is high. At ports such as Rotterdam and Singapore, the time taken is almost nil. Shipping permits and clearances take up to 3 days in India, whereas, in Singapore or Hong Kong, arranging a shipment and getting all clearances takes about a couple of hours. According to a World Bank report on operational efficiency of infrastructural facilities, India’s current port capacity can be boosted by at least 35 per cent simply by revamping port management practices, especially for the government-run major ports.
Operating parameters too are under pressure, notwithstanding the fact that 94 MTPA capacity had been added through 34 capital investment projects across India’s major ports in FY16 — the highest for any year. Nine Ports (Paradip, Visakhapatnam, Chennai, V O Chidambaranar, Cochin, New Mangalore, Mormugao, Mumbai and Kandla) registered growth in throughput during the first ten months of 2016-17 over the corresponding period last fiscal. Three Ports — Kolkata, Kamarajar (Ennore) and JNPT registered a downward slide in growth.