Mumbai: Indian ports are creating revenue streams from warehousing, tax-free enclaves, logistics services, leasing space to private companies and setting up industrial complexes to weather an economic slowdown. They are also dealing with several commodities like coal, oil and even automobiles to diversify risk.
“Indian ports are progressively getting their act right by diversifying into different cargoes and offering value-added services,” said
Mr. Eddy Bruyninckx, Chief Executive Officer (CEO), Antwerp Port Authority of Belgium.
Making a shift: Eddy Bruyninckx, CEO, Antwerp Port Authority of Belgium, says Indian ports are diversifying to beat the economic slowdown. Private port operators such as Adani Ports and Special Economic Zone Limited, Essar Ports Limited and Gujarat Pipavav Port Limied are converting themselves from just handling ships into logistics hubs. “We have suffered less during the slowdown as we diversified and created hinterland connectivity,” said Bruyninckx. “Port is an indicator of the global economy. Therefore, ports should be an industrial complex with supply chain management capabilities.”
Cargo growth at Indian ports was subdued in 2011-12 with total throughput registering a 5% year-on-year increase to 930 million tonnes, following a significant slump in volumes of iron ore due to mining restrictions and policy issues, according to a 30 July report by credit rating agency ICRA Limited.
“This has been the worst slowdown in the last 10-12 years. Ports require export-import trade inflows to operate well and be viable.
The economic slowdown has far reaching effects on manufacturing and trade, impacting ports directly,” said Mr.Prakash Tulsiani, managing director of Gujarat Pipavav Port. “Ports also need support infrastructure such as roads and railways for quick and smooth evacuation of cargo.”
“Developing long-term contracts and having captive cargoes are a good way to maintain trade flows when the economy is slow,” Mr. Tulsiani said.
Mr. K.K. Sinha, Chief Executive and Director at Essar Ports, said his company is focusing on different cargoes rather than chasing only containers, where 15 operators are fighting for the pie. Essar Ports is also developing a logistics division.
Adani Ports had created a special economic zone, logistics management (shipping to container train movement), storage and movement (food grain and fruits) as well as realty development. Jawaharlal Nehru Port Trust is planning to set up a logistics park and a special economic zone.
“Mechanization and better IT (information technology) infrastructure have helped us to increase our productivity,” Mr. Sinha said. “Our berth occupancy is 55%. This would mean than turnaround of ships are faster and slots are available all the time.”