MC Interview | Fall in India's EXIM has not impacted volumes at JNPT so far: Sanjay Sethi, chairman, JNPT

Sanjay Sethi, JNPA, Chairman

Despite an 8.7 percent year-on-year (YoY) fall in Indian merchandise exports in the first half of 2023-24, volumes at the Jawaharlal Nehru Port in Navi Mumbai have remained steady and are expected to stay strong, Sanjay Sethi, Chairman, Jawaharlal Nehru Port Authority (JNPA) told Moneycontrol in an interview.

"Our volumes during April-September have risen compared to last year. There are two major reasons for this. The first is that around 75 percent of containerised traffic is handled by the western ports in India, and we are seeing strong volumes for containerised traffic," Sethi told Moneycontrol.

The second reason is that while exports of a few commodities have taken a hit in 2023-24, most commodities are transported in bulk, which is not a significant portion of cargo handled by JNPT.

Sethi also said that it would be premature to draw a conclusion about India's export volumes based on a couple of quarters and that India's exports are likely to bounce back.

Demand for Indian goods in key markets such as the US, China, Bangladesh, and Singapore has seen a significant drop in recent months. While petroleum exports dropped by 9 percent in the first half of FY24 on-year, gems and jewellery closely followed, dropping by 5 percent.

Organic and inorganic chemicals, engineering goods, and ready-made garment textiles followed suit. These were the five top products that saw the maximum YoY jewellery drop.

Petroleum products, gems, and jewellery are two of the biggest commodities that are transported in bulk from India.

However, JNPA handled 42.19 million tonnes of total cargo and 3,112,145 twenty-foot equivalents (TEUs) of containers from April 2023 to September 2023, up 5.02 percent and 5.12 percent respectively, from the corresponding period of the previous financial year.

Edited excerpts of the interview:

India has witnessed a fall in exports over the last few months. What is JNPA’s view on exports going forward? When do you see exports picking up again?

While overall Indian exports may have fallen in the last two quarters, our volumes during April–September have risen compared to last year. There are two major reasons for this. The first is that around 75 percent of containerised traffic is handled by western ports in India, and we are seeing strong volumes for containerised traffic.

The second is that while commodity volumes have been hit, the impact on overall volumes has been limited.

JNPT had plans to open two additional berths for liquid cargo by May 2023. Could you share any updates on that project? How will JNPT expand capacity to address increasing liquid cargo imports and exports?

The additional berths are functional and were completed on time. Going forward, we plan to increase the cargo handling capacity of JNPT to 10 million TEUs, which is basically the second phase of the fourth container terminal, which will be completed by April 2025.

That is less than two years from now. The port would have reached maximum capacity by then. It is going on as per schedule.

Over the last few years, global shipping has been affected, first by the COVID-19 pandemic, then by the outbreak of the Russia-Ukraine war, and now by the outbreak of the Hamas-Israel war. If the war escalates, how will it impact your volumes?

Whether it is the Russia-Ukraine war or the Hamas-Israel conflict, it is very difficult to forecast the impact on shipping and even our volumes.

The world is more connected now, and we will figure out alternate ways to transport cargo even through disruption.

I can only say that I may not be the right person to do any forecasting at the moment. Any such disruption would have some effect on volumes.

How much effect? Will there be a lag? Those are still to be seen.

JNPT is expected to be a natural part of the India-Middle-East-Europe Economic Corridor. What formal discussions have you had with the government so far on the development of this route?

When you say formal discussions, the formal part is very recent.

A lot of this will follow. We have been in touch with the government and other ports involved in this project.

I mean, it's not like there is any formal thing that we’ve done till now, but the natural advantages to all the concerned parties are huge.

We are aware of this whole dynamic and are in talks with all the concerned ports.

In time, all concerned parties will have to come together to streamline the processes to develop this corridor. But right now, it is at a nascent stage.

How will the completion of the Eastern Maritime Corridor impact volumes at JNPT?

We don't expect volumes at JNPT to be impacted by the Chennai-Vladivostok maritime route.

We supply meat products, edible oils, and other commodities to Russia and Eastern Europe. But it's too early to forecast any impact on JNPT's volumes at the moment.

This is an evolving process, where when you ask those binary kinds of questions on 0 or 1, will it happen, won't it happen – it becomes difficult to answer.

There has been an increased focus by the government on green initiatives in the shipping and port sectors. What are some green initiatives in the works at JNPT?

The first part is that the overall decarbonisation strategy was chalked up in consultation with all our private terminal operators. This basically means that the action plans that were drawn up by the terminal operators and JNPA in unison have the stamp of go ahead of all parties.

We are working on three or four big-ticket items. The first one is the shore power supply. This has been a non-starter in the last five to seven years because of a number of legal and economic issues.

We have tried to address all of those issues. Distribution licencing is one reason we could not have done it in the past; we have addressed that issue.

We have now come out with a report to provide shore power to visiting ships in the next two years.

JNPA already provides shore power supply to tugs and port crafts.
The port has prepared an action plan covering all its activities, including cargo handling, storage, evacuation, and many other activities related to environmental protection.

As part of the action plan, the first implementation part is, of course, all the infrastructure that has to be provided.

JNPA will also provide some portion of the investment needed to create this infrastructure.

Companies like Maersk have gone ahead and declared that, not just for advocacy but for implementation too, they will invest and provide shore power to ships.

As you know, providing shore power is not commercially viable at the moment, but Maersk has agreed to take a hit for some time.

Going forward, I won't say 100 percent, but a significant portion of our power will be supplied through shore power, starting in a few years.

Under the Maritime India Vision 2030, JNPT had planned to use 60 percent renewable energy, the adoption of multi-fuel (CNG, LNG, and electric), shore power, LNG bunkering, and upcoming solar plants of 2.5 MW capacity, among others.

With the growth of renewable energy in India, we expect 68 percent of our power needs to be met by renewable sources by 2025.

We are slowly moving towards carbon neutrality as well, but that will take some time.

We have also signed two memoranda of understanding (MoU) to develop green hydrogen and green ammonia terminals.

(Shore power, or shore supply, is the provision of shoreside electrical power to a ship at berth while its main and auxiliary engines are shut down.

Shore power saves the consumption of fuel that would otherwise be used to power vessels while in port and eliminates the air pollution associated with the consumption of that fuel.)

What specific measures are being taken to enhance the competitiveness of Indian ports and make them world-class in terms of efficiency and infrastructure?

We have taken multiple steps to improve our competitiveness, especially by improving digitisation at the port.

Under the Maritime India Vision 2030, 60 must-do solutions were identified, which range from asset maintenance to actual dredging to crane operation—all kinds of things.

Till now, we have implemented digital solutions in 57 out of the 60 must-do solutions we have identified.

A lot of technology also has to come from the terminal operators, and by chance, they are all the best companies in the world.

We are still mulling other solutions, like using drones for dredging, and in time, if found viable, these will also be implemented.

And then, in order to increase competitiveness, we have enhanced the connectivity between our terminals with the launch of the National Logistics Portal Marine.

We are now even talking about connecting to other ports.

Logistics companies have in the past complained about gate delays at JNPT. What is JNPA planning to do to address this issue?

The Dwell Time at JNPT is the lowest in India compared to any other port.
JNPT has achieved significant improvement in overall dwell time, especially the import dwell time, which has reduced from 55.55 hours in 2018-19 to 37.33 hours in 2019-20 to around 18 hours now.

We’ve taken the whole turnaround time and dwell time issues very seriously.

Now there might be seasonal reasons for longer turnaround times and dwell times. But overall, there is empirical evidence to show that we have improved on both counts considerably in the last year or so.

Going forward, we don't expect dwell times to fall from 18 hours to 10 hours in one go; they will reduce gradually over time.

We are looking at some pneumatic systems in order to reduce dwell time and turnaround time even more, but it's a slow process.

There were some disruptions in the ICEGATE customs clearances a few months ago, but those have also been addressed now.

In the past, container freight stations (CFS) have said that the centralised parking plaza at JNPT has cost them more than 20,000 TEUs a month. Has JNPA addressed these issues with CFS operators?

When a new system is put in place, it is bound to impact the incumbent players, which in this case are container freight stations.

But from the perspective of JNPA and the government, the centralised parking plaza will help reduce time and costs for exporters.

When an exporter comes and parks at the centralised parking, he is getting the natural advantages of all the customs clearance there.

So, when you say a new dispensation hurts the old dispensation, in some way, maybe yes. That's all I can say, but overall, this saves both time and costs.