Lack of Infrastructure And Congestion In Indian Ports Affect Exports
Lack of infrastructural facilities in Indian ports are negatively affecting exports as the ports are struggling to cope with commodity traffic. Ports are unable to handle the container and vessel traffic despite a decline in economy and exports.
India has a 6000 km long coast line and 12 major ports and around 175 minor ports, according to the Indian Ports Association, in the 13 states (including the Union Territories). These ports handle over 85 percent of India’s international trade and the major ports under the jurisdiction of central government handle about 90 percent of the sea cargo traffic.
Majority of these ports face infrastructural problems resulting in delay in cargo exports.
“India’s port infrastructure is over stretched and there is a berthing delay of several days in the major ports. Though the manufacturing and factory output rate has declined now, the ports are unable to handle the current traffic. The delay at ports is effecting out international trade,” said B. Muralidhar, FKCCI former President and a major exporter.
Infrastructure at Indian ports has not grown in tandem with India’s growth rate. The figures of traffic handling in major ports of India show that congestion at ports has increased over the years.
At Mumbai port, the average pre-berthing detention on Port Account was 0.23 days in May, compared to 0.15 days in the same month a year ago. The number of ships that arrived at the port in May 2012 was 584 against 637 ships in the same period a year ago. Majority of the ports cargo movement was down by 5.1 percent to 47.6 million tons on a year-on-year basis, according to data from Indian Ports Association.
Though the government has initiated modernization of the ports, most of the improvements are limited to the equipments and technology. The capacity addition was almost nil in the previous financial year (2011-12 ) in major ports for cargo handling, while minor ports in Andhra Pradesh saw nominal addition of 34.54 million tons during the period.
The congestion in the port has further worsened as there is a surge in the export of agricultural products. Exporters, capitalizing on the depreciation of the Indian rupee, are finding it difficult to ship the cargo. Major ports like Mumbai, Chennai, Kolkata and Vishakhapatnam have days of waiting period to load the commodities.
A Wall Street Journal report quoting an executive with an international trading firm said that the waiting period at the port of Kandla has grown from 7-8 days in April to 18-20 days this week.
“We are witnessing a lot of inward cargoes in major ports like Kandla and Mumbai, which is affecting the exports of various agro-commodities,” said the executive to WSJ.
With the onset of monsoon, the exporters expect further delay in cargo handling at the ports.
The berthing delays have affected the mother ship traffic in to Indian ports. Only a few docks in the country have the infrastructure to handle mother ships. These infrastructural inadequacies have prompted mother ships to not to call on Indian ports. This has escalated the exporters’ woes since they are forced to depend on feeder ships.
“Motherships have stopped calling on Indian ports as they have to load and unload within specific timeframe, which is not possible due to the congestion in the ports. Now we have to depend on feeder vessels to send our cargo to mother vessels in Sri Lanka, Hong Kong or Singapore to reach European markets,” said Muralidhar.
Using the feeder service increases freight charges and is time consuming for the exporters.
Exporters feel that capacity building should be the primary concern of the Indian government along with improving the rail and road connectivity to minor ports. Majority of the trade flows through major ports because of better road and rail connectivity.
Although, the government has initiated private partnerships in port development not much progress has been made in that direction.
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