Capacity expansion plans at Indian ports is giving a renewed hope for port equipment players. Many port operators are acquiring new equipment as part of modernisation and expansion of handling capacities at these ports.
Studies conducted under the Sagarmala Programme indicate that by 2025, cargo traffic at Indian ports will be approximately 2,500 MMTPA while the current cargo handling capacity of Indian ports is only 1,500 MMTPA. Government has prepared a roadmap for increasing the Indian port capacity to more than 3,500 MMTPA by 2025 to cater to the growing traffic. This includes port operational efficiency improvement, capacity expansion of existing ports and new port development. From the port master plans for 12 major ports, 110 port capacity expansion projects (Rs 68,868 crore) have been identified for implementation over the next 20 years and are expected to add 783 MTPA to the capacities at major ports. To fill the demand gap, six new major ports are planned, which will bring in significant capacity expansion. Meanwhile, private sector ports are also growing with capacity additions and modernisation. According to the Ministry of Shipping, under project Unnati, the global benchmarks were adopted to improve the efficiency and productivity KPIs for 12 major ports. Around 116 initiatives were identified across 12 major ports to unlock more than 100 MTPA capacity just through efficiency improvement, out of which, 86 initiatives have been implemented to unlock around 80 MTPA capacity.
According to Anil Bhatia, Vice President - Sales & Marketing, TIL, Sagarmala seeks to develop India into a global maritime hub through integration with global production networks. He elaborates, 'Ports can play various roles. Apart from facilitating exports and supplying imports to the hinterlands, ports also play a role in trans-shipment, which is essential to cross-continental traffic and smooth functioning of global trade. India is yet to develop major trans-shipment ports. For becoming a global maritime hub, as the Sagarmala aims to, India must develop good trans-shipment facilities. With a 7,500 km long coastline and strategically located between the western world and South East Asia, India is perfectly placed to capitalise on port-led economic growth and development.'
Port performance in FY18
Cargo throughput at Indian ports have seen steady growth over the years. Major ports in India have recorded a growth of 4.77 per cent and together handled 679.35 million tonne of cargo during April 2017 to March 2018 (FY18) as against 648.39 million tonne handled during the corresponding period of the previous year. The share of the country's cargo traffic handled by 12 major ports is on increase and has reached 58 per cent in 2017-18, according to a government report. Nine ports - Kolkata (including Haldia), Visakhapatnam, Paradip, Kamarajar, Chennai, Cochin, New Mangalore, JNPT and Deendayal registered positive growth in traffic. Cochin Port registered the highest growth of 16.52 per cent, followed by Paradip 14.68 per cent, Kolkata (including. Haldia) 13.61 per cent, JNPT 6.2 per cent and New Mangalore 5.28 per cent. Petroleum, oil and lubricants (POL) topped the cargo mix at the 12 ports with a share of 31.55 per cent.
The container cargo handled by the 12 major ports during FY18 accounted for 19.67 per cent of the 679.359 million tonne (mt) of total cargo, according to the Shipping Ministry. JNPT, the biggest container port of the country, retained the top position among the major ports in container handling, with a volume of 4.833 million TEUs, followed by Chennai Port Trust with 1.549 million TEUs. Kolkata Port Trust held the third spot with 796,000 TEUs.
Cargo throughput at the ports has to increase in the coming years as the government through projects such as Sagarmala aims to expand capacities at Indian ports. But this is not enough. Says Bhatia, 'In order to successfully attract and handle more cargo, the economy of port usage has to match global efficiency standards. The logistics costs of Indian ports are very high. This needs to come down. Capacity expansion and upgradation of port infrastructure as envisaged under Sagarmala, digitisation of procedures, streamlined inspections and superior hinterland connectivity are much needed.'
The share of the non-major ports was 42 per cent in 2017-18. India has about 200 non-major ports (with around 70 functional) along its vast coastline on the east and west. they have steadily increased their market share over the years. However, according to government figures, the share has decreased in the past couple of years.
New port projects Major ports are nearing their maximum potential to handle cargo. The government under the Sagarmala project would focus on building new terminals and berths so that they are able to handle the large cargo traffic expected in the coming 8-10 years.
The Ministry of Shipping is coming up with six new ports in India, four of which would be on the eastern coast and the balance on the western coast. These ports are being developed at Wadhwan in Maharashtra, Belekeri in Karnataka, Enayam and Sirkazhi in Tamil Nadu, Tajpur in West Bengal and Paradip Outer Harbour in Odisha. Apart from these six new ports that would boost cargo handling and trade for India, the Ministry has also identified a handful of modernisation projects. One of the projects for expansion and modernisation includes Jawaharlal Nehru Port Trust wherein first phase of the fourth container terminal was recently inaugurated. The new terminal, Bharat Mumbai Container Terminals (BMCT) is operated by PSA International. Work on the second phase is likely to commence by the end of 2019.
Non-major ports are in expansion mode over the past couple of years. For example, reports indicate that Adani Group-owned Mundra Port was in the process of doubling capacity to 6.6 million TEU annually. Essar Ports is looking to increase its capacity utilisation at Hazira, Paradip and Visakhapatnam ports, and at Salaya in Gujarat. Essar aims to attain a total capacity of around 110 million tonne (mt) this year. The second phase of Krishnapatnam Port is under development.
New facilities & equipment
Many major ports are using old and low capacity equipment which has held back productivity at several berths. These equipment are insufficient to meet the current productivity requirements. Some major ports have been identified to replace old equipment with new ones. While there are also new terminals coming up where new set of port equipment have been installed or in the process of installing. BMCT, the fourth container terminal at JNPT, is equipped with the latest technology to offer customers fast turnaround of their vessels and is also well-connected by major highways and rail networks to key markets in Maharashtra, Gujarat, and the National Capital Region of India. BMCT's Phase 1 development has a quay length of 1,000 m and the deepest berths at JNPT, capable of handling super post-panamax vessels. BMCT received its first batch of three Super-Post Panamax quay cranes on June 30, 2017. Later, In August 2017, BMCT ordered 18 Konecranes Noell Rubber Tyred Gantry (RTG) cranes. This order follows upon an initial order for 18 RTG and four RMG cranes. The 18 RTGs currently on order will be delivered in two lots: nine units will be delivered by August 2018, and the remaining nine by end-2018. The RMG cranes will be used in BMCT's railyard, which can handle double-stack container trains up to 1.5 km long. The RTGs, with a lifting capacity of 40 t, will be used in BMCT's container yard, where they will stack containers 1-over-5, covering six container rows plus track lane.
Krishnapatnam Port Container Terminal (KPCT), a deep drafted container terminal, on the east-coast of India, recently commissioned five units of electrical Rubber Tyred Gantry Cranes (e-RTGCs) further bolstering its container handling capacity in the backdrop of a strong year-on-year container volume growth of 88 per cent in FY 2017-18. These new e-RTGs which have the potential to reduce energy costs by 80 per cent and operating noise level by 65 per cent whilst cutting down more than 1,400 tonne of greenhouse gases (GHG) emissions vis-a-vis the traditional diesel run RTGs, according to the company.
Speaking on the occasion, Anil Yendluri, Director & CEO, Krishnapatnam Port Co Ltd said, 'We are proud and excited to welcome the new e-RTG fleet which will further strengthen our æclean air' initiative through drastic cut in the emissions and will also boost our operational efficiencies multifold offering enhanced productivity for our customers and partners.'
KPCT is planning to increase its container handling capacity from the current 1.2 million TEUs per annum to 2 million TEUs in its quest to emerge as the global transshipment hub.
According to reports, JSW Infrastructure is planning to increase the company's overall cargo capacity to 200 million tonne from the 75 million tonne at present.
Port expansions mentioned above will act as the major growth drivers, apart from the government initiatives under its various programmes. Setting up of new warehousing and logistic facilities will also drive the growth for cargo handling equipment. Bhatia explains, 'Big-ticket projects for port modernisation and new port creation under Sagarmala, increased containerisation of domestic cargo, along with the development of Dedicated Freight Corridors (DFCs) and Multi-Modal Logistics Parks (MMLPs) will increase the demand for port equipment in a big way. Simultaneously, productive asset utilisation will also go up. The challenge will be to cater to this increased demand with the right assortment of products and superior customer service to ensure the maximum equipment uptime.'
According to him, Sagarmala is trying to address port-hinterland connectivity by focusing on multi-modal connectivity to ports. 'But such plans are conditional on the resolution of operational issues in the roads and highways sector, as well as difficulties associated with land acquisition. Certain regulatory changes are also required to improve cargo handling efficiency at Indian ports. Finally, more trans-shipment is absolutely essential to the success of India's strategy of port-led economic growth under the Sagarmala project,' says Bhatia.
Along with expansion of port projects, it is equally important for exim cargo traffic to grow at these ports. Also more and more cargo needs to be palletised and containerised. Says Bhatia, 'India is a growing market for port and container handling equipment. With increasing containerisation in India, development of dedicated logistics parks for handling containerised cargo and the growing thrust on developing container terminals along the east and west coasts of India, it is expected that significant new opportunities will open up for container handling equipment.'
Opportunities & challenges
Various initiatives taken by the government under Sagarmala are expected to add more port capacitiies in the country in the coming years. This is said to be a great opportunity for the port equipment players to tap the market and sell more equipment in the country. Bhatia lists out the major opportunities for port equipment as: 'Government's clear focus on infrastructure by way of targeted budgetary allocation, faster clearances and removal of other bottlenecks to on-ground activation of projects; Better availability of capital through innovative government initiatives like REITs, IIFCL, etc; Big-ticket projects aimed at port modernisation and new port creation under the Sagarmala initiative; Increased palletisation and containerisation of goods; and A shift in buyer preference towards higher capacity equipment.' The major challenges according to Bhatia include, 'Ensuring higher productivity and customer profitability - the primary challenge for equipment makers will be to deliver quality machines at affordable price; Managing equipment downtime by way of smooth availability of spares (especially those of higher capacity equipment, which is expected to rise in the days to come) and faster and efficient service; Matching supply with demand - as and when demand witnesses a sudden upsurge, keeping in step with it through timely delivery will be a test; Availability of trained operators - their demand is likely to increase in step with that of equipment; and Sustained availability of long term capital.'
The infrastructure sector is in the midst of a growth phase. According to Bhatia, the ports sector, and consequently the port equipment, are likely to witness aggressive growth going forward. Various projects undertaken for port expansion and connectivity in the coming years, opportunities are immense for port equipment players to cash in from the new and expansion projects.
At Excon 2017 last December, TIL launched a Hyster-TIL® ReachStacker - RS 45 Series, an ideal machine for port/terminal/container yard operations. It sets a new standard in low cost of ownership, without compromising on Hyster-Yale's principles of durability and toughness. This enhances TIL portfolio of ReachStackers with RS45 and RS series. It is worth mentioning here that both these series are being manufactured by TIL not only for the Indian market, but also for sale by Hyster-Yale to Asia-Pacific markets as well as New Zealand and Australia, among others. Hyster-Yale thus is able to source world-class fabricated components and fully built machines leveraging the manufacturing cost advantage of the TIL facility and Hyster-Yale's global distribution network. Thus, it is a win-win partnership on all counts. TIL also expects the export volume to grow in the coming years.
In addition, TIL is also an authorised dealer of Hyster® forklifts - selling Hyster products with capacity from 8T to 48T - providing application-focused solutions to customers in a wide range of heavy industries, and a range of container handlers. All these machines are backed by TIL's unmatched product support and aftermarket solutions to ensure higher return on investment by way of definite gains in productivity.
Safety Features: TIL considers the safety of operations - man, machine and cargo - to be paramount in port operations, always remaining a step ahead of competition by equipping its line of port equipment with state-of-the-art safety features, which employ telemetry and onboard machine diagnostics. Telematics is the technology of the future that seeks to improve all aspects of fleet management - machine productivity, total cost of operations and operator performance - in addition to safety, by way of wireless asset management. The entire range of Hyster-TIL ReachStackers incorporates to a high degree of telematics solutions and fleet data analytics. There is also the added flexibility of retrofitting the telematics application into older models and allied equipment from other manufacturers. Key features include: remote management of key performance indicators of the equipment, impact sensing, tracking regular preventive maintenance schedules, tracking and reporting aggregate costs, GPS tracking, access control, automatic shutdown, operator pre-shift checklist, etc.